SHIPPING.

HL Deb 13 December 1938 vol 111 cc502-43

LORD LLOYD rose to call attention to the shipping situation, and to move for Papers. The noble Lord said: My Lords, during the past few years the importance of the Merchant Navy as an integral and vital factor in our Imperial defence has been brought to the notice of the Government on various occasions in this House and elsewhere. For years past speakers in both Houses of Parliament, prominent shipowners, the Chamber of Shipping and the Shipping Federation have been warning the Government that the opening of hostilities or even a threat of war would disclose a grave shortage of the ships of all classes that are most needed to bring in our essential supplies, as well as a very grave shortage of British seamen. To each one of these warnings, uttered over a lengthy period now, the Government have invariably replied very complacently that all was well, that there were amply sufficient ships and an adequate supply of men not only to man the Merchant Navy but to provide an adequate reserve for His Majesty's Navy as well. That is an accurate summary of the replies consistently given on the subject.

I make no apology for referring again to this matter, for the crisis through which we have just passed has proved abundantly that we, the critics, and not the Government, have been right in this matter. Yet in all the admissions that have been made, such as they have been, of the gaps in our defences, in all the promises the Government have made of rapid amendment, I have never discerned any sort of appreciation of what Sir Basil Kemball-Cook, who is very well-known to everyone in the shipping world and was formerly Director of Admiralty Transports, has said, namely: The ability of this country to bear the strain of a European war will depend on our Mercantile Marine. I wish I had been able to see in the admissions of the Government some appreciation of that view of so eminent an authority, or a realization of the fact that our Mercantile Marine, in its seriously reduced condition to-day, is not able to bear the strain.

I may be told that I am raising this question prematurely and improperly because the Government have decided—no one will be surprised at that—to set up a Committee. They have set up a fact-finding Committee, and the only really satisfactory feature of that Committee is that it is presided over by my noble friend, Lord Essendon. We could not possibly have a more able, distinguished or knowledgeable Chairman. But either the Government know the facts or they do not. If they do not know the facts, I would ask my noble friend who replies for the Government why they did not seek for those facts at least four, if not five, years ago. If they do know the facts, surely they ought not to waste time now in setting up new committees. There is a main Committee, which I understand is divided into various subcommittees, each of which will report to a Shipping Policy Committee. In due course that Shipping Policy Committee will report—some time, I suppose, in the spring, if we are lucky—on the matter. I do not wish to be too critical of the Government, but really on this matter of committees I do feel that the country is getting very impatient. This procedure I believe is unnecessary. I am perfectly certain that the Board of Trade know all the facts. If they do not, then indeed a case is made out for a Ministry of Shipping, which some of us have been urging for many years. It is incredible that the Board of Trade do not know the facts perfectly. Therefore this is not only an unnecessary procedure but an attempt to throw upon the shipping industry responsibility for a vital section of our defence which properly belongs to the Government and to no other authority. What is required is not more committees but a little more decision on the part of the Government.

What are the facts that we have been so laboriously pressing on the Government for this long period? I will not recite them all again, but I will be as brief as I can. First of all, take the question of the shortage of ships. We have made representations about the grave shortage of ships over and over again in your Lordships' House and elsewhere, with the result that Sir Thomas Inskip said, I think at the beginning of February of this year: I do not agree that there is at the moment any shortage of ships because ton for ton and ship for ship substantially we are in as good a position to-day to get cargo space as we were in 1914. Then his lieutenant, Mr. Cross, a little more recently, in June, said: It is a fact that having regard to the improved speed of our cargo vessels and the larger carrying capacity per gross registered ton, the cargo carrying capacity of the Mercantile Marine is at least as great as it was in 1914. These very comfortable and complacent reflections have been contradicted over and over again.

For example, the Chamber of Shipping, than which there is no higher authority, in its annual report for 1937–38, stated: Excluding tankers there are about 2,000 fewer United Kingdom cargo and passenger vessels than in 1914. These facts are disquieting when it is remembered that 7,000,000 gross tons of United Kingdom shipping were sunk in the Great War, and that the United Kingdom population has increased from 45,500,000 to 50,000,000 in 1937. Then the old argument is constantly produced that, although we may have fewer units, still the units are much larger and that makes up for the deficiency. That can equally be shown to be quite wrong. The Chamber of Shipping says—and with all respect to the Government, I am inclined to think that the industry knows its own business— The effectual tonnage available for the carriage of foodstuffs, raw materials and troops in the event of war is only 14,000,000 gross tons as compared with 17,500,000 gross tons in 1914. Which is right—the industry itself, the Chamber of Shipping, the Shipping Federation, or the Government, the Board of Trade? I must leave your Lordships to decide, but I have no doubt myself as to which I should be inclined to think most reliable in a matter of this kind.

We have the advantage of the great knowledge of my noble friend Viscount Runciman to-day, and I understand he is going to reply for the Government. As recently as March this year the noble Viscount uttered a grave warning himself. He has not only had all the advantages of great personal knowledge of the shipping industry, but he was at the head of the Board of Trade for a long time. He, if anyone, as President of the North of England Shipowners' Association, must be in possession of the facts. Yet even a warning from so authoritative a source has not affected Mr. Cross, or Sir Thomas Inskip, or anybody else, in the least. Lord Runciman is reported as saying that he thought that some people in high places were apt to forget that British shipping was the very essence of our Imperial strength. It was disturbing"— why disturbing, if we have plenty of ships?— to realise that the number of British merchant ships had decreased by 1,000 since the War, and he wondered whether the seriousness of that was fully realised. … He was shocked at the amount of leeway that had to be made up. Not the complacency of Mr. Cross or Sir Thomas Inskip was reflected in Lord Runciman's speech. He went on: We could not continue a strong and vital nation unless we were prepared to place in the forefront of national importance carriage by sea. … The depression had hit shipping so hard that in these anxious days we had to realise that we should not have the same volume of shipping available if some catastrophe were to burst on us again.

When you reflect, my Lords, on the nature of such a catastrophe and the difference in its incidence that would occur now compared with 1914, and that in the War, even with our huge borrowing of neutral tonnage, we were very nearly beaten to our knees for lack of ships in the spring of 1918. A warning like that of Lord Runciman was surely very important. You must remember that now our ships would have to run the gauntlet of sub-surface, surface and super-surface attack to a far greater degree than they did in 1914; at any rate the super-surface attacks would be far greater. But Lord Runciman's warning was not heeded, and apparently was not even believed, by the Government. For it was three months afterwards that Mr. Cross again stated imperturbably, and even cheerfully, that: The cargo-carrying capacity of the Mercantile Marine is at least as great as it was in 1914. Again, I ask, who is right: Mr. Cross, or Lord Runciman, the Shipping Federation and the shipowners? After all, the catastrophe referred to by my noble friend Lord Runciman, the risk of war, was only just averted recently. Yet since that dangerous moment the Government do not seem to have paid very much attention to this matter.

No action of any kind has been promised, and not even a reference, so far as I know, has been made to this most vital point of our defences. We refer constantly to guns, to aeroplanes and to all the other munitions of war, but never a word is said to get energetic and prompt action taken in regard to a part of our national defences which is at least as vital as any other. The game of reference to committees still goes merrily on, on the principle, presumably, that a problem postponed is a problem half solved. I hope noble Lords will excuse me if I speak rather strongly on this committee question, but it is a feature which is causing grave disquiet in the country. I repeat, not only on this matter but on almost every other matter, the incapacity and lack of the quality of decision which seems to actuate His Majesty's Government to-day is causing grave disquiet.

Now may I say a word about manning and the shortage of men? The position in regard to manning is scarcely less grave than that in regard to ships. Here again warning after warning that we have made—I hope patiently, temperately and courteously—in this House and elsewhere, has been entirely ignored. May I remind your Lordships of the great demands made by the Admiralty on the Merchant Navy in the last War? No fewer than 13,510 officers and men of the Royal Naval Reserves, that is, Merchant Service officers and men, joined the Fleet in 1914. By 1918 the number had grown to something round about 23,000. I have frequently warned the Government, and so, I believe, has the Shipping Federation, that it is doubtful if in an emergency now one officer or one man could be spared. For a long time scorn was poured upon this statement of mine, but I believe it has been proved very nearly true.

Two years ago my noble friend Lord Templemore, who was replying to one of my warnings, took comfort, as your Lordships will remember, in the opinion of Admiral Sir George Chetwode, who had then lately been Admiral Commanding Reserves, and who had said: Owing to the numbers of Royal Naval Reserve (that is, officers and men of the Merchant Service), as well as fishermen and men who had served in the Navy in the last War, there would be no difficulty in getting all the men we wanted, at all events for the first year of the war. That was what was said by Admiral Chetwode and it gave great sustenance to Lord Templemore in his reply to me. Admiral Chetwode then stated that we had ten thousand Royal Naval Reserve officers and men, which he considered a most valuable reserve. If they had been there, they certainly would have been. Again, who is right on this matter? On September 30 last the Shipping Federation issued a memorandum of which the first sentence ran as follows: Recent experience has shown that if all British merchant ships were in commission, there would be a shortage of personnel in deck department and an acute shortage of engineering officers. Again I say, who is right, Mr. Cross and the Government, who say, "Splendid, we have all the men we want," or words to that effect, or the Shipping Federation? No doubt my noble friend will tell us.

Obviously the Shipping Federation's memorandum meant that if the Admiralty should call up the officers and men of the Royal Naval Reserve, merchant ships would be immobilised through lack of crews and the already grave shortage of ships would be dangerously augmented. That in fact was the position. I am informed privately but very authoritatively that when naval mobilisation began the Shipping Federation was compelled to approach the RegistrarGeneral—whose estimates, I may add, have for years been open to question by practical shipping men, as I expect my noble friend Lord Runciman will agree—to curtail the calling up of officers and men of the Royal Naval Reserve for naval service, and that instead of the 10,000 who were estimated to have been available some hundreds only could be called upon. Think how terribly grave is a position in which, because of shortage of seamen, either you have to put out of action ships of your depleted Merchant Navy or else have to go short in manning the Fleet itself at a moment of crisis. Surely it is time that the Government gave us an authoritative statement on that matter and told us what they were going to do about it.

Another thing that we have pressed, which is indirectly relative but very importantly relative, is the condition of the fishing industry. In the Great War, of our general Merchant Navy 2,479 ships were lost at sea and 14,287 men were drowned. Those were our pays devaste. After the War the stricken areas of France were there for all men to see. Our stricken areas were out of sight. They were at the bottom of the sea. So perhaps they were not so immortalised nor so impressed on the memory of those of our generation who travelled through the stricken fields of Flanders. Nevertheless, that was the price we paid for Admiralty in the War. And in a much smaller way, because it is a much smaller unit, the fishing fleet played its splendid part. In all 675 fishing vessels were lost in the War, and 400 odd men were lost. That is not a really adequate representation of the risks run by the men of the fishing fleet, because as they fish in fleets luckily a very much larger number of people are saved more easily than they could be from bigger ships.

In the fishing fleet, which is of enormous importance to our Mercantile Marine, the position is as least as disastrous as in other sections of the shipping industry. At the time of the Armistice the number of fishermen serving in the naval forces was 37,145. Yet there were still sufficient left at their work to carry out the important operations of the fishing fleet in finding food for our people. What is the position now? The Minister of Agriculture and Fisheries, Mr. Morrison—and the Ministry rather anomalously controls part of our Merchant Navy—stated in the House of Commons that it was estimated that the number of British fishermen employed in sea fishing in Great Britain was 79,000 odd before the War, in 1913, and only 49,000 odd in 1937. Here again, largely because of Government neglect as opposed to the vigorous State assistance of our competitors and because our Government have given no protection for a vital industry, we have largely lost our foreign markets in that trade. Continental Powers, appreciating, as His Majesty's Government have not, the lessons of the War, have fostered their fishing fleets, with the deliberate aim, in many cases, of building up first-class seamen with a view to a possible future war. Germany and Russia and the Baltic nations, all of them. What effort have we made to use the bargaining power conferred on us by our excess of purchases over sales to those countries to preserve the markets for our fishermen which we once had? None at all.

I do not propose to enlarge on this subject, and to weary your Lordships, because it is a separate subject, which I am going to venture to bring before you in the New Year—the whole question of the fishing industry and fleet. Moreover, we must not be too hard on the Minister of Agriculture, who has had plenty of trouble over milk and barley without our troubling him with fish. But it is all a part—and I do not say this, I hope, offensively—of the really sorry story of the Government neglect of the question of our Merchant Fleets, and I propose, as I have said, to bring the whole question of the fishing industry before your Lordships as soon as I can get the facts together. Really we are getting now into a vicious circle in the matter. Lack of employment for our merchant ships, loss of markets for our fishing fleet—in fact we are being driven from trade after trade by Government-aided foreign competition—all that means not only an actual shortage of British seamen to man our ships, but a heavy loss of regular employment for our people, and the virtual disappearance of an invaluable reserve for our Navy.

Now a word about shipbuilding, as to which I think Lord Essendon is likely to say a word; and I believe he will support me in saying how grave is the position. Every facet of practically the most important industry in the country is in a derelict or quasi-derelict condition, and yet a National Government, with no difficulties of Parties—I apologise to my noble friends opposite but certainly there are no difficulties on this question with any Party, for if ever there was a national question the preservation of our Merchant Fleet and the Navy is a national one—in so vital a matter as this (and I have been talking for at least four or five years pretty regularly on this subject), nothing has been done except the tramp shipping subsidy, which did some little good, and what is known as the scrap-and-build policy, which I think personally did not do any good (that is a matter on which opinions may differ).

With regard to shipbuilding, I will give a few salient facts only. Since the War, under a scheme of rationalisation of the industry, under the leadership of Sir James Lithgow, our capacity for building merchant ships has been reduced, I think, from 3,000,000 gross tons per annum to 2,000,000 gross tons per annum. That is, one third of our yards and slips, I infer, for one reason or another have been put out of action. Actually, the number of men capable of building ships and their engines has been reduced, according to Sir Archibald Hurd, by 25 per cent. since 1914, and shipbuilding is undoubtedly still on the down grade, if not heavily on the down grade. Again, Sir Archibald Hurd estimates that by the middle of next year 75 per cent. of even our reduced capacity to build will be unemployed—the building berths empty, the architects, draughtsmen and craftsmen idle. Sir Westcott Abell, the well-known naval architect, in The Times of October 25 last, said: It is disquieting to find that whereas 88 ocean-going ships of nearly 600,000 tons were launched in the first eight months of 1938, only 22 ships of some 150,000 tons were ordered to replace them.

Our shipbuilding industry, again, has declined partly because the resources of our shipowners have been exhausted by unaided competition with the resources of foreign Governments; partly because of the far higher costs of building in this country; and partly because of the active encouragement given to foreign yards by their Governments. Thus, not only have the numbers of our ships been heavily reduced; not only are we seriously short of men to man such ships as we have; but our capacity to replace wastage, and to expand in an emergency, has been seriously compromised. It is a very grave picture, and yet I doubt if my noble friend will contradict me as to the essential facts. Worse still, we have actually become importers of ships instead of exporters. During the past two years orders to the value of £5,000,000 have been placed by British shipowners in Continental yards. All these things are the direct result of the failure of the Government to respond to the pleas that have been made to them in past years. If shipbuilding and the shipping industry are highly protected in every other part of the world and we do nothing, how can we expect to survive in face of the enormous subsidised and skilful competition set against us?

What is to be done? Instance after instance has been given of the methods by which our ships have been driven out of trades originally built up by British capital and enterprise. Let me recapitulate. We have been virtually excluded from the Baltic trade with Russia by State-owned Russian lines, which now carry the whole of our exports to Russia, and more than 50 per cent. of the imports which we buy from Russia, although, as I have said, we have enormous opportunities for bargaining. Where we buy more from Russia than she buys from us we are in a perfectly good position to say to her: "If you want us to buy your grain and timber they must be shipped to us in British bottoms." Why do not the Government do that?

There are many facets of the shipping question which are far too complex for me to understand—I am not a shipowner—and I am perfectly well aware how careful you have to be in any interference with the shipping industry. If you protect the industry in one area it may have a very adverse effect in another. But the Baltic trade, I am informed, is one in which all shipowners could combine in a protective policy. It would not affect anything anywhere else. It is a special traffic, carried on in shallow draft steamers. We have allowed that trade to go, I venture to suggest, by sheer negligence on the part of the Government. I think that is very sad. I hope something will be done about it.

We have been driven out of Far Eastern trades by subsidised Japanese competition. May I quote a few figures, which I have quoted before in your Lordships' House? Take the Calcutta-Japan trade. In 1911 it was wholly British: it is now 61 per cent. Japanese. Take the Bombay-Japan trade, also practically wholly British a year or two before the War: now 80 per cent. Japanese. This is our own area—India. Take the India-Japan trade as a whole—73 per cent. Japanese. The same story is true of the Australia-Japan trade, which is now 79 per cent. Japanese. The process is beginning also in the African trade. Nothing has been done by His Majesty's Government to check these adverse tendencies. One British line, as we know—because I raised the matter especially in this House—has ceased to ply on the Empire routes in the Pacific. The other—there are only two—must soon go under if nothing is done, because of subsidised American competition.

I remember the present Prime Minister saying something to the effect that he would never allow British shipping to be swept off the seas. But we have been swept off in many parts of the world, and nothing has been done, except reference to one committee after another. Yet this is a matter for the Government, not primarily for the shipping industry, because the shipping industry is a very divided industry, and there are differences between one place and another, sometimes between one section of the industry and another, and only the Government can lead and combine. It is a question of Imperial defence also, not only one of business. What did the American Ambassador say at the Navy League Dinner the other night? He pointed out in my hearing that the United States had found it necessary to maintain a Merchant Fleet in foreign trade because she could not and would not rely for necessities on foreign shipping. A very sound reason, I should have thought. If that is true for the United States, how infinitely more important should it be for us, who live in an island, with no great hinterland of supply, such as the United States has. Yet it is precisely on foreign tonnage that His Majesty's Government are proposing to rely.

Mr. Cross—I was going to say the almost inevitable, certainly the complacent and imperturbable Mr. Cross, but also the ill-informed Mr. Cross—said in the House of Commons in June: It is probable that we should have much more neutral tonnage available to us than was the case between 1914 and 1918. I have never found anybody else, unless my noble friend is going to agree with Mr. Cross to-day, who would be quite so happy about this. Some of us think that in the kind of war which we fear—though we hope it will not occur—there would be grave difficulty for some foreign nations who supported us with neutral tonnage in the last War doing so again. They might be subjected to instantaneous and very heavy air reprisals ii they did so. At any rate, it is not safe for us to rely upon foreign tonnage to the degree that we have done in the past. I think that will be agreed. The noble and learned Viscount, Lord Hailsham, was almost as complacent as Mr. Cross. He said: Neutral tonnage was very freely available during the War, and I have no doubt at all that it would be available in the future. It is very nice and easy to say such things if you feel like that, but many of us do not. During the whole of the last War nearly all the world's merchant ships were coal-fired, and we could allow or withhold the bunker supplies. That gave us a tremendous hold over neutral shipping. To-day shipping is increasingly dependent on oil, over which we have got much less control. The Government are deliberately, I am afraid, relying for our security upon the highly problematical use of foreign shipping.

One other matter before I close, and that is the question of compensation for war losses, The Government's proposal is that if a ship is lost the shipowner only receives back 80 per cent. of the building price less the estimated scrap value at the end of her life, and less depreciation at 4 per cent. for every year of her age. Thus, to cite an example, a shipowner who ordered a vessel in 1936, say, for £80,000, would, if she was lost after ten years' service, receive back 80 per cent. of perhaps £40,000, which is £32,000. The difference between this and her original building cost would have to be met out of his own pocket; and, in addition, there would be the factor of increased building costs to be taken into consideration. A vessel, therefore, costing £80,000 to build in 1936 would to-day, I am told, cost £128,000, and in time of war rebuilding values would probably be still further increased. The result of this proposal being put into effect would be that a British shipowner would be unable to continue in the industry, and his place would be taken by a foreign competitor. I only say that in a passing reference because I have been asked to bring it to the notice of the Government.

I do beg the Government to consider whether they should not now use their bargaining power to help British shipping. We are in the most wonderful position to do so. The balance of our trade with Russia or Denmark, for instance, or many of the Northern European countries, from whom we buy far more than they buy from us, gives us these wonderful opportunities. I am informed that to-day the German Government are beginning to insert in all their commercial agreements what is called a Press clause. A Press clause, put in plain language, means that it is part of a commercial agreement that the Press of the country with whom the agreement is made shall sing a friendly note, and they will not sign a commercial agreement without a Press clause. Ought not we to have a Shipping clause in our commercial agreements? Why should not we say to foreign countries: "If you want to trade with us you must at any rate to some extent use our British ships for that purpose?" Take our coal exports. Of our coal exports, amounting to 40,337,000 tons less than half—18,000,000 odd tons—was shipped in British ships. Surely that is all wrong. In the case of the Argentine, which is very relevant, 69.6 per cent. of the shipping tonnage engaged was British, but Greek ships constituted no less than 24.6 per cent. of the tonnage of vessels carrying British coal to the Argentine. It is unquestionably all wrong. People who pay the piper ought to have the right to call some of the tune, and surely we must begin to use the fact of our enormous purchases in order to defend what was a living, and is still a vital, industry to us.

To recapitulate, British bargaining and buying power should be used to support British shipping and shipbuilding. Where necessary subsidy should meet subsidy, I remember my noble friend Lord Zetland, in reply to me, asking in a tone of horrified surprise at my ignorance, whether I realised what it would cost in subsidies to safeguard entirely (as I advocated) British shipping. With bated breath he said—"£121,000,000." It seems that so trifling a sum would serve to secure the greatest industry we have got. We should get the money back in a month or two, I should think, if we could recover all the trade we have lost. If the Board of Trade cannot handle the situation, I beg the Government to consider setting up a Ministry of Shipping before the crisis comes. We had to come to that in the last War, and we shall have to do it again in the next war. Why not do it before? With all respect to His Majesty's Government, may I suggest that we have a little more decision and fewer committees? Mr. Churchill, in a brilliant speech in the House of Commons a day or two ago—whether you agree with it or not, it was a brilliant speech—asked what was the fault to which Ministers of the Crown laid themselves open. Answering his own question, as he is wont to do, he said, "It is a fault which amounts to a crime—of not being able to make up their minds." This fault, this "decrepitude of the will-power," as Mr. Churchill put it, is very apparent in regard to the shipping question.

Let me give examples. American competition in the Pacific is a terrible story. This question was first referred to at the Ottawa Conference in 1932. Nothing happened. I brought the matter up in this House four years later, in June, 1936, when I was told that the matter was before the Imperial Shipping Committee. That was two and a half years ago. What is the position now? It is a long time since 1932. Ultimately it was agreed to subsidise the building of two passenger liners to maintain the All-Red route across the Pacific. The cost of the subsidies was to have been shared by the Governments of the United Kingdom, Canada, Australia, New Zealand, and Fiji. Now Sir Edward Beatty, in association with Lord Craigmyle, has agreed that, so high are the present costs of building, the construction of these two liners must be postponed. After all this discussion it has been left so late that the costs are too high to build the ships. It is six years since the matter was brought forward, and the whole thing now falls to the ground.

Then there is the matter of Japanese competition. On November 11, 1936, I brought to the notice of the Government the question of Japanese competition in the Far East. I was then told that the Government had only heard about it in the spring of that year—an amazing reply; it is almost unbelievable. Surely that constitutes some reason for having a Ministry of Shipping. Ultimately the whole question was referred to the Imperial Shipping Committee. That was two years ago. May I ask my noble friend what has happened? I know of nothing that has happened. It is quite evident that, as Mr. Churchill said in relation to Palestine, these references to committees are simply "a device to save the Cabinet from making up its mind." We have now these new Committees sitting, and I do hope my noble friend will be able to tell me that as the result of their recommendations the Government may be able to come to some definite decision as to what is to be done to safeguard and protect from further loss and depletion our Merchant Navy. It is one of the most vital portions of our Imperial defence, and I hope that that may be some excuse for having detained your Lordships, perhaps too long, in order to urge that something at least should be done.

LORD STRABOLGI

My Lords, I would make a suggestion to the noble Lord who introduced this Motion. He may not know that it is possible to have a speech in your Lordships' House reprinted from the OFFICIAL REPORT at a reasonable price. His speech is so full of facts and figures that it will be well worth reprinting, if I may make that suggestion. If he will send me a supply, I will do my part in distributing it. I shall send it to the shipping ports for distribution through our organisations there. I shall not detain your Lordships long. I hesitate to speak at all in the presence of the noble Lord, Lord Essendon, with his eminence and knowledge of this subject, but I feel it necessary to give general support to what the noble Lord has said, and, in that, I am voicing the opinion of the unions concerned—that is, of the officers and men. The noble Lord, Lord Lloyd, referred to the support of the Chamber of Shipping. I refer to the support of the unions concerned, which is along the same lines.

If I may just quote from the remarks sent to me for this debate by the Transport and General Workers' Union, they say: The decline in the number and personnel of British ships appears to be causing the Government little anxiety. The argument that, because we have faster and larger ships, all is well, can soon be destroyed. In the event of war the advantage of speed would largely disappear owing to time spent in congested ports. The significant result of larger and faster ships is that much greater demands are made on a smaller number of officers and seamen, with the result that our reserves in trained and experienced seafarers are depleted. One other short quotation from their remarks: British shipping is rapidly losing ground. The Government must not allow one of our most important national assets to decay because of the individualistic outlook of shipowners. I commend that particularly to the noble Lord, Lord Essendon, when he comes to address your Lordships.

The noble Viscount, Lord Runciman, who I understand will reply in this debate, will remember arguing, with myself also, in the old days of the Free Trade-Protectionist controversy, that if you embarked on an all-round system of protection and tariffs, particularly if you included iron and steel, you would, sooner or later, have to protect your shipping. That follows naturally and inevitably. We have the same trouble with agriculture to-day. When you protect everything else, you must not leave out great key industries like shipping and agriculture. They will demand, and justly demand, some measure of protection as well. I will go further and say that subsidies are no substitute. I would ask the Government if they have any other example of a highly protected country, as we are today, not protecting its shipping. I speak of protection in the economic sense; I will come to military protection in a moment, particularly for the benefit of the First Lord of the Admiralty.

The only constructive suggestion with regard to this part of my remarks which I propose to offer to your Lordships, not already made by the noble Lord, is that I would like to support the proposal canvassed lately, which I think is a very good one, of forming a reserve of older ships which would otherwise be laid up and decay or be scrapped, both tramps and liners. If we should be involved in war, we should require every ton of shipping we could lay our hands on. Many of these vessels would be serviceable for many years if properly taken care of. You would have to place care and maintenance parties on board, not just a couple of old men as watchmen. I believe that that would be a very useful reserve, and I commend it to the Government as a measure to be taken.

Just one word with regard to the policy of the Party for whom I speak. Our eventual policy, as the noble Lord, Lord Essendon, knows very well, is to make all transport by land, sea, and air a coordinated public service. We entirely support the proposals for a separate Ministry of Shipping. I presume the Minister, after the official scheme is working, would be a Minister under the Cabinet Minister for Transport. That is our policy. It will have to be done gradually and carefully, of course, but it follows inevitably, I think, from the arguments put forward with such eloquence and cogency by the noble Lord who introduced the Motion. I am expecting to see the noble Lord preaching full-blooded Socialism very soon. If British shipping cannot hold its own without Government assistance, then we have a right to demand that the people as a whole should receive the benefit of that assistance.

I particularly want to draw the attention of your Lordships to another matter of very great importance, of which I gave prior notice to the noble Viscount, and that is the lack of protection for British ships in a military sense. I hope that in this matter I shall have the support of the noble Lord, Lord Lloyd; certainly I hope to have the support of the noble Lord, Lord Essendon. Our ships have been piratically attacked during the last two years off the Spanish coast and on the high seas and in Spanish harbours; they have been sunk, damaged and detained, and our seamen and officers have been murdered, and our Government are too dilatory either in asking for compensation or in having these disgraceful hostilities against our shipping stopped.

I understand that Sir Robert Hodgson came back from Burgos yesterday, and that he had been there on this very question of compensation. May I ask the noble Viscount who replies for the Government what he brought back? The noble Lord, Lord Lloyd, did not mention British shipping to that part of Spain which is under the rebels. Before this horrible civil war broke out in Spain, 41 per cent. of the ships trading to that part of the country which is now under General Franco were British. That has fallen to 20 per cent. The year before the civil war 98 British ships and 73 German ships visited these ports. Last year only 39 British ships and 121 German merchant vessels traded with these rebel ports, so the policy of appeasement applied to General Franco is not bringing us any direct advantages in the way of trade. The terrible part of this business is that our shipping seems to be singled out specially for such attacks.

Your Lordships may have seen the story of a recent observer back from Barcelona who went through an air raid. They were talking about it afterwards in a cafe, and some one said: "Two ships in the harbour were bombed." The Englishman asked: "What nationality?" The reply given to him was: "Why, of course British; they don't attack others." There have been, according to the Shipowners' Committee who supplied me with the information, 140 attacks on British ships, 12 attacks on French ships and 8 attacks on ships of other countries. Really it does seem from those figures that the policy of attacking our shipping was deliberate and done for a certain purpose. To my mind the final humiliation is that the Government, our Government, are supplying these rebel pirates with lists of British ships which are not trading to Spain but which are bringing peaceable cargoes on the high seas to our ports, accompanied by the request that these ships should not be attacked, in other words saying: "You can attack all others." That is the lowest depth to which the Government have yet sunk.

I gave the noble Viscount a list of some of the attacked ships of which I happen to have had particulars given to me. I have photographs of documents and reports of Masters and full details about them, but I will not trouble your Lordships with all of them. I will only mention the particular cases which I have sent to the noble Viscount, Lord Runciman. There was the s.s. "Stanforth," bombed on the high seas on August 20; the s.s. "Lake Lugano," sunk in Palamos harbour on August 9; the s.s. "Yorkbrook," arrested on the high seas October 5, 1937; the s.s. "Stanwold" arrested on the high seas on September 31, 1937; the s.s. "Caper" arrested on the high seas on August 10, 1937; ship plundered and three of the crew murdered by rebel guards; the s.s. "Bobie" arrested at sea, September 29, 1937; the s.s. "Dover Abbey," arrested September 29, 1937, the same day; and two additional cases, the "Seven Seas Spray" with a non-intervention observer on board arrested in Santona harbour by the rebels on August 27 last year; officers and crew imprisoned in the hold, Master and Non - Intervention Committee observer imprisoned in the chart-room, officers and crew not released till September 8, ship finally released October 30; and the s.s. "Molton," captured outside territorial waters on July 14 last year and not released till September 7.

These are a few only of the cases of which I happen to have the full details, and of which I gave notice to the noble Viscount. The figures that I have for the total number of British ships attacked since the beginning of the civil war show the number to be 140, of which 19 have been sunk; 10 British ships have been captured and illegally detained. I see from an answer given in another place yesterday that the Government themselves admit that there have been 23 attacks with damage in the Mediterranean, six in the Bay of Biscay on the high seas; and in territorial waters, 87 in the Mediterranean and 4 in the Bay of Biscay. The Government, I am glad to see, regret—they do regret this time—to say that 48 officers and men and 3 non-intervention officers have been slaughtered and 64 officers and men and 3 non-intervention officers wounded in these attacks. That is a most extraordinary series of insults to the British flag.

If your Lordships will bear with me for a moment I would like to quote the particular case of the s.s. "Caper." It is rather an extraordinary case. I have the full account here from the Master. On August 5 she left Oran for Gijon. Ten miles off shore and about twenty-two miles from Gijon she was stopped by shots being fired at her and she was arrested by two rebel warships. She was taken into Ribades under armed arrest and all the ship's papers, register, articles, manifest, bills of lading and log books were confiscated. I hope the noble Lord, Lord Essendon, is burning with indignation when he hears this. This is a ship seized right out at sea and her papers confiscated. That is not the end. On August 11, the British Consul from Corunna paid a visit to the ship and remained there till August 24. On August 24 the ship left Ribades with a prize crew on board for Ferrol. She arrived and anchored at Ferrol on August 25 and six armed guards were left in charge.

Then I will quote the Master's words: About 8.45 p.m. I was in the chart-room below the bridge and heard a rifle shot fired and no other commotion at all, and in a few seconds all the guards were rushing for the bridge and firing their rifles as fast as they could. I myself thought at first that they were signalling the shore. I came to the door of the chart-room, saw a man lying on the deck and stepped out to help him, but as I got near him I was shot down with a shot through the right breast, and as I staggered to my feet another shot passed close to my right ear and went through my cap. I got into the chart-room and tore off shirt and singlet, and I was bleeding badly. I rushed down to the cabin calling for assistance and found nobody there, when another shot came through a cabin port, hitting the cabin lamp. I got under the table till in about twenty minutes time officials and assistance came off from shore. Several naval officers got aboard and questioned me and I was taken ashore to hospital. Three of the crew were found shot dead— These were British subjects serving in a British ship, about whom the noble Lord, Lord Lloyd, is rightly anxious. The captain continued: the body of the bo'sun being found on the bridge. The Spanish guards allege that he came up on the bridge and took hold of a rifle, but myself, I think he had come up on the bridge to sleep, as he had been sleeping up there at Ribades and he didn't know there were two guards sleeping up there. The crew were all taken ashore and lodged in the arsenal prison, where they were kept until August 29. Then he goes on to say that eventually he was allowed back with his crew and he found that the ship had been plundered.

Every bit of the ship's provisions and stores had disappeared, including all cigarettes, cabin utensils, plates, cups, saucers and glasses, all cutlery, blankets, and sheets and beds, cabin and chartroom lamps, and rulers and dividers for charts. The crew allege that they were taken ashore on the night of August 25, tied together and coupled with rope. Finally, on November 13, he managed to get away and he pays a tribute to the British Consul, Mr. Gayatt, for his kind courtesy and untiring assistance and service to us during our captivity and his unfailing efforts to obtain our final release from the Spanish authorities. May I ask if we are pressing for compensation? May I Luther ask if we are pressing for a cessation of these cruelties to our fellow subjects?

Things were not always like this, my Lords. There was a similar situation in the history of our country in the civil war between Spain and her South American Colonies in 1822. Spain attempted to exercise a blockade contrary to the rules of war. Admiral Rowley—a great name in the British Navy—who was Commander-in-Chief in the West Indies, replied as follows to the Spanish Admiral: The law of nations as hitherto asserted, has been recognised by the Government of His Britannic Majesty, as also other European Powers, and it behoves your Excellency to be careful how you violate it. Should you do so by seizing British vessels, which have not acted contrary to known law, I shall immediately reclaim them with compensation for any loss or damage they may sustain in consequence thereof and, if that be denied, I shall he under the necessity of directing them to be retaken, by force if necessary, and the vessel of war by which they have been molested to be brought into Port Royal where she will be detained until satisfaction he rendered for the outrage. For the information of the noble Viscount, I will say that that is to be found in State Papers, Vol. 10, page 943. That is the sort of language we ought to be using to-day.

I will come to a more recent case, that of the Venezuelan Civil War at the beginning of this century. This is important because conditions then were very similar to those prevailing in the waters near Spain to-day. There was a Revolution in 1899, as your Lordships will remember, and Castro seized power in Venezuela and became President. He was recognised by the British Government, but his opponents maintained a civil war against him. Their forces included a British passenger vessel which had sailed to South America under the British flag and had then been converted into an auxiliary cruiser. This led Castro to believe that the British Government were assisting his opponents, and he seized various small British craft belonging to the neighbouring island of Trinidad and at that time in Venezuelan waters on the ground that they were assisting the insurgents. One vessel, the "In Time," was sunk by a Venezuelan gunboat in a Venezuelan harbour and another, "The Racer," was captured in Venezuelan territorial waters. The total claims in regard to all vessels concerned amounted to £5,500. So important, however, did the British Government consider the principle of protecting British vessels that they immediately instituted, together with the German squadron in the Atlantic, a blockade of the Venezuelan coast. This blockade was not withdrawn until the Venezuelan Government agreed to pay full compensation for the shipping claims and to submit other claims to arbitration. And, of course, we finally got the money.

The Government of that day was a Conservative Government, with Mr. Balfour as Prime Minister, the late Mr. Joseph Chamberlain and the late Sir Austen Chamberlain being members. I often wonder what has happened to the Chamberlain family since then. This matter, of course, led to protests from Washington on the ground that we were violating the Monroe doctrine, and Lord Lansdowne, who was then Foreign Secretary, sent a formal Despatch to the British Ambassador at Washington. It is so important that I beg leave to quote it. The Despatch is dated January 13, 1903, and it is to be found in State Papers volume 96, pages 439 to 506. The noble Viscount, Lord Runciman, by the way can claim an alibi for most of the time covered by the noble Lord, Lord Lloyd's complaints, but other members of the Government, and particularly the First Lord, cannot do so. This is what Lord Lansdowne said in that Despatch: … some of the claims are of a kind which no Government could refer to arbitration. The claims for the injuries to the person and property of British subjects owing to the confiscation of British vessels, the plundering of their contents and the maltreatment of the crews … are of this description … The principle at stake is of the first importance and His Majesty's Government could not admit there was any doubt as to the liability of the Venezuelan Government in respect of them. Now, I understand, the plea from Burgos is that they cannot pay compensation and that we must wait until the war is over, and apparently the Government accept that plea. In those days we insisted on compensation and got it. Now, when British ships are detained or sunk and their crews are maltreated, not a penny of compensation is paid and the British Government are apparently quite happy.

If I may, I will quote one other speech made by the noble Marquess, Lord Salisbury, who has held high office in the State and has led your Lordships' House with such ability in the past. Speaking at Sheffield on January 30, 1903, the noble Marquess said: It might be said that the assaults upon British property and British liberty were small interests That might be so. But we were just as bound to the poor fishermen of Trinidad and to maintain the interests of commerce in those seas as to protect South African millionaires. The very essence of our Empire depended upon the security with which our fellow subjects in all parts of the world knew that they could appeal to the Mother Country and that the appeal would not be in vain. This was supported by the late Sir Austen Chamberlain, who was then Postmaster-General. Speaking at Birmingham on January 31, 1903, he said: Could any Government have shown more patience or a greater desire for a peaceful solution of the question? Would the nation have been satisfied with any Government which had done less to maintain British interests or protect British subjects? Well, we on these Benches are not satisfied that this Government has been jealous to guard British interests or to protect British subjects. This question of the protection of our shipping, where-ever it may be, is important because there may be other civil wars, other commotions, in which our ships may be attacked or sunk. If we do not protect them, what is the use of the noble Lord, Lord Lloyd, pleading for the sustenance of British shipping? What is the good of the noble Lord, Lord Essendon, presiding over committees and doing, as we know he does, all he can for British shipping, if the Royal Navy is not allowed to protect our ships and sailors sailing the oceans on their lawful occasions?

LORD ESSENDON

My Lords, the shipping industry is always profoundly grateful to the noble Lord, Lord Lloyd, for the interest he takes in their affairs and his remarks to-day show that none of his enthusiasm has abated. Generally speaking, I imagine that there is common agreement on the necessity for a strong Mercantile Marine for maintaining the trade of the country and indeed for preserving the very life of the nation in a time of emergency. General Smuts, in a speech he made early in the year 1918, said: The British Empire is not, like Germany, Russia or the United States, a compact territorial entity; it is scattered over the globe and entirely dependent on the maintenance of communications for its continued existence. The noble Lord who introduced this Motion had something to say about the amount of tonnage, the falling-off in the tonnage of the British Mercantile Marine and the increase in foreign tonnage. I could get him a lot of statistics about that, but in the few remarks I make to-night I do not propose to give any statistics, because the Committee of which you have heard something will issue their report very shortly, and you will be full of statistics from that report, I can promise you.

But I can put it very shortly, as far as the tonnage is concerned, by saying that since 1914 foreign tonnage has practically doubled itself and British tonnage has practically remained stationary. To put it in another way, foreign tonnage has increased by 21,000,000 tons and British tonnage has decreased by about 1,000,000 tons. That is thanks to the development of economic nationalism in the other maritime countries of the world, in many cases with the assistance of subsidies. In other words, the other nations have become more ship-minded. On the other side of the picture, we have a falling-off in international trade. We have tariffs, quotas, exchange restrictions and all kinds of things to combat. More recently another evil has raised its head, a very serious evil to the shipping industry: bilateral agreements, or what is better known as barter. You will generally find that those agreements mean that the cargo has to be carried in the ships of the countries concerned. The improvement which came about in the year 1937 was not, unfortunately, maintained, very much, I must admit, to my own surprise and disappointment. I thought we were in for a longer period of prosperity than we have had. Anyhow, the temporary improvement automatically terminated the tramp shipping subsidy, and, as it turned out, terminated it prematurely. It is only fair to say that the noble Viscount who is going to reply to this debate had a great deal to do with bringing that tramp shipping subsidy into existence, and the shipping industry will always be very grateful to him for his interest in that connection and for what he did for them on that occasion. In addition to that, the liner companies and trades have had a serious set-back.

In dealing with these matters it is only fair to state that these shipping questions were debated in another place a little while ago, and following on the debate the President of the Board of Trade repeated certain assurances that had been previously given to the effect that the Government recognised the vital importance of the shipping industry of this country and were prepared to help it in any way they could, even to the extent of granting financial assistance. The President went on to say that, in an industry so complicated and with ramifications so vast, the first move should come from the industry itself and that the industry should, with the knowledge of its difficulties, itself see and think what were the possible ways of helping itself. He gave the assurance that when it had performed its task and brought to the Board of Trade its results, it would not find either himself or the Government to which he belonged unsympathetic to the claims of an industry upon which, he admitted, the greatness of Britain was built in the past and upon which it must rest in the future.

Following upon that declaration the Chamber of Shipping and the Liverpool Shipowners' Association appointed a fact-finding Committee, and it so happened, as the noble Lord has indicated, that I had the honour of being Chairman of that Committee. We are now busy collecting our facts; I might even go further and say that we have collected the facts and that we are now busy collating them. That Committee was appointed at the end of July. You may feel that there has been a good deal of unnecessary delay, and to show you that this is not the case I should like to tell you what has been involved. It was the middle of August before we were able to get out our questionnaire to the industry; then the holidays intervened and there was some delay in getting our replies from the Committee members of the industry. We had to get reports in, not only from liners, but also from tankers, tramps, coasters and the near Continental and Mediterranean trades. We had to prepare reports on statistics of shipbuilding, and, I might almost say, on a hundred other matters. These reports are mostly ready, as far as the facts are concerned; and, the facts having been obtained, are being submitted to another Committee, of which also I happen to be Chairman and which will make recommendations to the Chamber of Shipping and to the Liverpool Shipowners' Association. That is what has been done with the facts. The noble Lord talked about next spring, but we are aiming to have these reports out by the first week in January.

LORD LLOYD

I meant the time when the Government would form a decision on what to do. I said it would be very optimistic to hope that they would form a decision by the spring; I thought it would be about June.

LORD ESSENDON

I beg pardon; I thought the noble Lord meant that it would be spring before the reports were ready. We aim at getting these reports out in the first week in January. Obviously I cannot anticipate any of the recommendations that will be made by the shipping industry following on the presentation of these facts, but I can assure the noble Lord that everything he has said and that others say this afternoon will be taken into consideration and the whole matter will be dealt with as quickly as possible.

I do not think my noble friend missed very much in his comments on shipping to-day. I had expected him to say something about the Rumanian wheat question, because he had a letter about it in The Times the other day. I think that is the only matter he did not refer to: the conveyance of British Government cargoes in British ships. It is safe to say that if that Rumanian grain had been shipped in British ships, it would not have been captured by General Franco and taken into the Balearic Isles. It may be that the Greek ships were practically on the spot. I quite agree that for prompt shipments it might have been desirable to fix two or three Greek ships; but inasmuch as, out of the fifteen or eighteen ships which were chartered to load in the Danube, there were only three British ships, the real reason seems to have been that the Greek ships were willing to carry cargo, which they probably could do, at one or two shillings a ton cheaper than British ships. British ships could have gone out in time before the closing of navigation on the Danube on December 20. There was plenty of time, but they were not prepared to go out in ballast to lift these cargoes at a loss.

In similar circumstances other countries insist on carriage of goods in vessels of their own nationality. The German and Italian Governments, in their purchases of meat, wheat, wool and other commodities, make a point that they must be carried in German ships, always assuming that German ships are available. In one of the fact-finding Committees only last night I was reading reports that German rice shipments are controlled for German flag carriage unless no German ship is available; thus, while German ships can carry rice freely to British ports, British ships cannot carry rice freely to German ports where these Government purchases are made. Instances of this kind, I might say, could be multiplied indefinitely. It is quite true, as I have said, that the rate on Greek ships is cheaper than on British, but even at a higher rate I suggest that these cargoes might very well have been carried in British ships. The operating expenses of Greek ships are much lower than those of ours, and I cannot too strongly emphasize this point, that the reason is very largely the higher standards established by the British Government, to which British vessels have to conform. I am sure my noble friend opposite will not be sorry to hear me say that I am not regretting the standard of safety, or the standard of manning or the standard of wages on which British ships are operated under present-day conditions, but I do suggest that British ships should receive the full backing of Government Departments on every possible occasion, so that in that respect at least they may enjoy the same measure of support as their foreign competitors.

There was one important point which the noble Lord dealt with, on which I must say I quite agree with him, and that is with regard to the Pacific trade. It is, I think, six years since the matter was first brought to the attention of the Imperial Conference, and after some four years of rather desultory conversation the matter was referred to the Imperial Shipping Committee in June, 1936. They gave their report in October, 1936, and it is a lamentable fact, but none the less correct, that had those boats been constructed over two years ago they could have been running now at very much less cost than the cost of building to-day. I appreciate that there were a number of Governments to consult, as apart from this country it concerned the Canadian, Australian and New Zealand Governments, all of whom were affected by this matter, and obviously negotiations had to take place between them all. But the pity of it is that somewhere in those countries there was not sufficient imagination to say: Let us get on with the building of these ships, and negotiate all the details during the twelve or eighteen months while the ships are being built. That would have been an unusual course, perhaps, but we have had during the past few weeks experience of how a departure from tradition can be very useful. It is, I know, easy to be wise after the event, and it may be there was some reason why that could not have been done, but the outstanding fact remains that had the ships been constructed two years ago, they could have been trading now at considerably less cost. I can well imagine the shipping companies concerned saying: "He gives twice who gives quickly."

There is another matter to which I would like to draw your Lordships' attention, and that is the question of shipbuilding. There is no doubt that the condition of shipbuilding in this country is exceedingly serious, and I think I can best illustrate that by quoting a remark made to me by a member of the Shipping Federation a few days ago, which very much surprised me. He assured me that some few years ago, prior to the shipbuilding rationalisation scheme, 46 per cent. of the berths at that time were vacant, and that now, after the rationalisation, and notwithstanding the fact that there is a large amount of Government work, the percentage of unemployed berths has gone up to 55 per cent. To me it was a most amazing figure. The shipbuilding industry is unfortunate in that we have the paradoxical situation of high prices of construction on the one hand, and low rates of freight in the shipping industry on the other hand, operating simultaneously.

In other words, the present position is to some extent two opposites, because on the one hand world conditions caused the rearmament programme, and the same conditions on the other hand are responsible for the depression in trade. The shipbuilding industry cannot be blamed for this. Like the shipowners they have a lot of leeway to make up. Like the shipowners, they have been hampered by rising costs and also by protracted deliveries on account of the difficulty in getting materials. They certainly cannot be accused of having exploited the situation. Possibly, looked at from the purely selfish point of view, shipowners might say that they do not want to encourage the building of ships because the fewer the ships the more likelihood of a rise in freights, but this would be a very narrow and selfish view-point to take, because in my opinion the shipbuilding and shipowning industries must stand or fall together.

It is, I think, a most deplorable fact that at the present time 7,000,000 tons of shipping are being built abroad for British shipowners, when in normal times we might expect to get 10,000,000 tons of foreign orders in this country. The shipbuilding and shipowning industries are each dependent upon the other, and unless something is done for the shipbuilding industry there will be a great risk of their losing their skilled labour, and certainly there will be no inducement to apprentices to come into the yards and take it up as a career. The maintenance of the Mercantile Marine is a great necessity, and that maintenance cannot be kept up if the shipbuilding industry is imperilled.

There are one or two other matters to which reference was made this afternoon. The noble Lord who introduced the Motion spoke of the necessity of using our bargaining powers, and that is a matter which the Committee of which I am Chairman is taking under its examination. He spoke also of a reserve of ships, and I think it would be an easy matter for the Government to decide that there should be such a reserve in return for any assistance given to the industry as a result of our report. They might stipulate that any ships which were being sold should first be offered to the Government, that these ships should be held at the disposal of the country if an emergency arose. The shipowners could look after the ships without charging anything and they would be ready in an emergency.

LORD STRABOLGI

Might I ask the noble Lord a question on that? Would he support legislation to that end, or would he rely on a purely voluntary scheme?

LORD ESSENDON

I think it could be done voluntarily between the industry and the Government. The noble Lord also referred to General Franco. That is more or less a political question, and I would rather leave it to the noble Viscount who will reply on behalf of the Government to deal with it. Obviously British ships are entitled to full protection on the high seas, and are entitled to protection against being deliberately bombed, even when they are in war ports, but it is inconceivable to me that the British Government will not insist upon full compensation for any damage which may be done to British ships. As it is a political matter, I prefer to say nothing more about that. I think, however, that sufficient has been said to show that the Committee appointed by the Chamber of Shipping and the Liverpool Steamship Owners' Association have plenty of work and plenty of material to keep them busy, and, as I have said, all the matters referred to will be taken into careful consideration. I think I can say this, that I am quite sure the shipping industry will not put forward any suggestions that are unreasonable, or that cannot be justified, but I do hope that prompt consideration will be given to whatever recommendations they may make. The worst thing that could happen to the industry at the present time is procrastination or undue delay. I do hope that when our report comes forward it will be fully considered, for something is urgently required to be done.

THE LORD PRESIDENT OF THE COUNCIL (VISCOUNT RUNCIMAN OF DOXFORD)

My Lords, it is always a great pleasure to listen to my noble friend when he addresses the House on the technicalities of his great industry, and I am sure we fully appreciate the assurances which he has given this afternoon that whatever proposals are brought forward will be sympathetically considered, and that support will be given by the shipping interests as much as possible to aid not only shipping but shipbuilding. We have had a debate this afternoon which has ranged over very wide fields which concern the British shipowner and seaman, but no part of it is of more importance than the discussion initiated by my noble friend opposite, Lord Strabolgi, on the losses which have been incurred in the Spanish region, the various cases which have been dealt with, and the very grim facts which have been elucidated in the course of inquiries by the Government before to-day. Let me point out what information we have and wherein it differs from that of the noble Lord.

He first cited the case of the "Stan-forth." She was attacked on the high seas on August 19 last. We communicated with the Burgos authorities. They were informed that His Majesty's Government must regard this attack as deliberate and enter a strong protest against such an attack on a British vessel on the high seas; they must also demand an immediate investigation of the incident. His Majesty's Government are now considering whether the case should be investigated by the proposed Commission of Inquiry into deliberate attacks on British ships. I must add that no damage was done to the "Stanforth." The next case he mentioned in his communication to me this afternoon was that of the "Lake Lugano." She was attacked by aircraft at Palamos on August 7 and 8 this year. His Majesty's Government protested, reserved the right to claim for the damage caused, and stated that in their view the case was one for the proposed Commission of Inquiry. The Burgos authorities in their reply accepted the latter contention. Then there is a batch of four vessels, the "Yorkbrook," the "Stanwold," the "Dover Abbey," and the "Bobie." News of the seizure of these vessels (in no case is it proved to have taken place on the high seas) and of their detention reached London early in October, 1937. His Majesty's Government demanded the immediate release of the vessels, and as a result of their representations orders for the release were in fact given. The ships sailed at the end of October and in the first days of November.

The next case was that of the "Caper." This vessel, which was condemned as a prize in September, 1937, was subsequently released as a result of the general representations which were made by us to the Burgos Government. While the ship was under detention an affray broke out between members of the crew and Spanish policemen on board, in the course of which three sailors (one Russian, one Dutchman and one Greek) were killed, and the Master was injured, as my noble friend says. This matter was taken up energetically with the Burgos authorities by His Majesty's Government, who requested a full inquiry into the causes of the incident and reserved the right to protest and claim damages. When the results of the inquiry, together with the Master's statement, were subsequently communicated, His Majesty's Government concluded that the evidence was not in fact sufficient to justify a protest to General Franco's Administration. There is no evidence that the "Caper" was plundered, as has been alleged.

The next case is that of the "Seven Seas Spray," detained at Santona at the end of August, 1937. His Majesty's Government protest al and requested an investigation of the reasons for detention. Orders were subsequently given at the end of October for the vessel's release. There is no information regarding the alleged imprisonment of the officers and crew in the hold. Finally, there is the case of the "Molton," captured on July 14, 1937, when inside territorial waters. The circumstances were complicated by the fact that the Nationalist cruiser which captured her by firing two warning shots was outside territorial waters at the time. The incident was witnessed by H.M.S. "Royal Oak," which, in accordance with instructions, refrained from preventing capture within territorial waters. His Majesty's Government requested the immediate release of the "Molton," and reserved the right to claim. The crew were forbidden access to the shore, but otherwise were at liberty and well treated. The ship and crew were released on September 6.

It will be seen from that list, which I have read carefully to the House, because I do not wish to commit any inaccuracy, that the tales which come here will not always exactly stand critical investigation. While I am fully alive to the risks which are run to British rights and which may affect them in the future, I think I must say hat I cannot believe that in any one of these cases the decision taken by His Majesty's Government was failing in energy, or failed to accord with the correct policy which we should adopt with an eye to the future.

LORD STRABOLGI

May I ask for an answer to the question I put to the noble Viscount as to whether we are getting any compensation for these illegal detentions? Has Sir Robert Hodgson got any satisfaction from Burgos?

VISCOUNT RUNCIMAN OF DOXFORD

I have no doubt that that will be an item which will form a subject of claim. I will now come to the discussion which was initiated by my noble friend Lord Lloyd. Lord Lloyd painted for us a very gloomy picture of the position in which we now stand, owing to our shortage of tonnage and the difficulty of filling up the gaps. I can assure him that no one feels that more intensely than I do, and as I travel up and down Tyneside and see the vacant berths there, I wonder how it can be. There are three explanations, but only one that is of major importance. The first is that shipowners will not place orders for new ships unless they see some prospect in the near future of making a profit out of the running of them. That in itself makes them dependent upon the freight markets. If the freight markets are depressed, as they are to-day, down to a much lower level than they have been for the last two years, then it is quite certain that they will reluctantly incur the liability of placing orders for new vessels on the stocks.

The second thing that has left the shipbuilding industry in a position of great embarrassment is that their costs are so heavy nowadays in material, auxiliary engines, and wages that it is little wonder that prices have gone up, as I think the noble Lord mentioned, something like 50 per cent. I am sure everybody will be reluctant to see any attack made upon wages and their present high standard level, least of all the noble Lords opposite. But at the present time we are paying the highest wages to mechanics, shipbuilders, shipwrights, and carpenters in Europe, and the effect has been seen in the quotations which are made from time to time for new ships. In the case of material, there was a risk at one time of the cost of steel remaining at a level which would be detrimental to the steel users. I am very glad to say that only during the last few days the announcement has been made by the steelmasters that they are reducing their schedule of prices by a very considerable percentage. That will redound to the credit of those who build. I have no doubt that these three points will be regarded by the shipping industry as a fair explanation of the height to which prices for new ships have gone during the last two years, and of the impossibility of filling that gap unless far larger sums of money are to be rendered available for the increase of their fleets to the shipping companies engaged in all the many branches of the industry, with its ramifications of coastal trade, tramps and liners.

In drawing attention to this fact, I come to the second point in what I have to say—namely, that we should, in view of the fact that shipbuilding is dependent on shipping, do what we can to enable the shipowners, I will not say to increase their dividends out of subsidies, but to make good their depreciation. If a concentrated attack were made on the depreciation accounts of our various companies, whether they are cargo boat concerns, passenger lines, or the humble coaster and tramp, we should certainly have to provide them with the means of filling up their gaps. I shudder at the thought of the calculations that will have to be made in some directions. For years no depreciation was paid or earned by some of the best-known of our great concerns. If assistance can be given to them to deal with their depreciation accounts and to restore their reserves, they will, I trust, be able to provide the shipyards with larger orders and bring about a renewal of their fleets.

I should like to say in connection with this that I have been examining only within the last two or three weeks a scheme proposed by Mr. Philip Haldin. Mr. Haldin is one of our most able younger shipowners in the City. He is the Chairman of Lamport and Holt and I think of the Court Line as well, and he has a very close knowledge of the conditions that govern most branches of the shipping industry. I never believe anybody when he says he knows all about shipping for I know that is impossible. Mr. Haldin, in enunciating his scheme, does not do so with any idea of providing proposals which outstrip the proposals of the Chamber of Shipping. They are most nearly akin to them. His scheme practically amounts to this. He would take vessels which would normally be laid up and bring them under the control of a company authorised to hold them in various places of laying up. The amount of money to be provided for this purpose would come as to 10 per cent. from the shipowners and as to 90 per cent. from the Government. The Government would be free to use these vessels in any time of emergency, and they would remain, as the noble Lord opposite said, in charge of a shipkeeper and perhaps a dog. The holding of them in the many places where it is possible to lay up tonnage is a very simple physical operation, and the proposal made by Mr. Haldin is a very simple financial operation; but of course it must have the approval of the Government as well as of the shipowners. Whether they will adopt Mr. Haldin's scheme or not I do not know. It may be they see serious objections to it. I know it is criticised in some quarters, but it is one of the concrete proposals the Government must take into account at the present time if they are to exercise their ingenuity over a broad area.

LORD STRABOLGI

May I ask the noble Viscount one question? I understood him to say a shipkeeper and dog would be placed on board. I suggested a care and maintenance party to keep everything in order. I do not know how long it is proposed these ships will lie up.

VISCOUNT RUNCIMAN OF DOXFORD

That is the way in which the ordinary tramp is provided for if she is laid up. They do not keep a maintenance staff on board these vessels. It is necessary to have some staff on passenger vessels in order to look after household equipment, but in the ordinary tramp it is not necessary to have a maintenance staff. My noble friend must from time to time have seen vessels laid up at Dartmouth and elsewhere. If he had gone through those vessels lying there for years he would have found that only in the passenger vessels was a staff provided. These details of Mr. Haldin's scheme are open to criticism, and may be discussed with good effect.

May I point out at this stage what has happened over the Matson Line? The Matson Line case is one that provided the country with a good illustration of how difficult it is to operate with any rapidity in the extension of schemes which are partly Socialistic—none the worse for that perhaps—but are the only means of keeping alive British interests on difficult routes. The Matson Line runs all round the world in one way or another. They keep up a constant service from the west coast of America to New Zealand and Australia. The proposal made some few years ago was that there should be some co-operation on these routes and that in that co-operation the Government should assist the big British line which runs from Canada to the Antipodes. The result of that was, not a brief, but I am afraid a very long discussion with the head of the Canadian Australasian Company and the representatives of the four Governments concerned. It is impossible to work a scheme of this kind merely supported by one Government, and one Government alone. Indeed it would be unfair, I submit, to choose one route, and one route alone, for such treatment. There were concerned in these proposals the Governments of Canada, Australia, New Zealand, and ourselves, to say nothing of the parent companies of the Canadian Australasian line which came in as separate entities. It was found on close examination by the Imperial Shipping Committee, which performs very useful services to the shipping industry, and is not one of those committees that the noble Lord looks on with contempt—

LORD LLOYD

Impatience.

VISCOUNT RUNCIMAN OF DOXFORD

They set to work to examine every detail of the working of the proposals, and ultimately they made up their minds that they must get a quotation for new ships. One noble Lord this afternoon said that if only the orders had been placed two years ago it would have been possible to have built the ships at a very much lower price. I do not knew how much lower the price would have been two years ago, but it is a very easy thing to mistake the shipbuilding market. Lord Essendon must often have seen mistakes in judgment with regard to new ships which have cost shipping concerns large sums of money. I need not remind him of what happened shortly after the War when, on every hand, we were urged to build new ships for our companies. As a matter of fact these ships built after the War became nothing but a curse to us, and it was a most pitiful thing to get rid of them at a dead loss rather than have them hanging around our necks losing money year after year. I do not know whether a bad shot was made at the new building costs for the ships which had to run from Canada to New Zealand, but it is not at all unlikely, and indeed it would be in complete harmony with what I have seen happen in many trades many times in the past.

This debate has ranged over such a wide field that I feel I must detain your Lordships for a few minutes more while I make reference to some important subjects raised in the course of the discussion. First of all let me say with regard to manning that, while very much alive to the fact that the number of available officers, sailors, and engineers has gone down, and that it will be impossible for us to provide the same number of men in the near future for Royal Naval Reserve as it was in 1914, I would point out that there are good reasons to explain the drop in the numbers. In the first place, sailing ships have almost entirely disappeared and with them has gone a considerable quota of our man-power. The number of sailors that can be obtained nowadays to sail in a square-rigged ship is very small indeed, and as for the little coasters they are scarcely seen round our coasts.

LORD LLOYD

Perhaps the noble Viscount will give us the reasons why the little coasters are so little seen along our coasts?

VISCOUNT RUNCIMAN OF DOXFORD

For one thing a sailing ship has a poor chance in competition with a steamer. I am afraid one cannot put all coasters into one category. As I mentioned a little earlier in my remarks, the variety of the ownership and of the trades in which these vessels are engaged is very wide, but that has not kept them on the seas. They seem practically beaten in open fair competition, and very largely by steamers which fly the British flag and run purely British services. The second thing is that the substitution of oil for coal has made an immense difference to the number of people who are required to man our ships, and especially our larger ships. I have had before me only to-day a table showing the experience of ships which have burned both oil and coal, and the reduction in the numbers employed when the turnover from coal to oil came was very material. One of the most serious facts with which we are faced in future is that oil is taking the place of coal. Unfortunately we are having to pay for it. It is hitting us hard also in the matter of employment, and there is no doubt that it will be impossible to find employment for as many men in these motor ships and oil-burning ships as used to obtain employment in the days when coal was the ordinary power fuel used.

I cannot say that I quarrel with anything that the noble Lord said on the subject of the fishing fleet. It is a remarkable fact that that fleet has gone down in numbers of vessels, and the amount of fish landed is lower than it has been for a long time past. If any means could be found for making fishing more attractive, as the noble Lord suggested, by way of increasing the number of the fish clauses in our trade agreements or otherwise, I am sure it would be favoured, certainly by myself and I have no doubt by my colleagues. They are in constant consultation with the shipping industry, and my right honourable friend Mr. Morrison is engaged not only in the troubles of the agriculturist but those of the fishing fleet as well.

I would like to add that there is no desire on the part of the Government to belittle the troubles with which we are bound to be faced in the future if we find ourselves plunged into war. I do not know that I can usefully add to what was said in another place by the Under-Secretary for Foreign Affairs, but I would like to point out that we have been taking energetic means to deal with shipping interests in the Mediterranean and elsewhere, and very shortly we shall have to face a difficult situation in the Far East. What can be done in the future depends, in my view, very largely upon what is done by the shipping industry itself. I would point out that we have not been inactive during the last few years. My noble friend spoke as though we had never done anything for shipping. We made a very great departure in giving a subsidy to tramp shipping.

LORD LLOYD

I did mention two cases.

VISCOUNT RUNCIMAN OF DOXFORD

Yes, but the importance of granting that subsidy to tramp shipping was that it had an excellent effect upon the whole of the freight markets. It enabled the freight markets to be raised to a higher level, and they have been kept at that higher level. Of course, looking back on what has happened during the last three years, it is quite possible to say that it would have been better to have left the subsidy still on the Statute Book, but with a sliding scale so that it should not be excessive when freights were up and should not be inadequate when freights were low. In the second place, I think my noble friend might have given us a little more praise for the scrap-and-build scheme. That came at a moment when it was necessary to give shipbuilding a fillip. Though it did not last long it did produce something like 50 orders, a material amount at that time, and it did enable also some companies to add to their fleets just at the moment when they most required it. Then, finally, there is the grant made to the Cunard company which enabled them to build the "Queen Mary" and the "Queen Elizabeth." These are considerable departures from our traditional policy. I do not say they ought not to be copied again, but if the noble Lord will give us time, which he is very reluctant to do, I think he may take it that there will be considerable advances made in the near future.

May I suggest to him that he made one slip in discussing this matter this afternoon? He apparently thought that the fact-finding Committee was a Government Committee. I must really correct him in this, for it must be corrected in the OFFICIAL REPORT. The fact-finding Committee is composed of three sections. One deals with trade, one is set up by and composed of tramp owners and deals with matters affecting tramp ships, and the third deals with liners and their work. These three sections of the Committee are all endeavouring to ascertain the facts. They are doing good work, but it takes some time to get together the extraordinary amount of material which is necessary in order to get a complete picture of the present state of the Mercantile Marine. When that has been obtained I have no doubt the shipping industry, like the shipbuilding industry, will make representations to the Government as to the way in which they think the situation can best be dealt with. If they do not make suggestions which are of value it will not be the fault of the Government, because the Government are prepared to lend a ready ear to any proposals which are made to them. There are the assurances which have been quoted, I think this afternoon, of the present Prime Minister, who, when he was Chancellor of the Exchequer, promised that he certainly would not withhold his support from any proposals which were made to sustain British shipping on a higher level. There is also the assurance of the President of the Board of Trade who, on two if not on three occasions, has made it quite clear that proposals for the benefit of British shipping would be gladly supported by him. And then I may mention myself as having done something in this matter already.

Now, my Lords, I think I have covered a good deal of the ground. I could not cover the whole of it, because the discussion has ranged over such a very wide field. I would conclude by saying that each of the questions, like that of the Russian trade and the trouble there is in many parts of the world which has to be met as much as possible, must first of all be the concern of the shipowners and the ship-owning companies. If they require Government assistance they have only to make their case successfully and they will find that the Government are ready to respond.

LORD LLOYD

My Lords, I should like briefly to thank my noble friend for his very courteous and interesting statement in reply to my Motion. I am afraid I must have expressed myself ill if I gave him the impression—I am afraid I did—that I thought the Government had set up the fact-finding Committee or that it was a Government Committee. I did think it was with the approval of the Government that the Committee was set up, but I did not think it was actually set up by the Government. I informed myself before the debate to make clear what the position was, so that I was under no misapprehension, although my remarks may have been incorrectly phrased.

I would say in conclusion that what we complain about in the Government's policy as regards shipping is, first of all, that they will not take the lead in this matter. My noble friend has just said again that it is primarily a matter for the shipping industry to take a lead in the matter and that then the Government will follow. I had long conversations—I do not want to mention names—with those most intimately concerned with the Pacific shipping question when they were over here, and there again a complaint was made in many quarters that the Government refused to take a lead. There were several Governments concerned. The list has been given by my noble friend, with Fiji at the end. The Dominions found it extremely difficult to come to an agreement. A very important person who was concerned in the negotiations constantly deplored to me that the Imperial Government refused to take a lead in the matter and pointed out that the Dominion Governments were not in a position to take a lead. Indeed a speech was made in your Lordships' House from the Government Bench—I cannot at the moment remember the date—in which it was stated definitely that the Government would not do so. That is what we deplore. We think the Imperial Government should take a lead. They know that the industry with its many ramifications is disunited. If the: Government are not going to look upon the industry as vital for defence but merely wait for the industry to compose its divisions, then it is going to take years and years.

My noble friend says that all they ask for is time. He does not differ, broadly speaking, from what I say in regard to the fishing industry, and he says that if measures can be devised the Government will be happy to consider them. But why have they waited until now? Why have they waited till the fishing fleet is ruined? That is the point I am making. Time is of the essence of the matter. We are in one of the greatest crises we have ever seen and that crisis is likely to last. Time is the one thing they cannot have. The noble Viscount pointed out the very obvious fact that of course shipping people are not going to build ships if they are not in a position to run them properly. That is a consideration which confronts other Governments just as much as the British Government, but foreign Governments have decided that in the circumstances at the moment, as they consider shipping vital to their defence—and how much more vital it is to us!—they will subsidise shipping, if necessary. But what the noble Viscount tells me is that it is up to the shipping industry to tell the Government what to do. I cannot feel that that is satisfactory.

The noble Viscount has gone further, and I thank him for it, in expressing a keen desire to remedy the present state of things, but we cannot help feeling that we are no further forward than we were two or three years ago. I feel a certain encouragement, as I have indicated before, because of the personality of the noble Lord who is at the head of these new Committees, but I do not think it is pessimistic to say that when they report it will be very difficult to take action on those reports for another four or five months. Where are we going to be in that time? I see no advantage in pressing this matter to a Division, but I believe that there is a feeling of great uneasiness and unhappiness and even indignation in the country about it. I do beg the noble Viscount to use all his efforts, not to secure more time, but to speed up matters and come to a decision. We are engaged in competition with countries which have all the advantages of swift action. In this country the Government are still asking for time when it is six years too late. I beg leave to withdraw my Motion for Papers, and at the same time I thank the noble Viscount for his courteous reply.

Motion for Papers, by leave, withdrawn.