SHIPPING. (Hansard, 18 April 1934)

LORD STRABOLGI

asked His Majesty's Government what steps are proposed to be taken to assist the mercantile marine in its present depressed situation, and particularly to assist in the scrapping of obsolescent cargo vessels and their replacement by modern ships. The noble Lord said: My Lords, the object of the Notice which stands in my name on the Order Paper is, as it states, to ask for information, and the reason for putting it down, as your Lordships I am sure will 649 appreciate, is that this question of the state of the British mercantile marine is extremely urgent. It is true that there has been a slight improvement in shipbuilding; the figures published this morning show that there are in round numbers 480,000 tons of shipbuilding in hand in British yards, including the new Cunarder; but in spite of that, British shipping has never in the whole of its history been so depressed. Your Lordships, I know, will not dispute that statement. One-third of the seamen are unemployed—the highest proportion of unemployment amongst seamen that we have ever had—and 2,000,000 tons of British shipping are laid up.

Whatever opinions your Lordships may have of the statement of the Chancellor of the Exchequer in another place yesterday in opening his Budget, it is the fact that, so far as I could find, nothing was said or hinted at of anything being done to assist this very important industry, or its allied industry of ship-building. We have had a number of promises, and statements of things to be done, as for example at the end of last year, when in another place Mr. Runciman said that the Government ware considering some form of retaliation against unfair competition by foreign shipowners, assisted in many cases by their own Governments. That was, as I said, at the end of last year. In your Lordships' House on February 7 last, the noble Lord, Lord Kinnaird, raised a similar Motion though not quite the same as the Question in my name and there was a very interesting debate in your Lordships' House. The noble Earl, Lord Stanhope, said then that the matters were under consideration and that the Government were waiting for the shipowners to propose a policy. Now, the shipowners have very varied interests according to the class of vessel which they are engaged in managing, and although it is natural that the views of shipowners should carry great weight, I do submit to your Lordships that it is an altogether new doctrine that the Government should have to wait for the shipowners themselves to produce a policy, which must be a national policy.

It may be asked: What do I suggest? I want to make it clear immediately that I am not suggesting that there should be direct subsidies to shipping. I believe that direct subsidies to the various classes of vessels engaged in the carrying 650 and passenger trade are uncalled for and would be definitely harmful. What I do suggest are two things definitely and one thing hypothetically. Definitely I do suggest the following: There should be assistance given to shipowners to scrap the great mass of old tonnage which is lying in our waterways and sheltered harbours round the coasts, idle, but ready to be sent to sea again, again to depress freights as soon as there is a revival of international trade. As long as those old ships, to the extent of nearly 2,000,000 tons, remain there will be no real revival of new construction. I suggest that we assist shipowners who will scrap their old vessels and replace them by new up-to-date modern ships; that they be assisted by being granted loans of money at a low rate of interest, the money of course being secured on the hulls of the ships—a very good security. The President of the Board of Trade has advised shipowners to build vessels of the latest, types, which, in spite of the depressed state of the world's markets, do pay their way to-day. The most modern vessels with modern Diesel engines, for example, and of modern hull construction, can be made to pay their way to-day even in spite of the abnormally low freights which have been ruling. The trouble is that owing to uncertainty and owing to this great mass of idle old ships, shipowners have been unable themselves to raise the necessary capital to do this sufficiently quickly.

That is my first suggestion. There is ample money available. The other day there was a public loan at a comparatively low rate of interest; £1:50,000,000 was asked for from the public and £250,000,000 was subscribed in a very few minutes. The lists were closed in a quarter of an hour. That was not so much confidence in His Majesty's Government as the fact that a great deal of money is lying idle waiting for investment. Viscount Halifax apparently thinks it is a mark of trust in the Government, but it is not a sign of good government to have a great deal of money lying idle that ought to be invested or employed. At the same time the noble Viscount will agree with me that the facts that there are a great many workmen forced to be idle, that our ships are idle and unable to obtain freights, and that trade is depressed, are not matters for the Government to congratulate 651 themselves upon. The real reason, as I have said, is that there is an immense amount of money waiting for investment, and a Government-guaranteed loan will immediately be a success. I suggest that money should be lent to our shipowners, who will be able to scrap their old ships and build new ones and in so doing provide an immense amount of work for our shipyards and the other industries concerned. The other suggestion I would make, and it is one which I think is very practical and long overdue, is that you should forbid the sale of our old ships to foreign owners, to be run by them to death under sweated conditions to the further depression of freights.

My third suggestion is hypothetical at the moment, but it is that if unfair discrimination by certain foreign countries against merchant ships under our flag is to continue we certainly should retaliate. It is for those reasons that I have put down my Question to ask for information and, if possible, to elicit a declaration of policy. I would submit that it is of no use saying that other nations are suffering more than we are and that other merchant navies are depressed. We are far more vitally concerned with the sea than any other nation except possibly Japan, another island Power. It is of the utmost necessity for us that we should have a prosperous mercantile marine and we cannot look with composure on this continued slump and depression in the shipping industry. With regard to shipbuilding, although there is this slight revival and no doubt there will be a further revival if trade revives, I suggest that we should stimulate shipbuilding in the way that I have proposed and so ante-date a possible revival. There is a terrible tragedy in the idleness of the shipyard workers. When a shipyard worker resumes work after enforced idleness it takes him some months to recover his tone, his working skill and endurance: every engineering employer knows that. Our shipyard workers have been a great asset to us in the past and long periods of idleness mean a loss of human capital far more important than the possible risk to the money which is at present idle and which I suggest in my proposition now before your Lordships should be used in the way I have explained. For these reasons I beg to ask for information.

§ LORD TEMPLEMORE

My Lords, I am sure we are all very grateful to the noble Lord opposite for introducing this Motion in the very brief and businesslike speech with which he has done so. This question is a very serious one, and it is serious both on account of the financial loss and also, as the noble Lord has said in the final portion of his speech, still more on account of the human loss, in the loss of efficiency by those unfortunate men who are kept out of employment for so long a time. On the other hand, the problem is one which bristles with difficulties, and I am sure the noble Lord opposite, with his great knowledge of the sea and seafaring matters, and his intimate knowledge of the port of Hull, will realise how difficult that question is.

It was very fully debated in this House on February 7 last, when the Under-Secretary for Foreign Affairs replied for the Government and pointed out—I make no apology for referring to this—that the crisis was mainly due to the fall in world trade and to the increase in the mercantile marines of practically every country, with the exception of our own. I should like to give certain figures. For instance, the mercantile marine of the United States has increased from 2,027,000 tons to 10,880,000 tons, an increase of 388 per cent., and Japan has increased her tonnage from 1,700,000 tons to 4,250,000 tons, an increase of 150 per cent. I merely repeat those figures in order to emphasise one of the reasons for this slump. Of course, the policy of foreign Governments in increasing their mercantile marines in this way is also rendered easy for them by the immense subsidies that they grant, amounting, I believe, to about £30,000,000 per annum.

It has become almost a commonplace, I know—and I am afraid my noble friend may smile—to say that any matter is engaging the consideration of the Government, but I can assure him that this important matter is engaging the attention of the Government very seriously indeed, and has been so for some months. This was emphasised, I think, not only in the debate which took place in this House on February 7 last, but in two debates in the House of Commons, one on December 13 last on a Motion on shipping by the member for West Newcastle, and the other on the 22nd of last month, on the occasion of the Second 653 Reading of the Consolidated Fund Bill, when the President of the Board of Trade made a fairly long statement about the position of shipping, and the attention which was being given to it by the Government

I must say this, that since the debate took place in this House in February several things have happened. The first was indeed referred to by my noble friend opposite, and I make no apology for referring to it, because I think it was an important action on the part of the Government, showing that they were out to assist shipping. It was the passing of the North Atlantic Shipping Act, which became law on the 28th of last month. That, at all events, whatever certain noble Lords may have thought of all the clauses of the Bill, was concrete action, showing that the Government were not going to sleep in this matter. The second thing was of an international character. There are indications that consideration of this matter is exercising the minds of foreign countries, and there has recently been held at Hamburg a meeting by shipowners of a number of important maritime countries, to consider the possibility of agreeing to a scheme for the laying up of a proportion of tonnage by each country, with a view to raising freights to a remunerative level. Such a proposal may be difficult to carry out in practice, but I think it has clearly much to recommend it.

The third thing is that last month four Governments—and they happen to be the Governments which specially backed us up in the World Conference last year, the Governments of Denmark, Norway, Sweden and the Netherlands—addressed a Note to His Majesty's Government in the United Kingdom expressing their willingness to co-operate with His Majesty's Government in any attempt to find remedies against the evils from which the shipping industry was suffering. They added that if the British Government convened a meeting they would be only too pleased to attend it to consider specially the following points: first, the abolition or limitation of subsidies; secondly, the restoration of equilibrium in the shipping trade by adjusting the supply of tonnage to actual world requirements; and, thirdly, any other measure that might be submitted to the conference which would help to combat depression, 654 and having for its ultimate aim the restoration of this important international industry to its former conditions of sound economic competition. His Majesty's Government welcomed this communication, but while they consider that the best way out of this difficulty is along the lines of international co-operation, they are rather doubtful whether any good could come from such a conference unless they could also get the good will of the larger seafaring countries, such as France, Germany, Italy, the United States and Japan, which, I am afraid, have not so far shown much desire to co-operate. However, the Government are considering very seriously this communication from the countries that I first named, together with other aspects of this problem.

The noble Lord made three very interesting suggestions. He first suggested that shipowners should get a Government loan at a low rate for scrapping their old tonnage as much as possible and building new ships. As regards that, I would like to refer again to the debate of February 7 in which my noble friend Lord Stanhope stated that … nations have at last begun to scrap their surplus tonnage. Last year some 2,000,000 tons of shipping was scrapped, and it is estimated a further 3,000,000 tons will go this year. I am afraid a good deal of it will be British, but there is at any rate some decrease in foreign countries as well. We see from that that the shipping of the world is gradually being reduced, and in time I suppose the situation would right itself. But the Government, of course, are not going to wait for that. That would be much too slow a process. I quoted those figures to show that at all events the policy which the noble Lord advocates is to a certain extent being carried out. Still, I will see that his suggestion is conveyed to my right honourable friend, because I think it possibly may be a very useful suggestion.

The second thing he suggests is to forbid the sale of ships to foreign owners That suggestion I will also have conveyed. A third suggestion he makes is. that of retaliation. That is in the minds of His Majesty's Government. I was reading yesterday the debate in another place last December, to which I referred at the beginning of my speech, and I think that on that occasion the President 655 of the Board of Trade made some such suggestion as that, showing that the possibility of retaliation was also in his mind. I repeat that His Majesty's Government consider it a most important question, one of the most important questions they have to grapple with, although trade and industry are improving and, I think, will improve still further. The noble Lord was so studiously uncontroversial that I will not for a moment suggest that too much credit is due to the Government for this—he and I would not agree about that. But, to whomsoever the credit is due, we think that trade and industry are improving, but there are one or two very black spots still, including coal-mining and shipping and ship-building.

I am authorised to say that, while it is not possible to make any specific statement to-night, my right honourable friend hopes to be in a position to make a statement in another place at a relatively early date. When that statement has been made, if the noble Lord wishes for any further information and will bring forward another Question in this House, I shall be only too ready to give such answer as I can on behalf of His Majesty's Government.