THE SHIPPING INDUSTRY

HL Deb 26 October 1955 vol 194 cc49-72

4.28 p.m.

Debate resumed.

LORD LUCAS OF CHILWORTH

My Lords, to resume the debate on the Motion on the Order Paper, I think your Lordships will agree with me that the noble Lord, Lord Winster, deserves not only our thanks for putting this Motion on the Order Paper but also our congratulations on one of the most interesting speeches that we have heard in this House for quite a long time on a matter of extreme importance. The noble Lord set the tone of this debate which has been maintained at a high level by the other speakers. I am in the position of not having much to say, other noble Lords having covered nearly all the ground, but there are just one or two comments that I should like to make and one or two questions that I should like to ask.

Before I do so, may I also offer my congratulations to the noble Lord, Lord Geddes, upon a really magnificent maiden speech: it was short, very much to the point, and supported with obvious knowledge of the subject about which he was speaking. He said one important thing which has been repeated by every other speaker: that one of the troubles facing the shipowning industry is the form of taxation. That is a great problem, not only of the shipping industry, but of all industry to-day. I have always felt that the shipping industry has an outstanding case for better treatment with regard to allowances than it gets at present. The noble Lord, Lord Winster, quoted the words of one of the leading shipowners, that to-day tax-dodging, or evasion, or whatever you like to call it, is becoming almost a major industry in the country. By this time—it is now half past four the burden has, I think, been increased. This curbing of success is an expensive business which I am afraid the shipbuilding industry will have to go on suffering, though I quite understand the difficulties which it creates for the shipowner of this country.

I now come straight to what I feel is one of the principal points in this debate —it has been dealt with most adequately by my noble friend Lord Winster. The noble Lord gave figures which are, I think, exceptionally valuable and disclose a most disquieting state of affairs, in regard to flag discrimination and the fifty-fifty arrangement, a subsidy, to American shipping. This matter has been emphasised, too, by the noble Viscount, Lord Runciman of Doxford. I want to ask the noble Earl, Lord Selkirk, whether he will look into this question—it would be unfair to ask him to give me an answer this afternoon. How do all these practices line up this country with America's determination to get rid of unfair competition from subsidised exports?

I read in the OFFICIAL REPORT of yesterday a Written Answer, given by the noble Lord, Lord Mancroft, to the noble Lord, Lord Barnby—it was a long reply upon the question of export subsidies. I was going to ask the noble Earl, Lord Selkirk, whether he would be good enough to define an export subsidy, but it would no doubt be a rather long reply, and in any event it would be unfair to spring it on him at the last moment. But perhaps if I put down a Question, the noble Lord, Lord Mancroft, on behalf of Her Majesty's Government, will be able to tell us whether these practices which the noble Lord, Lord Winster, and the noble Viscount. Lord Runciman of Doxford, have so well detailed to your Lordships are in any way covered by the new agreement that we are trying to make under the General Agreement on Tariffs and Trade. Only one variation is necessary to make this practice in America a direct export subsidy.

Surely we have to put up a hard fight on this point, because if we give way on this particular issue then export subsidies will be the rule all over the world, and we shall have to enter into competition. We in this country have suffered a great deal from the export subsidies of other countries, principally Western Germany, and we cannot just turn a cheek all the time and have our precarious trade damaged in this way. I do not intend to say any more upon that particular point which has been so well covered, but perhaps the noble Earl, Lord Selkirk, will tell me—it may be that he would prefer me to put down a Question—whether the General Agreement on Tariffs and Trade should deal with this matter so far as it affects the subsidy of exports.

The next matter that I think needs underlining is that of territorial waters. This point was raised by the noble Lord, Lord Winster, and was dealt with by the noble Lord. Lord Teynham, and the noble Viscount, Lord Runciman of Doxford. Where are we getting to? Surely this matter is the subject of International Law. I speak with reservation, but I think my fears, or anticipations, were underlined by the noble Lord, Lord Teynham: that Her Majesty's Government are thinking of a compromise on this matter, by agreeing to twelve miles. I do not mind twelve miles—it means only that some of us, when we go on a ship, will have to wait a little longer for a duty-free drink. But then there is the point about oil pollution. If we increase the limit of territorial waters from three to twelve miles, does that mean that we shall then suffer another setback in our efforts to clean the seas of oil pollution?

I asked the noble Earl, Lord Selkirk, during the passage of the Oil in Navigable Waters Act, 1955, whether Her Majesty's Government intended to set up an advisory committee on the lines recommended in one of the Articles to the Convention, and he told me that it was intended to set up a committee to decide upon how this matter should be administered, and as to the details and the research. I should like to ask whether the committee is functioning.

THE PAYMASTER GENERAL (THE EARL OF SELKIRK)

I am sorry—I did not quite follow the noble Lord. The committee was to do what? I want to get the point clearly in mind.

LORD LUCAS OF CHILWORTH

Resolution 7 of the Convention says: That Governments should create national committees to keep the problem of oil pollution under review and recommend practical measures for its prevention, including the carrying out of any necessary research. The noble Earl gave me an assurance that Her Majesty's Government were going to accept that Resolution and set up a committee. I want to know whether it has been set up and whether it has started to function.

One subject which, strangely enough, has not been touched upon at all to-day by speakers is the position of our coastal shipping. I understand that our coastal shipping is in a precarious position—not so much perhaps the coastal cargo liners, but the tramps. About 85 per cent. of the tramp cargoes at the present time consist of coal. I understand that in the last five years the number of tramps built or in service has decreased by about 22½ per cent. (I speak only of coastwise shipping) and if we compare the figure with that pre-war, we find that, numerically, it is less than 50 per cent. My Lords, looking at it first of all from the strategic point of view, is it wise to allow our tramp shipping to run down at this rate? Even if we do have another war and it is of the nuclear variety, we still have to eat—unless of course the scientists are going to manufacture nuclear pills that will save us from having to import the bulk of our food.

I understand from my friends in the shipping industry that one of the reasons why the fleet of coastwise tramps has not been maintained is that mentioned by the noble Lord, Lord Winster—taxation and the very high cost of replacement. I understand that the other reason is the intense competition which coastwise shipping is now facing from inland transport, principally road transport. I should not think that would cause any surprise on the other side of the House, for we have said that in season and out. We kept on warning your Lordships during the passage of the 1953 denationalisation Bill what would happen to coastwise shipping. You cannot have it both ways. If noble Lords on the other side of the House are going to stick to Tory dogma and have an all-in wrestling match in transport, with no holds barred, then the weakest must go to the wall. As it happens, for some reason which, perhaps, shipowners know but which I cannot fathom, coastal shipping is the weakest. If coastal shipowners claim that the sea is the cheapest form of transport, why is it that the trade of this country does not use the sea more often? The coastwise trade in freight other than coal is negligible, yet we still have our roads cluttered up with abnormal loads, much to the joy of the noble Lord, Lord Mancroft, who strenuously resisted any attempt of mine to say that some of them at least should go by sea.

LORD MANCROFT

No, it is not so.

LORD LUCAS OF CHILWORTH

All the arguments were put up against it that could possibly be put up by a very fertile imagination. Unless we stop this decline in the replacement of coastwise vessels I believe that we are going to be in a very serious position, because they are essential to us in our island home—as essential as many of the other ships mentioned by my noble friend Lord Winster. I am glad he mentioned trawlers. I do not want to make comparisons, but when one thinks of the great work of the trawlermen during the war, and even now—for they fight a battle for Britain every day of their lives when they are at sea—I believe that anything that can be done to improve the conditions under which they work should be done.

Perhaps the noble Earl, Lord Selkirk, will tell me whether Her Majesty's Government are yet prepared to relieve the congestion of the roads of this country by influencing some of the heavier loads to go by sea and so ease the position which, in the coastwise liner section, I am told by the chairman of the committee of the Shipping Federation, is desperately serious. The shipowners should now follow the example of most. Chambers of Commerce in this country and beg Her Majesty's Government not to further disintegrate road transport, or the transport of the country generally, by selling more vehicles. Sooner or later there is only one salvation for the coastwise shipping of this country and that is an integrated form of transport. You will have to come to it. The Government is almost there now. I beg them to cease looking at transport through political glasses and to look at it from the viewpoint of what is best for the country. They have now come to the conclusion that by far the best thing for the country is that the British Transport Commission should own far more vehicles than was thought good for it in 1953. The dawn of enlightenment will break over this Government gradually. It is coming, and noble Lords will see that what we said from these Benches in 1933 will come before this Government ends its term of office; and, after all, there must be some joy in Heaven over sinners that repent.

The problem of tankers has been mentioned, and I should like to know whether Her Majesty's Government endorse the views that have been expressed upon the future growth of the tanker fleet. If estimates I am given are correct, by 1960 the tanker fleet will reach somewhere in the region of 52 million tons dead weight. I believe that to-day it is 41 million tons dead weight.

THE EARL OF SELKIRK

Is the noble Lord referring to the world tanker fleet?

LORD LUCAS OF CHILWORTH

Yes. And if estimates made by knowledgeable people are correct, that the consumption of petroleum products will, within the next 25 years, be two and a half times what it is to-day, the capital investment for British-based oil companies will be colossal and investment is not a very popular thing to-day. Too much money, we are told, is being spent in investment. The oil tanker has gone on at such a pace that if it continues at its present rate Her Majesty's Government will, I believe, have to do something to see that we are not left to the mercy of many things about which the noble Viscount, Lord Runciman of Doxford, warned us to-day. It is a very interesting position and I can only hope that some of the older tankers will be able to bring to our shores other things which we so badly need. I believe that, at the present time, many are being converted for that purpose.

There is one question which I should like to ask the noble Earl and perhaps he can get the answer before he starts speaking. The noble Lord, Lord Teynham, mentioned the inaccessibility of many of our ports and the roads around them. The noble Lord is quite right; they are antiquated. I should like to ask whether the old, rather ridiculous, system of closed ports is still being operated in the old railway ports. In my view that was one of the most ridiculous anachronisms we had to put up with, where only a railway truck, or a lorry owned by a railway, could enter the port. Right up to 1951 or 1952 we had the farcical position of lorries having to load goods into trucks miles from a port or dock, so that the railway engine could drag the truck to the dock. Has all that gone? Are all our ports free to take any traffic by any method of transport?

I should like to say lone word about the future. In common with other noble Lords who have spoken, I am not going to enter into any discussion upon quicker turn-rounds or conditions in the docks. I think those matters are better left to the Committee who now have them under review. I am going to say a word or two, however, about some of the unfortunate strikes which have occurred in recent times—though very rarely. I refer particularly to the strikes which have broken out in the last twelve months on some of our ships—strikes by members of the crews. Admittedly they were unofficial, and I should be the last person to defend any unofficial strike. But I am not happy, and I am not satisfied that the crew conditions on some of our ships are nearly so good as they should be. High wages in any industry will not offset bad working conditions. If there is one lesson which industry has learned over the years it is that if you want to attract labour into your particular industry today, you must have first-class amenities, first-class plants, first-class accommodation. Your places must be brightly finished off and clean. Some of our factories to-day are models in that respect. They reflect the new thought that has developed in industry since the war. But I am afraid that the shipping industry has not entirely kept pace in that respect. I should like to see those who are at the head of that industry turn more attention to this matter. That will be a way of preventing sporadic strikes such as we have had of late. Coming generations will not tolerate, in the future, anything but the best possible working conditions, and it is only right that they should have them.

I read in The Times newspaper to-day that shipbuilding has had a spectacular revival. I know that shipbuilding is different from ship-operating. The noble Viscount, Lord Runciman of Doxford, said, I think, that many of our shipowners are taking a very big risk. But it is only right that they should, and I believe they are always prepared to take a risk so far as commercial considerations can ensure that they get some return. I believe they will have to face some terrific competition in a field in which they have not had to do so for many years-I refer to the high-class passenger section of the industry. I believe that the people concerned are not helping themselves by maintaining the low standards of amenities which at present they do maintain on some of our ocean-going liners. This especially applies to those routes on which there are monopoly or near-monopoly conditions. If I generalise, I do so because I do not want to mention names, but let me say that from this criticism I feel that I must absolve the North Atlantic liners: in them, conditions and amenities in general are really first-class. In passing, I suggest that one of the reasons for this is the intense competition; but when it comes to some of the other shipping lines it is a different story.

I have heard criticisms from many overseas visitors—some of them from the Commonwealth—concerning the poorness of the food standards on some of the liners on which they have travelled and the poorness of the amenities. They compare these British ships very unfavourably with certain passenger liners which fly foreign flags. If you want to attract customers to-day the highest standard is the only one to have. The same criticism that is directed at many of our hotels on the land is levelled at some of our floating hotels. I am sure that the shipowners concerned will be well advised to take these criticisms to heart. From my own personal experience I believe that they are justified. These shipowners are getting increasing competition from smaller ships on which the amenities are really good. Some of these smaller ships fly British flags but quite a number fly foreign flags.

With those remarks I would wish our shipping industry well. Whether those concerned will get from Her Majesty's Government the help which they require —and for which they have put up such a good case—remains to be seen: but I think that that case is unanswerable and I hope that it will receive sympathetic consideration by the Government.

4.57 p.m.

THE EARL OF SELKIRK

My Lords, I should like, at the outset of my remarks, to offer my warm congratulations to the noble Lord. Lord Geddes, on a speech which was exemplary—for brevity, for clarity and for authority. I very much hope that in the future the noble Lord will come to this House and speak frequently. I should like also to thank Lord Winster for raising this debate, and particularly for emphasising, as he did in the earlier part of his speech, the happy relations which exist between the officers for whom he speaks and the employers in the shipping industry. I think one can say with regard to the industry as a whole that the existence of the present happy relations between employers and employed is greatly to the credit of the National Maritime Board, an organisation set up entirely within the industry. I rather regretted the emphasis which the noble Lord, Lord Lucas of Chilworth, put on certain episodes which occurred during the summer. They were really very small episodes; there were never more than 1,500 men out, and they did not represent more than 1 per cent. of the total number of seamen employed at a given time. Regrettable as the episodes were, they were, none the less, of a comparatively small nature.

It is natural that the noble Lord, Lord Winster—and indeed the whole country—should be interested in the welfare of our mercantile marine of which we are all so very proud. The noble Viscount, Lord Runciman of Doxford, has emphasised that it is our lifeblood as a trading nation. It is true that we earn a substantial revenue from the services provided by our ships. It is important to remember always that these international services which are performed by our shipping industry are entirely without subsidy. Those engaged in the shipping business, as Lord Runciman of Doxford has said, neither ask nor expect any preferential treatment—that is the difference between our attitude and that which exists in many other countries. I feel that I can say—and I do not think anyone has suggested otherwise—that our. Merchant Navy is in very good shape. I feel that the shipping companies deserve the highest credit for the manner in which they have built up their fleets ever since the end of the war. Let me give the House a few figures in this connection: I think they are rather impressive. In 1939 we had 17 million tons of shipping. By September, 1945, that had dropped to a little under 13 million tons. We had lost during the war something like 11½ million tons. By 1955, after scrapping, selling or losing by casualty another 6 million tons, we had built up a bigger fleet than that which we had in 1939—that is to say, a fleet of the order of 18 million tons, as Lord Winster has said. I feel that that is a matter of very real credit to those engaged in our shipping industry. It is true, as the noble Lord, Lord Geddes, said, that compared with 1913, when we represented 42 per cent. of world shipping, or 1939. when we represented 26 per cent., the proportion to-day is only some 23 per cent.; but, none the less, our fleet is more modern and faster.

I think that I can say, too, that the shipbuilding industry is in a very strong position. Last year we completed 1,500,000 tons of shipping, which is more than has been completed in peace time for a good many years now. To-day, we have something of the order of 4½ million tons under order, without taking into consideration the orders which have been announced during the last day or two. During the last twelve months orders have exceeded completions. The noble Viscount, Lord Runciman of Doxford, said that a great deal of that tonnage was tanker tonnage. I am not sure what the prejudice against tankers is, but I understand that of the ships completed over the last twelve months, one million tons were non-tanker—that is to say, the majority of ships were non-tankers. I think we can say that both our shipbuilding and shipping industries are in good heart. Perhaps it is not unnatural, when orders are very heavy, that a certain number should go abroad. But it is not possible to have it both ways. The reason why the Norwegians place their orders outside this country is substantially the dates of delivery. This also is the reason why some of our own shipowners have placed orders abroad. At the present time, so far as the room is available, we are getting ample orders.

There has been some comment on the structure of our Merchant Navy. Of course, we have changed its structure, and I think it is right that we should have done so, because it indicates the adaptability of the service. The total number of liners has fallen and the total number of tramps has fallen; but the number of tankers has risen very considerably. Although the number of passenger liners has fallen, we are to-day carrying more passengers, because passenger traffic is being better spread through the year and because liners are running at a higher load factor. That is very creditable, particularly when we consider the immense development of civil aviation that has taken place. Despite that development, over 60 per cent. of the European North Atlantic passenger traffic is still going by sea and not by air. That, I think, is remarkable in these days. I notice that recently fast ships were put on the Australia and New Zealand run, and one of these for example has been booked up for a year or more ahead, indicating that even on these long routes, liner passenger services can well hold their own. I hope the noble Lord, Lord Winster, will not mind my saying that I was interested in his comment about aviation, because, after all, he played an important role in setting up these nationalised corporations at an early stage; and now he suggests that they are getting too soft a time. Maybe that is so, but it is an interesting comment coming from the noble Lord.

LORD WINSTER

My Lords, on this side of the House we are always willing to learn by experience.

THE EARL OF SELKIRK

That is a great quality, but it is not entirely confined to the other side.

There was some comment on the reduction in tramp tonnage. That is closely connected with, and cannot be separated entirely from, the change in the structure of our trade, particularly from the changes in the coal trade. I think it was inevitable that there should have been a fall in the tramps available because we are not exporting coal as we did fifteen years ago. To-day, the equivalent of a dozen tramps leave the country daily in ballast, whereas before the war they would have carried coal. Therefore, it is not unexpected that the number of tramps should have fallen and that a certain number should have necessarily changed over to tanker tonnage.

There have been certain suggestions that the Government are not considerate enough to the shipping industry in assisting it to replace its tonnage. I take it that noble Lords are not suggesting that there should be a preferential arrangement for shipping which does not apply to other industries, because, if I may say this to the noble Lord. Lord Lucas of Chilworth, that would be in the nature of an export subsidy. So I take it that that is not what is required.

LORD LUCAS OF CHILWORTH

My Lords, may I ask this question?—and if it is inconvenient for the noble Earl to answer on the spur of the moment, I forgive him. If he says that, he must say that the whole American arrangement for subsidising shipbuilding is an export subsidy.

THE EARL OF SELKIRK

Of course, it is. Strictly speaking, a service such as shipping does not come under G.A.T.T., but I do not think we can assume, on the remarks made by the noble Lords, Lord Winster and Lord Runciman of Doxford, that certain practices do not go on which are contrary to the best and fairest trade practices in the world. I think there can be no doubt about that.

Since we had our last discussion on shipping, when we examined this question of replacement, there have been two events on which it is worth commenting. The first was the introduction of the investment allowance, which I think is generally recognised as a contribution to solving the problems of the shipping industry. The second is the Report of the Royal Commission on Taxation of Profits and Income. The noble Lord, Lord Teynham, said that the cost of replacement should be the basis on which depreciation ought to be reckoned. The Royal Commission examined that point fully and had certain confidential information which is not available to us. The Commission came to the conclusion that it was not practicable to have a revaluation of capital assets and that the historical method was the only way in which it could be conducted, because of clarity in preparing accounts, because of equity between one taxpayer and another and because of convenience and on economic grounds.

I will not go over the arguments; they are set out in the Commission's Report, and I suggest that any noble Lord who wishes to do so ought to re-examine what it has to say. I know that some may prefer other arguments, but the matter has been thoroughly examined. I should add that one has to assume that the present state of our merchant fleet, which is a great credit to shipowners, shows that their resources have not been so eroded by taxation that they have been unable to build up the fleet. After all, the fleet as it is to-day has been substantially built up from war damage claims, depreciation allowances, and reserves, and has reached its present strength without outside capital at all. What the position may be in the future, a number of years hence, is entirely a different question.

A great deal has been said to-day on the subject of flag discrimination. I am glad that this matter has been brought up. The noble Viscount, Lord Runciman of Doxford, said that, whatever we may think about it to-day, this is an incipient growth, which will come to something of a considerable character. The first thing I should like to say is that this is nothing new. With the permission of your Lordships, I should like to read what a distinguished economist said on the subject over a hundred years ago, and I do so not only to show that it is an old problem but because it describes fairly accurately the nature of the problem. He was at that time condemning the navigation laws as he saw them, and said: And if he look at the evidence in these pages, giving examples of trade diminished, destroyed, and kept out of existence, the full free passage of the sea from port to port prevented, vessels obliged to sail half round the globe in ballast, or but half laden, or to lay up in harbour idle when there are goods for them to carry, and people in urgent want of those very goods, he will not think lightly of the whole amount of difficulties caused, and trade thrown away by the navigation laws. I think that is a fair description of the fact that this is not simply something in which this country is interested, but is something in which every trading country throughout the world is interested and has a considerable say.

I will not go over the points. The noble Viscount, Lord Runciman of Doxford, mentioned a number of the countries concerned, and it is fairly widespread. I should like to assure the noble Lord, Lord Winster, that we take the strongest line we can about this matter and we miss no opportunity to press home our views. The first thing we have to do is to see that we are scrupulously correct ourselves and that we scrupulously observe the requirement that no preferential treatment which can be interpreted as flag discrimination is used towards our own shipping. Secondly, we take diplomatic action, not only in observing what has happened, but in making representations on what is happening and what it is thought might happen; and representatives of the Ministry of Transport and Civil Aviation in various parts of the world report on anything that might appear to be flag discrimination. We also use to the full any rights that we have under treaties of commerce and navigation, and we intend in negotiating any new commercial treaty to see, rather on the line that the noble Viscount, Lord Runciman of Doxford, explained, that we endeavour to prevent t lose countries from using any form of flag discrimination, The Argentine trade agreement, as the noble Viscount said, is an example of that. We hope thereby to safeguard our shipping as fully as we can.

We also use our influence on the Maritime Transport Committee of O.E.E.C. The importance of that is that its influence is not simply confined to Europe, but extends to other countries throughout the world. There is also the Inter-Governmental Maritime Consultative Organisation which we hope will soon be established as a specialised agency of the United Nations. In these days when international organisations are growing up so rapidly and playing a considerable part, this is essentially the type of problem which should be dealt with by this sort of organisation. This particular organization, which will come into existence when sufficient signatures are there, has, as one of its purposes, to encourage the removal by Governments of discriminatory actions and unnecessary restrictions affecting shipping. That is one of the objects of the organisation, and we hope that we shall be able to use it in clue course. To sonic extent we can also use the Planning Board of Ocean Shipping of N.A.T.O. I agree that this is a serious matter, but it is not a matter in which we can compel our views to be accepted.

On the question of territorial waters, which has been emphasised to-day, I can assure the noble Lord, Lord Winster, that we have made it clear to the Ecuadorean Government that we do not accept their interpretation of this, matter. My information is, as one noble Lord said, that they do not regard as innocent transport a ship going through their waters, although it is not using its fishing tackle. We take an entirely adequate line, that this is not a claim which they are justified in making. I would add that we are not seeking to compromise the three-mile territorial limit but are standing on the position as we think it should be. This is a problem which is being examined by the International Law Commission of the United Nations and we think there will be a report, on it next year. We think that this is the better way to approach the subject, rather than to adopt some of the old-fashioned ways which nowadays are less appropriate. In the case of flag discrimination and territorial water claims we are dealing with world education, and we have to get incipient nationalities to realise that to-day their interest lies in co-operation one with the other. I believe that in due course we may be able to do that.

The noble Lord, Lord Winster, mentioned the "fifty-fifty" policy of the United States, and I can only say that I cordially agree with what has been said: it is a great pity that the United States should have lent themselves to this sort of thing. It is probably true that many sections, or at least some sections, of the United States mercantile marine are not strictly competitive: but the real point is that other countries can use this example for imposing restrictions. I can assure the noble Lord that we are alive to this problem and do not let the matter pass easily. Perhaps I might remind him of what we have already said on this matter, in case he has missed it. As the Government stated in a Written Answer in the other place on May 5 last [OFFICIAL REPORT, Coms., Vol. 540. col. 173]: The United Kingdom can accept this requirement"— that is, the "fifty-fifty" requirement— only where the transaction in question contains an element of aid and is one in which the United Kingdom are interested. They have declined certain further commodities offered to the United Kingdom under Public Law 480 on the condition that the sterling proceeds would be expended by the United States on purposes other than the provision of aid for the United Kingdom or to other countries. The other question that has been raised today is that of flags of convenience. It is true that these are arising rapidly, and the noble Lord gave the figures. There are four of them, which collectively cover about 8½ million tons of shipping. Panama has the fourth largest mercantile fleet in the world. But what is important is that this presents real competition with our mercantile marine. I agree with what the noble Lord, Lord Geddes, said, that many of these ships are first-class. I came back from Malaga in an American-built ship, flying the Panama flag and manned by a Spanish crew; it was a fine crew and a fine ship. That does present real competition. I would only say to the noble Lord that, on the whole, all these countries do observe most of the safety regulations. For instance, they have all accepted the load line convention. In fact, the illustration given by the noble Lord, that one of them was prosecuted for not fulfilling the load line convention, means that they must have accepted it, or they could not have been prosecuted. On the whole, it is not so much that as other circumstances which make this competition much keener.

Frankly, it is difficult to know what action to take about it. I do not think our shipowners follow this practice much. It would be wrong to prevent them from selling in this market their old ships, or those that they do not require, just as it would be a pity for our shipbuilders to be denied customers who would be able to buy, because they wished to register under a flag of convenience. For that reason it is not easy to see what action we can properly take. In fact it is extremely difficult to find out where the beneficial ownership of many of these ships belongs. I am afraid I can only say that it is a matter which must be viewed chiefly on a competitive basis and we hope that our own services will be able to meet it.

I will not keep your Lordships much longer, but the noble Lord, Lord Lucas of Chilworth, asked me about the committee on world oil pollution. I can assure him that that has been set up and is actually functioning. The noble Lord, Lord Winster, raised the question of trawlermen. I am glad the noble Lord raised it, because anyone who is familiar with the role that those men play cannot but be filled with admiration for their courage and for the resolution with which they carry out their duty. On the whole, I do not think it is fair to impute that their equipment is not of a high standard. The noble Lord suggested that their equipment was perhaps not all it should be. I am not saying that it could not be improved, but I think most of the ships are of a pretty good standard. I looked it up to see what the position was, and I found that over the last ten years about a hundred of these fishing boats of over 50 tons have been lost, and probably about twenty-six of these were said to be either missing or foundered.

If we take the very tragic case of the "Lorella" and the "Roderigo" which the noble Lord is aware were lost in a gale off the North Cape in January of this year (the report will be out in a few days, if the noble Lord wishes to see it), we find there two ships of modern construction and, in the opinion of the court, well found and quite capable of standing any gale, provided there was not this extraordinary combination to which the court referred—a combination quite unusual and unpredictable—of extreme cold, heavy gales, high seas and loss of stability due to ice freezing on the upper superstructure so as virtually to weigh the ship down. Those circumstances are extremely unusual, and the court itself was unable to make any suggestion, and no suggestion was brought to its attention, as to how that problem could be solved. However, the Hull trawler owners are looking into it to see whether there is any way in which matters can be made more satisfactory.

The noble Lord, Lord Lucas of Chilworth, raised some questions about coastal shipping. Whilst I agree with him that there is a certain measure of disquiet about the position, I do not think it is very serious. Frankly, we take the line that the best opportunity for the consumer is that his goods should be carried in the most efficient way. That is what we believe in, and I do not think there is any answer to it. The passing of the 1953 Transport Act of course created a much wider freedom for the railways. It obviously increased the corn-petition which might exist between coastal shipping and the railways. On the other hand, however, provision was made for safeguarding the position of coastal shipping. I think the noble Lord is not unfamiliar with it. A draft charges scheme has now been published and presented to the Transport Tribunal, and it is open to shipping not only to use their statutory right to object but also to bring before the Tribunal any case where the actual rate charged by the railways to the trader can be shown to be less than the cost to the railways of providing that service. Besides that, there is the Coastal Shipping Advisory Committee on which representatives of road haulage interests will or can be added, if they have not been added up to the present time. I do not see why coastal shipping should not be able to meet any fair competition which inlay be brought along. In a strange sort of way, that particular form of shipping is gaining by the present need to import coal. That is becoming a fairly important matter for the smaller type of ships, because in many cases they bring over Continental coal and in other cases American coal which has to be transhipped into some Continental port.

The noble Lord, Lord Teynham, raised the question of the docks. He asked whether the Dock Efficiency Committee has reported. In fact, port operations panels have been set up in some docks and dock users' committees in other docks. I think it is fair to say that the ports generally have, so far as structure is concerned, overtaken the losses they suffered during the war, and they are now handling considerably greater traffic than they did before the war. A good deal of capital improvement has taken place. For instance, since the war the Port of London has spent about £14 million on improvements, and Liverpool has carried out, and is carrying out, improvements to the value of about £20 million. The British Transport Corn-mission are spending E2½ to £3 million. The point I am making is that there is a good deal of modernisation and reconstruction which is taking place.

It is true that some criticism has been made of the Dock Labour Scheme. In many ways the scheme is a great improvement on what existed before, but it has not brought all the advantages which some people hoped. All I can say is that at present it is being examined by a Committee under Mr. Justice Devlin to see what alterations are desirable. I should not at the present juncture like to make any further comment about that.

LORD LUCAS or. CHILWORTH

Before the noble Earl leaves that point, may I ask if he has information as to whether the old railway ports are still carrying on as closed ports?

THE EARL OF SELKIRK

I am sorry I have not that information but I will write to the noble Lord. I have tried to cover the points which the noble Lord made. A great many questions he raised are international questions, and are not matters to which Her Majesty's Government can give an answer and tell him he is right. The points he has raised are of real importance, and I am sure that it is not only in the interest of our own shipping but for the wellbeing of all shipping and all traders throughout the world that we should try to persuade people that the free use of the seas is to everyone's advantage. Lord Winster has brought out that point very well; it has been of great value in raising this debate, and I thank him very much for doing so.

5.27 p.m.

LORD WINSTER

My Lords, I should like to reply to one or two points made by speakers in the debate. The noble Lord, Lord Teynham, spoke about shipbuilding. It is the case that the Norwegian authority I quoted went on to speak about restrictive practices and demarcation lines as being one of the great handicaps in our shipbuilding industry. In preparation for this debate I have been at pains to visit certain centres of our shipbuilding, and I have been rather perturbed to notice in several instances that what the Norwegian said is, I am afraid, true—that there are too many restrictive practices and that the demarcation lines are a very great hindrance to our shipbuilding industry.

The noble Lord, Lord Teynham, also spoke about our docks and the necessity for improvements there. To the best of my knowledge the Port of London Authority have since the war spent some £24 million on maintenance and engineering improvements, and a great deal has also been done by the Clyde Trust and on the Tees. I fully agree, however, that port facilities require continuous improvement through the new developments which are taking place. Load deliveries, for instance, have gone up by 400 per cent. This question of improvements and maintenance in the docks requires constant watching, but I should not like it to be thought that a great deal has not been done and is not being done by the various dock authorities.

On the question of passage through territorial waters, to the best of my knowledge ships are entitled to innocent passage through territorial waters though the country concerned has the right to impose regulations about pilotage, fishing and the passage of warships.

THE EARL OF SELKIRK

The point I was raising was that the Ecuador Government made these special claims about innocent passage.

LORD WINSTER

That is roughly the position in International Law. I hope the noble Lord, Lord Geddes, will allow me to add my compliments and congratulations, of which he has received so many—and they are well deserved—upon a notable maiden speech. I agree with him that we are now better fitted to meet the first impact of war than we were in the last two great wars. I think the merchant fleet has been well built up and is in good heart. I did refer in my remarks to the fact that the defensive measures for protecting the merchant fleet are now better than they have ever been. Certainly, we want a larger merchant fleet than we have, and if the Government will pay attention to some of the handicaps that I have ventured to bring to their notice this afternoon, I think we shall get it.

In speaking about "Panamanian flags" I did not say anything about "coffin ships," and I have no wish whatever to infer that all the ships flying these odd flags are "coffin ships." I am glad that the noble Earl brought out that point: that it was not part of my argument. Will the noble Viscount, Lord Runciman of Doxford, permit me to say that I think he, in his own person, typifies the shipowner who has effected such great improvement in the relationship between those who man the merchant ships and the shipowners? His is an example of that good will, thoughtfulness and care for the officers of which I have spoken. It is a great satisfaction to me that the noble Viscount felt able to agree with me upon so many points where he is the professional and I am only the layman.

In calling attention to the tanker tonnage, I think the noble Viscount brought out a most remarkable point in the development of the merchant fleet, but there is one curious thing that has come to my notice. While the tanker owners pay excellent wages, while conditions on board are wonderful for the officers, and while it is possible for a man to get a command early in life, and also to get a pension reasonably early in life—with all these advantages, the tanker service does not seem to be the most popular amongst officers. As the noble Viscount will know, it has many serious drawbacks; and although in many tanker lines officers are now allowed to take their wives to sea with them—going back in that respect to the days of Trafalgar—even that does not seem entirely to compensate officers for some of the drawbacks of the service.

I am grateful to my noble friend Lord Lucas of Chilworth for making what I thought was a most valuable addition to the debate, in drawing the moral of the subsidies to which I referred in terms of taxation and of the subsidisation of exports. It has opened out a new field of ideas to me, and it think they are very valuable ideas. On the question of oil pollution, in which the noble Earl takes so much interest, it may interest him to know that the Tyne Improvement Committee have established an oil-cleansing station on the Tyne where I saw a tanker carrying 18,000 torts of oil. Her tanks had been cleaned out, degasified and passed by the chemist; and the whole job was done within twenty-four hours at a cost of about £400. That is a remarkable example they are setting on the Tyne of what can be done cheaply and quickly. I hope that it will be followed by other countries.

As regards the noble Earl's remarks on coastal shipping, it is the unfortunate fact that in coastal shipping of under 500 tons figures are down by 50 per cent. It is regrettable that valuable coasting trade is so "down in the mouth" as it is at the moment. I could not entirely agree with my noble friend in what he said about crew accommodation. I think that in some of the older ships it is difficult, for structural reasons, to bring the crew accommodation up to what we regard as modern requirements. In the new tonnage being built I do not know that a great deal of fault can be found with the crew accommodation: I think it is of a fairly good level. The trouble exists in the older ships.

In thanking the noble Earl for the reply that he has been good enough to make, would endorse what he said about shipowners deserving great credit for what they have clone in rebuilding the merchant fleet. The noble Earl did not overlook the fact that I had enumerated the handicaps and difficulties which they have had to face in doing so, and that adds to the compliment which the noble Earl was good enough to pay. As regards alteration of structure in the merchant fleet, of course shipowners must go for what is profitable. This alteration in structure is a testimony to the adaptability of shipowners in going after the new lines which are opening out. It is perhaps invidious to mention names, but we have all noticed that the P. & O., that great line, has gone into air traffic and has also gone into the tanker "line of country" in a big way. Shipowners are, by tradition, a very venturesome race. They are always ready and anxious to go after new markets, new lines, which are opening up.

As regards the tramps and this question of structure, certainly the tramp tonnage is down; but our old tramp tonnage was all, or at least mainly, built to take out coal and to bring back grain. Unfortunately, we now have to go out to bring back coal and there are not quite enough tramps to handle that trade. I wish there were more. On the question of replacements, it is true that shipowners do not ask for help; they wish to stand on their own feet—or, shall I say, to sail on their own bottoms. They do not ask for help or want subsidies and so on; but what they do ask for is fair play. In my view, to contend that depreciation allowances should not have been calculated upon pre-war costs is not asking for help. I think it is merely illustrating a point where fair play did not rule.

The noble Earl, Lord Selkirk, said that the resources of the shipping industry have not been all so eroded as to prevent replacements. It is true that, owing to the wise financial policy that the industry have pursued in the past, we have seen them reproached for not having paid out enough in dividends and for putting very large sums to reserve. But it is this wise financial policy which has enabled them to rebuild the fleets to the extent they have had to do. I am looking to the future and, with taxation where it is, I do not think that the earnings will enable them to put by such large reserves as they so wisely did in the past. That is what I think the shipowners feel is not quite fair play. However, they do not ask for help all they want are conditions under which they can carry on their industry with the sane great success that they have done in the past.

On the question of flag discrimination, of course I rejoice to hear that the Government are so alive to this vital matter. It is within my recollection that in O.E.B.C. the Government took that line on this question of flag discrimination very strongly indeed. But they then came back and entered into the agreement with the American Government over the purchase of coal which I cited this afternoon. That entirely went back on everything they had said in O.E.E.C. As regards Panama, I have attended international conferences on this subject and, while I have just said there is no talk about "coffin ships," it is the sub-standard conditions on board about which one has to think. I may tell your Lordships that the International Transport Workers' Federation, which follows this matter with as much attention as do the Government, has in several instances prevented ships from going to sea because of the bad conditions on board. It is no part of my case that these ships are "coffin" ships, or that in all cases bad conditions prevail on board.

About trawlers, may I just try to put myself right with the noble Earl, Lord Selkirk, on one small point? I did say that they are good ships and that in everything to do with fish-finding great progress has been made. They are very well equipped. My point is that in those trawlers there is still done by hand a great deal of work which could be done by machinery if as much attention were paid to that side of the business as has been paid to improving the fish-finding equipment in the trawlers. I hope very much indeed that that matter will be looked into and that the Government will use their influence. My Lords, in conclusion, I think that we now have to wait and see what the shipping industry will think of this debate, and of the Government and of the noble Earl's reply. I feel that the noble Earl is not only deeply interested in this matter but most sympathetic to all the points that I have raised. But shipowners are a pretty hard-bitten lot. They have two proverbs very much at heart, one that "The proof of the pudding is in the eating" and secondly, that "Fair words butter no parsnips." I think that they will judge this debate, and the Government reply, in the light of those two proverbs. I should like to thank the noble Earl for his full and careful reply and for what he has been so kind as to say about myself. My Motion seems to have met with fairly general approval, so I now beg leave to withdraw it.

Motion for Papers, by leave, withdrawn.

House adjourned at eighteen minutes before six o'clock.