HL Deb 26 March 1936 vol 100 cc290-307

Order of the Day for the Second Reading read.

LORD TEMPLEMORE

My Lords, it will be within the recollection of your Lordships that rather over a year has passed since, it fell to my lot to conduct the British Shipping (Assistance) Bill of last year through this House. That Bill did two things. It first of ail granted a sum of £2,000,000 from public funds to certain tramp steamers trading overseas as recommended by the Tramp Shipping-Subsidy Committee, a body set up under the Act; and secondly, it gave assistance to ship-owners by means of what is known as the scrap and build scheme which was run by a body known as the Ships Replacement Committee set up under Part II of the same Act. The reasons for the introduction of the Bill last year were very fully explained by me on February 12 last year, and your Lordships will remember that we had very interesting and exhaustive, debates both on the Second Reading and on the Committee stage of that Bill.

The amount of money actually expended under the Act last year amounted to £1,989,999 12s. The different items may be found in Command Paper No. 5129 which was issued about ten days ago and is now available in the Vote Office. The subsidy, as your Lordships will remember, was limited to £2,000,000 and to one year only. No part of the £2,000,000 subsidy could be used for paying subsidies for voyages or parts of voyages taking place after December 31 last. Last autumn, however, certain of the tramp ship owners requested that the subsidy might be arranged for another year, and my honourable friend the Parliamentary Secretary of the Board of Trade made a statement in another place, in December last, that the present Rill was being brought in to make available a further sum of £2,000,000 for this year under the same general terms and conditions.

In arriving at a decision the Government had to ask themselves two questions: first, had the subsidy been of practical value to tramp shipping; and secondly, had it been such a success that the industry could now dispense with it? As regards the first question, the scheme undoubtedly has had the effect of putting British shipping on a more equal footing with its foreign competitors and has resulted in a marked increase in the employment of British ships. The increase in the number and the percentage of British vessels chartered in 1935 as compared with 1934 was most marked in the trade with River Plate. The percentage of British vessels in this particular trade rose from 41 per cent. to 50 per cent., or 578 vessels out of 1,125 as compared with 557 out of 1,343 the year before. Altogether it is reckoned that 188,000 tons more of British shipping was in use on December 31 last than on April 1 last year. This tonnage represented some 57 ships and the employment of 1,500 additional British seamen.

As regards the second question, whether the industry can now afford to do without the subsidy, I have to inform your Lordships that, as I think is generally known, in spite of the improvement in the number of ships on the seas and in the number of seamen in employment, the industry cannot be said to be in a flourishing condition owing mainly to the decline in the world's seaborne trade, which I am sorry to say still persists, and to the excess tonnage. Unfortunately, also, nearly 33⅓ per cent. of the men in this industry are still unemployed. But on the whole I may say on behalf of His Majesty's Government that we consider that the subsidy has justified the hope which we entertained for it last year. It has to a large extent restored confidence to the tramp shipping industry. It has increased the employment of British ships, and therefore the employment of British officers and seamen. It has also encouraged the industry to consider seriously the problem of organisation and the reduction of domestic competition. In fact, what it has really done is that it has enabled this important industry to hold its own, but it has not, of course, restored it to anything like prosperity, and for the reasons which I gave just now His Majesty's Government consider that the continuation of the subsidy is necessary to the industry.

Your Lordships will see that the Bill is a comparatively short one. It is a Certified Money Bill under the Parliament Act, and consists of two clauses, of which the second is only the Short Title. Turning to Clause 1, the only operative clause, I must explain that the method adopted in the Bill is to render applicable in respect of the new subsidy the relevant provisions of the Act of last year. The 1935 Act provided in Section 1 (1) that subsidies might be paid in respect of tramp voyages or parts of tramp voyages carried out in the year 1935. Clause 1 (1) of this Bill provides that tramp voyages and parts of tramp voyages carried out in 1936 shall be eligible for subsidies. When I come to subsection (2), I must keep your Lordships for a few moments, because it is a little complicated and I want to explain it fully. The proposal here is to change the date fixed in Section 1 (2) of the Act from January 1, 1934, to January 1, 1936. Section 1 (2) of the 1935 Act lays down that ships, to be eligible for subsidy, must, inter alia, have been British ships since the first day of January, 1934, except in the case of vessels completed after that date, which, if built in the United Kingdom, became eligible on completion. The provision was intended to prevent the transfer of vessels to the British flag for the purpose of obtaining subsidy. It has, however, caused some hardship to a number of owners bringing ships on to the British Register in the normal course of business, and these owners have pressed strongly that this disqualification should be removed from them.

The question has therefore been re-examined in the light of the experience gained since the Act was passed. The provision has had its effect in minimising the number of foreign-owned vessels added to the British Register, and the number of tramp vessels believed to be genuinely under British control added during the last two years since January 1, 1934, exceeds the number believed to be under foreign control. Moreover, the situation has been changed since the provision was included in the 1935 Act, as a result of developments in the working of the subsidy. In the first place, the Tramp Shipping Subsidy Committee set up under the Act have required as a condition of subsidy that vessels must so far as practicable carry all-British crews. A number of the vessels which Section 1 (2) of the Act of last year made ineligible for subsidy have been trading with a substantial number of foreigners in their crews, and it is estimated that if the majority of the vessels so made ineligible were now to qualify for subsidy, employment would be found for about 130 additional British seamen.

In the second place, the Tramp Shipping Administration Committee have succeeded in introducing minimum freight schemes into the principal tramp trades. The enforcement of these schemes on British ships depends mainly on the power to withhold subsidy from owners of ships not complying with the schemes. This sanction is, however, obviously ineffective in respect of owners of ships which are in any case ineligible for subsidy, as are those excluded from subsidy by Section 1 (2) of the Act. It is clearly desirable that this state of affairs should be brought to an end by making the ships eligible for subsidy. The addition of ships to the numbers eligible for subsidy does not add to the total expenditure, while on the other hand the number of ships affected by the proposed modification, twenty-two, would not be such as to affect appreciably the amount of subsidy to be received by any individual owner. The Tramp Shipping Subsidy Committee agree that the proposed change is desirable. It is therefore proposed to alter the date in Section 1 (2) for the purpose of the 1936 subsidy to January 1, 1936. The number of additional vessels qualifying for subsidy in 1936 is, as I stated just now, twenty-two, and of course the amendment will not make them eligible for any share in last year's subsidy.

Now I come to subsection (3). This provides for a sum of £2,000,000 for the subsidy in 1936, the same amount as was provided for 1935. The effect of the provision is that no part of this sum of, £2,000,000 will be payable in respect of voyages or parts of voyages carried out in 1935. On the other hand, no part of the £2,000,000 previously provided can be paid in subsidies for 1936. In the case of voyages carried out partly in 1935 and partly in 1936, the subsidy for the 1935 part will be paid out of the original £2,000,000 and for the 1936 part out of the new £2,000,000. Your Lordships will see that the provisions of subsection (4) are purely consequential. Section 6 (3) of the 1935 Act empowers the Board of Trade, after consultation with the Tramp Shipping Subsidy Committee, to decide various questions which might arise in connection with the 1935 subsidy. It is clearly necessary that they should have the same powers in respect of the 1936 subsidy, and the provisions in this respect of the 1935 Act will in fact apply in 1936, except the provision empowering the Board of Trade to decide whether any tramp voyage or part of such voyage was carried out in the year 1935. This position is rectified by the addition of the words "or 1936" after "1935" in the Act of last year.

I have explained as briefly as I can, but I hope not too briefly, the provisions of the Bill before your Lordships' House. I have explained that His Majesty's Government, while satisfied with the progress that has been made under the Act of last year and that it is getting our shipping back a little way towards normal, are convinced that it would be harmful if they did not renew the subsidy this year. I hope that your Lordships will take the same view, and I beg to move that the Bill be read a second time.

Moved, That the Bill be now read 2a.—(Lord Templemore.)

LORD STRABOLGI

My Lords, I am sure your Lordships would wish me to thank the noble Lord for the very clear and complete explanation which he has given of this Bill. It is in its drafting of necessity a little complicated, but I think he has made it perfectly clear. What he has not made quite clear is the Government's policy with regard to the shipping subsidy. Your Lordships will remember our long debates last year on this matter, and I do not want to reopen the old grounds of argument. But it was described as a temporary measure then. The Government declared that it was necessary for the time being, but, as we anticipated, sure enough, at the end of the year's subsidy they come along for another £2,000,000 for another twelve months. The Government are I presume, waiting for something to turn up to help the shipping industry generally and improve world trade generally, and they hope that matters twelve months hence will enable them to discontinue that subsidy. But your Lordships will have noticed generally in recent years, since this curious system of Government subsidies has been introduced, that, once you introduce a subsidy, it tends to become permanent. The beet sugar subsidy is a leading case there. We are entitled to know whether the Government have a settled policy in this respect.

At the beginning of his remarks the noble Lord who spoke for the Government referred to the scrap and build policy, which is of course part and parcel of this scheme, the idea being to enable the shipowners to carry on for twelve months, or longer as we now know, and in the meantime, to help them to replace their old fleets with more modern and economical vessels, built on modern and scientific lines. I do not know if the noble Lord is in a position to give us the results, so far, of that scrap and build policy, because this is very germane to the question of continuing the subsidies. If modern ships which pay their way, are built as a result, you may make out a case for continuing the subsidies and helping shipowners until they can build modern ships; but I will explain what happens—and it is a good example of what does happen when Governments interfere in private enterprise without completing the process, as my noble friends on this side would have them do, by taking complete control.

What happens, I am informed, is this. As soon as the Government's scheme was passed through Parliament the shipowners' price for selling old ships to would-be builders went up. For every ton built two tons of old ships had to be scrapped, and some of the potential shipowners who wished to build had to go into the markets and buy old ships. As might be anticipated, up went the price of old ships, and the shipbreakers—of course they wanted their whack out of this—brought down the price for scrap. The result has been, I am told by shipowners, somewhat disappointing. Under these conditions it does not pay shipowners to scrap and build so well as it did before the scheme was brought in. Then there is the curious complication that owing to the existence of the block currencies in Germany, it paid firms who were owed money in Germany and could not get it out to use the blocked marks for building ships in Germany, and this militated against the scheme. What I suggest to the noble Lord is that he should have this taken into consideration, and that the Government should alter their scrap and build scheme. They cannot do it at once, but they could consider it for the future. I have always agreed with the cheap loan, but it should be given to shipowners together with a free hand so long as the new ships are built in British yards and without the obligation to scrap two tons for each ton built. This would help a great deal to replace the obsolete merchant vessels with more modern ships.

Since our earlier discussions there have been some very regrettable accidents at sea, and the President of the Board of Trade, I venture to say most commendably, set up an inquiry under a distinguished and learned member of your Lordships' House, to look into the causes of these terrible disasters. Some very valuable results followed. I want to raise a matter which I ventured to speak about in this House before. I believe that under modern conditions a great deal of loss of life and property occurs at sea through out-of-date hatches. Ships to-day have to carry large packages of machinery—motor cars, and things of that kind—and therefore have to have larger hatches, and hatch covers, through conservatism, or something of that kind, are still made of wood. When a heavy sea comes on board there is danger of the hatch being stove in, and the ship being sunk. It is not always easy to find out the exact cause when a ship is sunk, as has happened, with the whole of her crew. But there is evidence of the wooden hatch danger. I would like to ask whether the Board of Trade are examining again this question of the steel hatch. There are authentic cases of ships being saved by having steel hatches, and of having survived terrible hurricanes for that reason.

One result of the Amulree Committee, and the Advisory Committees which followed on the Amulree Committee, also in connection with the desire to save life at sea, was that certain proposals were made with regard to improving the manning of merchant ships. I ventilated this question as well as I was able when we had the original Bill before your Lordships' House, and I ventured to point out that under the present somewhat antiquated Board of Trade regulations people could take a ship to sea in winter-time, on a long Atlantic voyage, with a crew so cut down in numbers, and indeed ability, that there was no margin for casualties. The good shipowner goes outside the letter of the law and provides more A.Bs. than he is legally required to do, but legally, to-day, ships can go to sea with crews not sufficient for their needs.

In another place Dr. Burgin, Parliamentary Secretary to the Board of Trade, was questioned on this point by my honourable friend Mr. Ben Smith, on February 26, and he then made a promise on behalf of the President of the Board of Trade and of the Government, that the recommendations of the Advisory Committee on Manning would be followed and new regulations would be issued. It is known what lines these new regulations will take. I think they are sufficient for the time being. They are much safer about the qualifications of A.Bs. and so on, and they would bring about considerable improvement. That was on February 26, and a month ago, and so far, I am advised, nothing has been done. I believe I am right in saying that it is a Departmental matter, and that rules can be amended and re-issued by the Board of Trade to tighten up the manning requirements; and I would like to ask the noble Lord if he will be so good as to inform the house when it is proposed to bring out new regulations with regard to manning. I hope it will not be said, as an excuse, that there are not sufficient A.Bs. available, because if that is the ease I think the Board of Trade should look into the matter further. There is heavy unemployment amongst seamen, and although many prime seamen may have been disgusted by recent conditions and gone into other occupations, I have no doubt that if they could get decent conditions they would be attracted back to the sea.

There is another matter. The noble Lord in his explanatory speech, referred to the obligations of shipowners receiving the subsidy to employ British seamen. There are British seamen and British seamen. I am speaking in the presence of the noble Marquess, the Secretary of State for India, and I do not want him for a moment to think that I have any hostility to our Indian fellow-subjects who servo at sea as Lascars, but they differ from other British seamen in this respect—that they do not receive the Maritime Board rate of wages and certain other conditions which have also been agreed by the Maritime Board. What I tried to do a year ago in your Lordships' House—and I am sorry I was not more fully supported—was to insist that no subsidy should be paid unless the Maritime Board wages were paid. The Government said that of course it was the intention that that should be done, but that they did not want to lay it down in black and white. A great many Lascars are being borne in our ships where we could quite well employ white seamen at the higher rate of pay. I am informed that last week a vessel called the "Colvin Bank," belonging to the Bank Line, which I see was paid a subsidy of over £76,000, was commissioned in the Bristol Channel, and apart from the officers, the only white member of the crew was the carpenter. All the remainder were Lascars at the lower rate of wages. Of course, this was within the letter of the law, but it was not the spirit of the law, as explained, I believe by the noble Lord himself when I put your Lordships to the trouble of a Division on this question a year ago. On that occasion I got some support from the noble Earl, Lord Howe, who will bear me out that we were promised that it was the intention that British seamen should be employed wherever possible.

Despite this subsidy I receive complaints about the depressed condition of coastal shipping. Just before his lamented death the late Lord Beatty wrote a very remarkable letter on this subject to the local authorities all over the country. He gave great help to the Coastal Trade Development Council, the trade association of the coastal shipping lines. He pointed out that there was a very remarkable thing—namely, that foreign coastal vessels were being used to carry subsidised articles, foodstuffs particularly, under other Government subsidies. He quoted the case of the seed potato carrying trade between Scotland and England which has fallen into the hands, I gather, to a considerable extent, of foreign steamship and motor-ship owners. We have a Potato Marketing Board, with all the paraphernalia of Government control, and to-day you are going to pass this Bill providing a subsidy for shipping, and yet foreign steamships carry the products of industries under your potato control.

Another example is the coal for the Government subsidised beet sugar factories. The coal industry is interfered with by the Coal Mines Act, and by your quotas and controls. But that controlled coal, used by the subsidised beet sugar industry is carried, for use by that industry, in foreign vessels. That takes place despite the subsidies you give to the British Mercantile Marine, and will give under this Bill, and I really think that that is almost laughable. It shows what a muddle we are getting into. As Lord Beatty said: It is remarkable that British taxpayers' money should be used to the detriment of a vital arm of our sea service. He was referring to the coastal shipping industry. I am sure this matter is exercising the attention of the Board of Trade. I am sure they want to help the coastal shipping industry. I am sure they realise it is important; and I and my noble friends would be extremely obliged if we could know what the Government's intentions are, and whether they have any schemes for helping that industry. As I said at the beginning of my remarks, the principle of this matter was decided a year ago, the Bill has been very exhaustively discussed in another place, and my noble friends do not wish to offer any opposition to it.

VISCOUNT BLEDISLOE

My Lords, it was somewhat of a relief to me, as I desire most warmly to support this Bill—although I am bound to say I do not think it goes nearly far enough—to note from the speech of the noble Lord, Lord Strabolgi, that he does not appear to object to the principle of the Bill, although he would like to see it modified in certain respects and certain explanations given of the apparent results of the former Bill. But when he speaks of the subsidy system commencing as a temporary alleviation of economic troubles, and becoming eventually a permanent system, I for my part entirely agree with him. It is in every way to be deprecated that our industries, whether shipping or agriculture or other, should come to be permanently subsidised by a British Government—and I say it incidentally as one who was responsible for introducing into this House, as a member of His Majesty's Government some ten years ago, the Sugar Subsidy Bill. But, after all, this is the inevitable result of the economic nationalism which is developing in every country of the world, and it is the only buttress or defence that we, in this country, can put up against unfair and probably crushing competition.

But I want very earnestly to put to His Majesty's Government the consideration that the time has come when this very serious problem of British shipping should be treated not in the piecemeal fashion in which the Government have hitherto handled it, but on a more extensive and logical scale; and I want particularly to emphasise the importance of the protection of British shipping, including liner shipping, from the point of view of Empire defence. Of course, I have in mind very particularly the Matson Line competition, which is tending to crush out our ocean liners as well as ultimately other ships of our Mercantile Marine in the Pacific Ocean. I want to make an appeal to the Government in this matter to handle the problem with a firmer hand and give more definite leadership to the other Governments of the Empire, who might conceivably be prepared to do their part, although relatively perhaps a small part, in saving us from the possible eventuality of the wiping out of the British Mercantile Marine from the face of the Pacific Ocean.

I have lived for the last five years up till recently in the most distant Dominion of the Crown, and I may say that nothing has caused me personally more anxiety than, on the one hand, the not unnatural territorial ambitions that have developed in recent years on the part of certain Asiatic countries, and, on the other, the relative helplessness with which that part of the Empire will be faced in the event of the gradual disappearance of the British Mercantile Marine from the waters of the Pacific Ocean. Your Lordships are all, I suppose, well aware of what is happening in the matter of what we are wont to call, and I think justly call, unfair subsidisation on the part of a great and friendly nation of their shipping, in competition with British ships plying between the shores of North America and New Zealand and Australia respectively. The effect of it has been that no British ship which plies between, we will say Vancouver or San Francisco on the North American Coast, and either New Zealand or Australia in the Southern Seas, can do so without risk of the loss, not of a few hundreds but of many thousands of pounds a year on every ship belonging to our British companies.

I know the matter is exercising the minds of the Australian Government and the New Zealand Government, and has been brought to the notice of the Canadian Government; but certain I am that, whatever these important Dominions of the Crown may do, they are relatively poor, they cannot possibly stand up to the very heavy subsidisation that is now taking place on the part of another great friendly Power; and the only hope of preventing the gradual disappearance of a large part of our Mercantile Marine from Pacific waters is for the British Government to join whole-heartedly with the other Governments to which I have referred in some attempt to meet this unfair competition.

Our food supply in time of war is to my mind our weakest link in the chain of national defence, rendered of course all the weaker by modern engines of destruction; but our food supply, after all, is carried to our shores to the extent of two-thirds from overseas, and in my humble judgment—and I have studied the problem for a good part of my life—always will be. The idea that somehow or other Great Britain is going to be self-contained in the matter of her food supply is a perfectly ridiculous idea and can never in fact be realised. If that did come about, some of our Dominions, certainly New Zealand, would be reduced to a condition of bankruptcy and unable to meet their financial obligations to the Old Country.

But even if we are safe from the perils of starvation in time of war, are our Dominions that are washed by the waters of the Pacific deemed to be entirely safe from the perils of invasion? Our small cruiser squadrons are admittedly wholly inadequate to resist attack from the Navy of any great Asiatic Power, particularly if it were supported by the allied Navy of some sympathetic country. The value of our once great Mercantile Marine for adaptation to war requirements cannot be exaggerated as far as our more distant Dominions are concerned. During the Great War not only were hundreds of thousands of troops carried to the battlefields of Europe from Australia and New Zealand in what may be regarded as converted ocean liners, but of course these vessels were equipped with certain war equipment which enabled them, if necessary, to be used for defensive purposes. I hope your Lordships will support me in my deep anxiety, from an Imperial defence point of view, to carry the principle of the Bill just a little bit further by being a little bit more logical in the application of these subsidies so that the British Government may do what lies in its power to co operate with the Governments of our overseas Dominions in at least protecting our mercantile fleet from such a degree of decimation, or eventual disappearance, as would constitute a real menace to other parts of the Empire in time of war.

The only other matter to which I desire to refer—and it is quite an independent matter—is the position in regard to trade with Russia in the matter of her timber supplies. I understand that we are the largest consumers of Russian timber. An apparently salutary trade agreement was entered into on February 16, 1934, under which Russia undertook to increase the employment of British shipping in the direction of securing fairer play for British ships. Although Russia has increased her purchases of British goods, in the matter of the timber trade British ships have been employed and are being employed to a steadily less extent every year. It would appear from figures collected by the Chamber of Shipping from thirty-nine ports of the United Kingdom representing 70 per cent. of the whole trade, that whereas in 1934 there were ninety-seven vessels under the British flag of a tonnage of 329,400 tons, in 1935 the British vessels had fallen to fifty-nine with a tonnage of 195,900, whereas Soviet vessels had increased in the course of that year from forty-one vessels, with a tonnage of 130,300, to no fewer than 121 vessels with a tonnage of 385,200 tons. In fact Russian tonnage shows a threefold increase in the course of the last two years, whereas British tonnage is forty per cent. less.

Having regard to the fact that Great Britain is one of Russia's very best customers, and that not only the timber but the freight is paid for by this country, it surely is hardly thinkable that His Majesty's Government can allow the present state of affairs to continue. I make these somewhat critical observations while at the same time warmly supporting this Bill and earnestly hoping that another Bill will be introduced from another place at no distant date which will do full justice to the liner traffic in the Pacific.

EARL HOWE

My Lords, I merely rise to apologise on behalf of my noble friend Lord Essendon, who would have been here today to take part in this debate had it not been for the fact that he is on board the "Queen Mary" during her trials. He was particularly anxious that your Lordships should know this, and he desired me to say that he will be here during the Committee stage of the Bill and will endeavour to answer, from the point of view of the shipowners, any questions which your Lordships have raised to-day. With regard to the speech which has fallen from the noble Viscount who has preceded me, I must say that I very largely share his views. I entirely support this Bill. In fact I do not see that we can do anything else. Nobody likes this principle of subsidies, but it is something that is forced upon us. I have some figures furnished by the Chamber of Shipping, and they show the comparative value of the subsidy in different countries. The value of the British tramp subsidy is in the neighbourhood of 11s. per ton as compared with the Italian tramp subsidy of 30s. a ton and the French tramp subsidy of 60s. a ton. In face of these figures I do not think we can blame His Majesty's Government. In fact we are almost inclined to tell them they have hardly gone far enough in the question of this particular subsidy. In regard to the working out of the subsidy, here again I am informed by the Chamber of Shipping that it does little more than provide for the actual depreciation of the ships. It does not provide for any increase in revenue, but just enables steamers to keep going which otherwise would go out of commission.

With regard to the remarks which have fallen from the noble Lord, Lord Strabolgi, your Lordships always listen with attention, I am sure, to a naval officer of his experience. At the same time, unfortunately, the noble Lord is rather wedded to certain theories when he comes to discuss the question of the tramp shipping subsidy. The noble Lord suggested that we might be able to get away from this subsidy if we adopted his pet theory of the nationalisation of shipping. I am not going to enter into a debate on that subject, because he is more competent to deal with it than I am, but it is only fair to point out that nationalised shipping has not so far been a conspicuous success in the countries in which it has been tried. I think your Lordships will agree that in America, for example, it has hardly gone with a swing; in Australia it collapsed; and I believe the same also can be said of Canada. Therefore, while we have great sympathy with his Lordship's desire to help the passage of this Bill, I hope your Lordships will not be stampeded into accepting any such theory as the nationalisation of shipping as being a necessary cure for the evils from which our shipping community is suffering.

As to the employment of British seamen, that is a matter in which I have taken very great interest in the past. Therefore, when the noble Lord raised the question of the employment of Lascars in British ships, I must say that I had considerable sympathy with what he said. At the same time, I am perfectly certain that if you replaced these Lascars in the ships in which they are serving by British seamen at a higher wage, all you would do would be to put up the cost of the operation of these ships and make it still more difficult in many instances for the shipowners to keep their ships in commission. For that reason I feel that while many of us desire to see more British seamen employed, at the same time, from the point of view of the nation and of the country, the great thing really is to keep these ships in commission and prevent them from going on to the scrap-heap or, as has happened, in some cases, falling into foreign hands, which they are apt to do if the costs of operation become too great. This was admirably illustrated by the speech which has just fallen from the noble Viscount, Lord Bledisloe. I hope your Lordships will pay careful attention to the point which he raised with reference to the operations of the Matson Line in the Pacific. I do not desire to detain your Lordships any longer on this Bill. I have only intervened at the desire of my noble friend Lord Essendon, and I know he will be here to do his best to deal with the points raised to-day at a future stage of the Bill.

LORD TEMPLEMORE

My Lords, I am glad to think that on the whole this Bill has not had such a bad reception, even from the noble Lord opposite (Lord Strabolgi). I was rather surprised to hear the first remark that fell from his lips. I may have mis-heard him, but I rather understood him to say that this muddle that we had got into came of Government interference with industry. That, I thought, was an extraordinary remark to come from the Benches opposite. If it had come from my noble friend Lord Phillimore, or some noble Lord behind me, I should have received it with less surprise. I will now endeavour to answer the points that have been raised in the course of the debate. My noble friend Lord Strabolgi said that this subsidy, which was temporary, is likely to be permanent. I can only tell him that His Majesty's Government like subsidies no better than other noble Lords who have addressed the House or than the noble Lord himself, and as soon as shipping can possibly do without it, this subsidy will not be continued. Even in these days, when we are liable to think in hundreds of millions, a sum of £2,000,000 is one from which no Chancellor of the Exchequer would part if he could see any way to avoid doing so.

As regards the scrap and build scheme which the noble Lord opposite said was a failure, I find that arrangements have been made during the last year for about 140,000 gross tons of shipping to be built, calling for advances of about £3,000,000 under the scheme of the Department which I have the honour to represent, and His Majesty's Government are not dissatisfied with that. The noble Lord said that he would like the Government to consider a loan in order to help in this building of ships. I can only say with regard to his suggestion that I will see it is conveyed to my right honourable friend and I am sure he will give it every attention.

LORD STRABOLGI

May I explain a little more? I really meant the same scheme that you have now to help shipowners with cheap money to build, but giving them a free hand without the obligation to scrap.

LORD TEMPLEMORE

I understand what my noble friend means and I will convey his suggestion to the proper quarter. I must enter a caveat, however, about that suggestion being advanced on this Bill, because, as your Lordships are aware, the scrap and build scheme is not dealt with in this Bill now before the House. But we all know that the latitude in debate allowed in your Lordships' House is very great, and I make no complaint, but will see that his suggestion is brought before the President of the Board of Trade. As regards accidents at sea, out-of-date hatches, and wooden hatches which the noble Lord says are dangerous, I can only inform him that the Board of Trade have the subject under review. They are examining the question of steel hatches and hope to come to a decision without undue delay. As regards improving manning, I may say that this question was referred by the Board of Trade to the Merchant Shipping Advisory Committee, whose report has now been published. Their recommendations will form the basis of new instructions on the subject which will be issued by the Board of Trade after they have been submitted to the Committee in accordance with the usual practice, and I hope there will be no undue delay about that. With reference to the employment of British seamen, the noble Lord quoted the example of a ship called the "Colvin Bank," on board which I think he said that, with the exception of the carpenter, all the crew were Lascars. I cannot contradict that, but I think his objection was very suitably answered by my noble friend Lord Howe, who spoke last, and said that if you displace Lascars in order to bring in British seamen, to whom you have to pay higher wages, that might possibly prevent a particular ship from carrying on.

I turn now to what was said by my noble friend on the Cross Benches, Lord Bledisloe, whom we are so glad to welcome back to our debates in this House. I have particular pleasure in answering the noble Viscount, because for a certain number of years after I first came to this House I used to sit behind him on this Front Bench when he represented the Ministry of Agriculture, and I have listened with great advantage to many speeches he made on beet sugar, barley and cognate subjects. I was very interested to hear what he said about the real cause of the necessity for these subsidies being granted. He said that it was the result of economic nationalism, with which statement, I think, none of your Lordships will disagree. As regards the problem of British shipping, particularly liner shipping in the Pacific, I can only tell the noble Lord that this subject is engaging the consideration of His Majesty's Government very earnestly, and especially the attention of the two right honourable gentlemen, the Secretary of State for the Dominions and the President of the Board of Trade.

The noble Viscount raised a rather large question about the Russian timber trade, and, while I have no doubt a great many of your Lordships will agree with what he said, and so do I up to a certain point, he will not expect me, I know, to go into that matter to-day, because really this Bill does not touch that question, and I did not come here prepared to deal with it. The noble Earl, Lord Howe, apologised for the absence of the noble Lord, Lord Essendon. I was indeed very sorry that the noble Lord was not able to be here this evening, but he had a very good substitute in my noble friend, and I was very glad to hear the noble Earl give his support to the Bill. I think I have now answered all the questions which have been asked. I can only say again that His Majesty's Government do not like subsidies any more than do any of your Lordships or anybody else in this country, so far as I know. They only keep subsidies on when they are really necessary, and at present they regard this subsidy as really necessary in order, if I may say so, to keep this industry with its head above water. I hope therefore that your Lordships will now give a Second Reading to this Bill.

On Question, Bill read 2a, and committed to a Committee of the Whole House.