European Community Shipping Policy

HC Deb 11 March 1986 vol 93 cc815-57 3.57 pm

The Secretary of State for Transport (Mr. Nicholas Ridley)

I beg to move,

That this House takes note of European Community Document No. 5635/85, Communication by the Commission to the Council on progress towards a common transport policy in maritime transport; endorses the view that the instruments are necessary; and welcomes the United Kingdom's endeavours to encourage the adoption and implementation of these measures which will provide for a freely competitive shipping policy for the Community and the necessary powers to combat the growth of third country protectionism which damages or threatens to damage Community trade and the trading position of Community fleets. This debate is both important and opportune. The package of measures attached to the Commission's communication 5635/85 represent the first steps towards a common European shipping policy. I shall be attending a Transport Council in Brussels on Friday to debate these measures and to try to conclude the negotiations on them. The Commission's memorandum covers a great deal of ground and the four draft regulations on countermeasures, freedom to provide services, competition, and unfair pricing practices together provide the essential tools for dealing with some, though not all, of the problems facing our own and other Community fleets.

In opening this debate, I shall concentrate on these four draft regulations, but I recognise that hon. Members will want to range wider than the regulations. The House will want to debate the whole question of the shipping industry, and I do not suggest that that would be out of order. With the leave of the House, therefore, Mr. Speaker, I shall reply both on these regulations and on the wider debate, if I have the good fortune to catch your eye again at the end of the debate.

I am sure that hon. Members will understand that this is not a good time for me to debate the shipping industry's taxation regime. We are only a week away from the Budget, and I am sure that I shall be forgiven if I avoid such matters.

However, before starting on the Community's shipping policy, I must refer to the question of British Ferries Sealink's access to Belgian ports, which has been mentioned in the House on more than one occasion. As this issue has not yet been resolved, my officials yesterday issued letters of consultation about the possible use of section 14 of the Merchant Shipping Act 1974 to restrict the access of the Belgian state ferry company—RMT—to United Kingdom ports. I am sure that this makes it clear how seriously I am taking this problem. I hope that BFS will now very quickly receive approval for the service which it wishes to operate.

Mr. Peter Rees (Dover)

I apologise to my right hon. Friend for intervening so early in his speech. I welcome the news that a letter of consultation will be issued. May I take it that my right hon. Friend envisages at least the possibility of a comparable restriction on Belgian ferries to that imposed on all British ferries at the port of Zeebrugge to ensure a rough measure of reciprocity unless he receives a favourable reply from the Belgian authorities?

Mr. Ridley

The Merchant Shipping Act 1974 requires me to have a fortnight's consultation and I am embarking on that from today. I very much hope and believe that it will be possible to settle this matter quickly, and I strongly hope that it will not be necessary to make a restriction. I am sure that the Belgians will feel that it is more opportune that we should come to an agreement amicably and I will try to achieve that.

Mr. Toby Jessel (Twickenham)

Is my right hon. Friend aware that the many friends of Belgium in this country will echo his last sentiment and hope that he is successful in his efforts. Is there not, however, a risk that if we ban Belgian ships from ports in this country they will retaliate by banning Townsend Thoresen ships from docking at ports in Belgium?

Mr. Ridley

I regard myself as being as good a friend of Belgium as anybody in the House. I hope and believe that it will now be possible to resolve the matter in a short time.

In Europe, we need to achieve two things. First, we need the Community to set its own house in order and to do away with restrictive laws which deny shipowners from one member state the opportunity to compete with shipowners from other member states on an equal footing. Secondly, the Community needs to arm itself with appropriate powers to deal with problems that arise as a result of protectionism or unfair practices in non-Community states. The draft regulations help a great deal in solving both problems. I shall discuss each in turn.

The first, annex II-1, is a draft regulation which provides for co-ordinated Community action, covering both diplomatic initiatives and counter-measures to deal with moves by third countries to restrict competitive access to ocean trades. The second, annex 11–2, is a draft regulation creating a freedom to provide shipping services to, from, between and within member states. That regulation would open up Community cabotage trades—coastal trades—and deny member states the ability to operate bilateral cargo sharing agreements with third countries and to maintain cargo reservation laws.

The third, annex II-5, is a draft competition regulation that will give effect to the treaty of Rome's competition articles, and will provide the basis on which liner conferences will be exempted from the anti-cartel provisions of the treaty and the conditions which must be complied with if the exemption is to be enjoyed. The fourth, annex 11–6, is a draft regulation providing for the imposition of a Community levy in cases where third country carriers are engaged in unfair pricing practices and thereby doing material damage to Community carriers.

I shall elaborate on each of the regulations.

Mr. Donald Stewart (Western Isles)

Is the Secretary of State aware that there is something slightly unrealistic about this debate, and that if he was making his speech in two years' time there might not be any British mercantile marine to discuss? Have the Government addressed themselves to the serious erosion of the British merchant marine which has been going on for the past five years? In two years, we may have nothing to bargain with in the EEC.

Mr. Ridley

I do not think that the right hon. Gentleman heard what I said at the beginning of my speech. I said that I would be happy to respond to wider questions, but the right hon. Gentleman must now address himself to the full regulations which are before the House. The regulations are of material significance, and could greatly benefit the British merchant marine.

First, there is now a broad measure of agreement on the co-ordinated action regulation, with only a few detailed points still to be resolved. One of the points that concerned us originally was that a single member state could prevent action under the regulation if a unanimous decision of the Council was needed in order to instigate the joint action envisaged. However, one of the amendments to the treaty of Rome agreed at the Luxembourg summit last December was that the qualified majority voting procedures should apply to provisions for shipping. Although the summit decisions have still to be formally ratified by Parliaments of all member states, when they are, it will be possible for co-ordinated action under this draft regulation to be decided by qualified majority voting procedures, thus giving more flexibility and reducing the possibility of blocking by one member state

The second regulation is the draft competition regulation—annex 11–5. This has been under negotiation in Brussels for over three years. It is common ground both within the United Kingdom and throughout the Community that a regulation in this area is necessary, if only to resolve the legal uncertainty which currently surrounds international liner shipping, particularly liner conferences. The regulation vitally affects both shipowners and shippers and in recent weeks a number of changes have been negotiated to deal with points raised on both sides. I think that the balance struck between their disparate interests is now about right. We are a major shipping nation and an island that is more dependent on trade than on any other major industrial nation, and I am glad that the regulation upholds the conference system in a competitive environment, while adequately protecting the interests of shippers. There is now a broad measure of agreement on this draft regulation, although, as with the co-ordinated action regulation, there are still a few detailed points outstanding.

The third regulation—annex 11–6—to the memorandum is the unfair pricing practices regulation. Negotiations on this too have gone well. This is the instrument which will enable the Community to deal with the unfair competition and distortions of the market by the Soviet and other state trading shipping lines whose subsidised operations unfairly undercut the rates of the commercial Community lines. This regulation is in fact an anti-dumping regulation.

Incidentally, annexes 11–3 and 11–4—the draft consultation decision and the draft directive on definition of "national shipping line"—need only a brief mention. Although we could support the draft consultation decision as it stands and the idea of a "national line" directive, neither we nor our European colleagues attach the same importance to these instruments as to the four draft regulations. So these two draft instruments are being laid on one side for the time being.

These three regulations are in an advanced state of negotiation. I believe that it will be possible for these to be approved by the Council within the next month or two. We have, however, made it clear to our Community partners that we want to see all four of the regulations brought into force together. This brings me to the fourth—the freedom to provide shipping services. Here negotiations are proving altogether more difficult.

We are particularly anxious to see the cabotage markets of all our European partners opened up to ships of all member states. The United Kingdom cabotage market is already open, but our shipowners have no access to the considerable trading opportunities along the coastlines of Italy, Greece and the Greek islands. Nor can a British ship delivering goods to Bordeaux and, going into Rotterdam, take on cargo from Bordeaux to Cherbourg en route as a French vessel can. This is a particularly wasteful loss of opportunity. I regret that there is still opposition to the principle of liberalisation of cabotage within the Community, particularly from Greece and Italy.

We have succeeded in coming to an informal bilateral agreement with the Federal Republic of Germany to enable our ships to participate in German cabotage, but we have been unable to interest Greece or France in a similar arrangement. There is also pressure for a long transitional period—as proposed in the Commission's draft—from Spain, Portugal, and France. Some member states are also trying to protect existing unilateral cargo reservation laws and bilateral cargo-sharing agreements. We are trying to get these phased out, or, at the least, to ensure that any that are allowed to continue should be specifically agreed by the Council. These are important issues. It is particularly intolerable that our cabotage should be open to all, whereas half the Community close their cabotage to us.

Soon we will have to decide whether to continue to fight for this regulation against such substantial opposition. We have three options. First, we might succeed in getting the principle of open cabotage and no cargo reservation accepted but with so many derogations that the concession would be worth little to our shipping industry. Second, we could seek a ruling from the European Court of Justice on the principle of closed cabotage and cargo reservation, which seems to us to be in direct conflict with the right of establishment firmly embodied in the treaty. Thirdly, we could abandon the campaign for open trading within Europe and ask Parliament to give us powers to close our own coastline.

We must make our decision against the background that all the member states, including ourselves, want to agree the other three regulations and get this urgently needed Community shipping policy off the ground. There is much of value in those regulations, particularly in the ability they will give the Community to stand together to resist protectionism and unfair practices.

Mr. Bruce Milian (Glasgow, Govan)

Why do all four regulations have to stand together?

Mr. Ridley

The other nine member states very much want the first three regulations to be adopted.

Mr. Milian

What do we want?

Mr. Ridley

We want all four regulations to be adopted. If we continue to insist on the fourth regulation, we may not get the first three. That is the dilemma.

On the other hand, to depart from the principle that all four measures should be introduced together would in itself be a major shift in our position. The General Council of British Shipping has already said to me, keen though it is on the freedom to provide services regulations, that we should not drag out the negotiations on them indefinitely, thereby losing the advantage of the other three regulations. I shall, of course, consult the council closely in the weeks ahead.

The four regulations are all directed towards ensuring the fullest possible competition on trades within, to and from the Community. In the future, with the regulations in force, we should be in a much stronger position, on a Community-wide basis, to defend our shipping interests.

4.11 pm

Mr. Robert Hughes (Aberdeen, North)

I was disappointed when the Secretary of State said that he would concentrate on the regulations and then said that he would be glad to respond at the end of his speech to the wider issues which were bound to be canvassed in the debate. That was a negative approach. Instead of asking us for questions to which he could respond, the right hon. Gentleman should have stated the Government's policy on merchant shipping. We could then have decided for ourselves whether that policy was adequate and whether there were deficiencies or gaps. We could have constructively criticised the Government's policies. However, the right hon. Gentleman ducked the issue by saying that he would respond to questions. The truth is that the Secretary of State has no shipping policy. That is why he has left the answers until the end of the debate. He hopes that our constructive debate will give him some clues on how to proceed. The problem is that the shipping policy of the Secretary of State is basically to leave everything to free market forces. The Government do not intervene. That is the same as not having a shipping policy.

As the Secretary of State referred at the beginning of his speech to his action on Sealink, I shall refer to Sealink now rather than later as I had intended. The Secretary of State has said that he has now taken preliminary steps under section 14 of the Merchant Shipping Act 1974 to take reciprocal action against the Belgian state ferry company—RMT—based on the fact that there have been restrictions against our rightful shipping interests. I was astonished to hear the hon. Member for Twickenham (Mr. Jessel) ask whether, if we took this action, there was a danger that the Belgians would reciprocate. It is precisely because the Belgians have taken this action against us that we have taken reciprocal action against them.

Sealink British Ferries got in touch with the Amalgamated Union of Engineering Workers, of which I am a member, and asked the unions to have a discussion with me on the problems faced by Sealink. Effectively, the Belgian port authorities are trying to freeze Sealinkfirst, freezing Sealink out of Ostend and then refusing to give Sealink right of access to Zeebrugge.

I should like to put on record my appreciation to the Secretary of State for his responses both in writing and when I took a deputation of trade unions to see him. I pay tribute to the way in which he has taken the matter extremely seriously. The right hon. Gentleman and his staff in the Department of Transport have done a lot of work trying to resolve this problem without resorting to this action. I think that at times the right hon. Gentleman may have been irritated by the way in which I constantly pressed him to take action under sections 14 and 15 of the Merchant Shipping Act. I think that he is as irritated as I am with the way in which the case which we have been jointly prosecuting has not been helped by Sealink's apparent prevarication about its needs.

I found it difficult to accept that, when the Belgian port authorities asked for an operating plan, Sealink said that it would take between a week and a fortnight to produce such a plan. I began to form the conclusion that Sealink was not serious about serving Zeebrugge. I was so concerned about that possibility that I wrote directly to Mr. Sherwood asking for an assurance that he intended to maintain passenger services. The Secretary of State had already told me in answer to a private notice question that there was a possibility that Sealink would change its mind. Last week, I wrote again to Mr. Sherwood saying that the threat of redundancies due at the end of this week would have to be withdrawn before we could give any further support to taking reciprocal action.

I am not sure whether the Secretary of State will make use of a section 14 order or of a section 15 order. I think that a section 15 order would allow him to prevent RMT from serving British ports for 90 days without reference to the authority of Parliament. The advantage of using that provision is that we would not have to extend the parliamentary process before the application. I understand that a section 14 order would require parliamentary approval before coming into effect. I hope that the Secretary of State will tell us which order he will use. I would prefer the immediate measure. I normally do not ask for orders to be brought into effect without Parliament first having discussed them but, in these circumstances, it may be necessary to take this action to concentrate the minds of Sealink and of the Belgian port authorities. Hon. Members should remember that 60 per cent. of the port of Zeebrugge is owned by the Belgian Government, which is why we can use sections 14 and 15 of the Merchant Shipping Act.

On Thursday, the Secretary of State will meet the Belgian Minister of Transport. I am not sure whether that will be a wholly convivial occasion or whether some work will be done beforehand. I invite the right hon. Gentleman to raise this issue sharply with the Belgian Minister. The right hon. Gentleman can say without any equivocation that he has the backing of the whole House in taking this action, if necessary.

I hope that it will not be necessary to take this action. I should prefer it if the matter were resolved, if Sealink could start operating its services and if the threat to seafarers' jobs were removed without coercion. If there is coercion, wider co-operation may be made more difficult in the future. I hope that the saga involving Sealink and Belgium which has haunted me for the past three months will soon end.

Mr. Peter Rees

The hon. Gentleman has referred to the way in which Sealink has conducted negotiations. Does the hon. Gentleman recognise that, although the St. David has been switched to the Stranraer route, another ferry, the Votigern, could easily operate in and out of Zeebrugge, apart from any freight services that Sealink operates from Dunkirk?

Mr. Hughes

It is true that Sealink wishes to operate the Vortigern, which is a combined freight and passenger vessel.

I come to the substantive point of the debate. I apologise if I have commented on Sealink for too long. In examining these European Commission documents, we should look at the background. There is no doubt that the background is the disastrous decline in the British shipping fleet. In 1975, just a decade ago, there were 1,833 ships registered in the United Kingdom, representing 32.1 million gross registered tons. By 1980 the total had gone down to 1,358. At the end of 1985 it had reduced to 600. It is estimated by trade union sources that by the end of this year the fleet will have gone down to 300, half its present size. That means that since 1975 there will have been a reduction from 1,833 to 300.

That dire forecast of only 300 ships is not fully accepted by some analysts. However, even the General Council of British Shipping, the organisation representing owners, forecasts the size of the fleet at the end of this year as 400. Whichever figures one accepts—and trade union forecasts have proved extremely reliable in the past—for a maritime nation so dependent on international trade such figures must cause everyone to be concerned. Even the Government, who seem to accept with equanimity the decline in manufacturing industry, must be concerned at the peril which faces us as an island trading nation.

The defence capacity of the nation is severely threatened. The Government could not mount another Falklands campaign with the projected or even the present size of the fleet, not that I want to see another Falklands exercise. Very few hon. Members want that; I do not think that even the Prime Minister wants it. Nevertheless, the fleet has fallen to such a small number that should such a need arise again, there is no possibility of mounting such an exercise. I find it hard to accept that from time to time Government Ministers accuse us of being unpatriotic when, by their actions, they have been much more unpatriotic than we have ever been in anything we have said or done.

Mr. Richard Ottaway (Nottingham, North)

I share the hon. Gentleman's concern about the defence of the nation. No doubt he will be interested to know, despite the Secretary of State's public statements inside and outside the House, that when there was a naval exercise off Norway last week it was necessary to charter Danish vessels to move British troops and stores to Norway. That happened despite the assurances that we could mount another Falklands campaign.

Mr. Hughes

I am grateful to the hon. Gentleman. That disproves the old adage that one should never give way. I was not aware of what the hon. Gentleman has told us; I am grateful to him for drawing it to the attention of the House. That shows that hon. Members in all parts of the House are concerned about the size of the British fleet. The right hon. Member for Taunton (Sir E. du Cann), whom I am glad to see in his place, raised the issue with the Prime Minister on 4 March. He asked: Will my right hon. Friend look again at the figures for the appalling decline in Britain's merchant fleet? Is she aware that hon. Members in all parts of the House are now desperately concerned about this matter and its implications, both for our defence policy and economically? He pointed out: More than 80 per cent. of British trade is now carried in ships with foreign flags. He asked the Prime Minister to do something about it. The Prime Minister's response was woefully inadequate. Indeed, my hon. Friend the Member for Wigan (Mr. Stott) wrote to her the next day to point out the full facts and to advise her that she was excessively naive. That was not overstressing it.

The other issue that concerns us as much as the economic effect of the fall in fleet capacity is the job losses for seafarers. Many thousands of seafarers have been beached because of the number of ships laid up. The threat to seafarers' jobs is compounded by the growth of the pernicious practice of registering under flags of convenience. When that happens, inevitably there is pressure to reduce manning levels and wages, to reduce or extinguish trade union rights and to replace British crews by Third world crews with much reduced wages and conditions. I do not know whether the Secretary of State approves of the practice but perhaps we can find a clue to the Government's attitude if we read the Prime Minister's answer on 4 March; I shall quote part of it: the important thing for the future of our merchant marine is to ensure that British shipping can compete with the fleets of other nations on costs. That is one of the problems."—[Official Report, 4 March 1986; Vol. 93, c. 151–52.] That says simply that it does not matter under what flag British shipping is registered, what conditions the crews have or whether they have trade union rights; it does not matter whether Third world crews are exploited so long as the merchant fleet can make money. In the Prime Minister's view, that is the beginning and end of the matter.

The Government will claim that many of the problems have arisen because of the recession in world trade. I do not deny that. We cannot consider a merchant shipping policy seriously without accepting that there has been a decline in world trade. The oft-repeated refrain from the Government in reply to charges about their failure to have any economic objective for the protection of any part of British industry is that it is not their fault. Their excuse is that the problem is caused by external forces and that they have had nothing to do with it. They say that they have to sit back passively and accept the position.

One of the major causes of the decline in the British fleet and its aging nature is that the Government have reduced and extinguished tax incentives for the depreciation of write-offs. The fleet of the EEC is also aging; only Italy and Greece have older ships than Britain. The General Council of British Shipping is seeking help from the Government in the Budget. The Secretary of State said that he would not answer any questions about fiscal policy when we are only a week away from the Budget. Nevertheless, I ask him to take seriously the cry for help and to use the new cloak of Cabinet responsibility, which has suddenly returned to the British political scene, to make an input into the Cabinet about assistance for British shipowners.

I want to enter one or two caveats about my support for the British merchant fleet. Any incentive given to British shipowners should be to build new vessels. Shipbuilding is going through a very difficult period. If I may be parochial for a moment, there is a shipyard in my constituency, not a big one in British terms or in world terms. It employs 650 people whereas about a year ago it employed 1,000. It is facing a great threat to its existence directly because of Government policy over privatisation. In their anxiety to privatise profitable yards, the Government said that they would privatise naval yards. Because of that, naval yards can no longer have access to the intervention fund for merchant shipbuilding even if they can get orders. The Minister should take note of that. We have pressed hard to get ships built in Britain. We need a full programme spread over several years.

Mr. Don Dixon (Jarrow)

Does my hon. Friend not agree that it should be a condition of any incentive that ships should be built in this country? Should we not take note of what Japanese shipowners have done? No Japanese shipowner has built a ship outside Japan since 1947.

Mr. Hughes

I agree entirely with my hon. Friend. He has anticipated me by about one sentence, but I am none the less grateful for that because it reinforces the point that I was making, which is that we need a full programme, spread over a number of years, to replace the fleet. But I want to see those ships built in the United Kingdom, not abroad. I want it to be made a condition of any assistance that is given to the building of ships that those ships should be built in Britain.

I know that the Minister will say that to tie aid to British shipyards would be contrary to EEC rules, because that is what he and his predecessors, whether in his Department or the Department of Trade and Industry, have said before. Sometimes I despair of the Government. They are busily playing cricket by the old rules, but we know perfectly well that our European partners in shipbuilding are bypassing them with hidden subsidies in the form of generous tax relief of one kind or another. No Labour Member, and I suspect few Conservative Members, will lend their support to taxpayers' money going to buy ships built abroad.

Dr. M. S. Miller (East Kilbride)

Is it not also important that ships should be manned by British crews?

Mr. Hughes

If we go on like this, the House may be under some delusion that my hon. Friends have written my speech for me, because that is another point to which I am coming.

I would not lend my support to the case which has been put forward by the General Council of British Shipping that taxpayers' money should be used to buy second-hand ships laid up abroad at distress prices. That is unacceptable. We should also be certain that any tax incentives for shipowners should not only apply to shipbuilding in Britain but should ensure that the ships are crewed by British subjects under proper conditions with full trade union rights and participation.

We need a fully thought-out shipping policy and the EEC regulations go nowhere near to matching that need. The regulations have clearly been under discussion for a long time and the Government, and indeed the Commission, have still not got them right. However, having said that, I had better say—not simply because it will be read in Hansard, but because I believe it—that I am making no criticism of the EEC commissioner who deals with these matters. He was a distinguished Minister in the Department of Industry and in that office did a lot for British shipping. He has a clear concern for shipping matters and for the people who sail our ships, but I know that he and the Commission are under constraints, not the least of which is the Government's approach to the matters.

Annex II-2 clearly states that Restrictions on freedom to provide sea transport services within the Community shall be abolished by 1 July 1986". The Minister said that there were a number of different way in which we might proceed. We might proceed down the road laid out in the document, which is that for certain classes of trade there is to be a derogation—a phasing-out for five years. But, more importantly, cabotage shall end 10 years from 1 July 1986. But even that is qualified. Each time we look at the document we see further and further qualifications. If any member state for whom that applied found that it created particular difficulties, the matter might then extend beyond 10 years. In a delightfully elegant and vague phrase, it says that the phasing-out period shall not apply where its application would cause particular difficulties. That completely negates the purpose of the regulation. I happen to agree with the Minister on this. There is a case for ending cabotage and there is a case for increasing cabotage, but there is no case for continuing the existing rules and for phasing-out over 10 years because while that is going on our merchant fleet will decline further. We shall still be refused access to those countries which operate cabotage rules and at the end of the 10 years nothing will be left.

Cabotage is necessary and I would much rather go down the road of saying that we should apply cabotage in the United Kingdom. There is no doubt that cabotage is necessary to stabilise the already too narrow base of our fleet. Once it is stabilised we must use cabotage and many other methods to broaden the base of our fleet.

The problem with the regulation—I hope that I have misread it but I suspect that I have not—is that it will make it difficult for us, or indeed any other EC maritime nation not using cabotage, to erect new cabotage rules after 1 July this year. Not only does the regulation make it more difficult for our fleet in the next 10 years, but it removes our right to bring in cabotage rules for our country and that is something that we cannot possibly accept. I should tell the House that the next Labour Government firmly intend to use cabotage for the British fleet.

Annex II-4 seeks to define a national shipping line. As I read it, there are three criteria. Article 1, paragraph 2, says: (a) the management head office must be situated and the effective control exercised in a Member State; (b) the executive board must consist of persons the majority of whom are nationals of Member States; (c) the company shares must effectively be controlled through a majority shareholding by nationals of Member States who have their domicile or registered office in one of the Member States. That almost reads as though there would be total control within a member state of the EC. But there is nothing in the document so far as I can see about the use of nominee shareholders, which would certainly be a way of getting round paragraph (c). There is nothing at all about a ship being registered in the member state. Therefore, the vessels and the crews will not be subject to EC safety standards. That will not help the EC fleet and it will certainly not help our fleet.

Annex II-6 deals with unfair competition. Under the regulations as they are published, only the shipowner may complain about unfair trading practices. Why should not the trade unions involved in shipping matters be allowed to complain to the Commission about unfair trading practices? After all, they have a much more personal and direct interest in unfair trading practices than the owners.

I want to refer briefly to safety, which is a matter of great importance. The most recent figures show that British ships have serious accident rates. The incidence of fatal accidents for personnel in British ships is 35 times that of manufacturing, six times that of construction, and four times that of coal mining. In other words, there is still a great need for safety on ships, for training, and for care of the people who sail in the ships.

In addition, we must be concerned about the total loss of ships through accidents. From 1970 to 1974, 355 ships were lost in the world. From 1975 to 1979, 391 ships were lost. From 1980 to 1983, 237 ships were lost. That is a serious matter, about which we should be concerned. There is clearly a relationship between the age of the vessels and their loss. In fact, 22 per cent. of vessels lost were over 25 years old in 1983, but only 5 per cent. were less than five years old. While there is that direct link, that is not the only issue. It is not a simple straightforward matter of the age of the ships and their loss, because old ships are running about the seas perfectly well managed causing no safety hazard, but there is a clear correlation between the way in which ships are managed and the risks which are being taken.

It is a matter of serious concern that the record of losses in world fleets has shown no real improvement in the last 20 years. Given that there has been a massive explosion of technology and of available information and so on, all this must make us wonder what is happening.

This leads us to ask how many ships are being lost because of fraud, how many are being deliberately sunk to get the insurance money from them. I believe that this is causing a great deal of concern not only in this country but throughout the EEC, and I am sure that the Commission is worried. I wish to ask the Government what they are doing about it, what investigations they are undertaking, and what pressure they are applying to ensure that the issue of fraud is taken much more seriously.

One matter not mentioned in the documents which we need to consider seriously is the problem of world-wide services, that is, the issue of ships carrying such large containers that they can undercut prices and sail all over the world carrying container traffic. Two shipping lines are causing concern, Evergreen Shipping, which is sailing out of Taiwan, and United States Lines, sailing out of the United States. There are grounds for at least suspicion that the kind of rates being charged suggest that a very heavy subsidy is being paid on the operations by Taiwan. This needs to be examined closely.

The Minister has said that the regulations deal with the threat from the Russian fleet. He is apparently prepared to act against the Russians and to say openly—I am not sure that he is on firm ground, but there is certainly cause for concern—that the Russians are dumping, but he is not prepared to say that the Taiwanese and the Japanese are dumping in regard to their shipping practices. I think the Minister should look at that closely. He should tell us what he is going to do. He should not rest behind the fact that there exists a series of regulations which it has taken a long time to bring together.

The regulations represent not the maximum but the lowest common denominator of what can be wholly agreed by the member states, even bringing into play the fact that the most recent changes in community law make it possible to decide these things by majority vote instead of unanimously.

Mr. Dixon

With regard to the Japanese, I have a letter from the managing director of Stephenson Clarke Shipping in which he says: The British Merchant Navy is competitive in crew costs with most Western fleets and the Japanese.

Mr. Hughes

The problem is that different voices say different things. When the National Union of Seamen asks for better pay, it is constantly told that its members are not competitive. I believe that we are competitive and that we give a first-class service.

The Minister and Government believe wholly and solely in the operation of free market forces and are unwilling to act even when the facts of decline are staring them in the face. Despite the work that has gone on in the Commission's deliberations, the documents do not match up to the full extent of the problems that the EEC fleet has to face, far less our own fleet. What we must and will have is a full policy for shipbuilding to reverse the disastrous decline both in the fleet and in shipbuilding. I wish to goodness that we on the Opposition Benches had the opportunity to put our plans into operation now instead of relying on the present untrustworthy Government.

4.44 pm

Sir Edward du Cann (Taunton)

In his interesting opening to the debate, my right hon. Friend the Secretary of State said that it was important and timely. I think that he could have put it more strongly. The subject of the debate is, I think, of the greatest importance to the economic and defence well-being of our nation. The situation we have to face is undeniably critical. But timely the debate certainly is, for it is appropriate that the view of the House should be solicited before my right hon. Friend has his discussions in Brussels, in which we wish him every success. I thought that he was entirely right when he said that it is appropriate that, in the course of the debate, we should discuss the context in which these discussions will be held.

The hon. Member for Aberdeen, North (Mr. Hughes) said by implication that we should use the occasion to ensure that we develop the House's thinking in relation to policy. I agree with that. I think it appears to many people outside the House, as it does to many of us in the House, that there is a vacuum on policy. It is to that aspect of our affairs that I shall endeavour to direct my remarks.

On more than one occasion I have expressed my deep concern at the decline of British maritime strength. The hon. Member for Aberdeen, North was good enough to quote one example of that, when I put a question to the Prime Minister a week ago. The statistics are well known. The hon. Member for Aberdeen, North gave some of them. In 1975 there were some 1,600 ships of 500 gross tonnage or above on the British register. By 1985 the figure was down to some 600, and now it is probably less. Our merchant fleet in effect is the smallest that it has been this century. That is the situation over which we in this House preside and of which, I believe, we should be ashamed.

We have no distant water trawler fleet. Only 44 per cent. of offshore supply vessels are UK-owned. The number of seafarers, of men employed in the sea trades, continues to fall. It was 140,000 or thereabouts at the outbreak of war, it is 30,000 today, and it will be less tomorrow. Then there is the lack of profitability of British ship-owning companies.

The implications, both economic and from the defence point of view, are serious indeed. As the hon. Member for Aberdeen, North reminded us, 80 per cent. of United Kingdom exports now are carried in non-British ships. There is thus an immense potential for economic and political blackmail.

I believe that the advantages of what is called the cab rank policy—that is, that those in Britain who wish to send goods by sea will get a price advantage if there are ships queueing up for their business—are purely temporary and are likely to be illusory. We have lost some £2 billion per annum in invisible earnings. Not only have we lost much direct employment, but we have lost much more indirect employment in the ship-related industries of this country: shipbuilding—which hardly exists today—ship repairing, the other marine trades, engineering, technology, finance, insurance and so on.

All this is bad enough—desperate enough, I would say—but when one examines the situation in defence terms, the picture is horrendous. As the hon. Member for Aberdeen, North pointed out, it is indeed doubtful whether we could mount another Falklands operation. We simply do not have the ships now to engage in a local conflict of that sort. It is no good my right hon. Friend the Prime Minister, for whom I have the deepest respect and affection, saying that all is for the best in this best of all possible worlds. It simply is not so. I do not know what advice she is receiving, but, if it is advice which leads her to that conclusion, I can only say that, in my view, it is wrong.

When one examines the situation which might exist in general conflicts, the supply and replenishment of this nation in wartime would be quite impossible. In his deadly intervention, my hon. Friend the Member for Nottingham, North (Mr. Ottaway) made that abundantly clear.

As the hon. Member for Aberdeen, North pointed out, it is a paradox that both the enemies of the free world and the most violent advocates of free trade are making common cause against the interests of this nation. He rightly said that my right hon. Friend the Secretary of State for Transport is proposing action against the one. In my view, however, one cannot have a left without a right. Therefore, it is appropriate that action should be proposed against the other.

The House knows that a parliamentary maritime affairs group has been established on an all-party basis to alert public opinion about this serious matter and to endeavour to propose practical action to remedy it.

What is to be done? I maintain my view that it would be right for the Government to appoint a single Minister to be in charge of maritime affairs. I remember, as do other right hon. and hon. Members, that when Winston Churchill found that it was essential to get aircraft built during the war, he swept away the obstacles in order to get the job done. He appointed Beaverbrook, who was provided with a clear remit and given power. One person was provided with all the necessary authority, which meant that the job got done. The situation is so serious today that a similar dramatic remedy is needed.

There is other action that we can take unilaterally, especially action of a fiscal nature. However, it is an international problem. It involves the changing patterns of world trade and the ambitions of some developing nations that involve them in protectionism. They have national aspirations with which one can sympathise but to which bodies that ought to know better—for example, the United Nations—give too much practical backing. There also is a great deal of economic opportunism. My right hon. Friend the Secretary of State also referred to the attitude of the Soviet Union, which is that maritime transport is a most significant economic and political asset that has to be exploited.

All of this means one simple fact: that, because of an excessive number of ships, with too many ships chasing too few cargoes, there is a real world problem. If it were not for money being too readily made available at the wrong rates of interest to finance shipbuilding, there would probably be no problem at all. It is absolutely clear that the traditional concept of free and fair competition in world shipbuilding terms is currently at stake. Some would say that it does not exist.

To mitigate that problem and to resolve it, international co-operation is needed. Where better to launch it, one might think, than in the European Community? The European Community is by far the world's largest trading bloc. It generates 25 per cent. of world trade. It has an enormous population of 320 million. Through the ports of the European Community there is handled, by weight, twice the volume of that of the United States and three times the volume of that of Japan. Therefore, it seems to me that the overwhelming issue for all member states of the Community is to ensure that it maintains sufficient maritime strength to prevent the domination of maritime transport in its waters by its competitors' fleets.

Dr. M. S. Miller (East Kilbride)

Does the right hon. Gentleman accept that Britain's status as a maritime nation even antedates the industrial revolution position occupied by Britain and that if we want to recover some of the aspects of our maritime authority and power the Government should step in and ensure that that happens?

Sir Edward du Cann

I accept both of those points at once and without reservations of any kind.

If the objective of the European Community ought to be to ensure that its maritime strength is maintained, that is not what it is doing. Western Europe's shipping, in terms of gross registered tonnage, has been reduced by approaching one third in the last decade, while ships that are registered under flags of convenience, or in the Pacific basin, or by COMECON continue to increase. It is clear, therefore, that the situaton will not be self-adjusting and that action is urgently needed to reverse the trend of decline.

In this context we have these documents. I say at once that this first attempt to develop a comprehensive Community maritime policy is to be welcomed. As the hon. Member for Aberdeen, North said, it has taken a long time to produce, but, alas, I am sorry to say that, in my opinion, for what it is worth, it is on the whole a disappointment. Its recognition of the dependence of the European Community on maritime transport is a good beginning. I do not deny that the policy contains many useful features, but its failures are more significant: they are these.

What the objectives of that policy should properly be are not defined. As I have tried to show, given the already stated dependence of the European Community on maritime trade, it follows that no important element of the means of conducting that trade should be in the hands of economic or strategic competitors. To put it briefly, I believe that the essential aim of the European Community's policy should therefore be to retain control of its maritime transport system. Nor does it help that the European Community's policy has to be co-ordinated between a number of separate directorates, in just the same way as it falls into the laps of different Ministries in the United Kingdom. I truly believe that it is no blueprint for prompt and effective action to perpetuate diffused responsibilities.

It seems to me that in two significant respects these papers lack a practical approach. The most important immediate objective must surely be to create a business climate in which member states' businesses owning merchant fleets can operate and prosper, for the reality is that if profits cannot be made by shipowners they will go out of business and stay out of business. That economic fact of life is, apparently, largely unrecognised in Brussels. I hope that my right hon. Friend will ensure that more emphasis is laid upon that fact.

Nor, I believe, are the realities of competing internationally, when costs or taxation levels are different in the European Community from those of our competitors, apparently comprehended. That is another serious weakness in these papers. Indeed, I go further and say that there is a culpable omission. The papers do not deal in any detail with the problem of Government subsidies to the shipbuilding industries—the point that the hon. Member for East Kilbride (Dr. Miller) made in his intervention. That is the root of the problem, but it is not mentioned at all in these papers. My view is that the European Community should make a strong contribution to the debate on this subject and get that debate going on a worldwide basis. I hope that my right hon. Friend will be successful in provoking that debate.

It is right that the papers insist that state aid should not distort competition between Community shipowners, but it is a second serious omission that the papers do not discuss the type of fiscal regime that would enable the European Community's shipping companies to compete on equal terms with companies in other parts of the world. Again, that is a practical matter, to which we should address our minds. As careful students of the European Community and its ways may think, such omissions are, perhaps, not surprising. The treaty of Rome is on the whole an inward-looking domestic document. It follows, perhaps inevitably, that more emphasis is placed in these papers on freedom of movement inside the Community than on wider considerations. I believe that the emphasis in the documents is wholly wrong, and that is why they are so disappointing.

I thought that one of the arguments in favour of Britain joining the Community was that we would be able to bring a new breadth of outlook to its affairs. Indeed, I hope that my right hon. Friend the Secretary of State will dedicate himself to doing that. There is, after all, so much that the European Community could and should be doing that is constructive. For example, it could create conditions, standards and training that would encourage young people to serve at sea; it could encourage the adoption of better technology aimed at reducing operating costs; it could develop comprehensive traffic management systems to improve standards of safety and navigation; it could take collective measures to reduce pollution and other incidents. Perhaps most importantly, the Community could be directing its actions to areas of international policy where its enormous collective strength as the world's largest trading bloc could ensure the compliance of non-member states and their fleets with fair rules of behaviour, including commercial and Government practices, technical and crew standards and conditions of employment. But alas such things are not mentioned, despite the fact that this is the first definitive document to come out of the Community and that we have waited so long for it.

It is time for an end to rhetoric, generalisations about competition policy and the like. The nation and the Community face a crisis. The position is deteriorating.

Ministers, especially our Ministers with all their experience, have great responsibilities, but they live up to them. I am sure that it is possible to identify and largely to eliminate the causes that force owners to flag out their ships or to go out of business. Let it be done. I am also sure that it is possible to reduce those high cost elements within our domestic control that prevent European shipowners from competing profitably internationally. Let that be done, too.

We have great strength in the EC—we should use it. I thought that another practical reason for joining the EC was the advantage that we were told combination would bring us—in other words, by joining with other nations the United Kingdom would acquire more influence and benefit. Of course, we know that assurances over EC affairs are often far from the reality. Let hon. Members look at our experience over budgetary controls. I believe that the House has been most grievously misled in this regard. However, that is a matter that we should pursue on other occasions.

Those of us who want to see the Community succeed now that the decision has been taken to sign the treaty of Rome find it worrying that we simply do not go for such potential advantages and seem unwilling to exploit them. As a result, the whole country seems to think that there is nothing but disadvantage to this adventure. That is not, I am sure, what the most passionate advocates of signing the treaty of Rome expected.

Why is there so little argument or pressure to maximise the advantages? There should surely be more. As has been said, in trying to obtain advantage from our membership of the EC no subject is more important than that of cabotage. My hon. Friend the Member for Eastleigh (Sir D. Price), who is no mean expert on this subject, has been pressing the point for a long time.

Our home waters now stretch from the Baltic to the Aegean. If Turkey joins the EC, the Black sea win also be included. There is a thought. Australia and New Zealand reserve their cabotage. The Latin American free trade area countries reserve their cabotage, and so does the United States of America under the Jones Act of 60 years ago. The latter's waters stretch from Guam in the Pacific to Alaska via Hawaii and the Caribbean. They cover an immense area. I merely say that we should do the same, and thereby provide a home base upon which to build prosperity.

I very much agree with what the hon. Member for Aberdeen, North said and with what I thought my right hon. Friend the Secretary of State was hinting at. If we cannot get a Community policy, we should go it alone. We should refuse to have in our waters the ships of those nations that refuse us access to theirs. It is time that we were a little more selfish in pursuing our own interests, and a little less sympathetic to the other fellow's point of view.

It is surely right to say that if action of a more imaginative kind is not taken by the Community in order to defend its interests, we face the prospect of an EC merchant fleet that will continue to decline. Equally, the prospects for ancillary industries will be bleak. That would be quite unacceptable to me, to most hon. Members, as well as to our nation and the peoples of the Community. We need a much greater sense of urgency and determination than we have so far seen. I hope with all my heart that my right hon. Friend the Secretary of State, an old personal friend of mine for whom I have such regard, will set an example. I look to him to provide that determination and urgency. It is all there to win, and the cause should be won.

The way things are going is nothing short of a scandal. We seem wholly to lack the resolution, strength of purpose and idealism to defend the interests of our people. I repeat that that situation is wholly unacceptable to me. I hope with all my heart that my right hon. Friend the Secretary of State will change it very much for the better.

5.6 pm

Mr. Bruce Millan (Glasgow, Govan)

I am glad to speak after the right hon. Member for Taunton (Sir E. du Cann) because I agreed with many of his remarks. Indeed, I think that most of them found an echo on the Opposition side of the Chamber.

So far, the debate has been wide ranging, but I wish to make some fairly limited though extremely important points about the regulation on free trade within the Community, which is included in annex II-2. I also wish to set my remarks in the context of the deepening crisis in our shipping industry. The figures are included in the Commission document, although unfortunately they only go as far as 1983. It is clear that, between 1975 and 1983, United Kingdom fleet tonnage fell from 32.18 million tonnes to 18.18 million tonnes. That catastrophic decline is still going on. Although I am not sure of the current figure, it must be nearer 12 million tonnes than 18 million tonnes.

Between 1975 and 1983 there was not a corresponding reduction in the Community's tonnage. It remained virtually the same, dropping from 94 million in 1975 to 93 million in 1983. The reduction in the British fleet was made up by a considerable expansion in Greece's tonnage. Greece is now a member of the Community and is one of the countries that reserves total coastal trade to its own ships.

Thus, the reduction that we have suffered has not been repeated elsewhere in the Community. There has been some decline in other countries, and the position has certainly deteriorated since 1983, but the fact remains that the British fleet declined considerably during that period and is still declining. It causes considerable worry to Members on both Opposition and Government Benches. It has been met with constant complacency on the part of the Government. That complacency was reflected in the attitude of the Secretary of State for Transport in his speech this afternoon. It affects jobs, strategic interests and defence interests, specifically in relation to maritime operations. It also has important implications for the shipbuilding industry, in which I have a strong constituency interest through Govan Shipbuilders, one of the best merchant yards in the United Kingdom but one which is suffering from an appalling lack of orders at present which, if not remedied soon, will mean further redundancies later this year.

There are therefore several aspects to this debate because it goes beyond the shipping industry and involves defence, strategic interests, the future of our shipbuilding industry and the rest.

Mr. Deputy Speaker (Mr. Harold Walker)

Order. I hope that the right hon. Gentleman will not go too far down that road, because shipbuilding is not within the compass of our debate.

Mr. Millan

You will find, Mr. Deputy Speaker, that I do not intend to go down that road at all, even though practically everyone else has, including the Minister. If I may say so, the right hon. Gentleman made a virtue of it in his opening speech, which I think you, Sir, had the misfortune, or perhaps good fortune, not to hear.

In any case, I want to turn immediately to annex 11–2, the draft regulation on free trade, and to deal particularly with coastal traffic, cabotage and offshore support vessels. The present situation is wholly unsatisfactory because there are no restrictions at all on access to our own coastal trade, whereas a number of Community countries impose restrictions. Some of us have pressed the Government for a very long time now either to impose restrictions on our own coastal trade—a course which I and other Opposition Members favour—or at least to take reciprocal action against those Community countries which prevent us from having access to their coastal traffic. That, of course, has been refused by the Government and, apart from an informal agreement recently reached with Germany, we still have substantial restrictions in Denmark, France, Greece, and Italy.

If this regulation went through, it would make it impossible for any member of the Community to indulge in these cargo reservation practices. That would perhaps be acceptable if something were to happen quickly, but we have the extraordinary situation that the draft regulation not only says that any of these cargo reservation practices in relation to coastal traffic will be phased out only over 10 years; it also states that if, at the end of 10 years, there are particular difficulties the phasing out may take longer, or may never happen.

It is ludicrous for us to accept a regulation of that sort. If all restrictions were to be removed immediately, I could see some justification in the Government looking with some favour on this regulation; but such a transitional arrangement would simply mean that we would continue to give free access to our own traffic to members of the Community and others, while not having the advantage of access to the coastal traffic of other member states. There can be no justification for accepting the regulation as it stands.

Instead of arguing, as the Government have tried to argue for a number of years, for the removal of restrictions by other Common Market countries, it would have been far more sensible for us to impose restrictions here in the United Kingdom. That would have brought them to their senses. It would also have been intrinsically the best policy for this country. It is still the best policy for this country. Therefore, there can be no justification for accepting this draft regulation as it stands, nor do I believe that it will be possible, given the vested interests involved, for us to have the regulation amended satisfactorily.

In an intervention, I asked the Secretary of State why we had to take all these regulations together so that we had to accept the whole package or none of it. I received no satisfactory answer. For the life of me, I do not see why we must adopt that approach. Certain parts of the other regulations are satisfactory. Because of restrictions of time, I do not want to deal with these other regulations, but I do not see why we should have to accept everything as a package. If that is to be the approach of the Government, we must not accept any of the regulations, because this one is so unsatisfactory.

It is unsatisfactory not only as far as cabotage is concerned. The same is true for our offshore support. There has been quite a change of view on the part of that particular bit of the industry which, being part of the General Council of British Shipping, has until recently, as I understand it, followed the usual line of the GCBS—being in favour of free trade without restrictions, being very unwilling to see action by the British Government to protect British interests, and taking the view that that would be against our interests in the wider field of shipping. That is a view which I have never held, and which I have argued against with the GCBS on different occasions.

The British Offshore Support Vessels Association is now a separate body. It takes the view that offshore support vessels should be completely removed from this regulation. I agree with that. If the regulation has to go ahead at all, offshore support vessels should certainly be removed from it. But again the regulation would simply say that there would be no possibility of the Government taking restrictive action to support our own offshore support vessel industry, one of the few bits of the shipping industry which has been doing relatively well in recent years—although even there some difficulties are being experienced, with boats being laid up.

We have the extraordinary situation, as the BOSVA points out in a recently circulated document, that in the North sea 170 vessels are operating in the United Kingdom sector at present, of which only 111 carry the British flag, about 30 of which are believed to be controlled by foreign operators, mainly Norwegian and American. So, out of 170 vessels, only 81 are genuinely British owned. Of 79 vessels in the Norwegian sector, 78 are Norwegian and only one is not.

I know that there have been discussions between the British and Norwegian Governments about this, and that all sorts of reasons are given for it. The reality is that the Norwegians very sensibly keep their offshore support a Norwegian operation. We ought to do the same. It is ridiculous that we should allow Norwegian vessels to operate freely in our sector of the North Sea when, in practical terms, it has proved impossible for British or any other support vessels to enter the Norwegian sector. The same applies in other areas such as the Dutch sector, although the two important sectors are the British and the Norwegian. Ours is open to everyone and we are paying the penalty. The Norwegian sector is restricted, in practice, to the Norwegian industry.

The British sector is the most important of all. If this regulation goes ahead, any possibility of our protecting it in the future for our own industry will completely disappear. I am delighted that at least one part of the General Council of British Shipping has recognised the need to protect our interests in important areas.

The whole business of free trade in shipping is a myth. If it ever operated, it has certainly not operated for many years now. Successive Governments have tended to say that there must be minimum restrictions on free trade because it is in the interests of British industry, and under the present Government that is almost dogma. In reality, the result has been that most export traffic is carried by non-British ships in new areas of activity, such as the North sea, where we are losing out to foreign competitors. We are being trampled on by other member states, and we are not taking effective retaliatory action.

If the regulations are passed, especially the one to which I specifically referred, far from helping the position as a genuinely active, interventionist Community policy, they will make it even worse and goodness knows, the British shipping industry is already in a critical condition.

5.20 pm

Sir David Price (Eastleigh)

Like the right hon. Member for Glasgow, Govan (Mr. Millan), I have both personal and constituency interests in the fortunes of the British Merchant Navy. As the House knows, it has been in steady decline for the past 10 years, and all hon. Members who have spoken so far have drawn attention to that fact. Like my right hon. Friend the Member for Taunton (Sir E. du Cann) and other hon. Members on both sides of the House who care about the British shipping industry, I have been drawing the attention of the House to that steady decline year by year and seeking remedial action.

I wish to give the House the correct figures which I have received from the General Council of British Shipping. From the peak in 1975 of 1,614 ships of 50 million deadweight tonnes, the fleet decreased to 640 ships of 16 million deadweight tonnes at the end of September 1985. That is a decline to nearly one third. In fairness, we must take account of technological improvements because today a container ship does a great deal more work than a cargo ship used to do. That varies, depending on the route, but I am told that the displacement of the older vessel by the new is a factor of three or four. Nevertheless, that is a dramatic fall, and we should take it into account.

Despite the recognition of that decline by successive Ministers, the Government have not succeeded in arresting, let alone reversing, it. To be fair to Ministers, we must recognise that many of the factors which have been having such a corrosive effect on our fleet are worldwide in character and largely unamenable to actions by our Government acting alone. For that reason, I have been looking expectantly to the European Community to put a shipping policy package together which would halt the decline in European shipping.

Our European neighbours have also been suffering a decline in their merchant fleets, but not at the same rate as ours, and with the notable exception of Greece which distorts all EC figures. Therefore, it has been in our national interest to encourage the Commission to come forward with a shipping policy, and I welcome its initiative. However, I regret the delay, and I am not particulary satisfied with the results. Meantime—this cannot be emphasised too often—much of the British Merchant Navy has been quietly but irresistibly disappearing into the mists of history.

The Commission's analysis of the reasons for the decline in European shipping reveals no new factors of which we were previously unaware. Indeed, it follows conventional analysis, but is not necessarily the worse for that. It also follows, not surprisingly, the free trade spirit of the treaty of Rome in its basic recommendation that the Community should not abandon what we in the United Kingdom used to call an open-seas policy. It is worth reminding the House of the words used by the Commission in the document. It states: A move to protectionist policy would almost certainly lead to a similar policy on the part of the US and most other countries and cross-trading opportunities would be lost; whilst in the direct trades little or nothing would be gained. In the Commission's view the maintenance of a non-protectionist shipping policy is still in the best interests of the Community shipping industry. That is fine, provided the Community acts against unfair competition, and so I looked expectantly to this report. The broad statement of Community policy leads directly to the Community's need to take collective action against other countries which either follow protectionist policies or do not play to international rules.

The following paragraph of the report states: It will, in the Commission's view, be necessary for the Community and its Member States to be more active than in the past to counter the threat to Community interests from policies and practices adopted by other countries which make difficult or impossible the maintenance of a commercially competitive system and which consequently reduce the possibilities for profitable enterprise open to the Community's shipowners. That is fine, but I wonder how far there is a programme for action in the document along those lines, and how far there is merely a vague recognition that there is a problem, and some day somewhere something may be done.

I then turned to the Commission's proposals against unfair pricing practices and read the analysis, which is good. Again, there is a reluctance to come to the point at issue. The report states: For some time now the Commission has paid particular attention—through its monitoring of specific liner trades—to the activities of state trading countries such as the USSR. The monitoring exercise, started in 1979 and covering trades between the Community to and from Central America, East Africa and the Far East, has been working very satisfactorily and has revealed that such tactics employed by state trading countries' carriers as underquoting and the creaming off of high paying cargo are causing damage to Community carriers. The Commission recognises the problem, but then it lays down many criteria, at the end of which it states: If all these criteria are satisfied the Commission proposes that it should be empowered to impose a countervailing duty on the freight rate(s) in question. We should move much more quickly to impose such countervailing duties. The sooner they are imposed, the more likely those who are causing unfair competition and unfair pricing will take remedial action.

Mr. Jonathan Sayeed (Bristol, East)

Does my hon. Friend believe that one of the possible reasons why this report does not have more teeth is that Community members may be responsible for some of the restrictive practices and pricing policies? Consequently any action against them may have been watered down.

Sir David Price

That is certainly possible, but as I was not involved in the discussions in Brussels I cannot answer my hon. Friend. Possibly the Minister can when he replies.

Why does the idea of imposing countervailing duties apply to passenger and cruise ships? I am sure all hon. Members who follow shipping matters have had representations from British shipowners. However, I do not wish to detain the House for long, and I should like to consider the internal market, as it is called in the paper.

I wish to take up the points made by the right hon. Member for Govan and by my right hon. Friend the Member for Taunton on cabotage. My right hon. Friend the Member for Taunton was kind enough to give me a pat on the back for raising this issue on a number of occasions. I do not think enough people are aware of the importance of coastal shipping not only to the shipping industry, but in its own right as a method of moving goods and freight around the United Kingdom. It is comfortably the second largest method after road transport. A great deal more tonne mileage is moved by coastal shipping around Britain than, I regret to say, by British Rail. I draw the attention of the House to this because it is an important matter in itself. Coastal shipping is also important, as right hon. and hon. Members have already said, as a good base for our shipping industry. I am grateful that my right hon. Friend the Secretary of State has been zealous in his desire to obtain access to the coast trades of other member states for British ships.

My right hon. Friend has had some success with Germany, but little success elsewhere. My right hon. Friend posed three alternatives, but I suggest a fourth. If my right hon. Friend has no collective success with the member states, then he should build on his experience with Germany and try for more bilateral arrangements. If that does not succeed, I am entirely with him on his third alternative: to close our coastlines to ships of other nations. I sense that is the general feeling of the House.

In the context of the forthcoming Budget, I draw my right hon. Friend's attention to a chapter in the Commission's report dealing with how the Community can properly help our seafarers. The Commission recommends tax concessions as appropriate aids to seafarers. For better accuracy, I shall quote the passage: The Commission would regard a favourable direct tax regime for Community seafarers as a reasonable way of helping to maintain the employment of EEC nationals on Community ships. Obviously my right hon. Friend cannot comment on that. However, I hope that, within collective responsibility, he will make certain that my' right hon. Friend the Chancellor of the Exchequer takes that recommendation firmly on board.

5.33 pm

Mr. Stephen Ross (Isle of Wight)

I start by supporting the Secretary of State when he visits Belgium on Thursday to uphold the rights of Sealink with the Belgian Government. The Minister will be aware that I have not always said nice things about Sealink since it has been privatised, but I think this issue deserves the support of the whole House and I hope he is successful.

I spoke to Mr. James Sherwood a few days after he had acquired Sealink and I made it clear that he had the virtual control of my constituency's economy in his hands—80 per cent. of all those who go to and fro, and most of the commercial traffic. I asked Mr. Sherwood whether he could reopen the Robb-Caledon yard at Leith to build a third "ro-ro" ferry. Mr. Sherwood had already said that he intended to order another such ferry straight away to carry some 150 cars. Scottish Members will be aware that the two largest car ferries that operate from the Isle of Wight were built at the Robb-Caledon yard—they were the last to be built—and they are successful boats.

Mr. Sherwood said that I must have thought him mad and that there was no likelihood of his ordering the boat from a British shipyard. He said that the boat would probably be ordered from the far east, although it could be fitted out in Britain or possibly in Scandinavia. I am glad to say that the third ferry is being built in Britain, not at Robb-Caledon but on Humberside. At least Mr. Sherwood has discovered that he can have a ship built in this country at a price which is acceptable to him.

We have had a powerful and damning speech from the right hon. Member for Taunton (Sir E. du Cann). He is chairman of the maritime group in the House, and I support all that he has said. I thought that he was a trifle hard on the Community, for I believe the rundown in our merchant fleet would have occurred even if we had stayed outside the EEC. However, at least we now have moves towards a common maritime policy. That must make sense. The General Council of British Shipping, in its brief to the debate, gives its blessing to the EEC document, and it states that it shares its support for free trade and points out the important statistic which has not been quoted in the debate, that British shipowners still earn half their income from carrying other people's trade.

The National Union of Marine Aviation and Shipping Transport Officers claims, however, that a move to a common maritime policy will do nothing to protect or promote British flag ships. Like many others in the House and outside, I am desperately concerned at the demise of the British merchant fleet. Many statistics have already been given and I will not bore the House with more. However, I would direct Members' attention to the document "Why the ships went", which has recently been published by the British Maritime League. It should be read by all Members, as they would learn much from it. That document forecasts that, by 1987–88, we will be down to about 500 ships, and it lists the different types. I will not bore the House with them, but it is a worrying statistic.

I do not believe that hiding behind our own protective barriers will do much, if anything, to stem the tide of decline. We stand a better chance of regaining lost ground if we support the Commission's proposals but press continually for much earlier action to implement them.

Such pressure should be exerted not only in Brussels but in the United States. In fairness to the Secretary of State, he recently made a speech on this subject in Washington. I happen to have read that speech and I congratulate him on his action. I hope that the Secretary of State will be tough in Brussels. He can be pretty nasty at times and he should be as nasty as possible over there. The Secretary of State should keep his barbed comments for Brussels and be nicer to those of us on Standing Committees.

The Commission states on page 27 of the report: it seems to the Commission that the promotion of a competitive Community shipping industry in terms of a non-protectionist policy, which could well mean an increasing concentration on high value, high technology services, is an effective means of ensuring and possibly expanding employment of EEC nationals in the long run. The Commission suggests that there should be more attention to training. As the hon. Member for Eastleigh, (Sir D. Price) has stated, there should be a direct tax regime to increase the chances of employment for EEC nationals on Community ships.

With the Budget a week away, I know that the Secretary of State is debarred from commenting on this, but I hope that he has been putting pressure on his former friends in the Treasury to introduce some favourable tax incentives to the Merchant Navy, the shipping industry and perhaps those people working in the industry. That would be a step forward in the attempts to assist an industry which is in crisis.

I have read the explanatory memorandum submitted by the Department of Transport on the various annexes. That relating to annex 11–6 deals with the important subject of unfair pricing practices in marine transport. Like the Secretary of State, I welcome the appearance of these regulations, subject to the need to tackle unfair competition within the Community itself. I know that the Secretary of State is attempting to do that. Annex 11–5 concerns the application of EEC competition rules. It is rather more controversial and comes in for some criticism from the GCBS. Such criticism is in conflict with the Government's views, and perhaps we will have some comment on that when the Minister replies.

I welcome the paragraphs in the main document on marine safety and pollution prevention. I urge that pressure be put on those countries which have not yet ratified the relevant international instruments. I represent a part of the country which is close to busy shipping lanes and has a coastline that is vulnerable to pollution. It is essential that ships passing through those waters are in sound condition—we have already taken steps in that direction—and under the control of somebody with experience and local knowledge. Several years ago, I went to Brussels with a local government delegation concerned with this subject, but nothing happened. Something has now happened, and it appears in the document. It is well itemised and I welcome all that it says.

Earlier today we received the views of Trinity House on the future of marine pilotage—a subject that the Select Committee on Transport considered last summer and reported on in July. I gather that legislation on the subject is probably due next Session. We made some recommendations about safety standards, compulsory pilotage and the manning of pilot boats, all of which are dealt with in the document. We found that Trinity House is held in high respect on the continent of Europe. It must have a major role to play in the future of coastal maritime affairs.

The motion accords with my thinking and that of my colleagues. If the motion is divided on—I would regret that—I shall vote with the Government.

5.40 pm

Mr. Richard Ottaway (Nottingham, North)

It is a pleasure to speak after the hon. Member for Isle of Wight (Mr. Ross). I endorse what he said about pollution. Many members of the Community have a Mediterranean coastline and a large role to play in combating pollution there.

I warmly welcome the Government's thrust towards this document — "Progress Towards a Common Transport Policy". I welcome anything that helps to remove internal barriers to trade in the EC. The proposals on cabotage are important. I do not support retaliation. Threatening to put up our shutters if we cannot get agreement does not help, but it must be said that, unless we can get the support of our European partners, we cannot rule out such action. We have strength in Europe. If we cannot get a common policy, we must protect our own interests, especially if we are faced with competition from non-United Kingdom vessels which receive fiscal support and other favourable conditions. I have in mind the fierce competition that offshore support vessels experience in the North sea. Many offshore support vessels are laid up primarily because of unfair competition from other countries.

One of the most serious problems facing our maritirne fleet arises from the fact that, apart from their support. for the Commission's proposal, the Government do not have a policy for the merchant marine. It is questionable whether the Government sincerely want a merchant fleet. Of course, they will pay lip service to the objective of a British merchant fleet, but they have shown no practical support for it.

I agree with ny right hon. Friend the Member for Taunton (Sir E. du Cann) who, in an excellent speech, called for a single Minister to get to grips with the British merchant fleet's problem and to formulate policies and promote them here and in the country. With the decline of the British merchant fleet, we are witnessing flagging out. A shipowner does not flag out from the British flag lightly, whether it be British Petroleum or a small owner. He will flag out for the simple reason that he can operate his ships more commercialy if he has the benefit of such things as lower crew costs and lower registration charges. If he finds it financially worthwhile to flag out, I see no reason why he should do so.

Mr. Ridley

Surely my hon. Friend means he should not do so.

Mr. Ottaway

My right hon. Friend is correct, but he will appreciate that the converse applies. If my right hon. Friend wants shipowners to flag in, he has only to make the prospect attractive. A little arithmetic shows that that would not be an expensive operation. When I made inquiries of the Department of Transport about how much the nation earns from British-owned and flagged vessels, the answer was not very much. I found it slightly surprising that the Department could not give a precise figure, but it reckoned that taxation revenue from British flagged ships amounted to about £20 million a year. That is a drop in the ocean for the Chancellor.

I hesitate to speak of capital allowances because the Government have just scrapped them, but if we could introduce disguised capital allowances and call them assistance to the British merchant fleet and they cost £20 million, and many ships flagged back in because it was financially attractive to do so, the benefit to the country would be immense. Crews would be employed and the many service industries in the City of London which rely on shipping would be helped. The service industries are to be found in the City of London for primarily historic reasons. The growth in world shipping occurred when London was the centre of world shipping. If London is no longer regarded as the centre of world shipping, the service industries, which bring in about £4 billion a year to the country—that should be contrasted with the £20 million—will simply drift away. It will become attractive to conduct arbitrations in New York or Geneva, because that is where the shipowners are. The chartered surveyors and engineers will wander off because there will be no good reason for remaining in London.

With the price of oil dropping, there will clearly be more trade in oil. The many oil tankers that have been laid up in the Norwegian fjords are being pulled out. That stimulus to trade—it might have been Sheikh Yamani who did it—shows how a little injection of enthusiasm to world trade can promote activity.

Many hon. Members have mentioned defence, but it was noticeably absent from my right hon. Friend the Secretary of State's speech. I do not blame him for that, as he is presenting proposals for a Common Market policy, but he and my right hon. Friend the Prime Minister have often said that we can still mount a Falklands operation. However, 50 per cent. of the ships that were used in the Falklands operation have been sold or are no longer available. We have had several NATO exercises recently. A couple of years ago we had operation Lionheart and just a few weeks ago we had a NATO exercise off Norway. On both occasions we had to charter Danish vessels to move British troops and stores.

Mr. Ridley

Where a ship that is chartered for military exercises comes from depends on what ships are available and whether they can be more gainfully engaged, because, for the military exercise, it is a one-off charter. The picture is therefore more encouraging than my hon. Friend thinks, because British ships suitable for the purpose were engaged on contracts elsewhere. Only underused Danish tonnage was available. That means that our ships were on more profitable business.

Mr. Ottaway

I think that proves my point. If ships are gainfully employed on commercial operations elsewhere, why does my right hon. Friend think they will suddenly be available in moments of crisis of which he has no notice?

Mr. Ridley

My hon. Friend should know that we can requisition tonnage in times of tension or war on a wide scale. We would most certainly do that.

Mr. Ottaway

My right hon. Friend says that we can requisition tonnage. Of course, much of the tonnage to which he refers is now flagged out. It is well established that he can requisition ships under, for example, the flag of Bermuda. However, he will have to find out where a ship is, pull it back, get rid of the crew and get British certificated officers on board, if there are any. He might then be able to start. The fact that the crisis may be over by that time is neither here nor there.

There is another aspect. A British-owned vessel may be flagged out under the Liberian flag. As yet, nobody has tried to requisition a British-owned vessel under non-British colonial ownership or flag. I do not think that it will be appropriate to test whether we can requisition a British-owned vessel under Liberian or Panamanian flags in the courts at a time of crisis. The crisis will be over by the time the courts decide.

The other day I was talking to a British shipowner who flagged out under the Bermudan flag because he found it more financially attractive to do so. He is now despairing. He wanted to get British business, he wanted to take things to the Falklands, but he found that other vessels were being chartered. There was no positive encouragement for him to keep his vessels available for use by the Ministry of Defence or the Department of Transport. I am not saying that he should rely solely upon business from the Government, but if there is not a system of priority chartering of British-flagged vessels for Government use, there is no encouragement for a shipowner to keep his ship on stand-by for use in times of crisis.

This is the greatest nation on earth, and it was built upon a history of maritime affairs. I believe that we should turn the corner in our lack of policy. We should start to formulate a policy. I think that the report we are debating and the European aspect is welcome. We have the European side sorted out. We must now get our own national fleet sorted out.

5.52 pm

Mr. Michael Cocks (Bristol, South)

I shall be brief because many of the points I wish to raise have already been adequately covered on both sides of the House. I wish to say that it is a travesty that we are here pleading for the remnants of the Merchant Navy of this country. Those of us who were brought up on Jane's Fighting Ships and the gallantry of the Merchant Navy seamen during the war find this a bitter issue to face. Bristol, which I still represent, has a very long maritime tradition and has adapted to the times—the shifting from the port in the heart of the city to the out-port of Avonmouth and latterly constructing west dock.

Our debate on these regulations stems from the loss of sovereignty which took place when we joined the EEC. It is interesting that I speak shortly after the right hon. Member for Taunton (Sir E. du Cann) because when we had our historic debate on the principle of entry he and I were here late at night and I followed shortly after him then. We both expressed reservations about the course which was to be followed. I think that the right hon. Gentleman abstained whereas I voted against it, but we were both extremely unhappy.

One of the arguments which was put forward at that time was that we should have been in at the start of the Common Market, we should have joined when it was formed and that inevitably there was a price to be paid for our late entry. However, it seems to me that we have the worst of all possible worlds. We are told that we have to pay a heavy price for not being in on the initial negotiations on entry and now we are told that some of the latest entrants into the Community are causing us some of the greatest problems. I refer particularly to what was mentioned earlier—cabotage. If we look at the countries which are said to be causing difficulties—Spain, Italy and Greece -- only Italy is a founder member of the European Community. Spain and Greece are latecomers. However, if I may use a slang phrase, they seem to be getting away with it and we seem to be pig in the middle all the time.

On Second Reading of the Bill dealing with the accession of Spain and Portugal I raised an anxiety in my own area about the bottling at source of sherry, port and different wines. I received an assurance from the Minister. However, on reflection it seems to me that we are the only country which seems scrupulously to observe all the rules and regulations within the Community. It also appears that, of all the countries in the EEC, we have pursued the most non-protectionist policy in regard to shipping and yet have suffered the greatest comparative decline. Therefore, on behalf of those of us who are atheistic or agnostic about the EEC, I urge on the Government the need to be strong about this matter.

Some years ago, in the early 1970s, I went on a delegation to the United Nations. Despite my reservations about the EEC, it seemed that one of the great benefits of joining the Community was the possibility of presenting a cohesive voice speaking as one from this great bloc, which the right hon. Member for Taunton mentioned. The size of its population and the sheer bulk of its trade would carry more weight than any of the individual members. It is true that at last some remnants of the shipping policy are coming forward but we wish it had been sooner and more cohesive. Unfortunately, there is now a tendency to talk about economic boycotts and restrictions by countries to enforce political policies and if the EEC speaks as one on this it is in a stronger position. Regrettably, we find that the rules are flouted with apparent impunity.

I should like to follow up the remarks of the hon. Member for Nottingham, North (Mr. Ottaway). I find it appalling that if we had a problem such as the Falklands dispute we would be scratching around to get the ships together with which to carry the men, materials and supplies. In his answer to the hon. Member for Nottingham, North, the Secretary of State said that British ships were being used to better advantage. I do not know of any better advantage to which ships can be put than taking British military and civil supplies to an area where we are in a state of conflict. If something is reduced to that sort of commercial equation, I wonder how we define the national interest.

It seems to me that during the first Saturday debate on the Falklands crisis there was a mood in the House which recognised that we had reached a very poor pass as a nation if we were scratching about to service such an operation. I hope that when the Secretary of State discusses the regulations in the Community he will try to get more cohesion and will try to press on our partners there the need to use our economic strength to much greater advantage. I did not want us to go into the Community to join a rich man's club but, in a world with such bickering and backbiting, and people not playing along, he must try to get them together. I wish him well in his efforts, but I hope that we can get more cohesion and more economic strength and do our best to keep our merchant shipping fleet going.

6 pm

Mr. Don Dixon (Jarrow)

I agree with the right hon. Member for Taunton (Sir E. du Cann) that we cannot wait much longer for a maritime policy. We cannot wait until the EC gets around to it. His points are reinforced by the fact that not long ago we had a debate on shipbuilding, in which hon. Members commented about the decline in the merchant fleet and were answered by the Secretary of State for Trade and Industry. Later, in a debate on defence, the right hon. Member for Taunton referred to the merchant fleet as the fourth arm of defence and expressed concern about the decline in it. That debate was answered by the Secretary of State for Defence. Today, we are discussing shipping in a debate on an EC document on transport, which will be answered by the Secretary of State for Transport. That alone points to the need for a maritime policy of which a Minister is specifically in control.

In 1981, the Select Committee on Trade and Industry dealt with shipping and shipbuilding, and in its report recommended that there should be a co-ordinated maritime policy for Great Britain. Unfortunately, no one has taken any notice, and right hon. and hon. Members since then have been imploring the Government to do something about the decline, not only in the merchant fleet but in the shipbuilding industry.

The explanatory memorandum on the document says: These proposals touch on the whole range of issues which affect shipowners; ports policy; maritime research; the operation of technical social, safety and environmental rules and standards; the problem of maritime fraud; the provision of navigational aids within the European waters; and so forth. However, it does not mention the fact that if we want a fleet we have to build and maintain it. It does not mention the fact that for years the EEC has been talking about a scrap and build policy. Such a policy was first discussed in the EEC in 1977, was brought back in 1979, but is still being discussed. Such a policy would help the merchant fleets, but two other nations are putting a block on the proposals.

Right hon. and hon. Members have spoken about the decline in the United Kingdom fleet from over 1,600 ships and 50 million deadweight tonnes to 640 ships and 16 million deadweight tonns. Our shipping industry has declined—50,000 seafarers have lost their jobs, and, what is more, the composition of the fleet leaves much to be desired. For example, 42.7 per cent. of our ships are over 10 years old, 13.7 per cent. are over 15 years old and 5.1 per cent. are over 20 years old. This compares with Denmark, France, Spain, Germany and Norway who have, respectively, 77 per cent., 73 per cent., 71 per cent., 69 per cent. and 68 per cent. of their vessels less than 10 years old. Such a large loss of ships in the United Kingdom fleet and the age of the remaining ships leave much to be desired.

We are talking not about a few thousand seafarers and a few ships but about the possible effects on 300,000 people employed in shipping. One of the problems is that we have always fought by the Marquess of Queensberry rules while everybody else has been involved in all-in wrestling. We know that Korea will carry its exports in ships under the Korean flag and that France will import oil only in French oil tankers. United Kingdom shipowners have had to contend with such practices for a long time.

The decline in the merchant fleet is reflected in the way that the British shipbuilding industry has declined. When the shipbuilding industry was nationalised in June 1977, 87,000 men were working in the industry. This year, British Shipbuilders is employing 10,000 men, albeit some have been transferred to the privatised warship yards. Next year, we have been told that there are no orders for merchant shipping and that that number will fall to 4,000 men.

It has already been said that if Galtieri were to invade the Falklands again today, we would not be able to put out a task force because we would not have the merchant ships available that we once had. In the 1930s, we also had no maritime policy. I can recall the rationalisation of those years. There was a shipbuilding security limit, and merchant bankers, shipbuilders and shipowners felt that there was over-capacity and used to go around buying up shipyards and closing them, and putting an embargo on the building of ships. In 1934, they came to the town where I was born and bred and closed down the Palmers Jarrow shipyard, one of the biggest enterprises in the world. Iron ore would come in and go out as a complete ship on the river Tyne. That yard was closed through shortsightedness and rationalisation, and in 1939 we could not get enough shipbuilders to build and repair our ships for the war. This is one of the dangers that we face, unless something is done immediately by the Government to try to stop the decline in the merchant fleet and the shipbuilding industry.

The Government's argument is that market forces should operate in this sector, but look what happened in Sweden. The last merchant shipbuilding yard there closed a matter of months ago and that country was one of the biggest merchant shipping builders in Europe only a few years ago.

Flagging out is another important factor in what is happening in the shipping industry at the moment. It affects people who sail the ships, and I have a letter from the deputy general-secretary of NUMAST, who was concerned at BP's decision to flag out its ships. He says: If its flag-out moves are allowed to follow the pattern of others in recent years we can confidently predict that within the very near future;

• —firstly the United Kingdom ratings will be replaced;
• —then the junior officer's jobs will be handed to Filippino or 844 others;
• —very shortly thereafter most of the United Kingdom senior officers will go;
• —after a further period the United Kingdom Master and Chief Engineer will be replaced".

That is the effect of BP's decision, and some 1,700 jobs for British seafarers will be lost for ever.

The Minister should be pressing Europe and asking it what it is doing about the scrap and build scheme. If it does not soon introduce a scheme, we should unilaterally adopt one ourselves. I accept the point made by the hon. Member for Eastleigh (Sir D. Price) about tax concessions. I think that such concessions are essential and I hope that the Chancellor of the Exchequer will make some provision next week in that direction. However, I believe that tax concessions or tax incentives should go only to shipowners who build ships in this country. It is important that any concessions should go to British shipowners.

6.10 pm

Mr. Harry Ewing (Falkirk, East)

I would have liked to discuss two issues in relation to the documents that we are discussing tonight—the ports policy in connection with competition imports and the, navigational assistance to shipping in European waters. In view of the constraints on time however, I will concentrate my comments on navigational assistance to shipping in European waters.

As the House Knows, and the documents state, a research programme was set up in 1981 named "COST 301." The purpose of the research programme was to investigate the safety measures for shipping in European waters. I make that point as a background to my comments about navigational assistance.

Navigational assistance is inextricably linked to pilotage, which was referred to by the hon. Member for Isle of Wight (Mr. Ross) and in the report submitted today Trinity House and the pilotage commission. As the Secretary of State will know, over the years there have Been attempts to harmonise the pilotage arrangements in ports in this country with the pilotage arrangements in European ports. My constituency covers the River Forth and the port of Grangemouth and I have strongly opposed any attempt to harmonise pilotage arrangements in European ports with those in ports on the River Forth in Scotland.

I am making a brief constituency point because there are many risks for shipping in the port of Grangemouth and the narrow navigational channel leading to it. When the Secretary of State discusses navigational assistance to shipping in European waters, he must take account of the pilotage arrangements. It is not practicable to harmonise pilotage arrangements in the River Forth with those in European ports because there are extreme hazards in that narrow navigational channel.

Before I describe those hazards, I should like to draw to the Secretary of State's attention the proposals from Europe that vessels under a certain tonnage should be able to enter ports without the need for pilotage. I am not so naive as to believe that pilots in this country do not peddle their own interests. There are pilots in my constituency and I art not taken in by the fact that many of them have come to see me at my constituency surgeries to tell me about the dangers on the River Forth. I can see both sides of the argument, and I am trying to be fair.

However, it is simply not on to expect vessels under a certain tonnage to come into a highly volatile port like Grangemouth without pilotage. The heart of the petrochemical industry is located at Grangemouth. The new Braefoot bay terminal, which is the export point for the Shell-Esso liquid gas and petroleum plant which was built at Mossmorran, is located on the navigational channel leading to the port of Grangemouth. Fairly substantial ships are loaded with highly volatile liquid chemicals for export on the edge of that narrow navigational channel. Further up the channel is the Hound point terminal, which is the other end of the North sea oil industry. Tankers of a fairly substantial tonnage are loaded with oil for export there on the edge of that narrow channel. The royal naval dockyard at Rosyth, which is a nuclear refitting base, is also on the edge of that narrow channel.

I must put it on the record that it would be highly dangerous for my constituents in Bo'ness and Grangemouth and in all the other towns that skirt the River Forth if vessels of any size were allowed to travel that narrow channel without an experienced pilot on board.

Although I have made these comments briefly, I hope that the Secretary of State will consider them in his discussions on the draft regulations and in his consideration of the legislation which we are told by Trinity House today is likely to be introduced in the next Session. I hope that, in finalising these regulations and in drafting the legislation to which Trinity House has referred, the Secretary of State will take account of the markets and warnings that I have given on behalf of my constituents.

The safety of those who sail the seas is paramount in shipping; but of equal importance is the safety of those who live in the towns and villages that skirt the shores. I hope that I have said enough to sound a warning to the Secretary of State about the dangers to my constituency and the other small towns on the River Forth if pilotage were abolished.

6.16 pm

Mr. Jonathan Sayeed (Bristol, East)

I thank the hon. member for Falkirk, East (Mr Ewing) for keeping to one point and allowing me to speak.

The fact that a massive bureaucracy such as the Common Market has at long last organised a common policy and written a document demonstrates how serious is the decline of the merchant fleet generally, and of the merchant fleet in this country in particular. Now that the policy has been produced, will it actually work? The answer to that depends on whether the policy has teeth.

Right hon. and hon. Members have mentioned that in 1975 we had the largest number of ships and the greatest tonnage. We should, however, also note that we had the largest number of shipping bankruptcies in that year. With or without our membership of the Community, the recession, the change from our major markets being deep-sea markets to being short or near-sea markets, the change to larger and more efficient ships and the change that North sea oil has brought about, there would have been a decline in the number of British ships and British tonnage.

The question is not how we are going to reverse that decline but how we are going to halt it. I am not so optimistic as to believe that we can return to the dead weight tonnages of 1975.

I return to the point that I made about the teeth in this EEC directive. My hon. Friend the Member for Eastleigh (Sir D. Price) was quite scathing about the directive's lack of penalties. We must penalise the dumping of shipping on to the market at freight rates which bear no relation to their economic costs. Within the Community we need to organise better cabotage arrangements. I am delighted that the Government are at long last waking up to the reality that a shipping policy is essential for this country. I believe that my right hon. Friend the Member for Taunton (Sir E. du Cann) and other Members in this House and in the other place have made sure that the Government are beginning to understand how important a coherent shipping policy is to this country.

It has sometimes been suggested that artificially low freight rates are good for this country, as they help our exports. They may be in our short-term interests, but one must consider who is offering these artificially low rates. One would then recognise that those rates are not in our long-term interests.

There are already, and there will increasingly be, powerful trading blocs—the United States, the Comecon countries, south-east Asia, with Japan and later China leading, and Europe. For a trading bloc to be effective, the internal market must be large enough to provide the economies of scale that would make it internationally competitive. Therefore, internally we need unselfishness and co-operation. Internally, Britain has been gentlemanly but other countries, within the Common Market and outside it, have been exceedingly self-centred. We have been losing out. I hope that these regulations are but the first step towards ensuring that the internal market works effectively and works for and not against us. I hope that Britain as a major market can work in its own interests on an international scale.

6.20 pm

Mr. Roger Stott (Wigan)

The debate has shown the House at its very best, because we do not often get almost complete unanimity on a subject. Every hon. Member is concerned about this subject, and that is the reason for the consensus.

When I left the Merchant Navy some 22 years ago. Britain's merchant fleet was one of the largest in the world. In every port in every country the red duster could be seen flying as a symbol of Britain's trading links and civil naval power. However, 22 years on, the picture is very different. It is almost beyond belief that this island nation, with its maritime history, has only 640 merchant ships flying the red ensign. This is profoundly worrying to the sea-going trade unions, to the General Council of British Shipping, to me and to almost every hon. Member who has spoken in the debate. I hope that the Secretary of State is seized of that fact.

The General Council of British Shipping has estimated that, if the present rate of decline continues, the British trading fleet will be reduced to between 200 and 400 vessels by 1990. The net loss of qualified seafarers is likely to continue at a rate of 5,000 a year. Almost every hon. Member who has spoken in the debate has referred to the acceleration in the decline in the past decade in the number of United Kingdom registered ships. As the armed forces do not maintain enough vessels in their own right, clearly it is to the advantage of the United Kingdom that we have a merchant marine which can support the Royal Navy in difficult times.

The sectors most hard hit have been the cargo liners, the bulk carriers and the tankers. In the past 10 years, more than 30 million deadweight tonnes have been lost. In the first nine months of 1984, more than 2 million deadweight tonnes were lost. Another two or three years of losses at that rate and, according to most experts, the fleet will be reduced substantially to about 12 million deadweight tonnes. The number of deadweight tonnes is perhaps more significant than the reduction in the number of ships.

The General Council of British Shipping and the unions argue that, in the next five years, there is likely to be an acute shortage of trained manpower in the industry. This will make it even more difficult for us to meet the demands for a defence capability. I and many other people believe that we will not be able to mount a Falklands-like campaign again. I have argued before about this matter with the Minister of State, Department of Transport. He has said that, if there is a conflict, Britain will have the right to reclaim those ships that have been flagged out. I was interested to hear the hon. Member for Nottingham, North (Mr. Ottaway) say that that may be possible if the ships sail under the Bermudan flag, but it may be more difficult if they sail under the Liberian flag. That is one difficulty. Another difficulty is that, even if we get those ships back to help the Royal Navy in times of conflict and difficulty, we would not get the crews back. Foreign crews are hardly likely to rush to participate in an imperialistic war on behalf of the United Kingdom.

Given that scenario, there is an overwhelming case for greater co-ordination between Government and industry. If there is a defence rationale in terms of the size and adaptability of the merchant fleet, there is obviously a case for setting a level below which, in the national interest, the fleet should not fall. However, to my knowledge, no such planning and co-ordination is taking place.

Britain has moved from the position in the 1950s when she had the largest merchant fleet, the second largest Navy, a large fishing industry and a large shipbuilding industry. This rapid decline is tragic. If in the future we are engaged in a military conflict, there will be problems in finding the men to man the ships required, even if ships sailing under other flags can be obtained. The trained officers and men to man them are unlikely to be available, unless steps are taken now to create a Merchant Navy reserve. In 1939, there were 159,000 seamen in Britain's merchant fleet; today, there are fewer than 40,000. It is against the background of that rapid and accelerating decline that we should judge these proposals.

My hon. Friend the Member for Aberdeen, North (Mr. Hughes) and the right hon. Member for Taunton (Sir E. du Cann) outlined the difficulties they saw in the regulations. I echo their remarks. The European Community depends to a large extent on its merchant shipping for its economic and social advance. With about one third of the world's seaborne imports and one seventh of the world's seaborne exports, shipping is vital for the Community. Traditionally, member states have carried a large proportion of their own trade in national flag vessels and some have been particularly important carriers of trade between other countries. Merchant shipping makes an enormous contribution to the Community's economy. It is a lifeline for imports and exports, it helps to earn foreign currency and it benefits the balance of payments. It is a customer of Community services, such as shipbuilding, steel and other related products. It is clear beyond doubt, therefore, that the Community's merchant marine is important on many fronts. If there is a further decline, the problems will continue.

I do not have a great deal of time in which to go into great depth about the regulations. I hope that the House will forgive me. I should like to make a number of points because it is important for the Secretary of State to respond to hon. Members' suggestions.

On flags of convenience, the Commission's analysis and the proposed measures have ignored the fact that shipping differs from other industries because of the rights and obligations which flow from registration. A ship represents a particularly mobile piece of its flag state inasmuch as the flag state's jurisdiction extends to the ship; yet it represents also a particularly mobile form of capital, the ownership of which can change quickly and can be almost totally obscured.

The Commission refers to "flagging out" as a response to the loss of a competitive advantage for member states' fleets. It argues that flagging out is a means used increasingly by EEC owners to remain competitive in world shipping markets and at the same time to retain control of their operations. Yet the Commission completely fails to acknowledge that it is the very existence of flags of convenience which makes it difficult for traditional ship operators to remain competitive.

As long as there is a mechanism to which owners can resort for avoiding social, safety and financial obligations, it will be difficult for any responsible owner to remain competitive. Furthermore, the Commission's statement that open registry shipping fosters the operation of highly competitive shipping services is an absurd justification for a system which has been set up primarily to flout attempts to impose controls at national or international level on safety, crewing and other aspects of seagoing activity. It is the very existence of flags of convenience that causes some of the major problems in world shipping today. The European Community should do something about it quickly.

My hon. Friend the Member for Aberdeen, North drew attention to annex II.2. A more positive approach to the question of cabotage would be the introduction of EEC wide cabotage, allowing member states to restrict participation in their coastal trade to their own flag or to those EEC flags which removed restrictions. That reciprocity would mean that we could enter the waters of other countries and they could enter our waters. If we cannot have reciprocity, it is not in our interest to continue the dialogue with the European Community. The chairman of the transportation committee in the European Assembly, a Greek whose name I cannot pronounce, said that we are talking about a free market approach but that we must take into account the differences which exist between member states. I am sure that the Greek Government and Greek shipping and transport Ministers are doing that. That is where we will probably find the most difficulty.

My hon. Friend outlined specific proposals that would help to stop the decline of Britain's merchant fleet. Other hon. Members, notably the right hon. Member for Taunton and the hon. Member for Eastleigh (Sir D. Price), both of whom have had a high profile on the issue for many years and who are concerned about the way in which our merchant fleet has declined, have expressed concern and have asked the Secretary of State to do something positive.

I want to underline the points made by my hon. Friend the Member for Aberdeen, North by urging the Secretary of State to read the document prepared by the International Transport Federation entitled "Towards a Common Maritime Transport Policy". That is a very good document, which points to sensible solutions to the problem. If the Secretary of State has not read that document, I ask him to do so because it makes a major contribution on the subject.

The maritime unions have consistently, realistically and accurately underlined the problems of the decline in their industry. They have also consistently, realistically and accurately put forward soundly based solutions for its survival. I want to do the same. The International Transport Federation, in its submission to the European Community, made proposals which could help. I shall refer to six of them.

Instead of opposing cargo-sharing arrangements the Commission should tackle the orderly development of cargo movements. The relationship between shipbuilding and other industries, such as steel, should be examined and an integrated approach should be adopted. A European scrap and build policy should be introduced with the aim of getting rid of substandard ships and building new ships in European shipyards to the highest standards and with the most advanced technical features. The capital side of shipping should be examined to see how the financing of Community shipping could meet the competitive advantages offered in non-Community shipyards and to non-Community owners, with particular reference to far east shipyards and shipowners. The fiscal regimes of flags of convenience countries should be considered, with a view to eliminating the unfair advantages which arise from the way in which capital and profits are created.

Most importantly for seamen, the social aspects of seafarers' employment should be examined with particular reference to hours of work and pressure to reduce crews. Strict regulations exist for the hours of work of other transport workers, such as lorry drivers, but the Commission has ignored the lack of regulation in shipping and the dangers which excessive working time poses to the health and safety of seafarers, vessels and the environment. Regulations on minimum rest periods, leave and time off should be introduced. There are other suggestions in that document which the Secretary of State might adopt.

As for my own suggestions, there is an overwhelmingly urgent need, as has been said on both sides of the House, for the appointment of a Cabinet Minister responsible for co-ordinating maritime policy. It is time the Government decided upon the level at which the Merchant Navy should be maintained. In his forthcoming Budget the Chancellor of the Exchequer should introduce a tax regime to help positively British shipowners to purchase ships from British yards. The trade unions and the shipping industry have been telling him that. The Government need to see shipping and shipbuilding as being more interdependent. Britain needs an integrated maritime policy. The first plank of such a policy should be the reservation of coastal trade and offshore supplies, combining the ordering, designing, building, operating, manning and repairing of ships for the United Kingdom within the United Kingdom.

As in so many other industries in Britain today, we are approaching five minutes to midnight. Shipping is crucial to this island nation. British shipping has served the nation well. British seamen have served the nation well in peace and war. It is now up to the Government to show them and the nation that they have a policy which will stop the terminal decline of the industry.

6.36 pm

Mr. Ridley

With the leave of the House, I shall try to answer as many of the points raised in this excellent debate as time allows.

The hon. Member for Aberdeen, North (Mr. Hughes), who has apologised for not being here, asked about the trouble we are having with Belgium and about the type of order that might be made. The hon. Gentleman was correct. Section 14 orders, under the normal procedure, require the approval of the House before action is taken. That is the type of order upon which I have consulted. Section 15 also allows action in advance of approval. We could use such an order if it was necessary but, as I have already said, I hope it will not be.

The hon. Member for Isle of Wight (Mr. Ross) and the hon. Member for Falkirk, East (Mr. Ewing) made considerable contributions about pilotage. I hope they will forgive me if I leave that to another occasion. The Government wish to legislate on it at the earliest opportunity and it does not fit in with the rest of the debate, although I listened with care and interest to what the hon. Gentlemen said.

The hon. Member for Aberdeen, North mentioned the serious problem of maritime fraud, although I do not think it is responsible for all the sinkings that he listed round the world. Solutions will only be reached through international co-operation. I assure the House that no nation is playing a bigger part in the discussions in the International Maritime Organisation and under the auspices of the United Nations than we are in trying to make progress on that important and dangerous subject.

Many hon. Members, particularly the hon. Member for Jarrow (Mr. Dixon), referred at length to shipbuilding. I do not think we should discuss that matter now. If we are to help the United Kingdom shipping industry we must consider its problems in isolation and not seek to tie it to, say, the supply of ships.

Mr. Milian

Why should we look at the shipping industry in isolation? Every hon. Member who has spoken today has said that it should be looked at in the context of a general maritime policy. The trouble is that we have been looking at it in isolation.

Mr. Ridley

I do not agree. It is right that the sources of purchase of transport equipment, whether for aeroplanes ships, buses, trains or cars, should be considered separately from the environment in which those transport industries operate.

There were pleas that the alleged six Ministers who deal with shipping in Britain should be rolled into one. I hate to have to say that that dreaded responsibility already falls on me and on my noble friend Lord Caithness, who has listened to much of the debate. Although I hesitate to expose myself to the wrath of the House more than I need, I cannot claim that other Ministers share that responsibility.

Let me come to the problems of the merchant fleet on the wider canvas and deal with many of the points that have been made. We take seriously the cries for help which the hon. Member for Aberdeen, North said that the industry has put forward. Much of what we are in the course of doing will prove to be much more helpful than perhaps hon. Members have given us credit for. Moreover, it is a difficult time for me to debate this because we are a week from the Budget and I cannot possibly give a hint, even if I were able to do so, of what my right hon. Friend the Chancellor of the Exchequer proposes. Much of the argument today has been about fiscal matters which cannot be pursued at this difficult time in the calendar of the House.

Let me say what the Commission's proposals will do to assist the decline in tonnage in the United Kingdom register. The right hon. Member for Bristol, South (Mr. Cocks) said that the regulations were too late and in a way I agree with him. I wish that they had come forward much earlier. But it is perhaps of some significance that they have been brought forward, debated and more or less agreed, quicker than any regulations that I can recall in the Community's existence. That is a measure of the urgency and importance with which the Community views the matter.

The regulations will be of great importance for liner shipping which, although it accounts for only 13 per cent. of the tonnage on the United Kingdom register, earns 43 per cent. of the revenue of our total fleet. Let me pay tribute to the tremendous performance that our liner companies are putting up in the face of intense competition and, in many trades, gross over-tonnaging.

The hon. Member for Aberdeen, North asked about Taiwan and Japan. There is no evidence as far as I know that the Taiwanese and Japanese liner trades are subsidised at all. However, he is right to say that the United States' lines are subsidised to a publicly known degree which can be ascertained. Secondly, if we can sort out cabotage, an EC policy will be of great benefit to our short sea traders and cruise operators. That underlines the difficulty of choice before us in the EC Shipping Council.

My hon. Friend the Member for Eastleigh (Sir D. Price), the hon. Member for Aberdeen, North and the right hon. Member for Glasgow, Govan (Mr. Millan) discussed cabotage. The GCBS believes that to open the European trades to our ships would be of far greater value than to close British trade to their ships, because the market is much greater than that which would be secured for us. I agree that 10 years is far too long to keep those trades closed to us. We have already pressed for a two or three year period at the utmost and I shall continue to press for the shortest period possible. However, the difficulty is that 12 countries must now agree to any regulation of this sort and we may well have to reconsider the options that I mentioned earlier.

Mr. Sayeed

If we cannot speedily reach agreement on cabotage on a Community-wide basis, will my right hon. Friend take steps to agree cabotage arrangements on a bilateral basis with Community members?

Mr. Ridley

We already have bilateral cabotage agreements with five member states. I gave the options earlier as to how we might pursue this matter and I should not like to decide which options we shall eventually have to take.

I come now to the decline of the fleet and the pressures that have led to the substantial reduction in the size of the United Kingdom fleet over the past 10 years, both through outright sales and transfer to overseas registers of vessels under United Kingdom beneficial ownership. We are not alone in this. The fleets of virtually every traditional maritime nation have declined in recent years. We must not exaggerate as some hon. Members did today.

The extent of the decline depends on what base year is used. All hon. Members seem to choose 1975. That was an all-time peak for the United Kingdom at an unstable level brought about by excessive subsidy before that period. That in turn shows the danger of excessive subsidy in shipbuilding. The decline from the level of the 1960s is far less marked. If United Kingdom beneficially owned overseas registered shipping—flagged out to foreign registries—is taken into account, the reduction in deadweight tonnage is small—only about 5 per cent. Therefore, there has been some exaggeration of the decline.

Flagging out has been a feature of the debate. We are not the only nation to flag out. Twenty-three per cent. of the Norwegian fleet, 26 per cent. of the Japanese fleet, 36 per cent. of the Greek fleet and 64 per cent. of the United States fleet sails under foreign flags. The United Kingdom figure is 21 per cent.

My right hon. Friend the Member for Taunton (Sir E. du Cann) mentioned the fact that we carry only 20 per cent. of trade from the United Kingdom. The figures show that we carry 22 per cent. of our imports and our partners carry 19 per cent. by weight. Of our exports we carry 24 per cent. and our partners carry 13 per cent. The rest of our trade is carried by cross traders and those cross trades are of immense importance to our fleet. Over 40 per cent. of the earnings of British shipowners comes from the cross trades. If we were to make a move which sought to deny the openness of cross trade to the world's free market fleets, we would do more damage than in any other way that we could to our interests. Therefore, that is not such a strong point as my right hon. Friend suggested.

Furthermore, those are aggregate figures for the decline in tonnage which cover different sectors of the industry—tankers, dry bulk cargoes, cargo liners, ferries, cruise vessels, and short sea and offshore support vessels. None of those is a privileged market—far from it. But their opportunities and prospects differ considerably. That is one reason why broad speculations about the future size of the fleet, while it may be striking and frightening, are not particularly meaningful. One must get down to the detail.

The National Union of Marine Aviation and Shipping Transport Officers has made a crude estimate that numbers in the fleet could fall by half this year. That takes no account of the different prospects for the different sectors of the fleet. On the other hand, the GCBS has recently suggested that numbers might fall to 400 or 500 by 1990.

Mr. Stott

Three hundred to 400.

Mr. Ridley

No, according to the GCBS it is 400 to 500. Neither of those figures allows for the increasing amount of shipping beneficially owned in the United Kingdom but registered overseas.

The surprising and striking omission from the debate has been how few hon. Members have referred to the matter of BP Shipping. My hon. Friend the Member for Nottingham, North (Mr. Ottaway) and the hon. Member for Jarrow did so, but only in passing. As the House knows, the company is handing over manning responsibility for its bulk tanker fleet to three agencies based outside the United Kingdom. The seagoing staff are being offered early retirement and redundancy terms by BP Shipping and jobs by the agencies. The plan involves the transfer of the ships to the Bermudan register. The company reckons to save £12 million a year by doing this. It is in the order, I believe, of £300,000 per ship per year in running costs alone.

I do not welcome the move, I do not welcome such transfers, but I must make it clear to the House that I have no power to stop any company moving the place of registration of its ships; nor would it be possible for the House to legislate to take such power because any company is free to establish its place of bnsiness and to register its ships in any country that it wishes.

BP's move illustrates the critical importance of the underlying factors of fiscal and crew cost advantage for the particular sorts of shipping involved. Overseas registers are here to stay—they will not go away—and we must seek to make the best use of such shipping for our economic benefit and defence planning as we can. The saving of £300,000 a ship will probably enable BP to run its fleet as an economic viable entity.

It depends to some extent—and this is the important point I wish to put to the House—on whether the overseas registry is British, as in the case of Bermuda, or foreign. This is the point to which my hon. Friend the Member for Nottingham., North referred. Vessels registered in Bermuda fly the red ensign. They are subject to the safety controls of the Bermudan registry which is ultimately controlled by us. The question of safety was raised by the hon. Member for Aberdeen, North. We can control the safety provisions in that registry in the way that I have described, so that point is covered.

The United Kingdom powers to requisition ships apply to the Bermudan registry or to any other dependent territory registry. The constraints of nationality of certain officers on merchant vessels registered in dependent territories are very similar to those in the United Kingdom. This is the point mentioned by the hon. Members for Wigan (Mr. Stott) and for Jarrow. There is no difference in the crewing requirements for the British registry and for the Bermudan registry. That enables us to maintain, and perhaps even with some negotiation to increase, the British crewing proportion. Indeed, in terms of the decline of the United Kingdom fleet and in terms of policy, in my opinion we should be talking about ships on the United Kingdom and the dependent registers together. In discussions with the United Kingdom shipowners, this is one of the matters that I intend to raise about their foreign registered ships and the defence needs of the United Kingdom.

Hon. Members have raised other general points about the availability of ships and crews to meet defence needs. With regard to ships, the House probably knows that the studies carried out for us by consultants last year indicate that generally adequate numbers of suitable ships are, and should continue to be, available to meet the needs of the Ministry of Defence in time of tension and of war.

I repeat what my right hon. Friend the Prime Minister said, that we have no doubt of our capability to mount a similar campaign to the Falklands campaign with the necessary attendant commercial merchant ships which were used on that occasion if the need should arise. There is no doubt whatever about that.

Mr. Ewing

Is that not unpatriotic?

Mr. Ridley

I think it is very unpatriotic of the hon. Gentleman to suggest that we cannot. I assure him that we can.

Sir Edward du Cann

My right hon. Friend surely must agree that it is the duty of all of us in the House to speak the truth as we see it. With the greatest of respect to his view, he has endeavoured to answer the debate by saying that the picture is by no means as black as many of us fear. In my opinion, there are answers to the points that he made. In my opinion, for what it is worth, the picture is indeed very much as black as we have suggested, and we have a duty, if we think that there are dangers in matters of defence, to state that plainly in the House, and there is nothing unpatriotic in doing so.

Mr. Ridley

My right hon. Friend is perfectly justified in seeking to say that, but to say that we do not have an adequate merchant marine to mount a similar operation to the Falklands is simply not the case. I hope that my right hon. Friend will accept that from me, because my right hon. Friend the Secretary of State for Defence and I have satisfied ourselves fully on that point.

I have more than I can say in the time available about the need for resupply and the ships available in time of tension or of war. This is a responsibility of NATO. NATO would pool its ocean-going shipping. We reckon that the resources of the NATO pool would be substantial, perhaps amounting to 50 per cent. of the deadweight tonnage of the free world. That is the tonnage available to NATO if civil resupply should be necessary.

The Government have studied all these matters. They have a policy for the future of the merchant marine. In addition to what I have said, we are major participants in—

It being three hours after the motion had been entered upon, MR. DEPUTY SPEAKER put the Question pursuant to the order [10 March].

The House divided: Ayes 239, Noes 153.

Division No. 97]	[6.56 pm
AYES
Adley, Robert	Bruinvels, Peter
Alton, David	Bryan, Sir Paul
Amess, David	Buchanan-Smith, Rt Hon A.
Ancram, Michael	Buck, Sir Antony
Arnold, Tom	Butcher, John
Ashby, David	Butterfill, John
Ashdown, Paddy	Carlile, Alexander (Montg'y)
Atkins, Robert (South Ribble)	Carlisle, John (Luton N)
Atkinson, David (B'm'th E)	Carlisle, Kenneth (Lincoln)
Baker, Nicholas (Dorset N)	Carttiss, Michael
Baldry, Tony	Cash, William
Banks, Robert (Harrogate)	Chope, Christopher
Beaumont-Dark, Anthony	Clark, Dr Michael (Rochford)
Beith, A. J.	Clark, Sir W. (Croydon S)
Bendall, Vivian	Clarke, Rt Hon K. (Rushcliffe)
Biggs-Davison, Sir John	Cockeram, Eric
Boscawen, Hon Robert	Colvin, Michael
Bottomley, Peter	Coombs, Simon
Bottomley, Mrs Virginia	Cope, John
Bowden, A. (Brighton K'to'n)	Couchman, James
Bowden, Gerald (Dulwich)	Cranborne, Viscount
Boyson, Dr Rhodes	Crouch, David
Braine, Rt Hon Sir Bernard	Currie, Mrs Edwina
Brandon-Bravo, Martin	Dicks, Terry
Bright, Graham	Dorrell, Stephen
Brinton, Tim	Douglas-Hamilton, Lord J.
Brittan, Rt Hon Leon	Dover, Den
Brooke, Hon Peter	Dunn, Robert
Brown, M. (Brigg & Cl'thpes)	Dykes, Hugh
Bruce, Malcolm	Eggar, Tim

Emery, Sir Peter	Moore, Rt Hon John
Evennett, David	Morris, M. (N'hampton S)
Eyre, Sir Reginald	Moynihan, Hon C.
Fairbairn, Nicholas	Mudd, David
Fallon, Michael	Needham, Richard
Farr, Sir John	Neubert, Michael
Favell, Anthony	Newton, Tony
Finsberg, Sir Geoffrey	Nicholls, Patrick
Fletcher, Alexander	Norris, Steven
Fookes, Miss Janet	Onslow, Cranley
Forman, Nigel	Oppenheim, Phillip
Forsyth, Michael (Stirling)	Ottaway, Richard
Fowler, Rt Hon Norman	Page, Sir John (Harrow W)
Fraser, Peter (Angus East)	Page, Richard (Herts SW)
Freeman, Roger	Parris, Matthew
Freud, Clement	Pawsey, James
Galley, Roy	Peacock, Mrs Elizabeth
Gardner, Sir Edward (Fylde)	Penhaligon, David
Garel-Jones, Tristan	Percival, Rt Hon Sir Ian
Gorst, John	Pollock, Alexander
Gow, Ian	Porter, Barry
Gower, Sir Raymond	Powell, William (Corby)
Greenway, Harry	Powley, John
Griffiths, Sir Eldon	Prentice, Rt Hon Reg
Hamilton, Hon A. (Epsom)	Price, Sir David
Hamilton, Neil (Tatton)	Pym, Rt Hon Francis
Hampson, Dr Keith	Rathbone, Tim
Hargreaves, Kenneth	Renton, Tim
Harris, David	Rhodes James, Robert
Harvey, Robert	Rhys Williams, Sir Brandon
Haselhurst, Alan	Ridley, Rt Hon Nicholas
Hayhoe, Rt Hon Barney	Ridsdale, Sir Julian
Hayward, Robert	Rifkind, Rt Hon Malcolm
Heddle, John	Roberts, Wyn (Conwy)
Hickmet, Richard	Robinson, Mark (N'port W)
Hicks, Robert	Roe, Mrs Marion
Higgins, Rt Hon Terence L.	Ross, Stephen (Isle of Wight)
Hind, Kenneth	Rossi, Sir Hugh
Hogg, Hon Douglas (Gr'th'm)	Rost, Peter
Holt, Richard	Rowe, Andrew
Howarth, Alan (Stratf'd-on-A)	Ryder, Richard
Howell, Ralph (Norfolk, N)	Sackville, Hon Thomas
Howells, Geraint	Sainsbury, Hon Timothy
Irving, Charles	Sayeed, Jonathan
Jessel, Toby	Shaw, Giles (Pudsey)
Johnson Smith, Sir Geoffrey	Shaw, Sir Michael (Scarb')
Johnston, Sir Russell	Shepherd, Colin (Hereford)
Kennedy, Charles	Shersby, Michael
Key, Robert	Silvester, Fred
King, Roger (B'ham N'field)	Skeet, Sir Trevor
Kirkwood, Archy	Smith, Tim (Beaconsfield)
Knowles, Michael	Soames, Hon Nicholas
Lang, Ian	Speller, Tony
Lawrence, Ivan	Spencer, Derek
Lennox-Boyd, Hon Mark	Spicer, Jim (Dorset W)
Lester, Jim	Squire, Robin
Lewis, Sir Kenneth (Stamf'd)	Stanbrook, Ivor
Lightbown, David	Stanley, Rt Hon John
Lloyd, Peter (Fareham)	Steel, Rt Hon David
Lord, Michael	Stern, Michael
Lyell, Nicholas	Stevens, Lewis (Nuneaton)
McCurley, Mrs Anna	Stewart, Allan (Eastwood)
MacKay, Andrew (Berkshire)	Stewart, Andrew (Sherwood)
MacKay, John (Argyll & Bute)	Stradling Thomas, Sir John
Maclean, David John	Sumberg, David
Maclennan, Robert	Tapsell, Sir Peter
McQuarrie, Albert	Taylor, John (Solihull)
Major, John	Temple-Morris, Peter
Malins, Humfrey	Terlezki, Stefan
Malone, Gerald	Thomas, Rt Hon Peter
Maples, John	Thompson, Donald (Calder V)
Marlow, Antony	Thompson, Patrick (N'ich N)
Mather, Carol	Thornton, Malcolm
Merchant, Piers	Thurnham, Peter
Meyer, Sir Anthony	Townend, John (Bridlington)
Miller, Hal (B'grove)	Twinn, Dr Ian
Mills, Iain (Meriden)	van Straubenzee, Sir W.
Mills, Sir Peter (West Devon)	Vaughan, Sir Gerard
Mitchell, David (Hants NW)	Waddington, David
Moate, Roger	Walden, George

Wall, Sir Patrick	Winterton, Mrs Ann
Wallace, James	Winterton, Nicholas
Waller, Gary	Wolfson, Mark
Ward, John	Woodcock, Michael
Wardle, C. (Bexhill)	Yeo, Tim
Warren, Kenneth	Young, Sir George (Acton)
Watson, John	Younger, Rt Hon George
Wells, Bowen (Hertford)
Wells, Sir John (Maidstone)	Tellers for the Ayes:
Whitfield, John	Mr. Tony Durant and
Wiggin, Jerry	Mr. Francis Maude.
Wilkinson, John

NOES
Abse, Leo	Gourlay, Harry
Adams, Allen (Paisley N)	Hamilton, James (M'well N)
Anderson, Donald	Hamilton, W. W. (Fife Central)
Archer, Rt Hon Peter	Harrison, Rt Hon Walter
Ashley, Rt Hon Jack	Haynes, Frank
Atkinson, N. (Tottenham)	Heffer, Eric S.
Bagier, Gordon A. T.	Hogg, N. (C'nauld & Kilsyth)
Banks, Tony (Newham NW)	Holland, Stuart (Vauxhall)
Barnett, Guy	Home Robertson, John
Barron, Kevin	Hoyle, Douglas
Beckett, Mrs Margaret	Hughes, Robert (Aberdeen N)
Bell, Stuart	Hughes, Sean (Knowsley S)
Bennett, A. (Dent'n & Red'sh)	Janner, Hon Greville
Bidwell, Sydney	John, Brynmor
Boothroyd, Miss Betty	Jones, Barry (Alyn & Deeside)
Boyes, Roland	Kaufman, Rt Hon Gerald
Brown, Gordon (D'f'mline E)	Lambie, David
Brown, Hugh D. (Provan)	Lamond, James
Brown, N. (N'c'tle-u-Tyne E)	Leadbitter, Ted
Buchan, Norman	Leighton, Ronald
Caborn, Richard	Lewis, Terence (Worsley)
Callaghan, Rt Hon J.	Litherland, Robert
Campbell-Savours, Dale	Lloyd, Tony (Stretford)
Canavan, Dennis	McCartney, Hugh
Carter-Jones, Lewis	McDonald, Dr Oonagh
Clark, Dr David (S Shields)	McNamara, Kevin
Clarke, Thomas	McTaggart, Robert
Clay, Robert	Madden, Max
Clelland, David Gordon	Mallon, Seamus
Clwyd, Mrs Ann	Marek, Dr John
Cocks, Rt Hon M. (Bristol S)	Marshall, David (Shettleston)
Cohen, Harry	Martin, Michael
Conlan, Bernard	Mason, Rt Hon Roy
Cook, Robin F. (Livingston)	Maxton, John
Corbyn, Jeremy	Maynard, Miss Joan
Craigen, J. M.	Meacher, Michael
Crowther, Stan	Michie, William
Cunliffe, Lawrence	Mikardo, Ian
Cunningham, Dr John	Millan, Rt Hon Bruce
Davis, Terry (B'ham, H'ge H'I)	Miller, Dr M. S. (E Kilbride)
Deakins, Eric	Mitchell, Austin (G't Grimsby)
Dewar, Donald	Morris, Rt Hon A. (W'shawe)
Dobson, Frank	Morris, Rt Hon J. (Aberavon)
Dormand, Jack	Oakes, Rt Hon Gordon
Dubs, Alfred	O'Brien, William
Duffy, A. E. P.	O'Neill, Martin
Dunwoody, Hon Mrs G.	Orme, Rt Hon Stanley
Eadie, Alex	Park, George
Eastham, Ken	Parry, Robert
Edwards, Bob (W'h'mpt'n SE)	Pavitt, Laurie
Evans, John (St. Helens N)	Pendry, Tom
Ewing, Harry	Pike, Peter
Fatchett, Derek	Powell, Raymond (Ogmore)
Faulds, Andrew	Prescott, John
Field, Frank (Birkenhead)	Redmond, Martin
Fields, T. (L'pool Broad Gn)	Rees, Rt Hon M. (Leeds S)
Fisher, Mark	Richardson, Ms Jo
Flannery, Martin	Roberts, Ernest (Hackney N)
Forrester, John	Robertson, George
Foster, Derek	Rogers, Allan
Foulkes, George	Rowlands, Ted
Fraser, J. (Norwood)	Sheerman, Barry
Freeson, Rt Hon Reginald	Shore, Rt Hon Peter
Godman, Dr Norman	Short, Mrs R.(W'hampt'n NE)
Golding, John	Skinner, Dennis
Gould, Bryan	Smith, C.(Isl'ton S & F'bury)

Smith, Rt Hon J. (M'ds E)	Wardell, Gareth (Gower)
Snape, Peter	Wareing, Robert
Soley, Clive	Welsh, Michael
Spearing, Nigel	Wigley, Dafydd
Stewart, Rt Hon D. (W Isles)	Williams, Rt Hon A.
Stott, Roger	Wilson, Gordon
Strang, Gavin	Winnick, David
Thomas, Dafydd (Merioneth)	Young, David (Bolton SE)
Thomas, Dr R. (Carmarthen)
Thompson, J. (Wansbeck)	Tellers for the Noes:
Thorne, Stan (Preston)	Mr. Don Dixon and
Tinn, James	Mr. Allen McKay.
Torney, Tom

Question accordingly agreed to.