SHIPPING.

HL Deb 30 July 1936 vol 102 cc411-49

LORD LLOYD rose to call attention to the shipping situation, and to move for Papers. The noble Lord said: My Lords, before referring specifically to the subject matter of my Motion I should like to say how sorry I am that neither of my two noble friends who replied to the recent debates on shipping and on food supplies is able to reply to-day, and especially for the reason which prevents my noble friend the Lord Chancellor from being here. I notice that my noble friend the Lord Privy Seal, who defended the Government on this matter last time, though he is here to-day, has apparently handed over the task to another colleague. Might I also observe that I have tabled a list of statistical and other questions, the answers to which I hope my noble friend will supply me with afterwards, as I shall not be able to refer to all of them in my speech without being unduly long.

It is only five weeks since I raised the question of British shipping in the Pacific and called His Majesty's Government's attention to its critical and serious situation. Then, after hearing the Lord Privy Seal's reply, I was constrained to express my disappointment at that reply, and indeed my sense of increased anxiety at what seemed—I scarcely like to use the word—almost the complacency with which my noble friend seemed to view the threatened extinction of two lines, our only two lines, the last links between three great British Dominions—namely, Australia, New Zealand and Canada. I felt then, as I feel now, that it was impossible to leave matters where they were without making one more attempt to urge His Majesty's Government to more rapid action, and to ascertain exactly what action they were going to take. Parliament is just about to rise, and will not meet again, we hope, until the autumn. By that time, unless prior action is taken, there is grave risk that these lines—one line at any rate—will be on the eve of suspension. It is obvious that great steamship lines, once suspended, are not easy to start again. I have taken great pains since we had our last discussion on this question in your Lordships' House to consult with others better qualified than I am to express a technical opinion on this question, and I find that all those I have consulted share my sense of disappointment and unhappiness in regard to the Government's reply.

Considering that this question of our shipping in the Pacific has been under review ever since the Ottawa Conference, it seems to me, with every allowance made for the difficulty which must necessarily face a Government in getting three parties into an agreement, very hard to understand how His Majesty's Government could inform us, as they did in the last debate, that they have not got enough data in their possession to come to a settlement. It is the view of people well qualified to know that data could have been easily procured in the four years, probably in four months; and to have referred so tardily this question to the Shipping Committee after so long a delay has meant that the visit of the Deputy-Prime Minister of Australia, Mr. Earle Page, and a distinguished representative of the Canadian Pacific Company, who are over here, has ended fruitlessly. Indeed, it is difficult to see how a settlement is easily to be arrived at now. I should like to ask my noble friend when he replies if he can tell us when he hopes to receive the Shipping Committee's Report, and what hopes he has of achieving an early settlement after the Report is received.

I now turn to the more general question of shipping, especially in its relation to food supplies in time of war. I make no apology, even at this late moment in the Session, for raising this question once again. The late Prime Minister's statement—the gravest statement that ever has been made in this country, made two years ago in the White Paper—still stands, unless Government are prepared to deny accuracy, that in the case of an aggression we could no longer feed our people with the resources at our disposal. Unless we are told that that statement is now untrue it remains almost the most urgent question in the whole Empire. Our solicitude as to the sufficiency of ships is, as I have said, mainly in relation to food, and also to those essential supplies of war and agriculture which are concomitant with the very existence of a beleaguered country. But in no part of the Lord Chancellor's speech—I hope when he reads this he will forgive my saying so—did there appear to be any realisation of the gravity of the danger of the existing situation; indeed his remarks in many passages seemed designed to assure the public that our anxieties were superfluous and unnecessary. It is therefore with double pleasure that in the particularly interesting speech from my noble friend the Secretary of State for Air. I listened to him repeating with emphasis what is, in the mouths of His Majesty's Government, a new doctrine, that preparedness is the greatest insurance for peace. For the last ten years we have always been told that disarmament was the surest road to peace. I could wish that the Government had made their discovery earlier, for the sake of the country—our finances as well as our safety.

It is not my object to criticise Government or to hark back into the past. We are concerned to support the Government in every possible and conceivable way we can in the; urgent preparations they are now making to remedy the deficiencies which admittedly exist. But I must refer to some of the statements made by the Lord Chancellor in the last debate. He seemed to find assurance and comfort in the sample, but I am afraid superficial, doctrine that it was unnecessary to store food in this country because if we had command of the sea such storage was superfluous, and if we did not have command of the sea it was useless. Surely it should be unnecessary to reply to so superficial an argument. Of course it is for the very purpose of assisting a depleted Navy, faced with an increased task, to keep command of the sea that we desire to relieve it of some of the convoy burden which will be so heavy in the next war. And therefore food storage, for retaining the command of the sea if for nothing else, is a vital consideration.

Then the Lord Chancellor took comfort, and asked us to take comfort, in the reflection that there had been a 15 per cent. increase in our home-grown food supplies. That is not the whole of the story. We are very glad that the Government have been able to increase during the last four or five years our food supplies in some degree, particularly in sugar; but the fact remains that there are 10 per cent. more mouths to feed than there were in 1914, and that is a serious set-off to that slight increase in food production. Furthermore, according to one of the greatest authorities on the question of food supplies, Sir John Orr, corroborated by another great authority, Dr. Cloudesley Brereton, the increases in home-grown food supplies have in the main been in fruit and vegetables, whereas a definite decrease in wheat and meat has to be registered. Therefore, there is not room for much comfort, and Sir John Orr tells us even that there is now a definite and greater dependance on foreign food supplies than there was in 1914. As I shall remind your Lordships in a few moments, not only has there been a terrible depletion in our tonnage, but an enormous increase in the duties that that tonnage has to carry out. Your Lordships will therefore see that the fact that there is a still further dependence on foreign food supply is a grave matter.

Although the Lord Chancellor admitted that the findings of the Food Commission of 1905 were not relevant to to-day, as is obvious, he quoted with satisfaction—and I suppose he must have thought that it had some reievance to to-day otherwise he would not have introduced it into his speech at all—that the Food Commission in 1905, by a majority, decided that there was no need to do anything with regard to food storage. But there was a very powerful minority who took exactly the contrary view, and no less an authority than Sir Herbert Matthews, in a paper which ho read before the Society of Arts quite recently, remarked upon it. I need not tell your Lordships who Sir Herbert Matthews is or cite the value of his authority to you: it is well known. Sir Herbert Matthews described the Majority Report of the Commission in 1905—I shall use his words—as a Report which had been drawn up more with a view to calming a growing public apprehension which was inconvenient to the then existing Government than to present a true statement of the case. There is but one justification for the adoption of such a course—namely, that the truth was so alarming that they feared to put it in black and white. That is a damaging statement. It is not mine, but Sir Herbert Matthews'. There is, I am afraid, no doubt to-day that there is nothing in the Food Commission's Report of 1905 which can give us the smallest reason for complacency, or anything to relieve our anxiety. But I do not want to labour this particular aspect of the question too much.

We must remember too our enormous dependence on oil fuel. It is perhaps trite to remind your Lordships of it, but we have changed from coal to oil in the case of the Fleet and in the case of an increasing number of merchant ships, our Air Force, our mechanised Army, industry, and transport. All these are practically entirely dependent on a foreign supply of fuel, all of which is an initial burden on transport from overseas, and all of which has to be convoyed in time of war with a depleted Fleet, with a gravely depleted mercantile tonnage, and in face of surface dangers, sub-surface dangers, and super-surface dangers as well. I have just obtained, before I came into the House, one set of figures with which I shall venture to trouble your Lordships. Of crude petroleum we imported 15,000,000 gallons in 1914. In 1935 we imported roughly 500,000,000. Of refined petroleum, as against 630,000,000 gallons in 1914, in 1935 we had to import 2,309,000,000 gallons. It would be convenient if my noble friend can tell us, in relation to that increase, to what extent does our British tanker fleet suffice to supply our requirements of crude oil, fuel oil, petrol, and lubricating oil. Then we shall get some idea, not only of the increased tonnage of this particular commodity that has to be imported, but how much neutral tanker tonnage we may require.

Again, the Lord Chancellor claimed that as world tonnage had gone up since 1914, there would be a far greater neutral tonnage available than in the last War. I tried last time to ask whether the Government were not mistaken in their reliance on neutral tonnage. I know it is the view—I must not say of all shipping authorities, but certainly of very important shipping interests, that they would be very unwise to rely in any degree on neutral tonnage in the next war. Why, is obvious. If you take Scandinavia, if we were at war with a Central European Power, Scandinavia would almost certainly be subjected to the risk of air reprisals which would be a great deterrent to her giving us any of the help she gave us in the last War. The same might be true of Greece or of any other neutral country that might be willing to give us a petrol supply.

We have also to remember another important factor in the case of neutral countries—that neutral countries had much less choice in the last War as to whether they acceded or did not accede to our request for tonnage, because in many cases they were almost entirely dependent on us for bunker coal, and if they did not lend their ships to us their business was ruined. This time there will be much less reliance on our bunker coal. Many of them have changed over to oil fuel, and it may well be that in certain possibilities they might find it more convenient to rely upon those Powers, and give their tonnage to those Powers, that have a continuous and uninterrupted flow of Continental oil which could reach them without fear of any interruption at sea. Therefore I hope my noble friend will tell us to-day what are the real reasons why His Majesty's Government feel they can so safely rely upon a large amount of neutral tonnage. You must remember that in the last War, even when we had a far greater tonnage of our own, we could not possibly have got through without relying on a very large amount of neutral tonnage.

I have only one more remark to make in reference to the Lord Chancellor's speech. The Lord Chancellor asked us to take comfort in the reflection that, though the total British tonnage had declined by about 1,000,000 tons, cargo carrying tonnage as a whole had increased. Might I suggest—and these are the views of experts, not mine—it is not tonnage in the main that counts, it is the number of ships that counts? A torpedo or a bomb does not sink a percentage of tonnage; it sinks a ship. Therefore, we have got to look mainly, for war purposes, to the number of ships we have rather than to the gross tonnage. In 1914 we had got roughly 2,000 tramp steamers; to be precise 1,906. We have not got 1,906 to-day. We have not even got 1,000. We have only got 924 tramp steamers, and many of these are very old. The depletion of our tramp tonnage, of the number of our ships, is rapidly proceeding every day. Whereas there was an increase in our tramp tonnage during the boom period after the War, in the last five years we have actually lost three million gross tons of United Kingdom tonnage. That seems to me an alarming figure when you come to consider that, even with all the neutral tonnage available to us in the last War, and all the enormous fleet of tramp steamers we had at that time, we were brought within a fortnight of starvation, with only two weeks' supply in the whole country at one bitter period in the Great War!

These facts alone, I think, would justify any one in pressing these points home to His Majesty's Government at so urgent, and dangerous a time as this. I say that the rate of decrease of this tonnage is likely to be enhanced in the near future because, since ship owners, particularly tramp ship owners, have been left for so long to struggle unaided against the subsidised attacks of foreign countries, their resources are now practically exhausted, and it is only a question of time before they may have to sell more ships to obtain ready cash. In that connection the scrap-and-build policy, with which the Government had hoped to do a great deal of good, has been of questionable value. It has meant a large depletion in the actual number of our ships because, of course, for every ton built two have got to be scrapped. It also has one other grave disadvantage—I do not know whether the Government reflected on it before, but in the event it has certainly proved a very serious disadvantage—and that has been the scattering and the diminution of the already exiguous personnel of the Merchant Navy. Throughout the shipping industry I have heard nothing but unhappiness about and criticism of the scrap and-build policy.

There is one other matter to which my noble and learned friend the Lord Chancellor did not refer in his speech but about which I should like to say a word to your Lordships, and that is the question I have just touched on indirectly—personnel. My information to-day is that the question of personnel in the Merchant Navy is perhaps the most grave because it is the most difficult to remedy. Young men are refraining from joining the Merchant Service because they feel it is a dying industry. I have already ventured, some weeks ago, to put before your Lordships the condition also of the fishing industry. Brixham, Lowestoft, Yarmouth are in a state of complete collapse, and a large number of the old sea-faring families are no longer contributing to the personnel at all, with the further result that the head of a great line told me only yesterday that not only is it difficult to get personnel at all but such personnel as comes forward is worse than it has ever been before. My information is that whereas in 1914 no fewer than 16,000 men were furnished by the Merchant Navy for the use of His Majesty's Royal Navy, it is doubtful now whether 1,000 could be found in case of need, and even that 1,000 could not be found without impairing to some considerable degree the cadres of helmsmen and quartermasters in the Merchant Navy. These are grave matters, and I would be grateful if my noble friend could give us some comfort in the matter and tell us what the Government feel they can do to remedy this unhappy situation.

My noble friend Lord Phillimore, in a debate which took place just after the debate to which I have referred on Pacific shipping, went into the question of the storage of food at some considerable length. I would like to ask His Majesty's Government to-day why is it that they say that food storage is impracticable and undesirable? That is what I gathered from what the Lord Chancellor said to us, and I believe that is their attitude. It is not the view of other experts. Only in the last few days we have had statements, which were reported in the Daily Telegraph of July 22, from Mr. Ian Mackenzie, the Canadian Minister of Defence, who took an opposite view to that pronounced on behalf of His Majesty's Government by my noble and learned friend the Lord Chancellor. He did not think food storage was either unnecessary or impracticable.

May I read a very brief extract from what he is reported by the Daily Telegraph to have said in his speech: I believe the time will come when England will have to adopt the practice of grain storage, and use the elevator system of storing wheat as part of her preparation of war defence. The usual objection, that wheat deteriorates if stored for a long time, is not borne out by our experience in Canada, where wheat has been stored for two years at a time. Another objection, that England's damp climate would affect wheat stored in elevators, does not take into account my own personal observations in Vancouver. There, in spite of a few months brilliant sunshine "— that is rather a big exception— the climate, on the whole, is very much damper than that of London. He went on to say: There is no reason why elevators should not be constructed underground. The principal thing to bear in mind is the interior temperature. He does not think food storage either unnecessary or impracticable, and his view was immediately supported, according to the same newspaper, by the Canadian Minister of Agriculture, Mr. Gardiner, who said that he saw no reason why Canadian methods should not be applied to this country in the event of emergency.

Wheat, he said, is stored all over Central Canada. This has particular reference to the difficulty mentioned by my noble and learned friend the Lord Chancellor, that it was difficult to deal with grain in scattered elevators or granaries; he argued that you could not concentrate them for fear of air attack, and that you could not scatter them because of the difficulty of transport. Though he did not precisely say what the difficulties were, he said the whole scheme was impracticable. Therefore the views of Mr. Gardiner, the Canadian Minister of Agriculture, are interesting on this point. He sees no difficulty in scattering the granaries all over the country. He said: Wheat is stored all over Central Canada in small elevators fifty feet high, each containing 30,000 bushels and made of timber encased in tin. He describes them in further detail, but I will not weary your Lordships by giving further particulars. If that is the case it is obviously impossible for us to believe that the Government have not some good reason which prevents them from adopting so important an expedient as this which might well mean the life of the country. I hope my noble friend will tell us, if he possibly can, what are the reasons why the Government do not adopt a system which experienced people have shown is extremely practicable, and which I think is common sense from a strategical point of view and might be of infinite and vital value in time of war.

I have not time, without wearying your Lordships unduly—I hope I have not already done so—to refer to the general question of British shipping, but I do not think it an exaggeration to say that British shipping in the Far East is in a state of something like collapse. The whole question of Japanese shipping at this moment is extremely complex. I have been reading a great deal about it lately, but I must confess, honestly, that I have not yet mastered it sufficiently to venture to speak to your Lordships about it. Experts have been interesting me in this question. It is extremely complex but I think there is no doubt the real situation is that that part of the British shipping is verging on something like collapse unless something is done.

The Japanese, moreover, are not only increasing their competition and their power to compete by enormous subsidies, direct and indirect—in the case of Japan chiefly indirect—but are preparing to build a great addition to the number of their cargo boats. The total Japanese steam and motor tonnage has increased by 181 per cent. since 1913 and a new law proposes a 50 per cent. increase in Japanese tonnage from 4,000,000 tons to 6,000,000 tons. A Japanese Minister has declared his Government's intention to see it increased to 8,000,000 tons. If this is done the ratio of Japanese shipping to trade will be three to one or, as the case may be, four to one—in other words, she will have three or four times as much shipping as trade, whereas the British Empire will only have just as much shipping as trade. With all that enormous spare margin of shipping it is unnecessary for me to suggest even to your Lordships how gravely and intensely will be the increased weight of competition against what remains of our shipping. I apologise if I have spoken at too great length on this matter, but I believe it to be one of the gravest aspects of Imperial defence to-day. I think that the attempt to relieve a depleted cruiser fleet of some of its onerous convoy duties and to give an assurance to the people of some few weeks' food supply a matter well worthy of being put repeatedly before your Lordships' House. I beg to move.

LORD STRABOLGI

My Lords, my noble friends have asked me to say a few words to state the attitude of the Labour Party on the very important matter broached by the noble Lord, Lord Lloyd. I hope the noble Marquess the Secretary of State for India, who I understand will reply, was not quite so depressed as I was by the gloomy picture drawn by the noble Lord, Lord Lloyd. I say that for personal reasons, but for political reasons I hope he will be still more depressed. Yesterday we had a debate in your Lordships' House after which the noble Viscount the Lord Privy Seal balanced very delicately the advantages of strengthening the League of Nations or weakening and abandoning it. Presently the noble Marquess and his colleague the Secretary of State for Air will, I suppose, take a very dire responsibility in deciding what the Government policy is going to be, and I hope they will have regard to what has just been said by the noble Lord, Lord Lloyd.

The picture drawn by him no doubt has good foundations, for I understand he went with a deputation which waited on the Prime Minister to tell him a few secret things about our awful situation. The picture drawn by the noble Lord, of what splendid isolation would mean—or, what is the same thing, what would be the result of weakening and practically abandoning the League of Nations—is, I think, not at all exaggerated. For that reason I hope that the noble Marquess, if I may most respectfully suggest it to him, should consider the matter very seriously indeed before he gives his vote in the Cabinet. May I be allowed before I go further to say that I share with the noble Lord regret at the absence of the noble and learned Viscount the Lord Chancellor, who took part in the last debate when some of the subjects dealt with this afternoon were raised. We all hope—here I speak for my noble friends—that he will soon be restored to his important office in full health.

I should like to be allowed to comment on one remark made by the noble Lord, Lord Lloyd, in reference to the reluctance of young men to join the Mercantile Marine and make it their career. He said it is because they look upon it as a dying industry. My information is a little different. They are reluctant to join the Mercantile Marine because conditions in it are still not such as to attract boys from good homes. That is one of the reasons why my colleagues in this House and in another place have always regarded it as a national necessity to improve the conditions in the Mercantile Marine. The noble Viscount, Lord Swinton, knew all about our activities in this respect when he filled the great office of President of the Board of Trade. The men in the Mercantile Marine are the reserves of the Fleet.

I was glad that the noble Lord, Lord Lloyd, also referred to the situation of the fishing industry, and I am sorry that the noble Earl, Lord De La Warr, was not able to be here to-day to hear what he said. I consider that the way in which we are treating the fishing industry at the present time is abominable. We are doing our best to cut down the fishing fleet and the activities of the fishing fleet in the interests only of the merchants. In other words, we are keeping the market short and keeping prices up and do not care how many men leave the arduous and dangerous calling of the fisherman. I am very glad that the noble Lord dwelt on that point. I hope that next time the position of the fishing industry is debated he will support our point of view. I am very glad that he also drew attention to the failure of the scrap-and-build policy. I have been charging my memory and I do not remember that he supported us when we offered the same criticism when the Subsidy Bill was being debated. I ventured then to insist that the scrapping of two tons for every new ton built actually meant the depletion of the Mercantile Marine. To-day I have confirmation of that from this unexpected source on the Cross Benches.

Now I want very briefly to state our policy with regard to shipping. We are in favour of shipping, like every other form of transport, being made a Government and national service—indeed, an Imperial service in conjunction with the Dominions. That is not practicable in the present political state of the country, and therefore we recognise that in certain circumstances it may be necessary to help the industry by subsidy, as I said in the previous debate. What we object to is a subsidy being given practically without conditions. As purists in economic matters we object to subsidies being given to private enterprise, but when, as in the case of shipping, it may be necessary to give subsidies, we demand that there should be certain conditions. We consider that the first condition is that the State should have some share of the equity created. There is an example of that in the Anglo-Persian Oil Company, now the Anglo-Iranian Oil Company. For high State reasons that company was given financial assistance, but there were conditions. The State has a large block of shares in that company and it has been a remarkably good investment for the British public. The Government have two directors on the Board who have some say in high questions of policy, although I know that they do not interfere in the commercial management of the company.

That example should be followed when the shipping industry is given a subsidy. The Cunard-White Star Company, I see, is going to build another great liner. When a subsidy is arranged some conditions should be imposed. I might allude also to the Suez Canal of which the noble Marquess has great knowledge from his Indian experience. In that company the State holds a very large block of shares and we have Government directors on the Board. We have some say in the workings of the Board. I think we are a little indolent sometimes in not putting down rates in favour of British shipping, but that is another matter. There are two precedents which ought to be followed. There is another condition that should be laid down. When we are subsidising private enterprise we should insist on a minimum rate of wages and minimum conditions in the shipping industry. In the shipping industry we have got on without serious trouble for many years because of the existence of the Maritime Board. Owners and different sections of the men get round a table and work out what should be the minimum conditions under which men live and work at sea. The difficulty is, however, that the Maritime Board's findings are not compulsory. As a decision on the matter may be taken by the Government before your Lordships meet again, I want to put the consideration to the noble Marquess that where a subsidy is given to private shipping for high national reasons there should be an insistence that at any rate the Maritime Board rate of wages and conditions are observed. We also think that there should be a minimum of British crews in the ships.

That, briefly, is the policy which my Party would wish expressed on this important subject. I have only one other thing to say—and here I must again refer to the noble Lord who introduced this Motion. It is very remarkable to me how noble Lords in this House and politicians in another place who have played a great part in breaking down our old fiscal system are now, if I may use the expression without offence, "squealing" when the results which we prophesied have come about. We always said, we Free Traders, that if you cut off trade by tariffs, quotas, and all the rest of it you would kill British shipping. Now, sure enough, we are getting complaints from the very people who were the loudest in advocating economic nationalism. Surely we can learn a lesson from this. Economic nationalism, I venture to say, is one of the curses of the world to-day. The efforts of nations to make themselves self-supporting, very often for war reasons or for purely selfish reasons, are bound to hit shipping and to affect all other nations as well.

I suggest that one of the ways in which we could restore tranquil conditions in the world and remove this horrible irritation between nations is by giving a lead and helping in every way we can to reopen the channels of trade to-day, to get over the currency difficulties which are blocking trade. That is why we are poor, that is why we have depression, that is why in the Fascist countries the dictators are able to say to their people: "Yes, you are poor and miserable, but that is because of wealthy France and England, who have taken all the best parts of the world and hold on to them." Your Lordships may remember one statement which was made in the controversy about Abyssinia by the Italian leader, Signor Mussolini. It was one of the few statements of his with which I have felt myself in any sympathy. He said: "This is a war of the Italian proletariat, the poor, for a place in the sun; we are being opposed by the wealthy and rich." There is some truth in that, and the way to get over that trouble is to open the markets of the world to the trade of all nations. You will help shipping in that way and you will also, I believe, do a great deal to remove the economic causes of war. I have attempted to explain the position of my Party in this matter. We want to help shipping any way we can. We think it a fine manly calling for British youths, and essential for the prosperity of the country. But we are opposed to the granting of indiscriminate subsidies without proper conditions.

THE EARL OF CORK AND ORRERY

My Lords, I hope not to take up much of your Lordships' time, as much of the ammunition that I had hoped to fire has already been fired with greater effect by my noble friend Lord Lloyd. I, too, wish to associate myself with his expression of regret at not seeing the noble and learned Viscount, Lord Hailsham, in his usual place on the Woolsack. I also wish to refer to the speech which the noble Viscount made on behalf of the Government in replying to the Motion of the noble Lord, Lord Phillimore, in the debate on July 9. Of course, as Lord Lloyd has pointed out, that reduction of 1,000 ships in our carrying fleet is a very great loss, and it is not nearly compensated for by the extra size or the extra speed of the ships that we have now. It is compensated, of course, to some extent, but we are not nearly in the same position.

I think that the noble Viscount was on even less firm ground when he got on to the subject of the alternative to British shipping and wished to rely upon neutral shipping. Who can say what countries are going to be neutral? If our isolationists got their way, we should find ourselves up against the whole world. And will the countries that are neutral be either able or willing to let us use their ships? Of the increase in world tonnage a considerable percentage is supplied by the United States, and the United States have lately rather stiffened in their attitude towards countries that either wish to go to war or are at war. In the last War, as the noble Lord, Lord Lloyd, pointed out, we had a tremendous pull over neutral tonnage: we could force it into our service by the operation of the Black List, and if a foreign owner got on to that list he was practically ruined. The United States bitterly resented this at the time but was powerless to alter the conditions that prevailed. In those days we had not heard of the word "parity." Nowadays, that power is rapidly decreasing. Your Lordships will have noticed from the latest returns that for the first time the number of coal-burning ships has sunk below 50 per cent. of the total ships of the world. It is not now a question of our denying foreigners bunker coal, but of foreigners denying us oil. I am an isolationist when it comes to employing foreign ships to carry British food, and I believe that for supplying food we must rely on ourselves. That means that we must have plenty of ships and well-found yards to replenish and replace them, to scrap and build the ships.

The attention of the public has lately been called to certain cases in which British ships have gone to sea ill-manned, ill-found and evading regulations. I am not going to attack the people who sent them there, but incidents of this sort are symptomatic of the straits into which British shipping has fallen. There is something to be said for the owners who are putting up a desperate struggle to keep their business going and keep their men employed, and for the sailors who would rather take risks at sea than starve on shore. That is what happens now in our Mercantile Marine. It is worse for the officers than for anybody else, for there is no provision for them, and lots of them are hanging about with nothing to do and getting no money for doing it. These are men who have served a long apprenticeship as truly in the service of their country as if they had been naval officers, and who have at times had to take more responsibility in a week than other people have had to take in the whole of their sheltered lives. We are losing, or have lost, many of these men. Only a fortnight ago I said good-bye to a man who was just leaving this country to go to Canada. He had been a Merchant officer for many years and had served in the Royal Naval Reserve during the War. He said he was going to the middle of Canada and was never going to see this country or a ship again.

We are losing not only these men of the Mercantile Marine but also at the other end the skilled men who ought to be working in the shipyards. There is a temporary revival at the moment, largely due to Government orders, but we are reminded that at any time that may come to an end. It was pointed out in one of the shipping papers only a few weeks ago that we have yards in this country capable of building 2,000,000 tons of shipping. There is nothing of that sort being built in this country at the present time. Lloyd's Register shows that in this country there are only 64,000 tons of ships being built to foreign orders, whereas foreign yards are building 390,000 tons to foreign orders. Yet if our yards are to be kept going, and if that industry is to be able to keep its men working, we have to look in the future to foreign orders to supply the work which they will do.

Are these orders going to be obtained unaided by shipbuilders themselves? I submit to your Lordships that shipping and shipbuilding have struggled manfully against very great difficulties, and I submit further that we cannot expect them to hold their part of the line for ever against repeated attack. The time has come now to give them powerful reinforcements, so that they can counter-attack and get back some of the ground that they have lost to our maritime rivals—Japan, Italy, the United States and Germany, all with a national shipbuilding policy which they carry out by subsidising heavily their ships and yards. Are we going to depend upon our people to fight them singlehanded—we who depend upon our shipping more than any other nation, and in quite a different way?

I do not wish to appear to speak against the extra cultivation here, but you are giving £2,000,000 as a subsidy, and consider it a generous subsidy, to shipping, and spend far more on growing sugar in this country, which does our ships out of all the sugar which they used to carry from the West Indies and does our Colonies out of their work. I think that shipping might be treated a little more generously. There is one branch of our shipping industry which is slowly forging ahead. I refer to the coastal shipping. That is not asking for anything, either a subsidy or anything else. What it does ask is that it should receive the support of its countrymen. These shipowners ask to be provided with cargoes by their fellow countrymen, and that such cargoes should not be given to foreign ships which come in and trade on our coast. They ask that if foreign ships come in they should be required to compete with British ships on equal terms. It seems incredible, but it appears that there are still firms in this kingdom who will give their work on the coast to foreign vessels. I am sure that many people who do so consider themselves very patriotic, and will sing "Rule, Britannia" on the slightest occasion.

Coastal shipping, by which I mean the shallow draft ships and the small ports, may have to play a very important part in the supply and distribution of food if we are ever again at war with a near neighbour. We shall have to depend on large numbers of small vessels and their crews for a great many naval duties round the coast. These must come, at least in part, from coastal shipping, and we cannot have too many of these ships. Both the coastal shipping owners and the harbour authorities have shown tremendous spirit and foresight, and all they ask is that they should be supported by their own countrymen. Many of your Lordships have interests and connections with local authorities or businesses that use coastal sea transport, and it is your support for which the industry asks.

LORD PHILLIMORE

My Lords, I had the temerity two or three weeks ago to initiate a debate on food supplies in time of war, and it is therefore unfortunate for me, and regrettable from the point of view of the House, that the Lord Chancellor is not present to-day. I cannot but feel that able as his reply was, I must have very much failed, during that debate, to make clear the line which I was trying to press on the Government. I was trying to press on the Government that as a mere matter of defence some form of storage was essential, and some increase in the production of our agriculture. I supported that partly on the ground of the great danger of starvation, and partly on the ground of the relief of our depleted Navy which would be necessary during the first few months of the war. I ventured to point out during my speech that the figures of mercantile tonnage were most disheartening when one made comparison with the figures available during the last War.

To clear up this question of the easing of the Navy by lightening its task during the first few months of the War, reference has been made to the Commission of 1905, but there is a far more important Commission which sat, although it was only dignified by the name of a Sub-Committee of the Reconstruction Committee after the War. That was a far more important Committee which, in the light of the experience of the War, reported on this very subject. That Committee, whose Chairman was Lord Selborne, took the precaution of consulting the Lords Commissioners of the Admiralty and got them to give a considered opinion. I will quote the last few words: Therefore, the experience of the present War leads to the conclusion that any measures which resulted in rendering the United Kingdom less dependent on the importation of foodstuffs during the period of a future war, and so in reducing the volume of sea-borne traffic, would greatly relieve the strain upon the Navy and add immensely to the national security. That was the very carefully considered opinion of the Lords Commissioners of the Admiralty in the light of existing events. I know it is argued that the next war will be different from the last War, and I fully believe that, but there will be certain essential parts of the problem which will remain unchanged so long as this country is an island and an over-populated island.

I was all the more astonished at the noble and learned Viscount's reply because, having three lines which could be taken to grapple with the problem, he came down in favour of the free importation of the necessary food supplies from abroad. In other words, he gave it as the considered opinion of the Government, no doubt, that we should in the first instance rely upon keeping the seas open from the very beginning of the war. He did not, of course, miss the point that that involved the free use of mercantile tonnage and, indeed, the use of the mercantile tonnage available to a far greater degree than during past times; but yet he himself furnished us with figures. He told us that we had 17,000,000 tons of shipping available, and he told us, at the same time, that we required 45,000,000 tons; in other words we, in his opinion, could rest dependent upon neutral tonnage to a very large extent for our necessary supplies. I thought he seemed rather to scoff at the idea that the possibility of starvation was a difficulty, and yet two days later the First Lord of the Admiralty made a speech in which he said that we had six weeks' supplies in this country—

LORD STRABOLGI

He said we would starve in six weeks.

LORD PHILLIMORE

I am not sure of his exact words, but he said we had six weeks' supplies, or would starve in six weeks, and that no measures which we could take if those six weeks' supplies came to an end would be of the least avail. I think that is the effect of it. If that is the case, then the condition and quantity of our merchant shipping is a vital point in our defence. Have we neglected it? Is it prospering? We know that during the last four or five years there has been a steady decline in the tonnage under the British flag. We know that that tonnage is in increasingly large units, and therefore not quite so useful in time of war. We know, as Lord Lloyd has pointed out, that our population has gone up and that our dependence upon oil supplies is greatly different from what it was in the last War. We know that in a mechanised war we should be more than ever dependent upon imports of minerals and raw materials. Can we rest easy with the present position of merchant shipping? I did think, I must own, that there was some small justification for the line taken by the noble Lord who leads the Opposition, when he suggested that in the great turnover of our policy which is founded, you might say, on Ottawa, and import duties, we had left behind shipping as a child, perhaps a sturdy child, which could be left to look after itself for a few years. But I cannot help thinking that that child has been left too long without its proper nurse.

The facts of the matter are that whereas this country used to import £600,000,000 worth a year from foreign countries we now import £400,000,000 worth a year. I am comparing 1930 with 1935 in round figures. That huge decrease in cargoes to this country is bound to have affected our shipping. And yet we find that foreign entries of cargo into this country have increased largely in quantity and value, whereas our own entries have remained practically stationary. World trade is now only 73 per cent. of what it was in 1929. During that process of contraction world shipping has naturally suffered, competition for world shipping has naturally increased, and other Governments have been beforehand with us, to say the least of it, in assisting their own shipping.

As my noble friend Lord Lloyd has pointed out, Japan has, I think, doubled her mercantile fleet within the last few years. Even our friends, such as France, are making very strenuous efforts to maintain, if not to increase, their Mercantile Navy and, at the same time, in order to do that, are placing restrictions upon the use of our ships. I am told that even the Government of M. Blum, which has not been very long in office, is enlarging upon the previous decision of the French Government as to the percentage of coal from this country which must be brought in French ships and as to the orders placed by municipalities abroad. I turn to the United States and I find that that country has increased its Mercantile Marine more than any other, and at the same time, as was pointed out in that Pacific debate, has increased its subsidy to an enormous extent and has choked out our Mercantile Marine.

I find that we made in 1934 a new trade agreement with Russia in which, as your Lordships will all remember, the value of the freights chartered by Russia in this country (if that is the right phrase) was to count as an item in the balance of payments, and the noble Earl whom I see sitting below me (Earl Stanhope) drew a very rosy picture at that time of the advantages which would accure to this country and to British shipping owing to that agreement. That agreement was entered into in February, 1934. During 1935 I find that our exports to Russia declined rather than increased, and I find that, whereas they mainly consisted during 1934 of our own produce and manufactures, during 1935 two-thirds of them consisted of re-exports. Surely if there ever is a place where our shipping ought to come in, it is in re-exports from this country; that ought to be their own particular field. And yet I find that the amount of shipping chartered from this country during 1935 was almost identically the same as it was during 1934. On the other hand I am told on very good authority that during 1935 the Russians put various additional charges on our shipping, such as increased pilotage dues, increased insistence on buying their bunker coal and other small charges, all of which diminished the profits which we should have had from this not very large volume of shipping.

I find that, whereas we were buying enormous quantities of timber from Russia, in June of this year there was not one single British vessel loading timber from Soviet Russia. I believe that, thanks no doubt to representations made by the Government, some effort is going to be made shortly by which during the remainder of this shipping season the Russians will make a greater effort to employ British shipping. But the timber shipping season is practically over. If anybody lives on the river Thames as I do and sees the imported timber coming up the river—especially if they have been interested, as I have been, in barge traffic—they will see that the shipping of imported timber is completely finished by September, and they will not fail to remember that the White Sea is closed to most shipping very shortly after that—or at any rate most of the ports, not all of them. So this concession which I believe is going to be forthcoming, though I welcome it as a sign that our own Government are taking an interest, is not a very valuable one.

And yet when it came to a question of poor little Portugal trying to score (if I may use the word) by certain restrictions on our shipping, the Government were firm and the results were good, at any rate for us. Our shipping interests have no complaint to make in that quarter at all. I cannot help thinking that, as I say, this child has been left behind too long, and in general terms I would appeal that greater consideration be given to it in future. If the noble Lord opposite is right, if the conditions in our Mercantile Marine are not yet all that they should be, how much less are they all that they should be in some foreign Mercantile Marines? And what advantage does not that give in the competition for first place? If we are going to insist on better conditions—and it may be that we ought, and undoubtedly certain remarks made on those founderings in the Atlantic do tend to show that—then surely the protection which we give to our own national shipping must be increased. I very much hope, without any wish to embarrass the Government, that they will pay great attention to what my noble friend Lord Lloyd has put forward.

LORD GLENRAVEL

My Lords, I am not going to make a speech, but there are two points upon which I want to find out where the Government stand. In the first place we all recognise that our life depends upon our Navy. That has for centuries been recognised. We have the best sailors the world has ever produced. I heard two Frenchmen once, when they saw something done by some of our sailors, say: "Well, we can build as good ships as they can build, but that sea-dog life is found in England and Scotland more than anywhere else." I want to put this point. It is recognised that our Merchant Navy has to be supported. It is recognised that we are only supporting it because of unfair treatment by other countries. This started when Germany went into the cement business in South Africa, absorbed all the railway fares, and put it into the fleet. It has gone on in all countries without exception, and to-day unless we are going to support our Navy and see that it receives fair treatment, our ships are not going to have a chance.

Although I very much believe what the noble Lord opposite said apropos who should reap the benefit of big subsidies, I put this to the Government: Will they consider that no vessel should be entitled to draw any subsidy whatever unless it has been built in British yards, by British workmen, and unless it has submitted to an inspection by someone on behalf of the Navy and necessary steps have been taken so that between-decks and other portions of the ship can be altered to carry aeroplanes or other war material in time of emergency? I think I am safe in saying that if an arrangement of that kind were made while the vessel was being built, it would be easier to make the change when a change became necessary in time of war. The other point I wish to suggest is that all our young sailors should be sailors of the British Navy. These men should be enrolled as men who can be called upon at any time to serve in any ship belonging to His Majesty. If we did that it would bring about, I believe, a new spirit, for these men in our merchant ships would have the distinction of being among the men reserved for fighting in case of need.

I hope the Government will consider doing something like that, because I believe it would be useful. There is only one remark I wish to add and that is in regard to our sailors. Reference has been made to the condition of our sailors. As one who has had to deal with foreign ships as well as British ships, I have no hesitation in saying that there are no better sailors than British sailors, and none who are better treated.

THE SECRETARY OF STATE FOR INDIA (THE MARQUESS OF ZETLAND)

My Lords, I feel I ought to start my observations with an apology to the noble Lord who moved this Motion for rising in reply to it. But I can assure him that I regret quite as much as—perhaps a good deal more than—he does that I find myself in place not only of the Lord Chancellor but of my noble friend the Leader of the House on this occasion. Nevertheless, I make no complaint against the noble Lord for returning to this subject so soon after our recent debates upon it, because I recognise that it is a subject of the most vital importance and because also the noble Lord's speeches, particularly on matters concerning Imperial questions, are always very well worthy of attention. Indeed, if I were to venture to comment on the character of the noble Lord's speeches at all, my comment would be in the first place that they are apt to be permeated with a spirit of almost undue pessimism. My other comment would be that they are almost invariably based on the assumption that while the dangers of any particular situation are glaringly apparent to the noble Lord himself, and indeed to anyone of ordinary intelligence, the Government are quite incapable of appreciating the dangers or, if they are not incapable of doing so, they are wilfully and perversely blind to them. I do not complain of that either.

After all, to accuse the Government of ineptitude, poltroonery, and other vices is the universal stock-in-trade both of organised Oppositions—the organised Opposition I see opposite me!—and of political knight errants, from whatever quarter they come. I remember only a few days ago the noble Lord who is leading the Opposition in your Lordships' House at this moment, Lord Strabolgi, with pleasing alliteration and with that bluff breeziness which characterises the vocal emissions of seafaring persons, blared across the Table at my noble friend the Leader of the House that the Government were dithering and doddering and dawdling when they ought to be up and doing.

LORD STRABOLGI

I hope I did not blare.

THE MARQUESS OF ZETLAND

And I had occasion myself only a short time ago to recall to your Lordships the torrid language in which, 150 years ago, Edmund Burke characterised the misdeeds and the omissions of Governments and Government Departments. I dare say it has been within the experience of some at least of your Lordships that even highly-placed officials at times give vent to their feelings by poking fun at one or other of the Departments of the Government which they serve. There is, for example, on record a Minute by the late Sir George Murray, when a high official at the Treasury, upon a proposal which was being submitted to the Chancellor of the Exchequer for the construction of an underground passage, with dugouts, between the War Office and the Horse Guards in order that this Department might continue adequately and efficiently to discharge its functions in the event of an air raid. Sir George Murray's Minute upon the proposal was in the following terms: This proposal may safely be turned down. No sane enemy with any acquaintance with our institutions would ever dream of destroying the War Office. The noble Lord, Lord Lloyd, has asked me a number of questions, some of which I hope to answer, but others of which, either because the information is not available or because it would be contrary to the public interest to give the information, I shall refrain from answering. In the latter category comes the noble Lord's question with regard to our naval requirements of oil fuel, petrol, lubricating oils, and so on. I am sure the noble Lord will realise himself on reflection that to give detailed figures on that subject would be contrary to the public interest, but I can in general terms, I hope, to some extent reassure the noble Lord, for this matter is under the constant survey of a Sub-Committee of the Committee of Imperial Defence which is charged with the responsibility of seeing that all necessary preparations are made, and, in any emergency which the Government are able to contemplate, we are satisfied that the supply of British-owned tanker tonnage will be, sufficient to meet the service requirements and to go a considerable way towards meeting civil requirements also.

The noble Lord also asked me a question with regard to British personnel, and he made some comment on the subject of the British personnel of the Mercantile Marine. I cannot give him figures comparable between the two years which he actually mentioned in his question, for no census happened to be taken in the years to which he referred, but the number of British seamen other than Lascars employed on sea-trading vessels registered in the United Kingdom on the censal dates of 1911 and 1934 was as follows: April 3, 1911, 136,000 odd; June 15,1935 (which was the censal date) 103,000 odd. The actual number of coloured seamen included in those figures is not known, and I cannot, therefore, give them to the noble Lord, though, as I pointed out, those figures were exclusive of the Lascars who, I suppose, form the bulk of the coloured employees of the Mercantile Marine.

It is quite true that those figures show a considerable reduction in number between 1911 and 1935, but the noble Lord will, of course, take into account certain reasons other than those which he has himself given for such a reduction. One of the reasons is the increase in the size of ships which has been already mentioned. Naturally a specified number of large ships require a smaller number of personnel than the equivalent number of smaller ships to make up the same amount of tonnage. There is also a considerable saving in the engineer and engine-room personnel, which is due to the substitution of a great number of oil fuel ships for coal-burning ships. Then you have to take into account the amount of tonnage which is laid up. But, having said that, I readily admit that the figures do show a substantial reduction.

Then the noble Lord asked a question as to net earnings. I do not know if he referred to that in his speech, but he told me it was a question that he would like to have answered. I will give the net earnings of the British merchant fleet in 1913 and 1935—that is to say, the net income for this country from the shipping services after foreign disbursements have been paid. According to the estimates made in connection with the balance of payments to the United Kingdom, the net national shipping income in 1913 was £94,000,000 and in 1935, £75,000,000, again an appreciable reduction.

The noble Lord returned to the question of the shipping lines in the Pacific. As your Lordships will remember, the noble Lord asked that question in this House a short time ago, and my noble friend the leader of the House (Viscount Halifax) gave a very full reply upon it; therefore the noble Lord will hardly expect that I shall have much to add to what my noble friend then said. My noble friend told your Lordships that the matter had been referred to the Imperial Shipping Committee, and all that I am able to add to that information is that the Imperial Shipping Committee have now taken all the evidence they require and are, I understand, at this moment deliberating upon their Report. When their Report is received it will then be for His Majesty's Government to consult with the Dominion Governments who are primarily concerned in this matter as to the action that should be taken. Though the terms of the noble Lord's Motion suggest that it was going to be confined to shipping, I have observed that a considerable part of this debate has been devoted to the question of storage of foodstuffs in this country, and a great many references have been made to the speech of the noble and learned Viscount the Lord Chancellor who replied to the Motion of my noble friend Lord Phillimore on this subject.

LORD LLOYD

I should like to say that I did warn my noble friend that I was going to raise this question of the storage of food in connection with shipping several days ago.

THE MARQUESS OF ZETLAND

The noble Lord is quite right. I received a message from him rather late this morning, I admit, to say that he proposed to make some reference to it.

LORD LLOYD

Some days ago I did so and again this morning.

THE MARQUESS OF ZETLAND

The noble Lord's message some days ago must have miscarried. I am making no complaint whatsoever. The matter is certainly connected with the whole question of shipping, but there again an answer was given on behalf of the Government by the Lord Chancellor so very recently that I really have very little to add to what the noble and learned Viscount, Lord Hailsham, said on that occasion. But let me make clear what the position of the Government is. The noble Lord seemed to me to be rather suggesting that the Lord Chancellor had wiped out the possibility of the storage of foodstuffs or other important materials altogether. That is not so. The Lord Chancellor gave the arguments for and against, and in the course of his speech he made it clear that there were very considerable arguments against the large storage of wheat in this country, and that, therefore, it was a matter which required most careful consideration. I can assure the noble Lord that that consideration has been for some time past and is now being given to the matter. It may interest the noble Lord to know that the Government have arranged for the services of Sir Ernest Gowers the Chairman of the Coal Mines Reorganisation Commission, in an investigation of the whole question of food storage.

LORD PHILLIMORE

Could the noble Marquess tell us whether that Commission has yet begun to take outside evidence?

THE MARQUESS OF ZETLAND

I am afraid I cannot tell the noble Lord whether it has taken outside evidence or not.

LORD PHILLIMORE

Or whether it will?

THE MARQUESS OF ZETLAND

There again I cannot pledge myself. I have not sufficiently detailed knowledge of the arrangements which have been made, otherwise I should have been very pleased to give the noble Lord any further information I could. The answers which I have given to these various questions clearly show that the Mercantile Marine has been, and is, going through a very difficult period and nobody who has any knowledge of the question would suggest otherwise. I hope the noble Lord is not going to accuse me of undue complacency as I thought he did in the case of my noble friend the Leader of the House. We are by no means complacent, but we do think it is fair when discussing a question of this importance that both sides of the picture should be presented. You get two different pictures of a question of this kind, each of which by itself may give a very false impression, and I am going to venture to make a few observations to your Lordships which will, to some extent I hope, correct the very pessimistic impression which the noble Lord, Lord Strabolgi, admitted the speech of my noble friend Lord Lloyd had created upon his mind.

What is the root cause of the difficulties through which the Mercantile Marine has been passing? The root cause is an economic one which is very well known to everyone who has studied the question. It is the fact that whereas world trade at the present day is little more than it was in 1913, the world's tonnage has increased by something like 50 per cent., so that you have a vast excess supply of tonnage to carry the trade which is available. The question we have to consider is how best can we aid the British Mercantile Marine in circumstances of that kind. There have always been two schools of thought on a question like that. There is the school of thought represented by the noble Lords opposite. If noble Lords opposite had their way the whole of the British Mercantile Marine would become State owned, and I suppose managed by some sort of a Soviet, probably with the noble Lord, Lord Strabolgi, as its chairman.

LORD STRABOLGI

No, I would ask the noble Lord, Lord Essendon, to manage it, and I would make it a semi-public corporation like the Port of London Authority or the British Broadcasting Corporation.

THE MARQUESS OF ZETLAND

I think the noble Lord, Lord Essendon, would be very surprised if he received that invitation, because if there is an individualist among shipowners it is my noble friend Lord Essendon. To my noble friend Lord Essendon the idea of the nationalisation of shipping is anathema, so I do not think that my noble friend opposite would have much success if he extended that invitation.

LORD STRABOLGI

Well, the next best one.

THE MARQUESS OF ZETLAND

That is one school of thought. Then there is the school of thought at the opposite pole, the school of thought represented by those who reject altogether State aid of any kind and regard private enterprise unaided as far the most successful form of enterprise. In normal circumstances I confess I think there is a very great deal to be said for that sort of view. It is the philosophy which originated in France two hundred years ago and which found the zenith of its expression in the person of Adam Smith, and under that system great things have been done. I said that in normal circumstances there is a great deal to be said for that point of view, but as I have pointed out circumstances are not normal. I have always held that in abnormal circumstances a certain amount of State aid to private enterprise is desirable and probably essential. That, after all, is the view which has not only been taken but acted upon by my right honourable friend the President of the Board of Trade in the matter of British shipping.

Let me remind your Lordships of what my right honourable friend has done. There is first and foremost the tramp shipping subsidy, not a very great subsidy but a useful one, a subsidy of £2,000,000 granted in 1935 and a similar amount for 1936. The conditions under which the subsidy is given provide, if I may say so, an admirable example of the combination of private enterprise with State aid. The subsidy is administered by the shipowners themselves. Arrangements are made by a statutory committee of the shipowners. I should have thought that the noble Lord, Lord Strabolgi, when he was putting his claims with regard to the conditions on which subsidies should be granted, would have realised that what he was asking has been acted upon already. It was a condition that agreements reached by the National Maritime Board as to rates of wages and the number of deck officers should be observed.

LORD STRABOLGI

I am sorry to interrupt, but may I ask the noble Marquess if he can make that clearer? I hope I am wrong, but I understood that that condition was refused by the Government. I moved an Amendment to that effect, but it was not accepted. There may be a gentlemen's agreement, but it is not statutory.

THE MARQUESS OF ZETLAND

It may not be statutory but it is an agreement, and it is being acted upon.

LORD STRABOLGI

Not always.

THE MARQUESS OF ZETLAND

Oh, yes, the noble Lord will find that is so. I do not say that these are not conditions which have been drawn up by the committee of administration. That does not matter. The point is that the conditions are being observed. Another condition is that so far as British personnel is available it shall be employed. That meets the noble Lord's views on this point, surely. One of the criticisms which perhaps not unnaturally was made against the scheme when it was first proposed was that if you give a subsidy like this to tramp shipping the only result will be that freights will be still further cut. But that is not so, for it is a further condition that the freight agreements which have been reached in connection with the more important trades should be observed. As a matter of fact, quite recently freights have actually risen, and the result of this scheme, which has now been in operation for about a year and a half, is already appreciable. At the end of last year the volume of British foreign-going tramp tonnage in commission was greater by 200,000 tons than on April 1 of the same year. So the tramp shipping subsidy is at any rate working tolerably well.

Then there is the scrap-and-build scheme, and I am bound to say that I was very astonished to hear that the noble Lord opposite was so opposed to the scrap-and-build scheme. I should have thought that if he had studied the result of the scheme he would have regarded it as an admirable scheme. Let me tell your Lordships what the result of the scheme has so far been. The effective results of the scheme up-to-date cover the building of fifty vessels aggregating approximately 190,000 tons gross, involving loans to shipowners of just over £3,500,000 sterling. The total tonnage—and I know that this is where the noble Lord criticises this scheme—to be demolished in connection with the scheme is approximately 380,000 tons gross. Up to the present time 86 vessels, totalling just over 326,000 tons gross, have been definitely nominated for demolition and the majority of these have either been broken up or are in the ship-breaker's hands. Of these vessels 39, totalling nearly 177,000 tons gross, were British vessels, and 47, totalling just over 149,000 tons gross, were foreign. Your Lordships will therefore see that the tonnage for demolition is roughly half British and half foreign, which means that for every new ton of building added to the British Register as the result of the scrap-and-build scheme one ton of old British shipping has been scrapped and also one ton of foreign shipping. Surely that must be a satisfactory state of affairs. Foreign shipping has been reduced and British shipping has had old tonnage replaced by new tonnage. Why, therefore, the noble Lord regards that as a bad scheme I am wholly at a loss to know.

I need only mention, as another measure taken by the Government, the facilities which were given for the construction of the "Queen Mary" and now, only a few days ago, for a sister ship. Let me also mention the matter referred to by my noble friend Lord Phillimore: the attempts which we make when we negotiate trade agreements to secure as part of those agreements better conditions for British shipping. The noble Lord admitted that in the case of Portugal we had been successful, but said that in the case of Russia we had not. Let me try to explain as briefly as I can to the noble Lord the position so far as Russia is concerned. The shipping situation between ourselves and Russia is a very complicated one. It is quite true that during 1935 the amount of British shipping chartered to the United Kingdom for timber and restricted to timber was something like half the amount which had been chartered by Russia for the same purpose a year before. During the opening months of this year the amount chartered by Russia for the same purpose was very small indeed. So far as the timber trade is concerned, therefore, British shipping suffers. Since, however, the total amount of British shipping chartered by Russia in 1934 and 1935 was practically identical in each year, it is quite obvious that what was lost in the timber trade was made up in other trade.

As, I think, the noble Lord himself appreciated, there were special reasons for the failure of those in Russia who chartered shipping to charter British shipping for timber. The reasons were in the main that they had a large supply of ships suitable for carrying timber themselves and were unwilling to agree to the rates of freight which had been agreed to by the White Sea and Baltic International Conference. That was the real reason, so far as I have been able to ascertain it. Nevertheless, conversations have since then been proceeding, and as a result of the discussions which have taken place I understand that the Shipping Chamber here have been assured that there is no desire on the part of Soviet charterers to boycott British shipping; that the Soviet charterers have chartered a large quantity of British tonnage throughout the world in the first five months of this year; that a number of British ships have recently been chartered for the Russian timber trade; and finally that the Soviet charterers have offered to give British ships the conveyance of considerable quantities of timber to this country at rates which are substantially in accordance with what is known as the Baltwhite scheme—the agreement as to freights to which I referred. So, though it may be poor comfort to the owners of ships which are specially designed to carry timber to know that what they have lost has been gained by other shippers, yet I hope it will be realised that as a result of the recent conversations the prospects for the owners of tramp shipping suitable for the transport of timber are once more brighter than they were.

LORD PHILLIMORE

Could the noble Marquess give us the duration of that agreement?

THE MARQUESS OF ZETLAND

No, I am afraid I cannot give the noble Lord information as to the duration of the agreement. The conversations have only just taken place, and I do not even know if these provisions have actually been made part of a formal agreement. I will not go farther than to say that I understand that this is the kind of agreement to which they are willing to come. I hope that, without laying myself open to a charge of undue complacency, I have shown that there is another side and that the situation, though still profoundly difficult, is not quite so bad as it is sometimes painted.

I have referred, and let me refer once more, to the governing factor in the whole situation—namely, the vast increase in ocean tonnage and the lack of increase in world trade. Nobody will deny that His Majesty's Government have throughout these difficult years taken such steps as have been open to them to endeavour to increase world trade, and we shall continue to endeavour to do so. After all, we held the World Economic Conference in this country a few years ago, and if that Conference proved to be a failure it was not the fault of His Majesty's Government. The result of this vast increase in world tonnage has, of course, been responsible for the large relative fall in the amount of British tonnage. Between the years 1914 and the present time the percentage of British tonnage has fallen from 44 per cent. to 28 per cent., but we cannot, of course, stop other countries from building ships if they are determined to do so, and build them uneconomically. Whether they are wise to do so or not is a different matter. After all, shipping which is built in excess of the economic demand is a very expensive luxury. It necessitates large subsidies, as noble Lords have already pointed out, and I am told that if this country were to think of granting subsidies to its shipping on anything like the sort of level that those subsidies are granted to their shipping by the chief other countries, the annual cost to the taxpayer in this country would be something like £21,000,000.

After all, these percentage figures are themselves apt to be a little misleading. The actual tonnage of coal and oil-burning ships of one hundred tons and over which we possess at the present time has an aggregate gross tonnage of 17,183,000 tons, as compared with a tonnage in 1914 of 18,892,000, a fall of about 1,700,000 tons; but against that it has to be borne in mind that a large addition of ships has been made to the Dominion and Colonial Registers, and the additional tonnage in the case of the Dominions and the Colonies amounts to something like 1,300,000 gross tons, so that the net actual fall in the tonnage of the Mercantile Marine of the British Empire is from 350,000 to 400,000 gross tons. Where Lord Lloyd gets his figure of 3,000,000 gross tons I have no idea. I have been able to find no figures which in any way correspond with his figure of a falling off in that period of 3,000,000 gross tons.

It is quite true—and I do not want to paint the picture brighter than it is—that for a number of years past British shipping has been run at a very small profit, or possibly no profit at all, and the result of that has necessarily been that reserves have become depleted, and that difficulty has arisen therefore in the construction of new tonnage. Here again the scrap-and-build policy of His Majesty's Government comes in, and, as I pointed out earlier in my observations, a sum of £3,500,000 has already been provided for the construction of modern mercantile tonnage. There has been a further advantage derived, certainly partly, from that scheme, and that is that we have, I suppose, a more modern fleet to-day than almost any of the competing nations. The percentage of our ships to-day which are more than twenty-five years of age is only 7.5, a smaller figure than in the case of any other country, I believe, with the exception of Holland. It may also be interesting to my noble friend to know that new construction has increased very consider- ably, even during the last twelve months. The actual amount of new construction which was registered in the June quarter of last year was 107 ships of 560,000 gross tons. In the June quarter of this year those figures have increased to 229 ships of a gross tonnage of 848,000 tons odd, so that there is, at the present time, a very considerable increase in the production of new ships in this country.

The noble Lord, Lord Strabolgi, said that he was even willing, in certain circumstances, to agree to subsidies being granted to shipping lines in this country. We do not reject that possibility. It is a possibility, certainly in the case of shipping lines in the Pacific, but I do not put it higher than that. It has not been ruled out by the Government; but generally speaking I venture to suggest to your Lordships that the granting of subsidies, so long as you can avoid it, is an unsound economic policy. I think my view on that point is more than borne out by the fact that it is the very countries which have been most lavish in subsidies to their shipping that have the largest proportion of their shipping laid up at the present time. In the case of the United States of America, a country which, as your Lordships know, gives great subsidies, they have something like 25 per cent. of their shipping laid up. In the case of France, which also grants subsidies to the shipping industry, they have something like 12 per cent. of their shipping laid up. Those figures compare with 4 per cent. in the case of this country.

I hope, my Lords, as I have said, that I have been able to answer some of the questions that have been put to me. I hope, without being unduly complacent, that I have been able to put before your Lordships certain facts which show that, while the situation is still sufficiently difficult, the Government are fully alive to it and are co-operating with the shipping companies—and let it never be forgotten that you must co-operate with the shipping companies if you want to have a successful outcome to any action you take—they are co-operating with the shipping companies in granting Government aid where it is considered that it can advantageously be given.

LORD LLOYD

My Lords, I must first of all say a word of thanks to the noble Lord who spoke from the Opposition Benches for some remarks he made in support of the plea that I was putting forward, but I should not like him to think that I could follow him any distance at all in his desire to see State shipping. I should have thought that the experiences in Australia and elsewhere of experiments in that direction would have been enough to frighten himself and his Party away from any such policy. And indeed, whilst I do not entirely differ from him in his view that if and when some semi-State enterprise is undertaken, the State should have some share in the equity in the kind of instance that he gave us—I think that is probably right and proper—yet the experience in the world so far has been that there has been extremely little equity to show at all after a Government has run a commercial undertaking.

The noble Lord also a little suggested that those of us who have for many years past identified ourselves with the protectionist policy, which we now have in this country, were, as he put it, "squealing" at the results of Protection on shipping. Exactly the contrary is the case. If we are, as he tersely puts it, squealing at all it is because we are not protecting our shipping adequately. He perhaps has forgotten that the Mercantile Marine in this country was built up under Navigation Laws and under a much closer system of Protection than any we have advocated. And if we to-day desire to see the same measure of scientific Protection applied to our great and vital industry of shipping as has actually saved our other industries from the blizzard of world competition, it is not because we have too much but because we have too little Protection.

Now I would like to turn to my noble friend who replied for the Government. I would like to thank him for his comprehensive and interesting reply. I hope he will forgive me if I say in preface that I was a little sorry he suggested bad faith on my part in bringing this important question forward and talked about political knight errantry. These matters are too grave for any such suggestions. These are matters of vital importance. Nobody so far as I know has ever suggested that I was bringing these matters up in a captious spirit or to embarrass the Government, and I do enter a disclaimer. I hope my noble friend did not mean that.

THE MARQUESS OF ZETLAND

I assure my noble friend that I had no intention of that kind at all. I was merely explaining that it was the usual practice of politicians opposed to the Government, whether they were an organised Opposition or whoever they were, to accuse the Government of ineptitude or any other vices.

LORD LLOYD

I am grateful for what the noble Marquess says, but the impression certainly was given, I think, that I showed a captious spirit of opposition, whereas I look upon this as a matter of intense gravity. At the very outset of my speech I tried to make that clear. When the noble Marquess suggested that we are moved by undue pessimism in this matter, I should like to remind him that it was because of too much optimism and of our lack of preparation that thousands of the flower of our youth were killed unnecessarily in the War, and it is in order to avoid similar disaster that I am pleading to-day.

He also suggested that it was improper for me to hold that Government failed to appreciate these dangers, but with one exception there is not a single fact that I have put forward to-day that has been challenged by the Government. My pessimism does not go anywhere near as far as that expressed by the late Prime Minister in a White Paper only a year or so ago. As I said at the opening of my speech, he actually went so far as to say that if there were an aggression against this country we could no longer supply ourselves and feed our people! And indeed the Government in the last two years have over and over again confessed their miscalculations on vital matters respecting our defence. As regards our air armaments the Prime Minister has more than once stood up and confessed that he entirely miscalculated the danger that was upon us. And therefore I do not think I need apologise if, in this vital matter of food storage and shipping, I try to bring forward before your Lordships how very grave is indeed the danger.

I do not think that the Government have failed to realise the danger latterly, but what I am suggesting is that the time for consideration and the time for investigation has long gone by, and that in the emergency of to-day it is action that we are seeking, and immediate action. It is all very well for the Government to say that questions of food storage are now being examined and considered. We think these matters ought to have been considered and investigated three, four, or five years ago; that the Government should be in possession of a policy to-day, and not be still investigating and considering on the eve of a possible great danger. That is the gravamen of my criticism. I do not suggest, and I never have suggested, that in this shipping question the Government have done nothing. I made that clear the last time I addressed your Lordships' House. But what I have said—and I believe I have the support of the whole shipping community—is that the Government have not done enough to meet the gravity of the emergency.

I do not say there is no virtue in the tramp subsidy, but it remains a fact that, except for one or two very large tramp owners, the amount distributed does not pay even for the depreciation. That is, I think, a fact that will be agreed to by the whole of the shipping community. I have not said the scrap-and-build scheme has no virtue. What I said was that the balance of advantage was, I thought, very questionable. Of course the scrap-and-build scheme has some advantages—namely, those cited by my noble friend. I am very glad to hear—and I confess I had not fully realised—that so large a proportion of foreign ships had been scrapped, and I think that does constitute a merit for the scheme. None the less, the loss of so many units of shipping and their personnel is, I think—and I believe it is generally thought—a very questionable advantage.

The noble Marquess has questioned only one statement which I made and I should like to give a reply to that. He says he can nowhere find any authority for the statement I made as regards the diminution of 3,000,000 gross tons. Perhaps I had better repeat the statement. I said that during the last five years we have lost 3,000,000 gross tons of United Kingdom shipping. The figures have been furnished me by the Chamber of Shipping, and they are as follows: In 1931 we had 20,300,000 tons, and in 1936 we had 17,300,000 tons, which is, by deduction, a loss of 3,000,000 tons. I have assumed that the figures given to me were correct. That is my authority for them, and that of course can be investigated afterwards. But I only wished to say that I did not give those figures haphazard. I understand that my noble friend does not now challenge this figure. I was amazed when the noble Marquess put the estimate of the subsidy we should have to give fully to compete with foreign subsidies in our shipping at so low a figure as £21,000,000. I should have expected that he would have said £150,000,000, or some such colossal figure. Really, if by the expenditure of £21,000,000 per annum we could save our shipping—and that would not be the net loss, for we should get presumably a great deal of it back in increased employment and increased services—if by the expenditure of so small a sum we could make full headway against foreign competition, it would be dirt cheap at the price. I am very surprised that the Government does not consider the policy. I would like to say that I am grateful to your Lordships for the patience with which you have listened to me, and by permission I would like to withdraw my Motion.

Motion for Papers, by leave, withdrawn.