Merchant Shipping Bill [Lords]

HC Deb 28 January 1988 vol 126 cc504-56

Order for Second Reading read.

4.44 pm

The Secretary of State for Transport (Mr. Paul Channon)

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

This Bill, introduced in another place at the end of October, deals, as the House will know, with a wide range of subjects, all of them important to the shipping industry and to the country at large. I am sure that the keenest interest of the House will be in the impact of the Bill upon marine safety, and that is where I wish to begin my remarks.

The whole House remembers only too well the appalling disaster at Zeebrugge last year. The House will agree with me that the public has a right to travel in safety. Transport and travel play an increasingly pervasive part in modern life in both commerce and leisure. All those engaged in the transport industry owe it to others to work uncompromisingly for greater safety. But I recognise that it is for the Government to establish the framework.

The loss of the Herald of Free Enterprise provided lessons in abundance for ship operators, for seafarers and for Governments alike. The Sheen report, which we received a few months ago, has formed in large measure the agenda for the Government's programme of follow-up action. More recently, the coroner's inquest has provided further valuable insights, particularly into the rescue arrangements and emergency procedures on board ships. I was determined to press ahead and implement as quickly as possible the main and most urgent recommendations of the formal investigation.

The law rightly requires consultation, and that has either taken place or is going on. We have now issued consultative documents on eight major packages of proposals. The first, covering the installation of vehicle deck door indicator lights, closed-circuit television monitoring of the doors and vehicle decks and self-contained emergency lighting, has now passed into law. Indeed, the installation of door indicator lights and closed-circuit television is already a legal requirement.

Two proposals — the introduction of boarding cards for the control of passenger numbers and the mandatory closing of vehicle deck doors before any roll-on/roll-off ferry leaves its berth, or as soon as it is physically possible to do so—will be dealt with in orders which I shall lay in about two weeks' time.

Mr. Eric Heffer (Liverpool, Walton)

Will the Secretary of State explain what he means by "physically possible to do so"? Surely it is important that the doors should be closed before the ferry leaves its berth. It could be out at sea before it is "physically possible" to close the doors.

Mr. Channon

The hon. Gentleman is quite right. Perhaps I did not phrase that as accurately as I could. It is mandatory to close the doors as a ship leaves a berth. There is a small number of berths from which it is not possible for some sorts of roll-on/roll-off ferries to leave with their doors in that position. This is a technical matter, and the regulations will make it much clearer. The hon. Gentleman and the public can be reassured. He is right to draw attention to this, and, if he is still worried about it he can contact me about it when he has seen the order.

Mr. Patrick Cormack (Staffordshire, South)

The Secretary of State mentioned boarding cards. When can we expect that order to be in force, as distinct from being introduced into the House?

Mr. Channon

I hope that that will not take long. I shall ask my hon. Friend the Minister for Public Transport to give the hon. Gentleman an exact answer, but we are pressing ahead with the issue of boarding cards for the control of passenger numbers and I hope to lay orders in a few weeks' time.

Other orders are close behind, covering such matters as the provision of draught gauges, loading computers and emergency escape windows; the provision by managements of comprehensive operating manuals and arrangements for their inspection by my Department; the designation of a person ashore responsible for operational safety; the weighing of heavy lorries before loading; the provision of special emergency equipment; regular checks on lightweight and centre of gravity; the reporting of potentially dangerous incidents; and the checking and recording of draughts and centre of gravity before sailing.

There are also measures that can be taken as a result of administrative action. One such decision that my right hon. and learned Friend the Attorney-General and I have taken is, in future, to ensure that formal investigations into marine accidents are not only impartial, but seen to be so. The responsibility for appointing and instructing counsel assisting the court will rest not with the Secretary of State, but with the Attorney-General. More substantially, I have decided to make important changes in the duties of marine surveyors. They are to devote more of their time to work on passenger ships and carry out many more spot and incognito checks than before. The control of passenger ferry operations—

Mr. Gerald Bermingham (St. Helens, South)

rose—

Mr. Channon

Perhaps I may just finish this point. The control of passenger ferry operations by the Marine Survey Service will also be improved by some of the measures I have already mentioned, such as the requirement for comprehensive operating manuals. I have a lot to get through, but I will give way to the hon. Gentleman.

Mr. Bermingham

The Secretary of State will recall that, when he made his statement to the House in respect of the Zeebrugge ferry disaster and the Sheen report that followed, I asked about marine surveyors and the numbers employed. He was kind enough to write to me on that matter. Will he now confirm that, bearing in mind the administrative steps that he proposes to take, he will ensure that there is an adequate number of marine surveyors so that adequate and comprehensive surveys can be carried out both officially and incognito? That is the only way in which we shall maintain safety standards.

Mr. Channon

Of course, there will have to be an adequate number of marine surveyors. The fact that I intend to have a marine investigation branch means that more resources will be devoted to this matter.

A moment ago my hon. Friend the Member for Staffordshire, South (Mr. Cormack) raised the important matter of boarding cards. It is my intention that the order to make boarding cards mandatory should come into force on 29 February. I am sure that my hon. Friend recognises that that date is before the summer season.

I come now to the international implications of the programme. I made it clear in July that certain crucial measures would need to be applied to all passenger ferries sailing from United Kingdom ports, regardless of flag. As our programme has developed, we have concluded that the majority of our measures ought to be applied in this way. But I do not wish to leave it at that.

Marine safety worldwide is dealt with by the International Maritime Organisation. Members will be aware that that organisation is extremely successful. It has had a series of safety conventions and, over the past few years, it has provided a great many benefits to seafarers and travellers all over the world. In November, I personally took an initiative at the IMO's assembly with the aim of obtaining early worldwide agreement—under the IMO's accelerated procedures — to many of the measures we have proposed, without, of course, prejudicing our right to require foreign vessels to conform, when in our ports, to requirements under our own laws pending international agreement. We obtained the assembly's endorsement of a resolution that we proposed and I am hopeful of real progress in the not too distant future. So we are pressing ahead domestically and internationally.

We have also convened a meeting of shipping administrations of the European countries — the main ferry operators exist in this part of the world — to consider the possibility of their taking action through their own laws. My main aim is to get the safety measures that we are imposing on United Kingdom ships and in United Kingdom ports extended to cover foreign ships in foreign ports as such ships, if bound for the United Kingdom, frequently contain large numbers of British passengers. But my further aim is to get international co-operation in enforcement. We have proposed, and received support for, the negotiation of a European ferry code as a vehicle for such an agreement. There is a lot going on.

Next, let us consider research. Last July I announced that I would be contributing a further £1 million to research on the safety of ro-ro ferries. A representative steering committee was announced in October and contracts are now being let. One of the first contracts, for completion before Easter, is to assess proposals for new ship stability standards now before the IMO for early adoption. Other contracts will cover the development of lifejackets that are easier to put on, and escape from a partially capsized vessel. But perhaps of greatest interest will be a programme that looks specifically at the basic design of ro-ro ferries. The Government are satisfied that ro-ro ferries are not inherently unsafe as some have alleged: a ro-ro ferry that is properly closed to the sea and intact is as unlikely to capsize as any other vessel. But improvements in the basic design to give a greater margin of safety may well be possible, and it is the Government's intention to complete the first phase of this work by the end of the year.

Mr. Cormack

Will improvements take into account that such vessels, if they sink, sink extremely quickly?

Mr. Channon

That is an important point. However, if they are properly closed to the sea they are completely safe. It is extremely important to bear in mind that if there is a disaster of this kind—fortunately, exceedingly rare— such ferries sink quickly. My hon. Friend's concern is much in our minds.

Mr. Heffer

rose—

Mr. Channon

I will give way, but this must be for the last time.

Mr. Heffer

The Secretary of State will agree that this is the most important matter to consider because, as the hon. Member for Staffordshire, South (Mr. Cormack) has said, if such ferries are holed and their design is as it is, they sink within minutes—

Mr. Robert Hughes (Aberdeen, North)

Seconds.

Mr. Heffer

Yes indeed. That is why this matter is so important. The right hon. Gentleman said that the first phase of the work would be completed by the end of the year. What does that mean? Is that the first stage? How quickly will he move on from that first stage? That is the most important question to consider.

Mr. Channon

The first stage of the research will be completed by the end of the year, but we are doing other things as well. We are checking the stability factors of those ships and how they measure up to the most modern standards that we have in force at present. Therefore, a great deal of work is being undertaken regarding the stability of ro-ro ferries as well as a great deal of research on their basic design. However, the evidence around the world suggests that if a ro-ro ferry is properly closed to the sea and intact, it is safe. The House will be aware that, in many parts of the world, ro-ro ferries have been sailing for years and years. The important point is that those ferries must be properly closed to the sea.

Mr. Heffer

rose—

Mr. Channon

I must press on because other areas relating to safety are also dealt with in the Bill.

The responsibilities of ship owners, managers, masters and crews are terribly important to ensure that a ship is maintained and operated safely. Clause 30 creates a completely new duty on ship owners to ensure the safe operation of their ships..

Clause 31 tightens up on the duties of masters and crew, requiring them to exercise due diligence in the carrying out of their duties and explicitly stating that a master's duties include responsibility for the good management and safe running of his ship. It also includes new defences that are not in existing legislation.

Clause 29 deals with a ship that is unfit to go to sea whether because of its physical condition, overloading or any other reason, and affects the owner and master equally. Amendments have been made or will be brought forward to extend clauses 29 and 30 so that they equally cover ship managers and charterers.

Clause 32, to which I briefly referred a moment ago, also arises from the Herald disaster and provides for the establishment of a new statutory marine accident investigation branch. The new branch will be separate from my Department's marine directorate and will report directly to me. It will therefore be free to take an entirely independent view should an accident raise questions about the regulatory policy of the Department. We also intend that all the branch's reports on the more important or significant accidents should be published.

The House will have many opportunities in the coming months to debate this programme. After tonight, there will be the Committee stage; and a number of the orders that we plan will be subject to affirmative procedure debate.

We all know that there is one group of people to whom this programme is of deep personal significance: the survivors of the accident and the relatives of the victims. They, above all, will wish to know that everything possible is being done to avoid a repetition of the Zeebrugge tragedy. I made arrangements to meet the Herald Families Association next week to discuss its concerns and suggestions as I wish to hear what it has to say to me.

I should refer briefly at this point to the proposal that has been made by the hon. Member for Aberdeen, North (Mr. Hughes) to refer the Bill to a Special Standing Committee. Of course, I have considered that suggestion extremely carefully, but I believe that the problems have already been fully exposed. There has been the Sheen formal investigation and the coroner's inquest, and I doubt that much could be done to add to our knowledge by a further round of hearings. This is not the time to go back to square one. I believe that our priority now must be a more specific, but no less demanding or responsible, task.

Our duty, which only Parliament can carry out, is painstakingly to consider specific proposals, make clear judgments, and decide what changes should be made to the law. I am sure that the Standing Committee will want to consider the safety proposals carefully. I can assure the House that the Government are willing to listen to constructive arguments on these important matters and to be responsive to them, from whatever quarter they come. But I have no doubt that the right course now is to get down to the task in Committee without further delay. For those reasons, I cannot support the proposal that we should have a Special Standing Committee as well.

Mr. Frank Field (Birkenhead)

I apologise for not hearing the beginning of the Secretary of State's speech. I am sure that the whole House welcomed his statement that in the near future he will be meeting families connected with the disaster. What contact did he have with the families before drafting the Bill? He said that in a sense the Bill is a result of that terrible tragedy. The two points that the families put to hon. Members at a meeting the other night were that they were unhappy about the penalties for companies when such a disaster occurred and were concerned about the safety of the ferries still in service. If there is the prior consultation to which the right hon. Gentleman referred, will he give an assurance that if those two points have not already been taken on board he will welcome amendments on them in Committee?

Mr. Channon

I do not think that there was formal consultation with the families before the drafting of the Bill, but I think that the points that the hon. Gentleman raises are covered by the Bill or by other measures. For example, he will see that clause 30 deals with his point about owners. It says that if an owner fails to discharge the duty imposed on him — the duty that makes him liable for unsafe operation of a ship— he shall be guilty of an offence and liable—

1. (a) on summary conviction, to a fine not exceeding £50,000;
2. (b) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both."

We may be able to discuss whether that is exactly right, but those are not negligible penalties; they are certainly a great deal more than has been suggested in the past.

As for safety, there is, as I have said, the research programme going on into the inherent qualities of ro-ro ferries. Following the Sheen investigation, the question of the stability of the existing ferries is being looked at. I dealt with that matter in answer to the hon. Member for Liverpool, Walton (Mr. Heffer). If the Herald Families Association has further detailed ponts on it I shall wish to consider them when I see the association next week.

I do not want to take too long, because other hon. Members wish to speak, but there are a number of other important matters that I should like to deal with briefly: measures of assistance with the shipping industry; the registration of merchant ships; and the establishment of a new fishing vessel register.

All of us recognise the strategic importance of the Merchant Navy. The experience of other developed countries has been very similar to our own, and a complex reality lies behind the crude tonnage figures. Fundamental changes in our trading patterns have taken place. Much of our oil now comes from the North sea rather than spending weeks at sea being transported through the Suez canal or round the Cape. The European Community has replaced the Commonwealth as our major trading partner. We face fierce competition from Third world countries. There is a massive world over-capacity in bulk and tanker shipping.

But some sectors of the British shipping industry have coped remarkably well with a uniquely rough period in world shipping markets. Our container fleet is about the same tonnage as it was in the mid-1970s. Over half the United Kingdom's international freight earnings come from our liner and container fleets, which account for only one quarter of our gross tonnage. Passenger ships account for only 8 per cent, of our gross tonnage, yet the United Kingdom earns over £800 million from the passenger ship business. So it is a complex matter. The shipping industry's contribution to the balance of payments invisible account grew by £221 million in 1986, the best for some years—and a reminder that tonnage on the United Kingdom register and the industry's value as a source of foreign earnings do not always go hand in hand.

There is also the development of the Isle of Man and dependent territory registers, which has enabled much tonnage to remain under British registration, with British crews, while taking advantage of the savings obtainable offshore to improve the industry's competitive position.

Many adverse factors — over-capacity, Third-world competition, new trading patterns—are not within our control, and it is folly to believe we could somehow escape them by erecting elaborate and expensive frameworks of subsidy. What we do must be carefully targeted. There are specific measures provided for in clauses 25 to 28, designed to ensure that we continue to have sufficient trained seamen to meet the defence needs of the United Kingdom in time of emergency.

On training, we are particularly concerned at the small number of officer cadets at present being trained. The training scheme which we intend to bring into effect this autumn will build on the successful use already being made by the industry of the youth training scheme, and will provide help to ship owners and management companies with the cost of employing Merchant Navy cadets while they are being trained. Details of the scheme will be announced as soon as possible. As has already been announced, £2.5 million has been earmarked for this scheme in the next financial year, rising to £3.5 million in the first full year, 1989–90.

Under the crew relief scheme, assistance will be available to pay a proportion of the cost of air travel for crew changes on ships registered in the United Kingdom, the Isle of Man, or the Channel Islands, which take place in distant waters. The objective here is to give companies an incentive to continue to employ officers and ratings resident in the British Isles in those ships which operate in the deep-sea trades. We have earmarked £3.5 million in 1988–89, rising to £5 million in the full year 1989–90, for this programme.

The third initiative, announced by my predecessor in December 1986, was the establishment of a Merchant Navy Reserve. The reserve will constitute a pool of experienced seafarers who can be drawn upon to supplement crews serving on Merchant Navy ships supporting the defence forces or engaged in supply. Membership of the reserve will be open to former seafarers holding valid certificates. Members will be paid a bounty in exchange for accepting an obligation to serve if called upon to do so.

Part II deals with the very serious problem of foreign-owned fishing vessels registering in the United Kingdom in order to fish against our EC quotas. This is, I know, a matter of concern to hon. Members who represent fishing constituencies. We are introducing stringent new eligibility requirements for the registration of fishing vessels in the United Kingdom. A fishing vessel would need to be beneficially owned as to at least 75 per cent, by British citizens resident and domiciled in the United Kingdom, or wholly owned by a qualified company. There will be powers to specify additional eligibility requirements.

These are stringent requirements, but we believe they are essential if British fishing quotas are to be preserved for British fishermen. They have been carefully drawn up in consultation with the fishermen's organisations and widely welcomed by them.

Part I updates the law on the registration of merchant ships. Hon. Members who are interested in this difficult and complicated matter will find the White Paper, published with the Bill, a helpful guide to this fairly technical area. The main objective of the changes, which I will not deal with in detail, is to ensure that there is more effective jurisdiction in future over United Kingdom-registered ships.

Importantly, the Bill gives new powers to the Secretary of State to define categories of register for the Crown dependencies and dependent territories. Under the present arrangements it has been possible for substandard shipping to obtain registration as British shipping in a dependent territory and thus to escape rigorous survey and inspection requirements applied to vessels on the United Kingdom register. The new arrangements in the Bill, combined with the substantial efforts which a number of dependent territories are making to improve their maritime administrations, will help to ensure that all ships sailing under the British flag meet the same high standards. In this way we are able to meet the recommendation of the Transport Committee of the last Parliament that early legislation should be brought forward.

There are a number of other clauses dealing with significant matters. Some of them — liability and compensation for oil pollution damage, lighthouses and unfair competition in international shipping services—are very important, but I do not want to weary the House with a detailed exposition of them today. They can be gone into in Committee.

I have tried to cover the main issues. If hon. Members have any questions, my hon. Friend the Minister of State will be pleased to answer them in his winding-up speech.

Mr. Conal Gregory (York)

My right hon. Friend referred briefly to light dues. Will he confirm to the House that the Government are still paying half the light dues for southern Ireland, which is a scandal? I hope that the matter will be dealt with in the Bill. The amount charged last year was well above the level required by the authorities.

Mr. Channon

My hon. Friend is right. We are indeed paying Irish light dues; I would have to check the exact proportion. However, I shall give my hon. Friend a trailer. My hon. Friend the Minister for Public Transport may have good news on light dues when he replies to the debate. I hope my hon. Friend the Member for York (Mr. Gregory) will be here to welcome it.

There is a wide-ranging series of proposals in the Bill. They underline our commitment to maritime safety, help to safeguard our strategic requirements, protect United Kingdom fishing quotas for United Kingdom fishermen and overhaul the legislative framework. The proposed measures have been welcomed by the industry, and they have received general support in another place. I hope that the House will agree that the Bill should be given a Second Reading.

5.10 pm

Mr. Robert Hughes (Aberdeen, North)

I agree with much of what the Secretary of State said. By and large, the Bill is non-contentious, although it contains some contentious issues. Having been upset earlier by the Secretary of State for Scotland, I must try not to carry my anger forward and vent my spleen on the right hon. Gentleman. There are many points on which there is agreement, but other issues will have to be scrutinised carefully in Committee. There is still much tidying up to be done in the legislation. I hope, as the right hon. Gentleman said to me in a letter, that he will be prepared to consider amendments on their merits.

I accept that much research is going on; and I welcome the fact that £1 million is to go into research, particularly on the safety of ro-ro ferries. I concede that there is no such thing as an unsinkable ship. The last ship that had that epithet was the Titanic. The right hon. Gentleman said that through ro-ro ferries are perfectly safe so long as they are watertight. That is much the same as saying that the Titanic was safe so long as it did not hit an iceberg.

I am still concerned about the safety of existing ro-ro ferries. We must consider urgently whether portable bulkheads should be fitted to protect ships. We hope that never again will there be another sinking like that of the Herald of Free Enterprise, which sank because the doors were left open, but we are concerned about a ship being holed. We do not suggest that the fitting of portable bulkheads would make a ferry unsinkable, but it would lengthen the time that the vessel would remain afloat. The time before the Herald capsized was so short that no one had an opportunity to save life. If we can buy time for lifeboats and rescue vessels, that may be the best that we can achieve. Certainly we should seek to achieve as much time as possible.

Mr. Heffer

My question is not so much for my hon. Friend as for the Government. My hon. Friend may agree with my suggestion that all British ships should be brought in, one at a time, to have portable bulkheads fitted. Obviously, in the long-term new ships will be redesigned. In the meantime, ro-ro ferries could have departmentalised doors fitted to ensure greater safety.

Mr. Hughes

That suggestion is worth pursuing. I cannot remember how many ships of a design similar to the Herald of Free Enterprise are at sea. The majority of ro-ro ferries have a different door-closing mechanism. Most have a bow visor, which is up while the ship is loading, and no one can go to sea with that visor up. I am not running down my hon. Friend's suggestion. Indeed, the number of vessels affected by his proposal might not be large, so the proposal should be considered seriously.

I am in danger of losing the thread of my speech. Before I come to issues which we will contest vigorously, perhaps I should deal with the Herald of Free Enterprise and with the motion that the Bill should be committed to a Special Standing Committee. When discussing merchant shipping and safety at sea, we all have engraved on our minds the events of Friday 6 March, when we first heard that the Herald of Free Enterprise was in difficulty. As events unfolded, we discovered that it was a tragedy of immense proportions.

The tragedy could have been far worse. Had the sinking taken place a quarter of a mile, or half a mile, further out, I doubt whether anyone would have survived. I am not minimising the loss of life, nor being complacent by taking refuge in the comfort that things might have been worse. It merely makes us more vigilant in ensuring that we scrutinise safety properly.

The procedure for referring a Bill to a Special Standing Committee was designed for non-controversial Bills. It has rarely been used. I think that this Bill almost exactly fits the category for which the procedure was tailored. I am sorry that the Secretary of State has turned his face against the proposal. During business questions last week we were encouraged by the Leader of the House to believe that the matter might be resolved through the usual channels. I am grateful to the Minister for meeting my hon. Friend the Member for Stretford (Mr. Lloyd) and myself to discuss reference to a Special Standing Committee. I wrote to him subsequently, and perhaps I should give the House our reasons for proposing that the Bill be committed to a Special Standing Committee to consider safety at sea.

We welcome what is being done by regulation and administration. We welcome what is proposed in the Bill. The point I wish to emphasise is that this is likely to be the only major shipping legislation in this Parliament. I cannot see that there will be time for another major merchant shipping Bill. Therefore, it is important that we do not overlook any aspect of safety and that we get the Bill right.

The Secretary of State is correct. We have had the Sheen report and the coroner's report. We are still waiting to see whether there will be prosecutions that might bring out further evidence. But there may not be prosecutions. There is still a body of opinion that we should not ignore any approach that might shed further light on how to improve safety at sea.

It is significant that the proposal to send the Bill to a Special Standing Committee came from the Herald Families Association. The association wrote to my hon. Friend the Member for Stretford on 21 December about its concern for the safety of existing ro-ro ferries. It drew my hon. Friend's attention to the special procedure and asked whether the Bill could be dealt with in that way. We have no intention of intruding on the grief of the families, or of prolonging or exploiting that grief, but as the initiative came from the families it should be considered seriously. We should bring in experts to answer our questions. Often non-experts or people directly concerned with an incident ask a blindingly obvious question which has not occurred to other people who have been studying the matter.

Mr. Jonathan Sayeed (Bristol, East)

As the Bill includes useful provisions to increase safety, does the hon. Gentleman not accept that a Special Standing Committee would delay its implementation?

Mr. Hughes

I am glad that the hon. Gentleman raised that point, because it allows me to emphasise what I was going to say. I should be glad to be corrected, but I can see nothing in the Bill that has to be passed by a fixed date to get things moving. We have made it perfectly clear that our proposal to send the Bill to a Special Standing Committee is not intended to delay progress. I accept that if the Bill went to such a Committee, reasonable time would have to be allowed so that people could prepare their questions and their evidence. I recollect that the procedure allows for only three sessions to take evidence.

I have offered the co-operation of the Opposition in getting the Bill through as rapidly as possible, and I believe that we could proceed along those lines without any great delay. I cannot say that there would be no delay, but there would be no great delay, and I hope that, even now, the Secretary of State will relent and allow us to put the matter to a Special Standing Committee. Today's debate will decide whether we will divide the House on that matter.

I shall deal with an issue that is not controversial before coming to the controversial matters. I accept what the Secretary of State said about the need for registration for fishing vessels to prevent the abuse of registration and access to the United Kingdom quota of fish under EEC rules. I hope that such regulations will be speedily implemented, but one or two issues need to be clarified.

The Scottish Fishermen's Federation believes that there should be registration of all vessels, irrespective of length or size, but the line must be drawn somewhere, or rowing boats or small vessels with outboard motors might have to be registered. As far as possible, the maximum number of boats should be registered. There is also the matter of the old register being closed and the period of transition, and whether the title of vessels should always be registered. The Scottish Fishermen's Federation has a point that should be considered in some detail in Committee.

I join the federation in welcoming the fact that under part III some money is to be provided to assist the training of officers and ratings in the Merchant Navy. That is a good idea, but why are the Secretary of State and the Government steadfastly refusing financial assistance for the training of fishermen? It is expected that the Secretary of State will make regulations under the Safety at Sea Act 1986 requiring fishermen to be trained in survival at sea, fire fighting and first-aid, but he will not give them any financial assistance. Why are the two parts of our maritime industry being treated differently? In previous wars fishermen served the Royal Navy extremely well. It was not only the deep-sea fishermen who had valuable experience to give to the nation. I hope that the Secretary of State will consider that point and perhaps take some action.

I now turn to an issue that is quite contentious and on which there is a great deal of disagreement. I have made representations to the Minister, who will know that I do not believe that the Bill should have started in the House of Lords. I accept that we have a bicameral Parliament and that the other place is perfectly entitled to start legislation, but it is generally accepted that such legislation will nor. be contentious, and that the House of Lords is at its best when reviewing legislation. I assert that it is not at its best when starting fresh legislation.

I resent the fact that the Government accepted an amendment on Report by Lord Mottistone, supported by the Earl of Inchcape, to remove section 42(2) of the Merchant Shipping Act 1970. Subsection (2) affects the position of seafarers involved in industrial disputes. It is a further restriction of the rights of seamen and it further tilts the balance towards employers.

The amendment was accepted in the other place after the most cursory examination. Indeed, no evidence was presented that such a change was needed, except for anecdotal evidence. Two of their Lordships thought that the subsection was redundant and that it was not necessary, but no facts were brought forward to support the removal of subsection (2). Lord Brabazon previously resisted an almost identical amendment in Committee. Having said, on Thursday 26 November, that he had no evidence that the change was necessary, 14 days later he accepted the amendment, saying that he had now been persuaded.

There was no reason for such a rush. It was the first time that the Bill had been aired. Lord Brabazon could have held his fire and asked for the evidence. He could have asked for consultation. He did not consult the trades unions involved or the employers' organisations, and he does not appear to have consulted his own Department. He had to admit that he had not had the time to prepare an amendment of his own.

That is no way to approach people's rights in industrial relations. It is likely to be extremely provocative. I do not take comfort from the Government's view, put about in the other place, and which no doubt they will put about in the House, that that change only puts seafarers square with other industrial employees in terms of industrial relations. That is no big deal. We know that throughout their terms of office the Government have been redressing the balance, as they would put it, between the unions and the employers. However, in the Merchant Shipping Bill they have gone too far.

I doubt whether the Government are aware of the ramifications of that amendment. Seamen do not work in a fixed environment. Their environment constantly changes. Perhaps in Committee the Government will be prepared to examine the legislation and change it. The amendment was made without proper consideration, and the Government will see the folly of their ways. We shall certainly pursue the matter vigorously in Committee.

I now turn to what is not in the Bill. The most glaring deficiency is that it fails totally to address the problem of the decline in Britain's merchant fleet. The Opposition have stated that view more than once, and it is shared by the National Union of Seamen and by the National Union of Marine, Aviation and Shipping Transport Officers. The General Council of British Shipping stated, quite categorically: First, welcome though the proposals for financial aid for training and reparation are, they will not arrest the decline of the UK-owned merchant fleet. If Government and Parliament decide that it is in the national interest — for defence, balance of payments, trade, or employment reasons — for there to be a UK-controlled fleet, manned at least in part with British nationals and available on at least a British Dependent Territory register, much more needs to be done. In particular, action is needed to help shipowners re-invest in shipping when the current aging fleet reached the end of its economic life. That could almost be a synopsis of the Labour party policy put forward in the transport document, "Fresh Directions". It is clearly spelt out on page 21 of the document. The Secretary of State often asks what our policy is, and we clearly spell it out that we want to improve coastal shipping facilities along the lines of Section 8 and Section 36 grants (which provide grants for rail sidings and inland waterway freight facilities. We want to: Provide tax incentives for scrapping older vessels and building new ships in UK shipyards and for use with UK crews. In that, we differ from the GCBS. It says that the ships should be partly manned by British crews. We say that they should be wholly manned by British crews.

We go on to say that we would Create a discretionary scrap only tax incentive, to reduce the surplus of old laid up shipping tonnage. We add that we would Ensure that our shipping policies are co-ordinated with policies to maintain an effective shipbuilding and ship-repair industry. The Government have gone wrong in the past because they have looked at shipping in isolation. It is not as though the merchant marine has suddenly declined. It is not as though the decline has sneaked up on the Government so that they were unaware of it. The decline has gone on for far too long.

The last time that we debated merchant shipping was on 11 March 1986, and the writing was on the wall then. At that time we debated various EEC regulations. I am glad that the loss of tonnage has not been as severe as we forecast at that time, but we cannot take much comfort from that. Indeed, it is rather sad to see that the best headline that the press could produce about the merchant shipping fleet was: Decline in shipping fleet slows down". Decline has not been arrested or reversed; it has only slowed down.

Mr. Gregory

The hon. Gentleman seems to be very much a prophet of doom and gloom today. If we were to follow the Labour party's policy set out on page 21 that he quoted, what level of subsidy would be necessary to arrive at that artificial and protective state?

Mr. Hughes

If we were in government we would be in a position to decide exactly how far to go.

An interesting convergence of views is developing. Two years ago the General Council of British Shipping was thought to be relatively satisfied with the answers given by the then Secretary of State, the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley). He told us that he could not give us any details, but he did give us a little trailer, as, indeed, the Secretary of State did this afternoon. He did not say that we should wait until the end of the debate, but that we should wait a couple of weeks until the Budget. However, the Chancellor did virtually nothing. The fact that the changes made in the 1986 Budget did virtually nothing for the merchant marine is demonstrated by the fact that, certainly up until September last year, for two years not one British shipowner placed an order for a British ship in the United Kingdom. The Budget did nothing. The General Council of British Shipping now accepts that there must be investment, and investment supported by the Government, in the British shipping industry, and we agree on that.

The second convergence of views is on cabotage. In March 1986 we argued for cabotage to be applied to the British coasts for the reservation of coastal trade to British ships. We include in that offshore vessels plying the North sea oil trade. The then Secretary of State said that that was not necessary, and the General Council of British Shipping said that the best way to go about things was to liberalise on cabotage, and if the European countries who already have it would let us have access to their trade, everything in the garden would be lovely. The General Council of British Shipping is now saying in its document that the time has come when we must seriously think of cabotage.

I was interested to read in the debates in the other place that Lord Gray of Con tin, and another noble Lord, whose name I have forgotten, were arguing about the need for cabotage. The General Council of British Shipping clearly said: more needs to be done to help British coastal shipping. It is unacceptable that so many of our fellow European Community countries—France, Spain, Portugal, Italy and Greece — should reserve their coastal trades to their own ships, which at the same time are able to trade freely in British coastal trades. GCBS would like to see all the Community coastal trades thrown open for competition, but it is clear that other member states will not negotiate away their restrictions whilst they can enjoy the best of both worlds. We believe that the Government should take powers to curb the free-for-all on the British coast as a spur to encourage the negotiation away of all EC countries' restrictions". We shall not achieve that objective. The countries that have cabotage know exactly how valuable that is, but I am glad to have that endorsement of the Labour party's policy, for which we have argued for some years, that cabotage is necessary. I hope that the Secretary of State will now agree that something should be done.

We have been given another little trailer. There are rumours, hints, suggestions in the press that the Chancellor of the Exchequer might agree to some rollover relief on capital investment in British shipping. But that is only a hint. We do not know what it will be. If he lives up to his previous record, it will not be any good to us.

Lord Brabazon said that something needed to be done on a number of matters and that he was concerned about the decline in the shipping fleet. He said that cabotage was a reserve power which remains to be used should the time be ripe. It is no use putting a substitute on with one minute to go, and the Secretary of State should now agree to apply cabotage. We should protect what we have in order to try to move forward, because the situation is perilous.

The hon. Member for York (Mr. Gregory) said that I was a prophet of doom. I wish that there was no need to be gloomy, but I doubt whether any Conservative Member will say what a marvellous buoyant state shipping is in and what a great future it has. No one will say that there is no need to worry because everything is going well and that the Opposition, the National Union of Seamen and the General Council of British Shipping are wrong; that all is going swimmingly. That is not what was said in the other place, and it is not what the Secretary of State said. We must take action soon and swiftly if we are to save the merchant shipping fleet.

I hope that the Secretary of State and you, Mr. Deputy Speaker, will have gathered from my remarks that there is much in the Bill that we welcome, but we believe that it should be probed. We shall not vote against its Second Reading this evening—that would be foolish—but we reserve our position on the Special Standing Committee.

I promise the Secretary of State that he will have to work hard to justify some of the changes that he has made, and he will have to work hard to review some of the changes that we want made. However, I hope that, in the spirit of co-operation, we can make some real progress in Committee, and I hope that we will have a useful debate.

5.37 pm

Mr. Patrick Cormack (Staffordshire, South)

There is no one in this country, maritime nation that it is, who is not deeply concerned about many of the matters in the Bill. Some of my colleagues may wonder why I, a Member for Staffordshire, am taking part in this debate. I would just point out that I speak as the son of a master mariner and as somebody who has spent more than half his life by the sea and who has sailed with the fishing fleet out of Grimsby. Therefore, I have a little practical experience.

But it is not for those reasons that I seek to intervene briefly today. I wished to catch your eye, Mr. Deputy Speaker, because some time before Christmas I received a letter from Mr. Maurice de Rohan, the chairman of the Herald Families Association. I had not at that stage had the pleasure of meeting Mr. de Rohan but I have subsequently met him and his colleague, Mr. Spooner, and other members of the association.

I was anxious that any help given in Parliament should be on an entirely non-partisan cross-party basis. I immediately enlisted the support of the hon. Member for Birkenhead (Mr. Field) and we have tried to work together. On Tuesday this week we received, together with a few of our colleagues, members of the Herald Families Association and listened to what they had to tell us.

No one who met those people who went through one of the most searing experiences, not only losing loved ones but losing them in circumstances almost too appalling to contemplate, could fail to be moved, not just by the stories of tragedy or the terrible accounts of families rent asunder, but by the quiet controlled passion which they have displayed. This is no group of people bent on vengeance or making destructive criticism.

It would perhaps be appropriate to quote to the House the aims of their association. They say, in the short document that they issued, that the association was established after the capsize of the vessel: It was formed by the bereaved of many of the victims to give mutual help and comfort … It is natural that those who share the same grief should want to help each other. It is as natural that they should seek to ensure that such a disaster as befell their loved ones should not recur. The Association seeks in all its activities to be motivated not by vindictiveness but by the wish to see the lessons of the disaster learned. That is an extremely balanced, moderate statement, and anyone who has met members of the association cannot fail to have been moved by their attitude and approach.

I would like to take this opportunity, on behalf of the association, to thank my right hon. Friend the Secretary of State for Transport for what he said this afternoon, for his promise to meet the association's members next week, for his promise to listen carefully to what they have to say and also for the speedy action that he has taken on a number of matters that have given them and us concern. I was particularly grateful for his assurance that the boarding pass will become a legal requirement by the end of February. That is speedy action and we should all be grateful for it.

I would, however, like to concentrate my remarks on one of the principal concerns of the Herald Families Association. In its major document, the association points out that one of its immediate objectives is to have the responsibility of the ferry company—P and O European Ferries, previously Townsend car ferries — determined. The members of the association make out a good case for that but you would rule me out of order, Mr. Deputy Speaker, if I developed that particular theme this afternoon.

The second of the association's major objectives is entirely pertinent and relevant — it is to press for immediate action on the safety and stability of roll-on/roll-off ferries, to ensure that they will sink slowly, enabling normal life-saving practices to be followed. They list a number of those ro-ro ferries which have gone down in minutes or even seconds in recent years. Their document has on its cover a picture of a ferry. One immediately assumes that it is the Herald of Free Enterprise. Not at all, it is the Gateway which went down with, thank God, minimal loss of life in 1982.

My right hon. Friend said that he was devoting money to research. That is splendid. He said that he was most anxious to see that these vessels were the seaworthy vessels that everyone who sailed in them had a right to expect. But there is one point that has already come out in the debate and on which I would welcome further remarks from my hon. Friend the Minister for Public Transport when he replies to the debate. It may be perfectly possible to ensure that never again will a vessel go to sea with its doors open, but if a vessel is holed, as the hon. Member for Aberdeen, North (Mr. Hughes) so rightly said, if there is a collision in the Channel — which is the busiest waterway in the world—and a vessel goes down as fast as the Gateway and the Herald of Free Enterprise went down, there could be further disasters.

As we are entering the era of the giant ferry carrying 2,000 passengers or more, one does not like to contemplate the enormity of the tragedy that could ensue if that were to happen. I hope, therefore, that real attention will be paid to what can be done to make these vessels more seaworthy in all normal circumstances.

Of course, the hon. Member for Aberdeen, North was right to refer to the Titanic. He was also right—in what I thought was an extremely moderate passage of his speech, although I did not agree with all his concluding remarks — to say that there is no such thing as an unsinkable vessel. Nor would the members of the Herald Families Association suggest that there was. But these vessels could be made more seaworthy, perhaps by adopting the suggestions made by the hon. Member for Liverpool, Walton (Mr. Heffer); and, if they could not be made more seaworthy, no more should be constructed. This point has not been sufficiently grasped.

On corporate responsibility, my right hon. Friend rightly drew attention to the fact that on indictment a company and those responsible for it can be liable to two years' imprisonment and an unlimited fine. That is all well and good, but there ought to be provision in this Bill for a company's licence to be revoked if it behaves in such an irresponsible way in future. Such a provision cannot be made retrospective, and I stress that neither the Herald Families Association nor I seek to be vindictive. But if we are trying to frame shipping legislation for the 21st century there ought to be real penalties, and they ought to include the ability to revoke a licence.

Mr. Frank Field

Will the hon. Gentleman remind the House about our meeting with the Herald families at which they stressed — and I was surprised by the comment—that safety at sea was not regularly discussed at board level? In this Bill and with its penalties, we must somehow raise that issue to board level so that it is considered regularly, not just perhaps once or twice, on occasions when a disaster like this puts it on the board's agenda.

Mr. Cormack

The hon. Gentleman is quite right. The families association is right in making this point. I was glad to hear what my right hon. Friend the Secretary of State had to say about the policing of the regulations and about random checks to ensure that they were enforced. That was a most welcome part of his speech, as was his reference to the supervision of ships sailing under other flags.

I have two final points. Looking forward, as the members of the association do, and seeking to envisage what could happen in the event of some terrible disaster in the future — and not just a maritime disaster — the Herald Families Association believes that its members' agony and torment would have been less had there been a national disaster unit, able to respond to this sort of calamity and able to ensure that information was more quickly and accurately supplied. It also believes that if a national disaster fund existed, able to cater immediately for the financial needs of those bereaved, it would be a help. While it is not appropriate for me to expand on those points this evening, I would be most grateful if my right hon. Friend would bear them in mind when he meets the association and if he would pass them on to his ministerial colleagues.

This is a constructive and welcome Bill. The families who have suffered so badly welcome it. Let us ensure that when it leaves this House—and it cannot go back to the other place when it leaves — it is as good a Bill, as unsinkable a Bill, as we can produce.

5.47 pm

Mr. Peter Shore (Bethnal Green and Stepney)

I can well understand why the Secretary of State began his speech this afternoon by referring to the topic of marine safety and to the appalling background of the Bill, the Zeebrugge disaster. A number of the things that he said in the course of his speech will be very welcome news to the House. I do, however, join both my hon. Friend the Member for Aberdeen, North (Mr. Hughes) and the hon. Member for Staffordshire, South (Mr. Cormack) in stressing that there is a serious subject for further investigation in the design of ferries. We shall not really be wholly at ease with ourselves and feel that we have achieved that degree of seaworthiness which I am sure the industry is capable of attaining unless we tackle the question of ship design and satisfy ourselves that we have the safest form of ferry available.

Another very important factor in this debate is that we are speaking against the background of a continuing and unprecedented decline in the United Kingdom merchant fleet. The extent of that decline is not, I fear, fully appreciated.

From more than 50 million tonnes on the United Kingdom register in 1975—I remember the figure well, and some of the special circumstances, because I was Secretary of State for Trade at the time—the fleet had shrunk to 25 million tonnes in 1982 to 16 million tonnes in 1985 and to under 6 million tonnes in 1987. At least some part of the fleet has been flagged out to the Isle of Man and Channel Island registers and to those of British dependent territories, and a small number of ships have been foreign registered, too. Taking account of all those categories of ships that are still British-owned, however, we have still shrunk from 28.8 million tonnes in 1982 to just under 17 million tonnes in 1987. Thus, in only five years, the number of United Kingdom-owned ships has fallen from 1,063 to 635. No other nation — with the possible exception of Norway — has suffered so catastrophic a decline. While most European fleets contracted in the period 1982–87 — the United States actually increased its tonnage — so the scale of the decline of those nations' fleets is not comparable with our own.

Uniquely, we are an island nation, the vast bulk of whose trade is carried by ships. Of course, major adverse factors have been at work—the sharp fall in the volume of oil trade and the major changes in the pattern of oil trade to which the Secretary of State referred, for instance. He might have added the slump of 1974–75 in world trade, and the further slump that followed another hijack of the oil price in 1979–80. So there were major factors beyond our control, as he rightly said.

However, some of our wounds are self-inflicted. In particular, the abolition in 1984 of free depreciation against capital costs in the form of a 100 per cent, first-year allowance, carried back, as it then was, against profits for the three preceding years, has had a major adverse effect. No other country has abandoned Government aid toward the capital cost of its ships. As up to 50 per cent, of the running costs of a ship relate to the cost of its finance, the effect on our competitiveness has been catastrophic. Any British shipowner now acquiring a ship for United Kingdom registering puts himself at a significant disadvantage. According to the General Council of British Shipping—I have not seen its figures challenged — the United Kingdom now stands 39th in the world order-book league. We have five ships on order with a deadweight tonnage of 51,000. The General Council of British Shipping is aware of no new ships on order for United Kingdom owners for registering outside the United Kingdom. No ships were ordered from August 1986 to September 1987, when one ship was ordered. That compares with orders in the United Kingdom registry of 363 deadweight tonnes in 1983, the last complete year before the 1984 Budget withdrew the 100 per cent, depreciation allowance.

There are, of course, costs other than capital costs—especially crew costs—which determine the competitiveness of United Kingdom ships. Nevertheless, United Kingdom ships are broadly competitive with those of western Europe and operate at substantially lower costs than those of the United States and Japan. Of course, we are massively undercut by flag of convenience operators.

It is against this background that the House should examine the provisions of the Merchant Shipping Bill. While there is much that is useful in the Bill on matters such as registration, safety and the fishing fleet, only a few clauses in part III address the issue of United Kingdom competitiveness and the decline in the British maritime fleet. According to Lord Brabazon, who introduced the Bill in the other place on 10 November last year, Their objective —that of the clauses, that is— is to ensure that the shipping industry remains capable of meeting the nation's essential shipping needs in times of emergency or war."—[Official Report, House of Lords, 10 November 1987; Vol. 489, c. 1293.] He then referred, as did the Secretary of State this afternoon, to the three initiatives on assistance with training costs, the costs of crew changes on ships operating in distant waters and the setting up of a Merchant Navy reserve.

These provisions are contained in clause 25, 26, 27 and 28. I welcome them, as, I am sure, does the House—as far as they go. Just how far is explained in the explanatory and financial memorandum of the Bill. The public expenditure provision for the Merchant Navy training and crew relief costs rises to £3.5 million and £5 million respectively in the full year 1989–90. Costs incurred in relation to the Merchant Navy reserve are thought to be in the region of £1 million a year. In relation to the needs of the United Kingdom Merchant Navy, those sums are peanuts.

I do not see how the Bill can be easily amended to make more adequate provision to assist our merchant fleet, but at least it would be good to learn from the Secretary of State — or the Minister — that he had forcefully represented to the Chancellor the need to resume assistance towards the capital costs of British shipping. I do not believe that the Government or Back Benchers on either side can be, or are, indifferent to the continued decline of the British Merchant Navy.

The cost in terms of our balance of payments is already high. We have moved from a national positive balance in the 1970s to a deficit of no less than £1.1 billion in 1985. I do not know what fleet size and composition the Ministry of Defence believes to be necessary in a period of tension or war, but there must be an irreducible minimum. On present trends, there is no reason why our shrunken fleet of 400 ships should not shrink still further to 200 or fewer in the 1990s. At the very least, I hope the Government will take an early opportunity to present to the House a comprehensive policy to prevent the further decline, and preferably to assist in the revival, of the British Merchant Navy.

5.57 pm

Mr. Neville Trotter (Tynemouth)

May I say how much I agree with the speech made by the right hon. Member for Bethnal Green and Stepney (Mr. Shore). He was absolutely right to remind us of the continuing decline of the Merchant Navy, which forms the background against which we are reviewing the Bill. I support all that he said about the need for fiscal measures to help the industry. It is relevant that our competitors in the western world are giving assistance of that nature to their merchant navies while we are not.

The picture is one of a fleet that is increasingly flagged out, manned by foreigners and to an underlying extent composed of aging ships. A difficult decision about replacement lies ahead in the near future for the owners of many of the ships remaining on the British register. Coming as I do from a shipbuilding area, I need hardly remind the House how important it is to obtain more orders for that industry. However, that is not the specific issue before us — we are debating the future of the Merchant Navy tonight. I emphasise the need for my right hon. friend the Secretary of State to take to our right hon. Friend the Chancellor the message that he must not delay the introduction of more fiscal measures to help the Merchant Navy, if we want the necessary fleet renewals, without which an aging fleet will in the near future become uneconomic and unable to maintain even its present size in the near future.

It is surely not necessary to remind the House why so many of us think it necessary for Britain to have a Merchant Navy. Apart from the economic argument, it is clear that the defence needs of NATO and of our own country necessitate the existence of an adequate Merchant Navy, as part of the deterrent that we must maintain. It is essential that a potential foe appreciates that we have the maritime capacity to sustain ourselves at a time of crisis. If he believed that that was not so, there would be more temptation to start the trouble that we are seeking to avoid.

I might mention for the benefit of my right hon. Friend that his predecessor in December 1986 referred to inquiries that were being made into the problems of being able—or unable at a time of crisis — to obtain United Kingdom-owned vessels that were flagged out and operating under foreign flags. Would they be available to us in a crisis? My right hon. Friend's predecessor explained it was both a legal matter for this country and also a matter for the other states concerned. I hope that before too long we shall hear what conclusions have been reached as a result of those inquiries. It is a very important issue for the continuing defence and security of this country.

Another important factor is that our merchant fleet should be able to compete fairly with its competitors. In recent years some ships flying the Red Ensign that have been registered in the dependent territories have not complied with our safety standards. That is wrong, and I welcome the proposals in the Bill designed to prevent that happening in future.

I want to refer briefly to the Isle of Man. The Select Committee on Transport, on which I have the pleasure to serve, visited the Isle of Man a few months ago. We were delighted to be told that the Isle of Man authorities are determined to impose on the ships registered in Douglas the same high standards that are to be found on ships registered in Newcastle, London or Cardiff. It is one of the few encouraging signs for our Merchant Navy that the Isle of Man register has taken off successfully as in effect a Red Ensign flag of convenience.

Coming from North Shields, I very much welcome anything to do with fair competition in the fishing industry. While North Shields vessels have not been the main sufferers as a result of the activity by the Spanish in the southern Channel area, it is right that we should prevent the abuse of the registry system that has occurred there. Foreign-owned vessels must not be allowed simply to transfer to the Red Ensign so as to obtain part of the United Kindgom quota of scarce fish. I congratulate my right hon. Friend on taking measures to correct that abuse.

I want to ask my right hon. Friend some questions about the new registry of fishing vessels. I believe that it is proposed that there should be a central registry for fishing vessels instead of the 90 or more port registries that exist at present. I hope that my right hon. Friend will appreciate that fishermen in North Shields and elsewhere do not want to go to Cardiff or deal with officials in Cardiff in order to obtain registration in future. I hope that there will still be officials in the local ports with whom the fishermen can deal and I hope that boats will continue to display the registration letters and numbers of the local ports around the coast as there is a great deal of pride in this local identity.

One of the greatest problems facing the Merchant Navy is caused by the low wages paid on so many of our competitors' vessels. Those vessels are manned by people who are, on the whole, satisfied with their wages because they are being paid the going rate in their own country. Undoubtedly, this is one of the main problems facing our operators at a time when world freight rates are actually less than they were seven or eight years ago. There is no margin to carry unnecessary costs.

The Bill contains welcome proposals, but I fear that they are rather modest when compared with the overall scale of the problem.

The new scheme for assistance for training will be helpful. It is a fact of life that so many of our competitors in the western world do not have to find the high cost of training as do owners in this country. For many years there has been an excellent marine college in South Shields on Tyneside. It has been very disturbing to see the constant fall in the number of young men entering the college for both deck and engine cadetships. There is now a shortage of cadets and I hope that this welcome measure will end that problem. I hope that more can be also done using existing schemes such as YTS or the Manpower Services Commission to assist in tackling the problem.

With regard to the repatriation of United Kingdom crews, I was interested to be told recently by the owners of a United Kingdom registered cruise ship that when she went on a round-the-world voyage the cost of the air fares for changing the crew en route amounted to £1 million. That is the level of burden that such ships carry to provide a British crew. However, such ships of course also have the great advantage of the highest reputation for the standard of service on board. The measure will be helpful in matching the competition with their lower costs of manning.

The Bill contains a welcome proposal to establish a Merchant Navy reserve. There is considerable debate whether in an emergency we would be able to obtain the ships that we would need. It can be argued that unless the crisis was worldwide, there would be ships available for purchase if we paid enough for them. I would, however, have been happier to see an additional proposal before the House to establish a reserve not just of men but of ships anchored in our waters. The United States has adopted that policy. It is taking advantage of the low price of modern secondhand vessels and has bought nearly 100 ships which are kept at anchor and which could be put into service in a day or two should a crisis occur. We should do that in Britain.

The number of sailors on the Merchant Navy register has fallen from 50,000 to only 25,000 over the past five years. There are probably also almost 7,000 British sailors serving on foreign-flagged ships. Unless we take steps now, United Kingdom sailors to man our ships in a crisis will simply not be available and the new reserve of men is timely.

Has my right hon. Friend the Secretary of State any idea yet as to how long it will take to establish the reserve? What kind of training will be available? As I understand it, the reserve will consist of former seamen who will state that they are willing to be recalled to the colours in an emergency. As time passes, they will tend to become rusty and there must surely be a system to provide regular refresher training.

I want to refer to unfair restrictions on the market. We have always believed in free trade at sea, and quite rightly so. That was the whole basis for the birth of the Merchant Navy, which involved the carrying of other people's cargoes around the world. Many British companies are still satisfactorily and effectively doing that today. However, 79 per cent, of the weight of cargo coming in and out of the United Kingdom is now carried on foreign-flagged ships and by value the figure is 64 per cent. We can see the temptation of suggesting that we should think of protectionism. However, that is not the answer and it is not what the General Council of British Shipping is asking for. It is right that we should have free trade on the seas and we can benefit from that. However, it is essential that the rules are fair and that our people are not discriminated against as they increasingly have been. I therefore welcome the new powers sought in the Bill to counter unfair competition.

Finally, I want to refer to the problem of cabotage and to coastal trading around this country and neighbouring coasts of Europe. Different rules seem to apply. Our coasts are open to all, yet a number of our important neighbours' coasts are not open to our ships. That is very unfair and I am sure that my right hon. Friend has that point very much on board.

6.7 pm

Mrs. Ray Michie (Argyll and Bute)

I also welcome this necessary Bill. I appreciate the fact that the Secretary of State, like other hon. Members, started by referring to the safety aspects, and we would not expect anything else. We all appreciate that they are so important following the Zeebrugge disaster and tragedy.

I want to draw the Secretary of State's attention to several safety aspects to which he referred with regard to ferries which differ from the ferry involved in the Zeebrugge tragedy. I want to refer to the ferries serving the Scottish islands. I hope that the right hon. Gentleman will not insist that a six-car ferry should require closed circuit television, when the whole length of the ferry can be seen from the bridge by the master. Perhaps a little money could be saved in that way. I believe that the deadline for installing emergency lighting is July 1988. I am not sure whether approved equipment exists at the moment. Therefore, there could be a problem in meeting that deadline.

Reference has been made to the registration of fishing vessels. I have a particular interest in the part of the Bill that deals with that registration, as fishing is an integral part of the life of many communities in my constituency. Part II provides for a new system of fishing vessel registration which, I am glad to say, would do away with the ability of non-United Kingdom vessels to flag into the fishing fleet and enjoy British quotas. I am glad that the Government have responded to the need to ensure that those quotas are taken up only by United Kingdom fishermen, as they have been fought for long and hard over the years.

The Scottish Fishermen's Federation, which includes the Clyde Fishermen's Association — of which I am proud to be honorary president—holds the view that, if the exploitation of quotas by non-United Kingdom interests is to be eliminated, all loopholes must be closed. The registration of fishing vessels for title may be a matter of concern. Possibly it is peculiar to Scotland, and it is probably an issue for the Committee to consider. I believe that at present there is an option on whether a boat is registered for title, but in Scotland such registration is recognised custom and practice.

Another point of concern is the lack of definition on when the old fishing vessel register will close once the new one has been opened. While it is accepted that both registers will run concurrently for a time, it is important that a limit should be imposed, perhaps of four or six months. The federation stresses that that will be necessary if the new register is to be a success.

The administrative arrangements for the register have already been mentioned. Although I believe that they are being centralised in Cardiff, I nevertheless welcome the Government's recognition of the need for business to continue to be conducted personally at local offices, because local knowledge and expertise must not be allowed to disappear. I was reassured by the answer given by Lord Brabazon in another place that officers will be retained in many ports, including two in my area, in Oban and Campbeltown.

The Bill provides for financial assistance with the costs of training Merchant Navy officers and rating. However, as has been mentioned, there is no word about assistance for training in the fishing industry. We should give that some consideration. The Sea Fish Industry Authority has provided only limited support, and that is not guaranteed beyond March 1988. Many fishermen are already undertaking training for survival courses, and it is surely reasonable that that branch of the maritime industry should receive some support.

I was interested in the Bill's definition of a fishing vessel as a vessel used … for or in connection with fishing for sea fish. According to the Bill, 'sea fish' includes shellfish, salmon and migratory trout (As defined by … the Fisheries Act 1981)". I am sorry that eels in inland waters in Scotland are classified as freshwater fish, because they are at the mercy of foreign companies that come over and fish out all the eels, leaving our own eel fishermen with the thought of the dole. That is a tragedy, and I really do not know why eels should be so classified. Perhaps someone will consider the eel fishermen's plight.

I see no provision in the Bill that makes a serious attempt to arrest the decline of our once large, and always proud, Merchant Navy. Although the financial assistance for training and repatriation is welcome, it will not halt the decline of the fleet. I believe that what is required is a package of measures that will put us on more of an equal footing with our competitors.

The deep concern of many of my constituents about the decline came to light during the last election, when attitudes ranged from astonishment to downright disbelief that this island country could have allowed such a rundown in our fleet. While a Merchant Navy reserve sounds very laudable, I believe that a greater determination to have a viable merclant fleet crewed by United Kingdom seafarers would obviate the need for such a reserve. The continual "flagging-out" has meant that fewer and fewer people have come forward to be trained, and the danger is that we shall soon find ourselves without enough pilots or harbour masters, or enough crews for cross-channel ferries, Caledonian MacBrayne and the large ships criss-crossing the world's oceans.

I was delighted to learn that a company in Glasgow, Clyde Marine Training, which has 12,000 British seafarers on its register, set up a training schedule only last March. The company managed to attract 50 youngsters to train this year, and hopes for another 100 next year. The young cadets come in with O-grades, the Scottish equivalent of O-levels in England. With the use of existing finance through the Manpower Services Commission, the cost to the shipowner is very much less — about £6,000 over four years—whereas previously it was £25,000 per cadet over four years.

I referred to the interest of my constituents. That interest extends to the whole of the highlands and islands area, for it was a tradition stretching back to the first world war that crofters and fishermen left the land to join the Merchant Navy in far greater numbers than ever joined the Royal Navy.

During the depression of the 1930s, when unemployment was so high, highlanders used to come to Glasgow and join the long queue in Jamaica street, where stood the men on the dole hoping to join the Merchant Navy But, because of their fishing and seafaring experience and tradition, those highlanders were often taken out of the queue and given jobs straight away. There is a wealth of knowledge, expertise and dedication among our people. It would be a tragedy if this country were to suffer any more loss, or see any further decline in our fleet and in the crews who man it. I give the Bill a general welcome.

6.18 pm

Sir David Price (Eastleigh)

I detect a desire to make progress, so I shall be as brief as I can. In doing so, I declare both a constituency and a personal interest in the fortunes of the British Merchant Navy.

This is a miscellaneous Bill containing all sorts of different clauses. It therefore lends itself particularly well to study and debate in Committee. On the Opposition point on whether a Special Standing Committee should deal with it, I should mention that, as I understand the rule applying to such a Committee, it can have only four sittings.

Let me put forward an alternative suggestion. It might be an education for those of us selected as members of the Standing Committee to go and look at a few ferries, with the safety angle particularly in mind. Perhaps we could pay a visit to the ship tank at the National Physical Laboratory to examine hull designs and other such matters. The alternative would be to set up a Select Committee so that we could have proper assessors and advisers. However, I think that that is outwith the scope of what is being proposed.

I should certainly be sympathetic to any thought that we might have, as it were, hands — on experience of ferries, rather than just talking about them. In the normal Select Committees on which I have always served, I have found that the visits outside Westminster are often more valuable than the formal evidence that we take here.

I am asking almost the same question as the right hon. Member for Bethnal Green and Stepney (Mr. Shore) and my hon. Friend the Member for Tynemouth (Mr. Trotter), which is: will the Bill assist in reversing the dramatic decline in the size of the British merchant fleet? We must all ask ourselves that. As the House knows, I have found myself in the unhappy and uncharacteristic position of having to warn the House about the steady decline in the size of the British Merchant Navy. I do not enjoy the role of Jeremiah—to be quite honest, I do not think that it becomes me. However, I fear that the figures quoted by the right hon. Member for Bethnal Green and Stepney have proved that, unfortunately, one's fears were correct. The right hon. Gentleman quoted chilling figures to the House, which I shall not repeat.

The question that we must ask ourselves is the one to which my hon. Friend the Member for Tynemouth assumed that the answer was generally accepted: do we need a Merchant Navy? I should like to suggest briefly the headings, without developing them, for the reasons why I believe that it is absolutely essential that we have a Merchant Navy of reasonable size. The first, which has been touched on, is national security, not only during war but in situations of emergency that are short of war. All the evidence — again I shall not attempt to detain the House — shows that the total availability of merchant ships to the whole of the NATO Alliance has been steadily declining. That includes those ships that are flagged out to dependent territories and can be reached, and those under Liberian and Panamanian register. It is a matter of serious moment.

The House must remember that in our case the Merchant Navy is asked to fulfil three roles. The first is direct support for the armed forces. The second is the provision of transport to continental Europe which, in the jargon, is called sealift. The third is to ensure civil resupply of our island economy and, indeed, of western Europe from across the Atlantic or anywhere else. That alone gives cause for deep concern to anyone who cares not only about the Merchant Navy but about the defence of our country. There is also the economic question of control over our own trade. Again, the right hon. Member for Bethnal Green and Stepney quoted some figures so I need not detain the House, although I wish to make the point that we should control our own trade. Furthermore, the balance of payments argument is a little too lightly swept away.

In those circumstances, where do we look for improvements? I suggest that there are two areas: first, measures to help reinvestment and, secondly, measures to assist with running costs. Again, the right hon. Gentleman quoted figures showing the dramatic fall in reinvestment in new vessels since 1984. There are various ways in which the position could be restored. At the moment, the preferred solution is roll-over relief for balancing charges.

However, there should be no doubt that unless the Chancellor restores some form of investment incentive to British shipowners, we shall not get the ships. I hope that my right hon. Friend will talk to the Ministry of Defence and especially to the admirals about that.

I do not want to tell stories out of school, but when one meets some of the admirals informally on the various all-party maritime groups, one realises that they are clearly concerned about the decline in the British and the NATO Merchant Navies. However, they are fearful of the Treasury and that if anything were done to assist investment in the Merchant Navy it would somehow have to be paid for on the naval Vote. The admirals are a shrewd lot. I repeat that unless something is done we shall not have the necessary Merchant Navy back-up for the Royal Navy.

Referring to assistance on running costs, we are delighted to have aid for training costs—we shall discuss that more in Committee — and for repatriation. However, there is also the question of income tax for seafarers and the problem of social security changes and the like, all of which, in different ways, get more favourable treatment from other western European Governments, let alone what happens in the Far East.

We should not be too purist. We should look at what happens in the real world and see whether we can adapt it. I understand that the European Commission is giving serious consideration to some such measures of relief which would have general application. I hope that our Ministers who go the Commission will give such proposals their welcome and support.

Clauses 27 and 28 deal with the Merchant Navy reserve, which we welcome. However, it is no good having a reserve of sailors if there are no ships for them because, surprise, surprise, just as ships need sailors, sailors need ships. We do not have sufficient ships that might be available to the reserve. We also need the right mix of ships because it is a question not just of tonnage but of the right tonnage. I suggest that my right hon. Friends consider setting up a Merchant Navy strategic reserve. Time forbids me to go into that in detail but no doubt we can do so in Committee. However, it is a well-known concept and means doing the same for merchant ships as the Royal Navy Reserve does for officers and seamen. We must also consider the alternative of a crew-related allowance for those who take on extra reserve commitments.

I welcome clause 37, but in Committee we shall wish to probe my hon. Friends on precisely what it means. I put in a plea for us to take tougher powers to deal with other European countries over cabotage. I give notice now that I intend to table amendments to strengthen that part of the Bill. In such matters we must play to what I would call "French rules" rather than to the letter of the treaty of Rome. French rules were well illustrated when my right hon. Friend the Member for Worcester (Mr. Walker) was Minister of Agriculture, Fisheries and Food. Then we were threatened with being flooded with highly subsidised frozen turkeys, which would have upset turkey farmers in this country. Quite rightly, my right hon. Friend's veterinerary surgeons discovered the risk of a rather obscure turkey disease. That worked admirably and was within the law. I call that playing to French rules. The French play to the rule that they never do anything internationally that is not perceived to be in the interests of France. It is a question of all animals being equal, but French animals being more equal than other animals. Of course, we wish to have free access around the coasts of Europe — that has been our steady position — but it is not happening. Incidentally, the Greeks are every bit as bad as the French, and probably worse—

Mr. Channon

They are worse.

Sir David Price

Yes. My right hon. Friend says, "They are worse"; and that affects the cruise trade. Therefore, I beg my right hon. Friend that in the matter of cabotage we play to French rules.

6.29 pm

Mr. Terry Fields (Liverpool, Broadgreen)

When we debated the ministerial statement on the King's Cross fire, I was moved to say that it took tragedies such as that to prompt the introduction of legislation. We have discovered that with other legislation dealing with the fire service, which followed the death of firemen and civilians. I doubt whether we should be discussing amendments to a law introduced in 1894 had it not been for the death of nearly 200 people in the Herald of Free Enterprise disaster a short time ago. As my hon. Friend the Member for Aberdeen, North (Mr. Hughes) said, the importance of this debate arises from the fact that we are not likely to be in the game of making further changes to merchant shipping legislation or discussing it again this Session.

Two hundred lives have been lost, and in discharging our duties and responsibilities we must take every step to ensure as far as humanly possible that a repetition of the disaster is avoided—albeit in the confines of the concept that it is impossible to ensure 100 per cent, safety in any walk of life.

We are amending the Act, and any positive change is good. However, we must ask ourselves how good it is, and the importance of the task on which we are engaged will be reflected in the legislation, which should secure the safety of life and property and ensure the future of the British merchant fleet.

In the debate in another place last year the Parliamentary Under-Secretary of State for Transport said of the Pilotage Act, which was a forerunner of this Bill, that it provides a framework within which an industry with proud traditions can adjust to modern circumstances and operate more efficiently." — [Official Report, House of Lords 10 November 1987; Vol. 489, c. 1292.] It is important to bear those matters in mind.

I shall centre my remarks on a number of key issues. There is admirable scope, even in this debate, to consider valuable amendments to stiffen up the Bill, which is somewhat suspect in certain aspects. For example, there are anomalies about registration. I shall not wave a racist flag, but, in the interests of the safety of the crew and passengers of ocean-going vessels, we should ensure that vessels sailing under the Red Ensign are covered by legislation that ensures safety, protection and a good standard of shipping. Gibraltar has 150 registered ships. Gibraltar is part of the dependent territories, but last year it had no inspectors to police international regulations. It now has two inspectors—hardly sufficient to cope with the needs of a fleet of 150 ships. Those ships can fly the Red Ensign and thus, in the view of Merchant Navy officers, bring the Red Ensign into disrepute because of the lack of safety measures on those ships. Foreign-owned ships with foreign crews registered in Gibraltar under the so-called protection of the Red Ensign go to the Gulf and elicit the support and protection of the Royal Navy. We need to tighten up the Bill, and I am sure that we can make amendments in Committee to do so.

Last week I met members of the Herald Families Association. One of the deceased was an old friend of mine, and I therefore have close contact with the family and the association, which made a parliamentary sortie last week. I support the families' view. They are not vindictive. In framing legislation, we have a responsibility to ensure that there is no repeat of the tragedy visited on those families. I believe that we could take other measures in that direction.

The Merchant Navy officers have sought to separate the master from the owner-manager so that the master remains responsible for acts of omission over which he has control. However, the Bill deals with the provision of a suitable ship and suitable equipment and crew, over which he has no control. In those circumstances, there must be a divergence of responsibility and we must insert into the Bill that divergence of responsibility, by means of suitable provisions, to ensure that the law is observed by all concerned.

The demise of the merchant fleet in this country has been referred to. Tonnage has dropped by 64 per cent, in 10 years. In the same period the number of seafarers employed has dropped by 62 per cent.—from 80,000 to 30,000. Of the 500 deck and engine officer cadets employed in the industry, only 107 serve on British flag ships. That is a critical situation.

As has been said, if we cannot legislate for safety, there are certain other things that we can do. We can ensure that owners of shipping fleets have responsibilities and discharge those responsibilities, and that discussions on safety take place in company boardrooms, as they have not done hitherto. It is one thing to pass legislation: we must ensure that it is adequately policed. We must ensure that there are inspectors to check that what is laid down by Parliament is practised by the companies.

The Herald of Free Enterprise disaster was predictable, following as it did the Gateway disaster. Companies could have looked at recent history. Seventeen such vessels have sunk — the Gateway in a couple of minutes and the Herald of Free Enterprise in four. Companies should have acted positively, rather than merely responding to circumstances.

We must be very clear about what we are discussing in terms of the stability of vessels. We shall need expert advice if we are to ensure that our vessels have that stability. In the last two episodes, two ro-ro vessels went down in a matter of six minutes, collectively, with a loss of human life. That must mean that there is something wrong with the design of the vessels, and we need to correct that design fault. Hon. Members have talked about the use of the marine fleet in war time. We should remember that the Royal Navy refused to man these vessels in the Falklands extravaganza before they had been modified to make them safe. In Committee we must examine the question of stability.

There is widespread concern about the design of the ships, as the Herald Families Association told us the other day. That concern goes far beyond politics, and far beyond the interests of those who have lost loved ones. The naval architects and experts are all concerned about the matter. We in this House have a duty and responsibility to ensure that in Committee we insert into the Bill safeguards to protect such families.

Time will not allow me to go into great detail, as I should have liked, on behalf of the families and the merchant shipping officers, although, given the opportunity, I shall raise some of those matters in Committee. Following the death of so many people in the Herald of Free Enterprise and Gateway tragedies, we must remember that the big ferries in operation now carry 2,000 passengers. If 2,000 passengers went down with a ship in a matter of minutes, it would be beyond the wit and ability of the rescue services to extricate them. We must seriously consider methods of evacuation in such circumstances.

Finally, I refer to early-day motion 176, tabled by me and signed by a number of my hon. Friends. It deals with the Herald Families Association and discusses the corporate responsibility of the shipowner. The merchant officers and others issued dire warnings of the faulty practices on that vessel and others operating on the line. Those warnings were never acted on in the boardrooms. They were never acted on by the parent company. Through neglect, human life was lost.

My early-day motion calls for corporate manslaughter charges to be brought against companies. It notes the findings of Mr. Justice Sheen, which highlighted the company's refusal of requests for both an additional officer and warning lights to indicate that the bow and stern doors were closed. We have heard that some of those measures might be introduced.

Some Members may not be calling for the setting up of a Special Standing Committee. I would argue that retrospective legislation could be introduced, given the criminal negligence of those shipowners. I have been told that retrospective legislation cannot be introduced. I do not know whether it is retrospective, or ex post facto, but since 1980 the Government have introduced at least eight pieces of retrospective legislation—the National Health Service (Invalid Direction) Act 1980, the Employment Act 1982, the London Regional Transport (Amendment) Act 1985, the Housing and Planning Act 1986, the Rate Support Grants Act 1986, the Teachers' Pay and Conditions Act 1987, the Local Government Act 1987 and the present Local Government Finance Bill. All those measures contain retrospective provisions, and some were intended to punish what the Government would call profligate local authorities.

If we are sincere about redressing the injustice that families have experienced, we should be considering retrospective legislation to deal with those whose criminal disregard for the safety of crew and passengers allowed these tragedies to happen.

I hope that all hon. Members will be in agreement, so that we can ensure that what has happened does not happen again.

6.41 pm

Mr. David Harris (St. Ives)

I hope that the hon. Member for Liverpool, Broadgreen (Mr. Fields) will forgive me if I do not follow the points that he has made but concentrate on two other aspects of the Bill.

The first matter has been touched on by various hon. Members — the provision in part III to establish the Merchant Navy reserve. Clause 28(2) provides: The Secretary of State may make such payments as he thinks fit in connection with the training and certification of members of the Merchant Navy Reserve". Most of us have a vague idea of what my right hon. Friend the Secretary of State has in mind with regard to the training and composition of the reserve. I know that this matter will be raised in Committee, but it deserves a good deal of thought. It is pointless having a reserve if it consists only of former members of the Merchant Navy whose names are on a list somewhere in the Department of Transport. Obviously, there must be training, and we should give thought to the means of providing it, whether on existing vessels or on a special vessel, perhaps chartered by the Department, to provide suitable training.

It will come as no surprise to you, Mr. Speaker, or to other hon. Members, that my purpose in seeking to catch your eye is to speak about what I regard as the scandalous way in which, over many years, we have allowed foreign vessels to gain access not only to our waters but to our precious stocks and quotas. That has been detrimental to the fishermen whom I represent in Cornwall, which is the nearest area in the United Kingdom to Spain.

I almost stumbled across this matter when I was the Member of the European Parliament for Cornwall and Plymouth. The practice of what has become known as flag of convenience fishing was just beginning. I was horrified to learn how completely defenceless we were. I well remember going to a dusty office in Plymouth where foreign boats were registered. A very nice lady told me that she had no powers whatsoever and that if someone came in with a set of papers she had to register his boat.

Under pressure from myself and others, the position was changed and tightened up. In that regard, I pay tribute to Ministers, particularly those in the Ministry of Agriculture Fisheries and Food, and especially the current Minister of State who has been very concerned about this matter.

Various measures were introduced — some were holding measures—but the matter developed to such a stage that at the end of the last year my right hon. Friend the Minister of State told me that there were 50 ex-Spanish vessels — flag of convenience vessels that had been transferred from Spain to Britain—on our register. In addition, a further 70 United Kingdom fishing vessels were beneficially owned in part or to a large extent by Spanish interests. Those vessels—whether transferred or bought by Spanish interests—are Spanish-owned. All the benefit that is derived from them goes back to Spain; they are British vessels only in the formal sense that they manage, by one means or another, to get on our register.

The harm that they have caused to our fishing interests is considerable. At long last we have the legislation for which I and others have been fighting for many years. I hope that it works. It is no good having legislation if it does not.

I hope that my hon. Friend the Minister will say how these new powers will be applied. We know that to be on the new register vessels will have to be at least 75 per cent, owned by British interests.

How will the Minister, or his officials, determine that the provision is applied and obeyed? Speaking from experience, may I point out that the Spaniards are very adept at getting round rules and regulations. I would thoroughly endorse what my hon. Friend the Member for Eastleigh (Sir D. Price) said earlier — that perhaps we need to play by the French rules. It is instructive that, to my knowledge, not one Spanish vessel has been transferred to the French register. The French would not tolerate it for one minute. Their administrators would ensure that it did not happen. With this law in place, it is up to our administrators to ensure that Spanish vessels do not come on to our register by any device that they may try to use.

I well remember that many years ago I discovered one Spanish company that was supposed to be operating from an office over an antique shop in Kensington high street. All that it had on those premises was a little brass name-plate.

My plea is to ensure that the legislation works. If it does not, the anger of fishermen, particularly in Cornwall, will indeed be great. I hope and believe that it will work. We must ensure that these bogus vessels are completely removed from the register and that they are unable to fish from our quotas.

6.48 pm

Mr. Gerald Bermingham (St. Helens, South)

I appreciate that time is short, so I propose to concentrate on one subsection of the Bill.

The Secretary of State was kind enough to allow me to intervene and raise the subject of surveyors. He is well aware that I have expressed concern over some time about the quality of the work that has been carried out, but that is no reflection on those who have been acting as inspectors and surveyors. However, because of the sheer volume of the work, there was a failure to carry it out. That may seem a tortuous way of putting it, but it is fair.

I am glad that an assurance has been given this afternoon that further surveyors will be recruited and that it is accepted that further costs will be incurred in acquiring the number of surveyors that we need if we are to inspect the ships that are currently registered and, indeed, many other ships that sometimes call at our ports on which conditions are anything but satisfactory. Safety extends not only to ships registered under the British flag or the flags of dependent territories, but to ships, which often carry British officers and seamen to the four corners of the world, registered under the flags of other nations. We are all aware of the scandal of flags of convenience over the years.

The assurance given by the Secretary of State this afternoon is indeed welcome. I can assure him that I shall be watching most carefully in the weeks, months and years ahead and, should I see any delay on his part or any diminution of that undertaking on this subject, I shall be after him. Safety is far too important to be left to political chance.

It is in that context that I want to raise the problem, as I see it, under clause 3l(8)(b) relating to the duties of a master. While I welcome anything that increases responsibilities and the enforcement of those responsibilities, it really is drafted in a way that leaves a lot to be desired. Under that subsection "duty", in relation to a master, is defined as including his duty with respect to the good management of his ship and his duty with respect to the safety of operation of his ship, its machinery and equipment". If one says it quickly enough, it sounds all right. But what exactly is meant by "good management"? Who is to be the judge of that? Who is to give the master of a ship a fair crack of the whip?

As the Secretary of State is well aware, certain questions have recently been raised about the Surveyor-General's organisation. Indeed, he is probably well aware of the letters from the National Union of Marine, Aviation and Shipping Transport Officers to him and to the Surveyor-General reminding the latter that at one time an undertaking had been given, as I understand it, that one of the Deputy Surveyors-General would be a man with nautical experience. Such a person would bring to the Department the practical everyday knowledge which is gleaned not from books, magazines and articles, but from the practical job.

Somebody in the Merchant Navy once told me that when he left college he certainly knew the rules; when he had sailed for a few years on the high seas he began to learn about the sea. It is that sort of knowledge that should be brought to the Department. In saying that, I am not criticising any of the persons in the Department, for whom I have the highest respect and regard, but Captain Shone, who has retired, has not been replaced by anyone with the necessary nautical experience. Perhaps the Minister, in replying tonight, will give an assurance that somebody with the necessary nautical experience will be appointed.

I do not want to stress the point too much tonight—I think that the Secretary of State and the Department are well aware of it—but if clause 31(8)(b) is to have any practical meaning and real bite, it is necessary that the surveyors from the Surveyor-General's department, when discussing what is meant by the management of a ship, should have the sort of day-to-day knowledge that comes from practical experience in defining the terms of duty.

Perhaps a simpler solution would be to teach parliamentary draftsmen — I am sorry that I have to repeat this each time I speak in the House — how to draft so as to convey into words something that is both practical and enforceable.

The Bill has many good parts, some of which have been mentioned by right hon. and hon. Members on both sides of the House. I wish the Bill a speedy passage to the statute book. It is long overdue in many ways.

I have mentioned one small aspect tonight and I will touch briefly on one other. I have listened to all that has been said about the Zeebrugge affair and, of course, one has nothing but the deepest sympathy for all those involved. If the rules of the sea are obeyed and if ships are surveyed and working practices are looked at carefully, tragedies such as that do not occur. It is necessary to remember that the scars are also borne by those who served on the Herald of Free Enterprise and they will be carried for ever. Perhaps we ought also to have a little sympathy for the members of that crew, many of whom showed such great heroism on that night.

On that note, I wish the Bill a safe passage.

6.55 pm

Mr. Jonathan Sayeed (Bristol, East)

The hon. Member for St. Helens, South (Mr. Bermingham), having made his point so ably himself, will, I hope, excuse me if I do not directly follow him.

Having studied this Bill, I have come to the conclusion that it must have been drafted by Sir Humphrey Appleby's alter ego. I can imagine its genesis. It would have started with the Minister stating, "Humphrey, I've got a problem. Members are saying that I am to blame for the merchant fleet having declined by nearly two thirds in 10 years and that I am doing nothing about it. "But, Minister", would have come Humphrey's reply, "It's the Opposition's job to oppose." "No, Humphrey", says the Minister, "you don't understand; even my own side is blaming me. I've made a decision: we must do something."

Aghast, Humphrey answers, "Do something? Why? Everything is going splendidly; soon there will be no Merchant Navy to trouble you. But we'll still have the staff, we'll still have the budget. Indeed, Minister, we'll need more men and more money to oversee its orderly demise. You, Minister, will have a bigger Department and will be even more important—pictures in the papers, the PM programme, perhaps even Terry Wogan." After a period of silent reflection by the Minister as he sees all these accolades passing him by, he sorrowfully announces, "No, Humphrey. I have to be dynamic. Go away and prepare a Bill."

And so a Bill was born, but Humphrey's hand had lost none of its cunning. A Bill there would be, a grand title it would have. It would contain many useful measures, but it would singularly fail to address the central problem that we, an island nation, appear to be doomed to maritime obscurity.

I have never underestimated the problems that confront us in reversing this trend. My right hon. and learned Friends will know that in previous speeches I have fully acknowledged the over-tonnaging, the predatory pricing, the shift in trade patterns and the impact of containerisation. But action can and must be taken not just to protect our commerce but to secure our defences.

My hon. Friend will have read the Sea Group report. Can he confirm to me today that he is confident that we could mount another major out-of-area offensive? Is he able, even as a paper exercise, to state what ships could be taken up from trade to mount another Falklands-type operation?

Personally I doubt that we are able to provide the numbers or, just as important, the mix of ships necessary unless we are prepared to rely on foreign powers. We have only to remember the reaction, during the Falklands campaign, of the United Nations, of Commonwealth countries and of some EEC countries to recognise how dangerous that would be. To subordinate our strategic imperatives to myopic considerations is folly.

In general, I agree with the Treasury view that financial and tax distortions would be counter-productive and that the market should be able to come to a decision based on commercial considerations, not on tax handouts. Therefore, the general restructuring of capital allowances and the reduction in corporation tax was a bold and sensible step by a very able Chancellor, but, when he included merchant shipping in the capital allowance proposals, he made a mistake. He ignored the fact that, unlike other assets such as plant, machinery and buildings, ships are mobile. They will be removed from a hostile tax regime to one that is more accommodating.

That is what has happened with British shipping, yet, elsewhere in Europe, where crew and capital costs are similar to ours, the evidence is that a more liberal tax regime increases the tax take. More ships paying less produce more revenue than a few ships paying more. The Treasury should not find that concept difficult to understand, because a direct analogy can be drawn between this proposal and that of personal taxation. We have seen that, in English-speaking countries, as the upper bands of personal tax are reduced, tax revenues from the same percentile have increased. This conclusion has become so obvious that the Labour Government of New Zealand are proposing to abolish all higher rate bands of personal taxation.

We look to the Secretary of State for Transport to persuade my right hon. Friend the Chancellor of the force of these arguments. The Secretary of State for Transport must defend British shipping from the blinkered, single-year balance sheet approach of the Treasury. He must remind that organisation that the defence of the realm and its strategic interest must be paramount. He must show that these proposals will cost nothing; indeed, for the reasons that I have detailed and by the use of merchantmen as force multipliers, we can expect savings.

I wish to turn from general considerations to make some brief remarks on specific proposals in the Bill. I welcome the establishment of a Merchant Navy reserve, but I am doubtful about its effectiveness. First, I have yet to be persuaded that there will be ships for them to man. Secondly, if the Bill were ever extended to embrace serving officers, it must be recognised that most British officers are employed aboard foreign-owned or flagged ships and there is no guarantee that the owners would release them from their contracts of employment at this country's request. If the Bill is to include only those who have retired, we must remember that they become time-expired.

Although the training provisions are useful, I am not sanguine that they will encourage young men to join the Merchant Navy. I challenge my hon. Friend who will wind up the debate to say whether he would encourage another son of his to enter such a profession, given the uncertain future faced by a Merchant Navy officer.

My next point refers to certificates of competence, particularly those of Commonwealth countries. My hon. Friend the Minister will know that we currently recognise Commonwealth certificates of competence, yet doubts have been raised about whether they are always granted properly. As the United Kingdom had no ability to monitor their award, automatic recognition of Commonwealth certificates of competence should cease. Although, in the main, it is right to make the owner responsible for the safe operation of a ship, I can imagine occasions when such a proposal would be iniquitous, for example, in the case of a bare-boat charter, where the charterer provides the crew and thus the owner of the ship has no control over its safe operation.

As many hon. Members have dealt extensively with the problem of ship construction and safety, I shall not dwell long on his aspect. However, I ask my hon. Friend, when he winds up, to confirm that he will use his best endeavours to ensure that standards imposed on British ships become common standards. If they do not, British shipping will suffer yet further disadvantage. This is particularly important in the case of major structural changes such as longitudinal or transverse bulkheading of vehicle decks of ro-ro ferries.

I am pleased that my right hon. Friend the Secretary of State confirmed that he intends to work through the International Maritime Organisation. I wish to pay tribute to that organisation, which exemplifies how United Nations organisations should operate. I wish to record my appreciation of the leadership displayed by its Secretary General.

I wish to turn now to clauses 36 and 37, which strengthen and widen the Secretary of State's power in cases of unfair competition. Time and again, the House has stressed that, although Britain observes the laws against unfair competition, our Community partners and trading competitors do not; indeed, they flout them. Will my hon. Friend explain what action he proposes to take to combat cargo reservation and restrictions on cabotage? If he thinks that that will take up too much time in his wind-up speech, perhaps he will send a full reply detailing the position of our major competitors and partners and what action, if any, he intends to take.

Clause 29 fails to deal with individual lorry weights. I am surprised about this because they affect loading factors on board ship. I hope that my hon. Friend, either in Committee or by statutory instrument, will make provision for weighing freight vehicles at British ports. We know that about 30 per cent, of all vessels coming from France by ferry are overloaded. As we cannot expect the French to weigh vehicles leaving their ports, particularly when they conform to their laws but not ours, we must weigh them on entry to this country. By the use of a graduated system of fines with severe penalties for major and deliberate overloading, hauliers would not be tempted to take the risk and, consequently, ship safety would be improved and our roads would last longer.

Finally, I welcome the establishment of a marine accident investigation branch, separate from the marine directorate proposed in clause 32. Both will still be under the same Secretary of State and, although I am prepared to accept that "Chinese bulkheads" will probably be effective, I would have preferred to see the degree of separation enjoyed by the aviation industry.

If we judge these measures in terms of maritime safety and by the way they plug some holes in previous legislation, this modest Bill is sensible and welcome. However, if we judge it as we should, by what it will do to halt and reverse the rapid decline of the British merchant shipping industry, it fails. Unless we act, we shall rue the day that we watched idly as our maritime heritage and power disappeared before our very eyes. I hope that the Government will show that same ingenuity and effort of will in righting this mistake as they have elsewhere in the governance of this country.

7.8 pm

Mr. Brian Wilson (Cunninghame, North)

I congratulate the hon. Member for Bristol, East (Mr. Sayeed) on an elegant speech which contained a good many home truths and pertinent questions for his Front Bench. There is much to welcome in the Bill, although some points need further examination. However, as the hon. Gentleman suggested, the overall picture is that we have a mouse of a Bill to confront what I regard as a national crisis.

When the sins of the Thatcher years are finally tabulated, I believe that the destruction of the British Merchant Navy will be high on the list. It is incredible that this island nation, which still relies overwhelmingly on merchant shipping for its trade, should have witnessed a decline from 1,500 ships in 1979 to 400 ships in 1988. There is every prospect, as confirmed by the General Council of British Shipping, that that decline will continue so that, by the early 1990s, there will be about 100 ships left, almost exclusively coasters and ferries. That represents an extraordinary picture of the maritime strength and weakness of Britain in the late 1980s. I believe that those who have been responsible should be deeply ashamed.

It is a matter of some considerable interest to many hon. Members—if not, it should be—that there is not the slightest chance that a Falklands-type merchant operation could be mounted again, because the ships are not there. Recently, in the south-west of Scotland, a major military exercise was mounted—Purple Warrior. There was such a dearth of British merchant shipping that ships had to be hired from all over the western world to make up the numbers. I hope that we do not have a real conflict as opposed to a military exercise; but, if there is one, it seems unlikely that there will be time to organise the hiring arrangements before it is too late in the day.

Today, Conservative Members would like to create a mood of consensus. They would like to believe that the decline in the Merchant Navy is just one of those things that happened and that there was no political error involved. That is not the case. The destruction of the British Merchant Navy has been a direct consequence of the madness that prevailed in the management of British industry and the British economy from 1979 into the early 1980s.

When the right hon. Member for Chingford (Mr. Tebbit) had responsibility for merchant shipping, he said: It seems to me that if British owners can switch their ships to a flag of convenience and as a result increase profitability, then it seems eminently sensible to me that they should do just that. One can feel the sneer coming from those words. In the early 1980s, when Thatcherism was in full flood and everything was to be left to the market and laissez faire, such words were extremely fashionable. However, the paean of praise for flags of convenience, when quoted today, does not bring the same cries of "Hear, hear" from the Conservative Benches as it no doubt did in the early 1980s.

When it suits their purpose, Conservative Members like to cover themselves in the flag. However, in the past nine years they have shown a remarkable contempt for a flag that has served the people of this country well—the Red Ensign. It is not as though the policy advocating flags; of convenience has been entirely abandoned. No one on the Conservative Benches has had the courage today to stand up and speak out in favour of flags of convenience, but the policy of the Government, behind the scenes and through international organisations, is one of support and promotion of such flags. In UNCTAD, the British Government have been in the forefront of resistance against phasing out flags of convenience. The British Government have blocked any move attempted within the EEC maritime policy against flags of convenience. British flags are fine so long as they do not conflict with the profit interests of those whom Conservative Members ultimately serve.

Because of time I wish to restrict my remarks to flags of convenience. In the Bill the provisional granting of certificates is reduced from six months to three months. I do not believe that that is good enough. Crown territories, such as Gibraltar, Hong Kong, the Cayman Islands and Bermuda, have been turned into disreputable, flag of convenience boltholes. If a disreputable, unscrupulous or careless shipowner can gain British registration for three months, there is nothing to stop him moving that ship to one bolthole and then to the next. He will still continue to fly the Red Ensign without any of the controls that have always been assumed—prior to this Government—to go hand in hand with the responsibilities of that flag, as he travels round the globe. Surely that is unacceptable. Provisional certificates should be done away with because if shipowners can register for three months there is no way of getting them out again. I cannot understand how any Conservative Member can defend the principle that those territories, which exercise none of the controls that go with genuine British registration, should be allowed to use the Red Ensign to cover up operations that are patently substandard.

My hon. Friend the Member for Liverpool, Broadgreen (Mr. Fields) spoke about the number of inspectors in Gibraltar. The flag of that bolthole covered the Syneta that went down off Iceland a year ago. My hon. Friend said that, in the past year, the number of inspectors had risen from zero to two. That is even less of a step forward than might appear because the last place that most of the ships registered in Gibraltar are likely to be, or within 1,000 miles of, is Gibraltar. All the inspectors can do is check up on brass plates of addresses of convenience. We need an inspectorate system that allows inspectors of this country to insist upon boarding any ship that enters British waters, irrespective of the flag it may be flying and irrespective of the country or statelet with which it may be registered.

I believe that it is high time that we repaid some of the debts owed to the people who have served in the Merchant Navy over many years. It is tragic that communities which used to rely largely on employment within the Merchant Navy have seen that great industry disappear. Young seamen used to go on to colleges to learn the skills of the maritime industry and would travel the world as a result. Now, those colleges are closing and the courses are disappearing because there is no point in training to be a merchant seaman if there is no Merchant Navy to join. I hold the Government responsible for totally failing in the past nine years to take action because they were imbued with the market philosophy — philosophy callously represented by the words of the right hon. Member for Chingford and his lackey of those days, a gentleman by the name of Sproat, who is best forgotten.

The formation of a Merchant Navy reserve fills me with no excitement. I would regard it as ineffectual in any crisis. I also believe that that reserve adds insult to injury. In the coastal communities of this country there are thousands of unemployed seamen who would dearly love to be back aboard British ships — Red Ensign ships — working at their chosen career. That option is not open to them because, under the patronage of the Government, the Merchant Navy has come close to being wiped out. To tell those people that they are of no use to the country as seamen in times of peace but that they might get a call to do something in time of war shows additional disregard for them. It adds insult to injury.

The Government should come back to the House with a real Merchant Navy Bill. In the past nine years they have signally failed to present such a Bill to the House. That Bill should create incentives to build ships and keep them under the Red Ensign. It would act against abuses to the Red Ensign from flags of convenience. It would not give a nod and a wink to British shipowners who take their business where they want, employ Third-world labour at the lowest possible cost and disregard safety and other factors. It would introduce sabotage. I plead with the Government to do something for the Merchant Navy, for, my goodness, the Merchant Navy has done a lot for this country.

7.19 pm

Mr. Conal Gregory (York)

The Bill is important, containing major new initiatives. However, they will not fully reverse the decline that we have discussed tonight in our merchant fleet, down from approximately 1,500 ships in 1975 to perhaps 400 last year.

We are debating the Bill against a background of enormous oversupply in world shipping capacity. But subsidy is not the right way forward. The Opposition introduced a number of red herrings. They were very short on specifics or constructive ideas, which is rather sad.

We are right to reduce the unnecessary regulation of the maritime industry. Despite red tape, some 60 per cent, of the United Kingdom shipping industry's international freight earnings were made in cross trades in 1986.1 believe that Britain needs a capable merchant fleet in times of emergency or war, so I welcome the assistance the Bill proposes, both in greater safety at sea and ensuring stronger powers against unfair competition.

I wish to raise two specific subjects—responsibility for safety and light dues. The Bill imposes new statutory duties on owners, management, master and crew. Masters, who are highly trained, surely accept that responsibility, but one of my constituents, a shipmaster who lives in Chalfonts, York, raises the question whether a penalty of £50,000 and/or two years imprisonment for what will be a criminal offence is excessive. The Committee should consider where negligence lies if the owner or manager ignores a dangerous situation. Clauses 29 and 30 appear inadequate in that respect. The responsibilities of the owner and master need to be clarified, as we should otherwise be leaving a void at the mercy of case law.

The second subject I wish to raise is the imposition of light dues. Under section 634 of the Merchant Shipping Act 1894 the management of lighthouses and other navigational aids in the sea areas around the British Isles is vested in three general lighthouse authorities: Trinity House of Deptford Strond, the Commissioners of Northern Lighthouses and the Commissioners of Irish Lights. Income from light dues is carried to the general lighthouse fund, from which—subject to the consent of my right hon. Friend the Secretary of State for Transport—the authorities' expenses are met, together with costs relating to certain overseas lights.

The authorities last year proposed an 18 per cent, increase in light dues, which the Government reduced to 14 per cent. Subsequently a £1 milliom levy on fishing vessels over a certain size was proposed. That increase was strongly resisted by ports and other shipping interests, on the ground that it would distort competition and put a further burden on Britain's port users.

However, the United Kingdom is competing with other European ports. Antwerp, Le Havre and Rotterdam—to take just three ports across the channel — impose no dues. The average cost of using Antwerp is £2.50 per tonne. Here the average is £7.50 to £15 per tonne, through light dues, the iniquitous dock labour scheme and European port subsidies. Felixstowe and Tilbury, for example, are put at an enormous disadvantage.

I hope that my hon. Friend the Minister can report a real reduction in light dues. A cursory glance at the accounts of the general lighthouse authorities suggests a surplus of £19 million in reserve, with an estimated £12 million at the end of 1987–88. In reality, £31 million is expected. The discrepancy arises because of an underestimate of light due receipts, together with expansionist plans by the bureaucracy of the authorities, rather than efficient budgeting.

Last year's increase was unnecessary. Savings should be passed immediately to Britain's port users to ensure that we are truly competitive. Our food and other industries will benefit as a result. The general formula by which light dues are applied is seriously in need of re-examination.

Finally, it is scandalous that the United Kingdom is still paying 50 per cent, of the light dues for Eire. British taxpayers should not finance port costs in competitor countries.

Subject to those qualifications, I welcome the Bill. It is a major step forward from the Victorian era of 1894, the date of our last Bill on this important subject.

7.24 pm

Mr. Calum A. Macdonald (Western Isles)

I have a twofold constituency interest in the Bill. First, there is a strong fishing interest in the constituency. Secondly, like the constituency of the hon. Member for Argyll and Bute (Mrs. Michie), the Western Isles has a long tradition of merchant service. But the Bill is important not only to my constituency, but, obviously, the whole country—north and south of the border. That is why it is regrettable that Scottish National party hon. Members have been absent throughout the debate.

I want to be constructive. I welcome the provisions for registering fishing vessels in order to preserve United Kingdom quotas. That will be welcomed in my constituency as a first step in the right direction. It is not complete, but it is a welcome first step.

My response to the rest of the Bill must be lukewarm. The background against which the Bill must be judged is a steep decline in the Merchant Navy and the merchant service. In my constituency we do not need statistics to prove the decline. We have seen it happen in a very real way. As recently as the 1950s every family in the islands had one member or even two members serving in the merchant service. My father was a merchant seaman. We have today reached the predicament in which we are lucky to find even one seaman from each village still at work in the British Merchant Navy.

The crucial question is whether the Bill will help arrest that decline. Unfortunately, I fear that the answer must be no. Indeed, measures such as the establishment of the reserve are no more than an admission of the Government's defeat on this issue. The setting up of "Dad's Navy", as it has been described by the National Union of Marine, Aviation and Shipping Transport Officers, is an eloquent statement of the Government's despair. It is tragic, not only because of the continuing loss of jobs but the loss of a priceless tradition and history of skills which may prove impossible to replace.

The present decline cannot be laid at the door of another group of British workers pricing themselves out of jobs. Sometimes an attempt is made to blame that, but it is not true. For example, a French seaman is paid double what a British seaman is paid. A Norwegian is paid three times as much. In fact, a British seaman's wage is on a par with that of a Greek seaman, hitherto regarded as coming from a low wage economy. So I hope we can lay that ghost to rest.

My hon. Friend the Member for Aberdeen, North (Mr. Hughes) rightly made clear the crucial importance of cabotage in any strategy to arrest the decline. I know that Conservative hon. Members have an ideological objection to any moves towards what they would regard as an artificial and protected state for the merchant service. But, as has already been pointed out, even from the Government Benches, we must live in the real world, and the fact is that France, Germany, Italy, Greece, Spain and Portugal, all within the EEC, all practise cabotage to some degree. Of course in the North sea we have the ridiculous situation of Norwegian supply vessels servicing the British sector, while practically no British ships are able to operate in the Norwegian sector.

I acknowledge the Government's view that protectionism is generally undesirable. But there is no realistic prospect of a genuine open market in this respect. The Government must surely change their attitude, just as the General Council of British Shipping has been forced to do, and change it soon, if the merchant service is to be saved.

Yesterday the Secretary of State for Scotland made it clear that he was considering the privatisation of the Caledonian MacBrayne ferry company which serves the inner and outer Hebrides from mainland Scotland. Opposition Members have many reasons to oppose any move towards privatisation but one reason should appeal to all hon. Members. There is at present nothing to stop any privatised ferry owner from turning himself into an offshore company, setting out with a new name and a new flag, and perhaps even a foreign crew.

We already have the bizarre example of British Channel ferries flying the flags of Bermuda and Finland. What a monument it would be to the Government's peculiar combination of ideological frenzy on privatisation and their hopeless apathy on saving the merchant fleet if one day soon ferries crossing from the Minch to the outer isles of Scotland were flying the flags of Bermuda or Finland. If that bizarre prospect is to be avoided the Government must get to grips with the decline of the fleet. Unfortunately, the Bill will not do that.

7.31 pm

Mr. Michael Irvine (Ipswich)

The Secretary of State will have noticed that hon. Member after hon. Member has brought home to him the decline in the British merchant fleet and the need for action to combat it. The provisions in clauses 25 and 26 for financial assistance for training and for crew relief are welcome. So is the provision for the establishment of a Merchant Navy reserve. But those provisions go not nearly far enough. They are all addressed to the issue of manpower. However, the issue is not just one of manpower but of ships.

So long as the British Merchant Navy has to compete against unfair competition, its decline will never be satisfactorily reversed. How can it be fair for the British Merchant Navy to have to compete in a situation where so many foreign states keep their coasts protected, yet here on its own coasts it has to meet full competition from overseas merchant navies? So long as that fundamental unfairness persists, so the decline of the Merchant Navy will continue.

In general I am much in favour of competition but my support for competition is not of the ideological kind mentioned by the hon. Member for the Western Isles (Mr. Macdonald). Often allowing market forces to work their course has a beneficial effect in the long run, but if competition is to be beneficial it has to be fair and free. The competition that our shipping industry faces is far from being fair and free.

It should be remembered that in 1985 United Kingdom registered and owned ships contributed no less than £745 million net to our balance of payments. It does not end there because they contributed a further £637 million in import savings. Those are large figures. They underline the importance to the national economy of the shipping industry in spite of its decline in recent years.

More important still is the contribution that the merchant fleet makes to our national security. In 1983 the then Under-Secretary of State for Trade, the former Member for Aberdeen, South, Mr. Sproat, following a not dissimilar debate when the decline of the British merchant fleet had been raised repeatedly in preceding speeches, said: the adequacy of the merchant fleet for defence purposes is kept under continual review by my right hon. and hon. Friends. In the considered opinion of the Ministry of Defence, the merchant fleet remains capable of meeting defence plans. I cannot emphasise that point too strongly." — [Official Report, 30 March 1983; Vol. 40, c. 433.] Since that was said the British shipping industry has lost the advantage of the free depreciation provisions that it previously enjoyed. It lost that advantage in 1984. Since that was said, the United Kingdom merchant fleet has more than halved in strength. Many of us would like to know whether it is still the considered view of the Ministry of Defence that the merchant fleet remains capable of meeting defence plans. Many of us need to be reassured.

7.36 pm

Mr. David Shaw (Dover)

I have two main interests in speaking on the Bill. The first, obviously, is that my constituency is Dover, where we handle about 15 per cent, of the nation's trade as it passes through each year; in addition, some 14 million passengers pass through the port each year. I have also taken an interest in shipping because for a short time I worked in the shipping industry.

Much has been said today about car ferries and their safety. It is important to place on the record, so that hon. Members can be fair to the many people who work in the shipping industry and in particular on ferries, that until the disaster of last year the record of ferry safety was one of the highest for any means of transport. The disaster of last year is brought home to me every week as I come to the House because I drive past the wood that has been planted in Dover in memory of those who died. I was pleased to take part in the planting of that wood and to meet many of the families and relatives of those who died. It is a memorable place and I hope that many of the family members will visit it over the years.

The Sheen report on the Herald of Free Enterprise disaster showed that complacency had set in in one operation. The consequences of the complacency were a horrific shock to everyone in my constituency. About half the crew died in the disaster, and half of those lived in my constituency. All of us in Dover have had to live with the aftermath of the disaster. It was a shock to everyone but especially to the 10,000 people whose work is involved directly or indirectly with the port and the ferry companies.

Since the disaster I have been on board the car ferries at Dover and have looked at the safety features that have been installed, including the features on the new ferries that are in operation. Many provisions of the Bill have already been brought into practice. I am pleased to tell hon. Members that a boarding pass system is in operation. There are warning lights and television cameras monitoring the bow doors and the vehicles on the car deck throughout the journey. The new car ferries have special features concerning bulkheads below the water line.

I commend the approach of the crew and officers on those car ferries, which today is of a very high standard and brings credit to the fleet. The administrative systems now in place have been greatly improved since last year and have been operated safely and efficiently. Much has been learnt as a result of that disaster. I am sure that hon. Members will agree that it is terrible that such a disaster had to take place before the lessons could be learnt.

Therefore, I welcome the safety measures in the Bill, because they will reassure the public that the voluntary practices now in operation in our ferry companies will become law. My local ferry companies will want to ensure that that law is obeyed.

I shall raise two matters of concern to our shipping industry. The position of cabotage in clause 37 has been mentioned in the debate. The shipping industry is concerned that the negotiations started by the Secretary of State's predecessor within the EEC were not successful for Britain. I hope that the present Secretary of State will renew the vigorous efforts of his predecessor to get EEC agreement on this point. It is fundamental that we should not keep our markets open for foreign vessels to ply our coastal trade unless our ships can enter overseas markets. We did not join the EEC to be placed at a competitive disadvantage within the Community.

I also ask Ministers to consider with my right hon. Friend the Chancellor of the Exchequer the position of investment in the shipping industry in Britain. The hon. Member for Cunninghame, North (Mr. Wilson) conveniently managed to put together some statements and figures that implied that the Government were trying to do down the shipping industry. Nothing could be further from the truth. The United Kingdom tonnage peaked in 1974 after several successful years under a Conservative Government. The decline of the shipping industry dates from the Labour Government's term of office between 1974 and 1979. Having recognised that decline, it is no good for Conservative Members to say that Opposition Members bear the responsibility for it. We must look at ways in which it can be reversed.

I draw the attention of the Secretary of State to the fact that, as an accountant, I appreciate the effect of tax allowances suddenly being changed at short notice from 100 per cent, to 25 per cent. The effect of capital allowances is more important to shipping companies than to any other companies. The balance sheet of a shipping company will show that a high proportion of its assets are in large, expensive ships. That is in complete contrast to the assets of companies in manufacturing and other areas of the economy. It means that ships that may depreciate over 10, 15 or 20 years cause accounting differences to the taxable profit.

An odd effect is that shipping companies can be assessed as profitable for tax purposes when their accounts may show a break-even or loss position. That could result in a rate of tax that could not be achieved, even by a Labour Government. I am sure that hon. Members can work out that, from an accounts point of view, taxation can be more than 100 per cent, of the profit. That is the curious effect of 100 per cent, capital allowances being lowered to a rate of 25 per cent, and possibly less in subsequent years.

If the Department of Transport is serious in looking after the interests of the shipping industry in the next few years, it will carefully examine and communicate the findings of such examinations to my right hon. Friend the Chancellor of the Exchequer. I suggest that this matter needs to be examined.

7.44 pm

Mr. Tony Lloyd (Stretford)

The debate has been interesting, if only for the reason that there has been a great deal of self-discipline and that has allowed many hon. Members to make significant and worthwhile speeches.

It has been suggested that the Bill is not the greatest Merchant Shipping Bill since 1894. As one of the organisations involved in shipping suggested, it is something of a rag bag of measures. We need not apologise for that. Primary legislation provides the opportunity to tidy up various matters, so Opposition Members accept the general thrust of what the Government seek to achieve.

Two overriding issues have dominated the debate. Safety has been on the minds of all hon. Members because of the disaster to which I shall refer later in my speech. Another important issue is the decline of the merchant shipping fleet. The Bill has no relevance to that problem. Hon. Members on both sides of the House have systematically explained to the Secretary of State why the Bill is irrelevant to the decline of the merchant shipping fleet. Only the hon. Member for Dover (Mr. Shaw), with an extraordinary and breathtaking display of mental gymnastics, managed to blame the Labour Government for the rapid decline in the merchant shipping fleet. I will consider that deeply, but I doubt whether I shall draw the same conclusion.

The British fleet has declined dramatically during the past few years since the removal of the initial allowances in the 1983 Budget. The General Council of British Shipping is at one with the parliamentary Labour party and others in regretting that move. It is clear that it did massive damage to the British fleet.

The Government have allowed not only the flagging out of large sectors of the British merchant fleet, but parts of it to be sold off. I particularly refer to BP. The Government can be described fairly and clinically as the Government of flaggers out and floggers off. That has been a great disadvantage to the British economy, almost to the level of neglect. My right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) made clear the importance of the merchant shipping fleet to the British economy. Historically, it was much more important, and it could do much more for the United Kingdom economy if the Government adopted measures that allowed for its development, not its destruction.

Conservative Members were concerned about cabotage. As my hon. Friend the Member for Aberdeen, North (Mr. Hughes) pointed out, only two years ago Opposition Members argued that the Government should do something about cabotage, through legislation, the European Court or by applying our own cabotage system. At that time, no voice was raised on the Conservative Benches — [Interruption.] I defer to the hon. Member for Eastleigh (Sir D. Price) who has always been a consistent supporter of that view.

Sir David Price

I have always been a consistent supporter of it.

Mr. Lloyd

I shall not argue about the consistency of one hon. Member.

The Government have consistently refused to consider imposing such measures. It is time that the Government got off the fence. Will they take action through the courts to make sure that the British fleet has equal access to other coasts? Shall we make sure that Italy, Greece, Spain and France allow our merchant fleet to compete on equal terms in their waters, or shall we instead make sure that at least we have protection for our fleet against the sort of unregulated competition in our coastal areas that would not be, and is not, allowed by our competitor nations?

Those are the important issues. The decline of the fleet is a fundamental issue. Sadly, the Bill is largely irrelevant to it.

Great play has been made by the Secretary of State and some of his predecessors about the importance of the fleet in time of war. On 10 December 1986 the then Secretary of State, now the Secretary of State for Social Services, in a speech to the General Council of British Shipping, said: We quite deliberately do not take a view of what should be the size or shape of the industry in peace time. Our functions in respect of shipping in war or emergency are altogether different. For the life of me I cannot understand how it is possible not to have any plans for the industry in peace time, and yet believe, whether naively or honestly, that vessels will become available in time of war. That matter was also mentioned by Conservative Members.

As has been pointed out, as recently as last November, during the military exercise Purple Warrior, it was necessary to bring in ships from outside the United Kingdom because they simply were not available from the British merchant fleet. The Minister for Public Transport shakes his head. I hope that he will explain why. On that very issue Lord Brabazon said that suitable United Kingdom vessels are not always available to meet MOD requirements. That is not because, as he intimated, that the British fleet is so successful throughout the world—we all know that that is not true—but simply because the fleet no longer exists.

Whatever the merits of the Falklands war, the merchant fleet was assembled with some difficulty to supply that military action. All hon. Members know that today it would not be possible to supply the Falklands exercise with the merchant fleet slimmed down to its present level.

The time has come when the Government must put clearly on the record whether in all seriousness they believe that foreign vessels would become available. In the past, Ministers have always ducked the question of what powers would be used to requisition ships flagged out to British dependent territories. I have tried to discover the mechanism whereby they could be requisitioned, but I am told that no clear answer exists. Vessels flagged out to flags of convenience nations are beyond the Government's control. That is a matter of fundamental importance to our nation's future.

The hon. Member for York (Mr. Gregory) said that he was unhappy about clauses 29 to 31, which deal with the balance between masters and owners and the relationship of the crew. I do not want to go into the arguments in great detail. I simply give notice that we are not wholly satisfied with the balance between the different parties involved. In Committee, we shall want to examine the relationship between the responsibility of the owner, brought into the legal framework for the first time—we welcome that— and of the master and crew.

In general, we are not unhappy with the new registration procedure with its several tiers, but that system must guarantee, in the minimum possible time, that vessels sailing under a British flag, whether directly from Britain or from one of the dependent territories, should maintain the highest possible safety standards. I think that the Minister will agree with me on that. Different standards should be allowed only in the short term, and maximum efforts should be made to achieve the best possible standards.

My hon. Friend the Member for St. Helens, South (Mr. Bermingham) discussed the history of the surveyors and whether in the past they have been equipped to do the job with which they have been entrusted. I share his view that in the past that has not been the case. I do not make my comments in any party political sense. Every hon. Member is concerned about safety after the Herald of Free Enterprise tragedy. I pay tribute to the hon. Member for Staffordshire, South (Mr. Cormack) who spoke on behalf of the families of those involved in the disaster. I am sure that every hon. Member will want to associate himself in general terms with his remarks.

All Members will accept that there can be no compromise on safety matters, particularly when examining what went wrong. Things did go wrong and there was a considerable chain of errors. The company has already been thoroughly indicted, and that is right and proper. The Government's response now is to recognise that liability should apply to the owner. However, we have a responsibility to the families of those who died in the Herald of Free Enterprise to make sure, through general safety measures and structures, that such a tragedy cannot happen again.

It is worth quoting briefly from a letter from J. W. Kime, a United States coast guard, to Mr. de Rohan, chairman of the Herald Families Association. He said: I have already instituted a program to verify that the stability of ships taking on passengers in the United States is in accordance with the International Convention on Safety of Life at Sea. In addition, the United States has been pushing very hard at the International Maritime Organisation for damage stability standards for cargo ships, which under present regulations could sink with a hole in their side only as large as a dinner plate. I mention that because I want to refer to the reason why the Opposition thought the Special Standing Committee structure would be worthwhile introducing. It is important to examine roll-on/roll-off ferries, but it is also important that somebody with the experience and professional knowledge of Rear Admiral Kime should be able to say that the safety record of other categories of ships should be examined. That is why we hope that the Minister will be able to reconsider the Government's position on the Special Standing Committee.

Because safety is of such fundamental importance, we welcome the new independence of the accident investigation department. The hon. Member for Bristol, East (Mr. Sayeed) reminded me of a point that I had intended to make when he talked about the necessity for independence. It is increasingly the view of many in the industry that there is a strong argument for an independent structure for the examination of the safety of shipping.

The Opposition, with others, believe that the time has come for the Health and Safety Executive to be concerned with maritime safety. The Health and Safety Executive is already experienced in safety in many areas of industrial life. Obviously, there are differences, but they are not so fundamental that an already established independent organisation could not learn and benefit from existing expertise in the Department of Transport to do a job independently of the Department in the same way as applies to aviation. The Opposition would like to put on record tonight the fact that we shall look at it when the Bill is in Committee.

The very important areas of safety and the decline of the fleet have been touched on tonight. The Opposition will want to examine the Bill carefully to ensure that on safety we are doing all we can within the legislative framework. We accept that much has already been done by the Government about the ferries, though not directly through the Bill. It is our obligation—the obligation of every hon. Member—to make sure that safety standards are put at the top of the list of priorities. We will, therefore, devote considerable time to them in Committee. We still feel that, when it comes to the decline of the fleet, the Bill is largely irrelevant. That is the view of practically every hon. Member who has spoken tonight. Opposition Members will not tonight vote against the Bill, as structured, but we feel that it does not adequately take care of the interests of the merchant fleet in Britain.

8 pm

The Minister for Public Transport (Mr. David Mitchell)

Anyone listening to the debate tonight cannot but have been struck by the breadth of personal experience of the merchant fleet which resides on both sides of the House. The debate has inevitably taken place under the shadow of the Zeebrugge disaster, and on all sides of the House our hearts go out to those involved. In opening the debate my right hon. Friend the Secretary of State dealt at some length with the wide-ranging actions taken by Government, both in response to, and going further than, the Sheen inquiry.

Hon. Members have raised certain points on safety which I would like to turn to now. My hon. Friend the Member for Staffordshire, South (Mr. Cormack) spoke sensitively on behalf of the association of bereaved families and asked me about the date for the introduction of compulsory boarding cards: 29 February is the date by which United Kingdom-flagged ships will have to comply whether sailing from United Kingdom or from foreign ports. For foreign ships the order has to go through the affirmative procedure of this House, and my right hon. Friend has, therefore, considered it prudent to set the date of 1 April for these ships.

I should also make it clear that we have no jurisdiction to require boarding cards for foreign ships sailing from foreign ports and that we must look to our negotiations with other European Governments in this respect. The hon. Members for Aberdeen, North (Mr. Hughes) and Stretford (Mr. Lloyd) asked about the possibility of a Special Standing Committee. Mr. Justice Sheen carried out a most thorough investigation of the causes of the tragedy and made many detailed recommendations, which we are following through. His work was valuably supplemented by the coroner's inquest. We need not go back to square one, therefore, and we shall press on to bring these changes into the law as soon as possible.

Mr. Frank Field

rose—

Mr. Mitchell

I have a lot of points that hon. Members have raised with me. May I just take them a little further? The hon. Member for Aberdeen, North, the hon. Member for Liverpool, Walton (Mr. Heffer), the hon. Member for Staffordshire, South and the hon. Member for Liverpool, Broadgreen (Mr. Fields) all raised the question of the intrinsic safety of the roll-on/roll-off design.

Ro-ro ferries, when intact, are perfectly stable. They become unstable only when large quantities of water reach the vehicle deck, which is well above the level of the sea. In the case of the Herald, the water entered through the open bow doors from the bow wave at full speed. The various measures that we have already taken will do everything possible to prevent a repetition of that.

The Sheen report rightly identified among the proposals that it called "longer term" the need for research into aspects of ferry design. Accordingly, a steering committee set up by my hon. and noble Friend in October has been developing a programme of research to look at all the items on ship stability listed by the Sheen report as longer term items. Portable bulkheads, raised particularly by the hon. Members for Aberdeen, North and Walton, will certainly be one of the possible measures that this research will cover.

The hon. Member for St. Helens, South (Mr. Bermingham) raised the issue of the condition of foreign vessels in United Kingdom ports, seeking that they should be inspected. The system known as port state control carries this out. We have an undertaking to inspect 25 per cent, of vessels coming into our ports, and we inspect more than that. What is perhaps more important—and I can claim some responsibility for this during my earlier activities in that side of the Department — is that it is not done on a random basis. With the aid of the computer based at St. Malo we are operating a system with the western European countries which maintains a comprehensive record of the inspections of ships. If a vessel comes in which has not been checked in some other country for port state control and nothing is known about it, it is highly likely to be checked. A priority system ensures that those which are pretty certain not to be in danger of difficulties are given a lower priority in the system. I hope that the hon. Gentleman will feel that in that way we are doing exactly what he was seeking in his earlier intervention.

Mr. Bermingham

I am delighted to hear what the Minister has to say and I thoroughly welcome the idea of looking at vessels which have not normally been inspected elsewhere. Will he not agree with me, however, that I sought to press the point that unless we have an adequate number of surveyors we cannot carry out that sort of checking, which is more than welcome?

Mr. Mitchell

Yes, of course. I entirely accept what the hon. Gentleman has said. The number of surveyors has gone down but not by as much as the number of ships in the United Kingdom fleet, so pro rata the staffing level is better than it was before. It is a legitimate point to make.

Mr. Tony Lloyd

The surveyors have a responsibility not just for the domestically registered fleet but for those ships which have disappeared from the British register and have gone elsewhere. Could he give comparative figures for surveyors and vessels to take that into account? It is a much more important figure.

Mr. Mitchell

If the hon. Gentleman will allow me, that is a Committee point. I will have armed myself with detailed information by the time we reach that stage.

The hon. Member for Argyll and Bute (Mrs. Michie) asked about the appropriateness of certain requirements for big vessels in relation to island ferries. I sympathise with the point that she makes and I shall write to her in detail on the matter.

My hon. Friend the Member for Bristol East (Mr. Sayeed), speaking with the wealth of experience of someone who represents one of our traditional ports, raised important matters. I cannot cover all of them because of the time available but I can say that we have taken on board his point about bare-boat charters and we shall amend clauses 29 and 30 to cover ship managers and ship charterers.

Several hon. Members raised matters concerning fishing. In paricular, I can tell my hon. Friend the Member for St. Ives (Mr. Harris) that I am keenly aware of the concern felt throughout the fishing industry over foreign, mainly Spanish, vessels registering in the United Kingdom and then using the United Kingdom fishing quota. This quota-hopping is an abuse of the system. It is no light matter. There are now some 130 vessels which are largely foreign-owned on the United Kingdom register. The extent of their activities is demonstrated by the fact that landings in Spain in 1987 amounted to over half the recorded United Kingdom catch of western hake. That confirms what my hon. Friend the Member for St. Ives was saying about the harm that is being done. The new arrangements which will require fishing vessels to be at least 75 per cent. United Kingdom-owned will effectively stop this legalised poaching.

Part II of the Bill is complex because the new safeguards for the legitimate United Kingdom industry must be watertight. Already leave has been sought from the High Court to challenge the Government's right to introduce this legislation. At a preliminary hearing, the challenge was withdrawn and costs awarded to the Government. My hon. Friend the Member for St. Ives also asked whether the arrangements would be effective.

I want to pay tribute to the industry for its co-operation and detailed assistance, and in particular to the Scottish Fishermens Federation, to the Clyde Fishermens Association, whose secretary phoned through his support today, and to Daphne Lawry, the doughty fighter for the Cornish fishing interests, who told me this morning that she was delighted with the thorough work that has been done.

Mr. Harris

I am grateful to my hon. Friend for paying tribute to the fishing industry, which started the whole momentum for the campaign. I pay my own tribute to it also.

My hon. Friend mentioned the court proceedings in this country. There is some suggestion that if, as I am sure it will, the Bill becomes law, it will be challenged in the European Court. Has he anything to say about that? Is it a real threat to the effectiveness of the proposals?

Mr. Mitchell

We are confident that what we are doing is wholly within the spirit of the proper way in which the fishing quotas were meant to operate.

My hon. Friend the Member for St. Ives also raised a pertinent point about how the policing would be done. Clause 13(6) gives powers to appoint a person to investigate eligibility to the register. He will have the power as an inspector under section 27 of the Merchant Shipping Act 1979. Those powers include powers to enter premises and require production of documents.

The decision to have a central registry at Cardiff will avoid the possibility of foreigners who are refused at one point going to another to try to register. I hope that we have stopped up the holes in that way.

My hon. Friend the Member for Tynemouth (Mr. Trotter) and the hon. Member for Argyll and Bute asked about more information on the registry of fishing vessels. Most registered business is already conducted by mail, and fees for the new arrangements will be discounted so as to constitute an encouragement for postal business. For transactions that necessitate a personal appearance, however, a local office service will be available from 23 offices of fishery departments around the coast. Those offices will have stocks of various forms, and by means of facsimile links with Cardiff will be able to provide certified transcripts, access to the registry and place markers on where transactions are to be conducted. Vessels will continue to be registered as belonging to one of the 112 traditional ports of registry. I hope the hon. Member for Argyll and Bute will feel somewhat encouraged by that.

The hon. Member for Aberdeen, North raised the issue of section 42(2) which was repealed as a result of an amendment in the House of Lords. The reasons behind it are not as dire as the hon. Gentleman feared they might be. That section has now been overtaken by a more general provision in the Merchant Shipping Act 1974 which allows seafarers to take strike action providing that the ship is not at sea at the time. Section 42(2) allows a seafarer to give 48 hours' notice of his intention to terminate his employment on a ship, provided that, at the time, the ship is securely moored in a safe berth in the United Kingdom. During the period of notice the seafarer cannot be compelled to go to sea. This provision opens up possibilities for abuse, particularly on ferries, since by giving notice but not actually going on strike the crew cannot be compelled to operate the vessel. That is an abuse of what was intended by section 42(2), and I am sure the hon. Gentleman would not want to support or sustain an abuse of that sort. I can give him the clear assurance that the other forms of legislation covering strike action to which I have referred satisfy the point that he would otherwise legitimately have raised in this connection.

As regards the merchant fleet and the national interest, numbers are not the whole story. The right hon. Member for Bethnal Green and Stepney (Mr. Shore) and my hon. Friend the Member for Tynemouth commented on the defence aspect. The other aspect concerns the health of the merchant fleet as a major United Kingdom asset. The Merchant Navy makes a vital contribution to our national defence needs. We need access to ships and trained crew —hence the Bill's provision on training.

In answer to my hon. Friend the Member for Tynemouth I can say that YTS provides training for 16 to 19-year-olds at officer or rating level. The Bill takes that further with a spend of £3.5 million a year on an additional two-year training scheme to become officers, and four years for those who are not ex-YTS trainees. The scheme will start in 1988–89, and also provides some money towards officers who are training to become masters.

My hon. Friends the Members for St. Ives and for Tynemouth asked for more information about the reserve. As hon. Members know, the Bill sets up the Merchant Navy reserve, which is open to British seamen who are on the Cardiff register, in which their qualifications are recorded. Evidence of health will be sought through the normal seafarers' medical certificate. A bounty of £200 a year will be payable. Members can resign up until an emergency, if they so wish, and the proposed age limit is 55—but we would welcome the advice of hon. Members and of the Committee that will consider the Bill on whether that is the appropriate age.

I say to the hon. Member for Stretford that, in spite of the decline of the fleet, we still have enough ships to support any likely overseas operation.

Mr. Frank Field

In previous years we have had clear statements from the Ministry of Defence that it is happy with the size of the merchant fleet. Has the Minister had any conversations with his colleagues in the Ministry of Defence more recently about that? Are they still satisfied with the fleet's size?

Mr. Mitchell

We are continually having conversations with our friends in the Ministry. If the hon. Gentleman wants to put down a question to my colleagues, I am sure he will receive an answer.

The hon. Member for Stretford said that the problem with exercise Purple Warrior was that it suggested that there were not enough United Kingdom vessels to be able to mount an overseas operation in an emergency. It is quite wrong to suggest that there was a shortage of United Kingdom vessels; we had plenty but they were gainfully employed in commercial operations. Rather than interrupt those operations for a test of emergency, some Danish vessels were chartered because they were less active at that time. Most hon. Members would recognise that that was a sensible way in which to proceed. There would have been uproar in the House if we had proceeded in the alternative way of requisitioning vessels that were otherwise gainfully employed.

Mr. Wilson

If the General Council of British Shipping's forecast of a decline to 100 ships — almost exclusively coasters and ferries—is fulfilled, will that still represent a satisfactory military commitment by the Merchant Navy?

Mr. Mitchell

Of course, we are watching with concern what is happening. We keep a constant eye on that. If something of that sort happened we would take a great deal of interest in it and consider how to react. What matters when mounting overseas operations such as the Falklands war is the type of vessel that is required. Most of the loss of tonnage from the register in recent years has been of giant crude oil and dry bulk carriers, which are not vessels that one would require for the support of the Royal Navy.

Mr. Sayeed

Will my hon. Friend, in his normal courteous fashion, now accede to the request I made earlier, when I asked him to state, as a matter of paper exercise, what vessels he would take up from trade should there be another Falklands-type episode?

Mr. Mitchell

On further consideration, I do not think that my hon. Friend would expect me to make that information public.

There is another aspect to the value of our merchant fleet in addition to defence. The fleet is a great British asset and a huge investment. Some people try to blame the Government for the merchant fleet's decline. The truth is that there are many complex reasons for the decline, as my right hon. Friend the Secretary of State made clear. Those reasons are connected with shifts in the pattern of world trade and our own trade. For example, when oil is brought ashore through a pipeline from the North sea, there is no need for a vast fleet of tankers to bring oil from the middle east.

It is important that the United Kingdom fleet should be viable and profitable. Thanks to outstanding management by our shipping companies and the officers and men of our merchant fleet, much of the industry— not all of it — is profitable, competitive, viable and making an increasing contribution to our balance of payments which have risen by £221 million since 1985–86. The overall deficit on the sea transport account is the lowest since 1982.

My hon. Friend the Member for Bristol, East, my hon. Friend the Member for Dover (Mr. Shaw), the right hon. Member for Bethnal Green and Stepney and others commented on tax aspects. Hon. Members will be aware that those are matters for my right hon. Friend the Chancellor of the Exchequer. I will draw his attention to the points that have been made in the debate. I hope that hon. Members will believe that that is helpful.

It is very important that we should understand the complex reasons why there are shifts in the strength of our fleet in different types of vessels. To achieve a better understanding, we have carried out some research into the short sea trade and we are publishing an assessment of that trade today. The report covers the pressures within that trade and the way in which it is moving. A copy of the report will be placed in the Library of the House and I believe that hon. Members will find it very helpful.

Of course the Government have an important contribution to make and that is well demonstrated by the Bill. I can tell my hon. Friend the Member for Tynemouth that clause 37 strengthens the Secretary of State's powers and the effectiveness of the EEC in co-ordinating action against unfair and discriminatory activity by third countries. The Bill arms us for the first time with a practical means to combat unfair practices inside and outside the EEC. Some 60 per cent, of our United Kingdom shipping international freight earnings come from cross trades and that demonstrates how vital it is that access to those markets should be maintained for the health of our merchant fleet. I want to pay tribute to the officials in the Department of Transport who visit ceaselessly one place after another trying to find ways in which to keep open those trading opportunities that are so important to the health of our fleet.

My hon. Friend the Member for Bristol, East asked for details about foreign cargo reservations. As he has tabled a question for answer tomorrow, I hope that he will wait 24 hours for his reply.

My hon. Friend the Member for York (Mr. Gregory) raised the question of light dues and the costs and burdens on the users of our ports. I have some helpful news to announce. Good progress is being made in reducing the costs of the three general lighthouse authorities. The size of their tender vessel fleets is being significantly reduced following a consultants report. Progressive savings are being made through the alteration of lighthouses and by other means. In addition, revenue from light dues is buoyant thanks to the increasing volume of trade passing through our ports. Taking all those factors into account, the Government have decided that a reduction of 10 per cent, in light dues for 1988–89 will be possible. The necessary order will be laid shortly.

Looking further ahead we expect to receive the report of the working party studying the structure of light dues. Hon. Members will be interested to know that I understand that that report will include a recommendation that we should abolish light dues on deck cargo. That will require an amendment to be tabled in Committee.

Many hon. Members referred to cabotage, including my hon. Friends the Members for Dover, for Tynemouth and for Eastleigh (Sir D. Price) and the hon. Member for Stretford. We cannot accept the continuation of the present inequitable situation Matters are moving forward. The German Government now occupy the presidency of the EEC and they have moved quickly to reopen the negotiations on cabotage regulations. The first round of negotiations took place this week. Whereas under the United Kingdom presidency unanimity was required for shipping regulations, with the Single European Act in place, decisions can be reached on the basis of a qualified majority. That gives us grounds for hoping that the problem can at last be resolved.

The Bill contains 53 clauses and eight schedules. It appears complex, but its purposes are simple and straightforward. They are pre-eminently to improve safety; to close loopholes on ship registration; to deal with fish quota poaching; to provide for a Merchant Navy reserve; to improve training and assistance to ship operators for crew relief; and to assist the merchant fleet with stronger powers to keep open the markets in which it trades. For greater security of our defences, for safety and for the health of our merchant fleet, I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Motion made, and Question put, That the Bill be referred to a Special Standing Committee — [Mr. Robert Hughes.]

The House divided: Ayes 52, Noes 140.

Division No. 158]	[8.26 pm
AYES
Banks, Tony (Newham NW)	Jones, Martyn (Clwyd S W)
Battle, John	Kennedy, Charles
Bermingham, Gerald	Kinnock, Rt Hon Neil
Cook, Frank (Stockton N)	Kirkwood, Archy
Corbyn, Jeremy	Lamond, James
Cryer, Bob	Lloyd, Tony (Stretford)
Ewing, Mrs Margaret (Moray)	McAllion, John
Fatchett, Derek	Macdonald, Calum
Field, Frank (Birkenhead)	McKay, Allen (Penistone)
Fields, Terry (L'pool B G'n)	McNamara, Kevin
Flannery, Martin	Michie, Mrs Ray (Arg'l & Bute)
Flynn, Paul	Molyneaux, Rt Hon James
Foot, Rt Hon Michael	Morgan, Rhodri
Forsythe, Clifford (Antrim S)	Morley, Elliott
George, Bruce	Mullin, Chris
Grant, Bernie (Tottenham)	Murphy, Paul
Home Robertson, John	Pendry, Tom
Howells, Geraint	Pike, Peter
Hughes, Robert (Aberdeen N)	Powell, Ray (Ogmore)
Hughes, Roy (Newport E)	Prescott, John
Ingram, Adam	Shore, Rt Hon Peter

Skinner, Dennis	Wilson, Brian
Smith, Andrew (Oxford E)	Wise, Mrs Audrey
Spearing, Nigel	Young, David (Bolton SE)
Taylor, Matthew (Truro)
Thomas, Dafydd Elis	Tellers for the Ayes:
Wallace, James	Mr. Frank Haynes and
Wardell, Gareth (Gower)	Mr. Alun Michael.
NOES
Amess, David	Janman, Timothy
Arbuthnot, James	Jones, Gwilym (Cardiff N)
Arnold, Jacques (Gravesham)	Jones, Robert B (Herts W)
Ashby, David	Kilfedder, James
Bennett, Nicholas (Pembroke)	King, Roger (B'ham N'thfield)
Body, Sir Richard	Kirkhope, Timothy
Boscawen, Hon Robert	Knapman, Roger
Bowis, John	Knight, Greg (Derby North)
Bright, Graham	Knowles, Michael
Browne, John (Winchester)	Lennox-Boyd, Hon Mark
Buchanan-Smith, Rt Hon Alick	Lester, Jim (Broxtowe)
Burt, Alistair	Lightbown, David
Carrington, Matthew	Lilley, Peter
Chalker, Rt Hon Mrs Lynda	Lloyd, Peter (Fareham)
Channon, Rt Hon Paul	Lyell, Sir Nicholas
Coombs, Anthony (Wyre F'rest)	MacGregor, John
Coombs, Simon (Swindon)	Maclean, David
Cope, John	McLoughlin, Patrick
Cormack, Patrick	McNair-Wilson, M. (Newbury)
Currie, Mrs Edwina	Mans, Keith
Curry, David	Martin, David (Portsmouth S)
Davies, Q. (Stamf'd & Spald'g)	Maxwell-Hyslop, Robin
Davis, David (Boothferry)	Meyer, Sir Anthony
Dorrell, Stephen	Miller, Hal
Douglas-Hamilton, Lord James	Mitchell, Andrew (Gedling)
Dover, Den	Mitchell, David (Hants NW)
Dunn, Bob	Monro, Sir Hector
Durant, Tony	Moss, Malcolm
Fairbairn, Nicholas	Neubert, Michael
Fookes, Miss Janet	Newton, Rt Hon Tony
Forsyth, Michael (Stirling)	Nicholson, David (Taunton)
Fowler, Rt Hon Norman	Onslow, Rt Hon Cranley
Freeman, Roger	Page, Richard
French, Douglas	Paice, James
Garel-Jones, Tristan	Pattie, Rt Hon Sir Geoffrey
Gill, Christopher	Pawsey, James
Glyn, Dr Alan	Porter, David (Waveney)
Goodson-Wickes, Dr Charles	Portillo, Michael
Gow, Ian	Powell, William (Corby)
Gower, Sir Raymond	Price, Sir David
Greenway, John (Rydale)	Raffan, Keith
Gregory, Conal	Redwood, John
Griffiths, Peter (Portsmouth N)	Rhodes James, Robert
Ground, Patrick	Riddick, Graham
Gummer, Rt Hon John Selwyn	Ridsdale, Sir Julian
Hamilton, Neil (Tatton)	Roberts, Wyn (Conwy)
Hargreaves, A. (B'ham H'll Gr')	Rowe, Andrew
Harris, David	Ryder, Richard
Hawkins, Christopher	Sayeed, Jonathan
Hayward, Robert	Shaw, David (Dover)
Heddle, John	Shephard, Mrs G. (Norfolk SW)
Hogg, Hon Douglas (Gr'th'm)	Shepherd, Colin (Hereford)
Hordern, Sir Peter	Sims, Roger
Hunt, David (Wirral W)	Skeet, Sir Trevor
Hunter, Andrew	Squire, Robin
Irvine, Michael	Steen, Anthony
Jack, Michael	Stern, Michael
Jackson, Robert	Stevens, Lewis

Stewart, Allan (Eastwood)	Walden, George
Stradling Thomas, Sir John	Walker, Rt Hon P. (W'cester)
Summerson, Hugo	Waller, Gary
Taylor, Ian (Esher)	Wardle, C. (Bexhill)
Tebbit, Rt Hon Norman	Watts, John
Thompson, D. (Calder Valley)	Wheeler, John
Thompson, Patrick (Norwich N)	Widdecombe, Miss Ann
Thorne, Neil	Wiggin, Jerry
Thurnham, Peter	Wilshire, David
Trotter, Neville	Wood, Timothy
Twinn, Dr Ian
Viggers, Peter	Tellers for the Noes:
Waddington, Rt Hon David	Mr. Kenneth Carlisle and
Wakeham, Rt Hon John	Mr. Alan Howarth.

Question accordingly negatived.

Bill committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).