HL Deb 09 March 1937 vol 104 cc562-80

Order of the Day for the Second Reading read.

THE EARL OF MUNSTER

My Lords, owing to the unavoidable absence of my noble friend Lord Templemore through illness, it falls to my lot to ask your Lordships to approve of the two Bills which stand in his name for Second Reading this afternoon. It was in the autumn of last year that the tramp shipping industry requested the Government to renew the subsidy for a further period. After consideration, the Government decided to ask Parliament to make provision in 1937 for a sum not exceeding £2,000,000, but at the same time they warned the shipowners that this subsidy could not be renewed at the end of this year. Although conditions in this industry are distinctly brighter than they have been for some years, and the index for freight rates for the last few months has been above the average for 1929, it will be within the recollection of most noble Lords in this House who take an interest in shipping that during the years of depression the losses for the tramp shipping industry were very serious indeed, and it must accordingly take longer than merely a few months of comparatively favourable conditions of prosperity to repair the damage to the financial structure of the industry.

Moreover, during the last two years nothing approaching a sufficient sum of money has been set aside for the depreciation of ships, and in the fourth Report of the Tramp Shipping Administration Committee the arrears for depreciation are placed at a figure of some £10,500,000. I might mention, as your Lordships are probably aware, that the subsidy is based entirely on freight and if the average level rises above 92 per cent. of the average level for 1929 the amount of subsidy will be reduced, no subsidy being payable if that level is attained. On the other hand, if the average rate of freight is below the 1929 level then in the opinion of His Majesty's Government financial assistance will be necessary for the industry, and the subsidy will automatically become payable. I think the policy that the Government have pursued in granting this subsidy to the industry has been highly successful, for both the subsidy and the organised cooperation that have resulted from the subsidy have achieved all the results which we hoped for. The rates of freight have been maintained and improved. British vessels have been placed on a footing to compete on equal terms with those of foreign competitors. The British tramp ships in commission on December 31 last year were about 285,000 gross tons more than in April, 1935. The policy of subsidy has furthermore reduced to normal proportions the sale of British tramp tonnage to foreigners. The number of foreign-going tramps owned in the United Kingdom has started to increase after a long and continuous period of decline. Lastly, the wages and conditions of employment, both for officers and seamen, has been improved and I am advised that the unemployment among seamen, more especially white British seamen, has been' substantially diminished by the better conditions prevailing in the industry.

With these results obtained from two years of the grant of this subsidy, I think it would appear to be foolish in the extreme if we were now to jeopardise all the good that has been done by deciding not to renew the subsidy at the first signs of improvement in the industry. It should also be remembered that the industry is in no condition to face a serious setback, and there is a great deal of lost ground still to be recovered. British tramp shipping is a vital element in our national prosperity in peace time, and it is essentially part of the blood-stream of the life of the people in the event of war. Perhaps I may now briefly refer to the clauses of the Bill. Clause 1 extends the period in respect of which subsidies are payable to the end of this year, and subsection (2) provides that sums necessary for payment of subsidies and other expenses may be defrayed out of moneys provided by Parliament. That is the Bill that I present on behalf of my noble friend for Second Reading, and in his absence I shall be happy to endeavour to reply to any queries that may be addressed to me. I beg to move.

Moved, That the Bill be now read 2a.—(The Earl of Munster.)

LORD STRABOLGI

My Lords, I am sure your Lordships regret the absence of the noble Lord, Lord Templemore, and I hope the reports about him are good, but I should like to congratulate the noble Earl on avoiding the danger of running on the rocks when venturing into strange seas, and on his explanation of the terms of this rather complicated measure. In fact I think he steered a very good course. I do not rise on behalf of my noble friends to oppose this Bill, because we think just as strongly as the noble Earl and His Majesty's Government that the continued prosperity and success, and also the quantity, of British shipping form a most important national interest. But I wanted to ask one or two questions, and I am glad to see the noble Lord, Lord Essendon, present. If I can draw him into making some useful addition to your Lordships' knowledge I shall be Very happy, for I am sure no one in your Lordships' House has a greater knowledge of, or interest in, shipping than the noble Lord. If I make a few mild criticisms I want the noble Lord, Lord Essendon, to understand that they are not aimed at him or at the great companies with which he is connected.

I did not understand from the noble Earl whether the effect of the subsidy after the first two years has been to arrest the reduction of British tonnage. In other words, has the effect been to arrest this gradual melting away of the mighty British Mercantile Marine? That is the ultimate test of the success of this experiment. Secondly, is the noble Earl and the Department of Government concerned satisfied that the undertaking given—namely, that when a subsidy was given National Maritime Board conditions would be observed—has been, in fact, implemented? In that connection my information is that there are isolated cases where the Joint Maritime Board agreed rates and regulations have not been observed. I Would like to deal with a particular matter which affects the noble Marquess, the Secretary of State for India, as well as the noble Earl, Lord Munster—the employment of Lascar seamen in ships receiving the subsidy. The Party for which I am speaking has nothing but good will and comradeship towards the Lascar seamen, and any one who knows what Lascar seamen did in the Great War in face of the very atrocious attacks upon peaceful merchant seamen cannot but be grateful to them. But we have this criticism to make, that they are paid less than the wages for equivalent work by white seamen. We do not think it is right that the subsidy should be given to vessels manned by Lascar seamen receiving less than the Maritime Board rates of pay. The next question I would like to raise with the noble Earl is why we have not yet had particulars of the subsidy paid in 1936. That complaint was made in another place and the information, I understand, is still not available. We ought to have that information before this Bill passes through all its stages in both Houses of Parliament.

I want also to raise a very important matter, partly at the request of my noble friend Lord Lloyd. He and I in many matters affecting shipping see eye to eye, and in this particular matter I certainly see eye to eye with Lord Lloyd. Is the noble Earl—I am sorry I have not given him notice of this question—in a position to say whether the Government have taken any further decisions with regard to British shipping in the Pacific? Since this matter has been ventilated in your Lordships' House one British line has been extinguished and the remainder are threatened—I believe the noble Lord, Lord Essendon, would bear me out in this—and the situation is; serious and of great Imperial concern. What is happening? I am glad to see Lord Bledisloe in his place, and I am sure he is equally alarmed at this threat to the British Mercantile Marine in the Pacific. Are the Government doing anything? I hope the noble Marquess the Secretary of State for India is not going to leave the House for at least one moment. I apologise for calling him back, but this is a matter which affects him and is also of concern to the noble Viscount the Leader of the House. Are the Government doing anything about shipping in the Pacific, particularly between India and Japan? My information is that Japanese com petition is worse, if anything, rather than lighter, and that at the present time about 80 per cent. of the regular shipping between India and Japan is Japanese, whereas a few years ago 80 per cent. of it was British. This is due, I am told, to very unfair Japanese com- petition. I am sure that the two noble Lords I have mentioned—the Leader of the House and the Secretary of State for India—are just as concerned as Lord Lloyd and I are about this particular matter.

Finally, I must take the opportunity of once more stating that we on this side are opposed to subsidies in principle to any private enterprise unless they are accompanied by a measure of State control. Nevertheless, in the peculiar circumstances of the present Government in office, we cannot expect that. Therefore, in a wider national interest we do not oppose this particular subsidy being renewed for another year, and I hope with the noble Earl that the rates will be such that very little of it will be required.

LORD ESSENDON

My Lords, I intervene in this debate with a certain amount of hesitation because I happen to be interested in the industry which is to benefit under this particular Bill. On the other hand, with few exceptions, I am only associated with vessels of the liner type, both cargo and passenger, and consequently have little direct interest in the tramp shipping subsidy. But I am interested in seeing that the industry in which I have worked all my commercial career, and which I consider is so vital to the interests of this country, is not placed in the position of not being able to exist. It occurred to me that I might be able to make some observations to your Lordships and to give you some information that would help you in coming to some conclusion on this important matter. I am very much obliged to the noble Lord opposite for the very polite way in which he spoke about me. I gather that he and his friends are not going to take this Bill to a Division. If they did so, I would not feel entitled to vote in the particular circumstances.

The real test of this Bill is whether or not it has achieved its object. The object was to save the tramp section of the shipping industry from disaster, and the Government in introducing the Bill very wisely made certain reservations to improve conditions and to minimise domestic competition within the industry in order that the subsidy might not be dissipated. I venture to suggest that the subsidy has justified itself by freeing the tramp section of the industry from col- lapse, by restoring confidence, by promoting increased employment amongst British ships, by increasing rates of freight, and in setting the industry on the road to recovery, and incidentally by giving increased employment to officers and men. In considering this matter we have to remember that the basic economic facts which made this subsidy necessary in the first instance have not very materially altered. The shipping industry cannot prosper without world trade. There has been a very considerable improvement in that respect since the year 1932, but we are still 14 per cent. below the amount of world trade that prevailed in the year 1929. The improvement in tramp freights that has taken place during the last year has been to some extent due to the failure of the grain crops on the Continent of Europe and the consequent heavy purchases which have been made by Continental countries, necessitating grain being carried from great distances—from Australia, America, the Pacific Coast, and Canada—but the rates of freight that prevailed at the beginning of the year have not been maintained. In the early days of the year, from the River Plate, the rate was 34s. 6d. per ton; to-day it is about 26s. 6d. per ton. From Australia at the beginning of the year it was about 46s. 3d. per ton; to-day it is about 38s. 6d.

That is one of the causes of the improvement, but I suggest to your Lordships that the principal cause has been the organisation of the Tramp Committee which has instituted a system of minimum rates of freight, which has worked very satisfactorily. In fact, the existence of the subsidy has made the working of the Committee not only possible but practicable, because, as your Lordships will understand from what was stated last year, no shipowner can get the benefit of any subsidy if he opposes and does not work in conjunction with this scheme. If and when the subsidy ceases, I think it is very important that this Tramp Committee organisation should be continued, and I see no reason why it should not be, because it is only fair to say that foreign tramp shipowners have cooperated with the Tramp Shipping Committee in the most admirable manner possible. There are about 250 tramp shipping companies in this country, and the Chamber of Shipping received reports a little while ago from 176 of those companies in regard to last year's trading. Those particular companies required 5 per cent. depreciation, which would represent £2,096,000. The actual profits from the voyages were £1,216,000, so that there was a deficiency of some £800,000. The noble Earl in introducing this Bill also informed us of the amount of depreciation for the six years from 1929 to 1935, which was £18,000,000, and only £8,000,000 was earned, leaving a deficiency of £10,000,000. Any further depreciation that was provided in the accounts of the shipping companies came either out of reserve or out of returns from investments.

I am sure your Lordships will appreciate that six months of cumulative prosperity in the industry does not compensate for six years of ruinous depression. During those six years the industry has had to contend with shrinkage in world trade, aggravated by the uneconomic nationalism of other countries, which has resulted in their fleets being very considerably increased, chiefly by subsidy allowances. One satisfactory feature of the whole matter, which I am sure will please the noble Lord opposite, is that the cuts which were instituted in 1932 to masters and men have now been entirely restored, and, in addition, a Superannuation Bill has been brought in for the masters and the officers and the engineers. And these advantages apply not only to the subsidised section of the industry, but to the whole of the industry. The unemployment of masters and officers has been very materially reduced. So far as the sailors are concerned, the noble Earl, in introducing this Bill said, I think, that their unemployment had been very much diminished. I think I will go further and say that unemployment amongst the white sailors has been entirely eliminated. In fact there is likely to be a shortage both of trained engineers and seamen which threatens to become acute. That is the position as it is to-day.

One point I would like to refer to, and that is the safeguarding clause in the Bill under which, if freights get down to 92 per cent. of the 1929 level, then there is an automatic reduction in the subsidy. If they get down to the 1929 level the subsidy ceases altogether. I am not going to predict whether that is likely to be achieved, but certainly there have been periods during the past few weeks when the 1929 level has been attained. Personally I hope the day will soon come when the subsidy will have to be abolished altogether. In any case, the Government are keeping back the payments until the end of the year, when it will be seen whether the 1929 freights will have been attained or not, so that it is quite possible no payment may be made under this Bill at all.

I would like to point out that tramps running costs have risen something like 20 per cent. within the last few months. This does not in any way affect the subsidy payment, because the subsidy is based on gross freight levels. But another and a very serious factor is the increased cost of building owing to the recent rise in prices, and I am afraid that the replacement of ships by British shipping companies for some time to come is going to be a very difficult matter. That is a very serious question because British shipping has already been reduced from one half of the world's tonnage to one third of the world's tonnage. An even more serious factor is the fact that in the event of war we only have now for the importation of our foodstuffs and of our raw materials and the carrying of troops an effective tonnage of 14,000,000 as compared with 17,500,000 when the last War broke out. Or, to put it another way, there are nearly two thousand vessels less on the British Register than there were at that time. And the shortage, I think, applies most particularly to 3,000 ton and 4,000 ton vessels that were particularly suitable for carrying iron ore into this country. The effect of all this is that we shall be much more dependent on neutral tonnage than we were before the last War, and we do not know that, in the event of another conflict there will be any neutral tonnage available. We do not know who our allies or our enemies will be, but, even under the best conditions in war time, it is certain that neutral tonnage will cost us a vast sum of money if we ever have to enter into a contract to use it. That is why I regret the falling off in British tonnage, and particularly the increasing prices at the present time, when it will be so difficult to rebuild and reconstruct the fleets.

Now to return to my original theme as to whether or not this subsidy has been justified. I suggest that it has been justified, and at a very low cost, a cost of £4,000,000 for two years. Many industrial experiments have cost a great deal more than £4,000,000. Without a Mercantile Marine adequate for both civilian and military requirements the vast expenditure which is now being incurred for armaments quite possibly might be rendered useless. In the event of any emergency arising, and in the event of our being unprepared, the Government would naturally be asked why they had allowed such an important link in defence as the Mercantile Marine to fall below the adequate requirements of the country. I suggest that £2,000,000 a year is not an abnormal sum for the rescuing and reviving of an industry which is of such value to the country as the shipping industry, and I hope your Lordships will agree that this Bill shall be renewed for what, I trust, will only be a convalescent stage, and it is quite possible that the money will not be required from the State at all.

THE EARL OF CORK AND ORRERY

My Lords, I rise to support this Bill, but I do so with a minimum of enthusiasm, because I venture to think it does not go nearly far enough. I support it on the principle that half a loaf is better than no bread. Your Lordships will remember that the President of the Board of Trade, in announcing his intention to continue the subsidy for 1937, warned the shipping industry that "its plans should be laid on the definite assumption that the tramp shipping subsidy will cease at the end of 1937." In the forefront of the Administrative Committee's Report a tribute is paid to the benefits that tramp shipping has received from the payment of this subsidy. The Report states that it "has succeeded in saving the British tramp shipping industry from certain ruin." It is further mentioned that when the original Act was passed the tramp shipping industry was "on the brink of catastrophe." Owing, however, to the improvement in world trade, and to the steps taken by the Committee during the past year, shipowners have been able to meet expenses and, latterly, to put something by for the renewal of their fleets.

The Report further states: It should not, however, be lightly assumed that because of rising shipping values, and the advance of freight rates since the Committee began its work, that the industry is now set on an even keel again and needs no further care or assistance. As we were reminded the depreciation now stands at £10,500,000. That Report was published in January last. Lord Essendon has pointed out that since then ship-building prices have risen, are rising and that there is every prospect that they will continue to rise. To quote the Report once again: It is impossible 'to secure a Mercantile Marine adequate to the needs of the country' unless existing British shipping is put upon a sound financial basis. Your Lordships will remember that "to secure a Mercantile Marine adequate to the needs of the country" were the words used in the King's speech last November to declare Government policy in regard to British shipping.

The Chairman of the Tramp Shipping Administrative Committee is Sir Vernon Thompson, and as such he has recently been the recipient of several eulogistic compliments from representatives of the Government upon the value of the advice he has rendered and the assistance he has given. Why not follow that advice a little further and make sure that existing British shipping is on a sound financial basis before you even consider abolishing the subsidy? If the present improvement in the freight market continues it seems probable that no subsidy will be paid under this Bill for 1937. So long as tramp shipping is holding its own, no expense to the country will be involved. Before ending the subsidy, might it not be considered worth while to use the money to build up a fund to assist British shipping in the future when and where it seems desirable to do so, without all the publicity of having to bring in another Bill and the inevitable delay which is caused thereby? The knowledge that the Government had this money and power to act, and were ready to use both, would give a sense of security to shipowners and enable them to face the future with more confidence. They could plan ahead and on broader lines instead of living from hand to mouth in an atmosphere of uncertainty.

Further, the declaration of the Government that it intended and was ready to come to the assistance of British shipping when and where required would have a salutary effect abroad and would do something to implement the proud boast of the Chancellor of the Exchequer that "we are not going to see the British Mercantile Marine swept off the seas." I may be told that the subsidy justifies that statement, and that it has had the desired effect. In this respect the title of the Bill is misleading. It does not deal with a subsidy for British shipping as a whole but with one section only—although it is a very important section. Liners and cargo liners are not affected except indirectly and coastal shipping not at all. As regards the cargo liners, the noble Lord, Lord Essendon, has pointed out in speeches here and elsewhere that it is just the class of ship which foreign countries are subsidising, and the process of sweeping British cargo liners off the seas still continues. No assistance is going to the coastal vessels, tramp or liner, or to the ships engaged in the short sea trades, although these small vessels have to face an intensive competition and they cost ton for ton more to run than the larger ships.

It cannot be said therefore that British shipping is being subsidised, and yet that is the impression that some people get from the title of this Bill. Coastal owners are not asking for a subsidy and they do not ask that foreign ships should be excluded from the trade of our coasts, but they ask that that trade should be carried on on equal terms and they hope and expect to get the support and assistance of their countrymen. I am not advocating the handing over of large sums of money to the shipping industry. I have no financial interest in the shipping industry and I approach this question simply as a student of national security. That security is based upon an adequate Mercantile Marine. It is for the safety of that Mercantile Marine in war that we go to the expense of maintaining a strong Navy. It is the Mercantile Marine that is all important, not the Navy. If the Mercantile Marine fails in its function a Navy treble the strength we visualise would not save us.

Appeals for any form of assistance are sometimes met by the argument that the shipping industry has no more claim upon the public than any other industry. Shipping, however, is essentially a national industry. It is more; it is the foundation of our national defence and of our national prosperity. It is quite astonishing to read statements by members of the Government taking credit for having rescued our tamp shipping when it was on the "brink of catastrophe." I should like to ask how members of the Government reconcile their duty to the nation with having allowed that part of the industry to get into that state. Having taken four years to obtain it, it seems that the subsidy is to be wiped out at the end of three years, in spite of the warning of Sir Vernon Thompson that financial assistance and care are still required and that we have a lot of leeway to make up if we are to have a Mercantile Marine adequate to the needs of the country.

Recent speeches by prominent leaders in the shipping world have not been very optimistic. I do not think Lord Essendon sounded very optimistic. An examination of the recently published report of the Chamber of Shipping points out that we have now two thousand fewer passenger and cargo vessels than we had at the outbreak of the late War! We know that we had not enough then and that under modern conditions we shall want more. It has been stated that we shall want at least seven hundred more ships. How is the deficiency to be made good? It certainly cannot be left to the shipowners to make it. It would not be reasonable or fair to expect them to build more ships or employ more men than will enable them to conduct their industry with efficiency and with due regard to the shareholders and the well being of those who serve them. Over and above this, the provision of men and ships becomes a national concern and just as much a part of the rearmament programme as is the building of cruisers and other warships to protect our dwindling merchant fleet.

There are many other matters that want looking into in the conditions of the Mercantile Marine and I, like Lord Strabolgi, do not attack the big concerns but a great number of mushroom companies that spring up when there is money to be made and fade away afterwards. The conditions of service have been improved greatly of late but all at the expense of the owners. It does reduce the possibility of their adding to their fleet and helping to make up this deficiency. There is the training too. The Mercantile Marine does not want as many officers in peace time as are required in war time. You cannot expect them to engage more officers than they need, but at the same time they have got to be there and I submit that the excess should also become a national concern. We want more ships. Those in excess of the needs of the Mercantile Marine to carry on their business should, when they cannot be employed profitably, be laid up and when trade improves they could be chartered, used by their original owners or chartered to others. Latterly I have been receiving several letters from Mercantile Marine officers as a result of some remarks I made at a meeting. They all point to the difference of treatment in some companies and in others. Some are mentioned with praise; with others it is quite the reverse. If one third of the stories I have heard are true I submit that an examination should be made of this matter in the interests of owners and officers alike. It has been said that merchant service officers are not an isolated class of the community and must be considered in relation to other bodies of employees. I contend that they are a class apart. They are indispensable and in reality they are national servants. If every shipping office closed to-morrow, the Government would have to take over all ships and officers and men and run the ships themselves.

I fully realise that I have touched on a big question, so big that I am convinced that what must come in the near future, and I hope in the term of the present Government, is a Ministry of Shipping presided over by a Cabinet Minister. That Ministry should have its budget and should have its estimates approved by Parliament, so that we should be able to secure the maintenance of a Mercantile Marine adequate to the needs of the nation. I do not propose that such a Ministry should interfere in any way with the normal business of shipping. It would, however, be able to make arrangements to keep a larger fleet in being than is actually required by business and be able to keep a sufficient number of officers to man it over and above what the needs of the shipping industry required. It would look after the interests of those who serve in the Mercantile Marine and in fact treat the Merchant Navy as what it is—an indispensable national service in peace and war. It would initiate a long-term shipping policy which would at least let everyone concerned know exactly where they were and inform the world that British shipping and its welfare would henceforth be supported by all the re- sources of the nation. Meanwhile, I suggest in conclusion to the Government that the warning of the President of the Board of Trade as to the definite withdrawal of the subsidy should be retracted, and that the subsidy should be kept alive as a ready weapon in the hands of the President of the Board of Trade to allow him to come swiftly into action in any part of the world wherever British shipping wanted help in the national interests.

LORD LLOYD

My Lords, in the few remarks I am going to make I should like to join with the noble Lord, Lord Strabolgi, in congratulating my noble friend who introduced the Bill both on the pleasant facility with which he did it and the prudent brevity with which he economised his arguments. I could not help feeling a certain gratification when I heard him make the same speech in favour of a tramp shipping subsidy as I had been making for months and years before the Government was persuaded to take it up. The noble Earl, Lord Cork, mentioned the phrase which Government spokesmen have used about saving tramp shipping from disaster. It really is a very grave thing that the Government, in face of constant and repeated warnings, should have allowed such a situation to grow up in the prime industry of this country, and after two or three years' warning to make so humble a claim that they have just saved it from extinction. It is not very satisfying to some of us, especially in view of the remarks of the noble Lord, Lord Essendon, when he reminded your Lordships of the terrible danger—that is no exaggeration—in which this country exists to-day for lack of shipping to carry the food supplies of the country. I can only echo what Mr. Winston Churchill said the other day in another place. I am amazed at the complacency of Parliament, amazed that at the most critical period probably in the whole of our history we should not be more interested in or more concerned at the depletion in our shipping. In that connection I should like to ask the noble Earl if he could give us some quite definite information, because some of us feel that we make speeches in this House time after time asking for information and are very often not supplied with it.

I would venture to ask the noble Earl—I do not think he can claim that it is not in the public interest to do so—whether he can tell us what the Government are going to do with regard to two main questions in relation to our shipping. The first is in relation to the Pacific shipping question which I have ventured to put before your Lordships on several occasions. It is two years ago now since first I raised the question of the probable extinction of at any rate one and of possibly our two lines in the Pacific. I do not think the Government paid very much heed at first when I suggested that there was every possibility that the British line competing with the Matson Line would be completely extinguished if the Government did not go to its aid. I remember reminding your Lordships of the speeches amongst others, of Mr. Neville Chamberlain and Mr. Runciman, saying that British shipping would not be allowed under a National Government to be swept off the seas. Nevertheless, the New Zealand Line no longer exists. This question was referred to the Shipping Committee. Very tardily the Shipping Committee has reported. We are now waiting to know the result of the negotiations taking place with the Dominions. Time goes on, month after month, year after year, and the situation is grave. I hope therefore that the noble Earl will be able to tell us to-day exactly when he hopes that some definite action will be taken to restore the line between San Francisco and New Zealand, and when something can be done, and what can be done, to give that essential help to the Northern Line which has been requested and for which a case has been made out.

The second question I would like to ask is whether he can give us any information as to the Government's decision as to the aid that must be given to our shipping in the Far East. I reminded your Lordships some few weeks ago of the terrible stress which has overtaken our shipping, at the hands mainly of Japanese competition, between Japan and India and elsewhere. I have not the figures with me at the moment, but I think I am understating and not overstating the case when I say that whereas only a dozen years or so ago the main bulk of the shipping between India and Japan was under the British flag, to-day at least 80 per cent, of it at both ends is under the Japanese flag. What is the Government doing about it? There is not time for these matters endlessly to be referred to Committees, with the same delay that occurred in the case of the Pacific question, because the extinction of our trade between Japan and India would be almost fatal. Would the noble Earl tell us quite definitely what steps the Government are taking to meet this competition and to equip our shipping lines with the necessary powers to face that competition? Those are the only two questions that I want to ask, but I do hope that the noble Earl will give us clear and quite definite replies to them.

THE EARL OF MUNSTER

My Lords, the debate which has taken place on this Bill has ranged over a very wide field. I will endeavour to do my best to reply to some of the questions raised although some of the points made, especially by the noble Earl, Lord Cork, and the noble Lord, Lord Lloyd, were not really germane to the problem under discussion. My noble friend Lord Lloyd was good enough to give me notice that he proposed to ask these questions and I shall endeavour to reply to him.

The noble Lord, Lord Strabolgi, asked one or two questions. He first asked me whether the reduction of British tonnage had been arrested. My reply to that is that undoubtedly this subsidy has arrested the reduction in tonnage. The figure generally shows an increase, and it is expected that this will be shown when it is published at, I think, the end of June this year. He also asked me about the conditions of employment for seamen and officers under the Tramp Shipping Subsidy Committee. Applicants for subsidy are required to satisfy that Committee on various points in relation to each voyage in respect of which the subsidy is claimed. The members of the crew, including the officers, must be paid rates of wages in accordance with the appropriate National Maritime Board Agreement. In the course of 1936 the new rates of wages and increases were brought into effect in the National Maritime Board Agreement, and the undertaking required to be given to the Committee covers these increases as well. At the same time, the number of deck officers carried must be in accordance with the operative agreement which is in existence at the present time.

Then my noble friend asked me a question concerning the employment of Lascar seamen on British ships. Some vessels carry these Lascar crews signed on under a Lascar agreement made in accordance with the requirements of the Government of India, and I think probably the noble Lord knows that the agreement is signed before an official of the appropriate Government Department in that country. These seamen are engaged in the East, and they are therefore outside the scope of the National Maritime Board Agreement. Since there is no National Maritime Board relating to the rates of wages applicable in such cases, the Tramp Shipping Subsidy Committee's requirement that the rate of pay must be in accordance with the appropriate National Board Agreement does not operate in respect of the crews. That is to say, the practice of employing Lascar crews, especially in vessels in India, is one of very long standing, and the employment under the Lascar agreement cannot, therefore, afford any grounds for withholding this subsidy. I hope I have made that point clear; I know it was raised continually during the discussions in another place. The subsidy for T936 has not yet been completed; payments have not yet been finally adjusted. I cannot give the noble Lord any definite date, but I am assured that a White Paper will be issued in the course of a short time setting out the full facts of where and how the subsidy was paid during last year.

Perhaps now I might turn to the question which was raised both by the noble Lord, Lord Strabolgi, and by the noble Lord, Lord Lloyd, concerning British shipping in the Pacific. My noble friend stated quite correctly that the Committee had examined the question of British shipping in the Pacific and that it had issued a Report. Perhaps my noble friend recollects that on previous occasions he has asked why this problem was not referred to the Imperial Shipping Committee until the spring of 1936. My noble friend has said that it should have been referred to that Committee at least two years before that date.

LORD LLOYD

If at all.

THE EARL OF MUNSTER

The policy to be followed up to that time had been discussed between the Governments of Australia, New Zealand and the United Kingdom, but no definite scheme had been put forward by the shipping com- panies on behalf of the Canadian-Australasian Line for its future running, nor was there, apparently, any agreement among the Dominions concerned as to the course to be followed. My noble friend will know perfectly well that this Committee has now reported, and its Report is being examined by the Dominion Governments. At the same time, His Majesty's Government in this country are ready to take their share in these deliberations, and in order to facilitate a solution they have formulated certain proposals as to the course of action which have been forwarded to these other Dominion Governments for their consideration. I am not yet in a position to make any further statement on what agreement will finally be reached, but I can assure my noble friend that His Majesty's Government realise the necessity for reaching a decision as soon as possible.

LORD LLOYD

Might I interrupt the noble Earl, if he will forgive me? I would not interrupt my noble friend if we had not had this over and over again. My noble friend is merely giving me the same answer that my noble friend Viscount Halifax gave me over a year ago when he said that the Government could not take a lead in the matter. I asked him then why the Government could not take a lead in the matter. I should like to know why the Government could not take a lead in the matter, and why they cannot now. I never got a reply; that is what I want to know.

THE EARL OF MUNSTER

My Lords, I thought I had made it clear. After this Committee reported, the Report was sent to the Dominion Governments, and His Majesty's Government in this country have made definite proposals which are now being considered by the respective Dominion Governments. I cannot give the noble Lord what he asks for, because I know of no further remarks which I can make that would satisfy the noble Lord. On the question of Japanese shipping, however, I think I have something which will satisfy him. We are already aware that Japanese competition is making itself very severely felt throughout the whole British Empire, and the Government are doing all they can to assist British interests and British industry to meet that competition. As regards shipping, Japanese competition is to-day very strong in Far Eastern waters and, moreover, is lively, under the new arrangements which the Japanese Government propose to make to assist their shipping, to become even more severe. The Imperial Shipping Committee have therefore been invited to inquire into the position of British shipping in the Far East. The reason, here again, why reference was not made at an earlier date to the Imperial Shipping Committee is that it is only within the last few months that definite requests in this respect have teen made by British shipowners to the Government. My noble friend will be satisfied, I hope, but he will certainly be gratified to hear that this Committee have agreed to carry out this inquiry. Their first meeting to hear evidence is being held this afternoon, while this very debate is in progress. I hope that will give my noble friend a sufficient reply to the two points which he has made and which are not really germane to the matter we are now discussing.

The noble Earl, Lord Cork and Orrery, asked me a question concerning the continuation of the subsidy. As he will recollect, the President of the Board of Trade, in informing the industry that the Government would be prepared to continue the subsidy for another year, warned it that after that time he would not be in a position to guarantee that the subsidy would be renewed. I am in no position to add anything to that letter which was sent by my right honourable friend to the President of the Chamber of Shipping. I think I can say this though, that the industry must now make its plans on the assumption that this subsidy will not be renewed at the end of this year. On the other questions which the noble Lord raised I apologise to him, but I have absolutely no information. A large number of them, again, were not germane to this Bill. At any future date I shall certainly be happy to answer the questions which the noble Lord should see fit to address to me.

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