§ 3.8 p.m.
§ THE PAYMASTER GENERAL (LORD MILLS)My Lords, with your Lordships' permission, I should like to repeat to you a statement which is being made in another place by my right honourable friend the Minister of Transport. This is the statement:
"With your permission, Mr. Speaker, and that of the House, I should like to announce the arrangements made for the replacement of the 'Queen Mary'.
"The size, speed, accommodation and physical characteristics of the new ship will be as recommended by the Committee under the Chairmanship of Lord Chandos. All appropriate shipyards in the country will be invited to tender. The Committee advised that the capital cost should not exceed £30 million, and the Government agree. Up to £30 million the Government and Cunard's contribute in the proportion of 3 to 2. This compares with the Chandos Committee's suggestion of a fixed contribution by the Company of £12 million and therefore gives an added incentive to the Company to keep down the cost. If the final cost is greater the excess will be met by Cunards.
"The ship will be owned by a separate wholly-owned subsidiary company of Cunard. Provisions will ensure the ship and company remain under British control.
"The Chandos Committee proposed that the Government's 25-year loan should carry 4½ per cent. interest. The 151 Government agree that in the special circumstances of the North Atlantic passenger trade some assistance is necessary to run an express service against subsidised competition. But the Government has decided that financial assistance should not take the form of an artificially low rate of interest, but should be an outright grant, which Parliament itself would authorise. Therefore interest on the loan will be at the rate for 25-year loans which is being charged by the Public Works Loan Board when the agreement is signed. The additional cost which this higher rate of interest places on Cunard will be offset by an outright Government grant. At the present interest rate of 6¼ per cent. and assuming a total cost of £30 million, the grant would amount to some £3 million, and the loan to £14 ¾ million.
"Also interest will be charged from the actual dates that monies are advanced and not from the date the ship enters into service, as proposed by the Chandos Committee. Interest accrued during construction will be added to the principal of the Government's loan and will be repayable on the same terms.
"The only other significant change from the Chandos Committee's recommendation is that there will be no reduction in interest charges payable to the Government whatever the rate of yield on Cunard's investment in the ship. But the rate of yield above which profits must be used to accelerate redemption of the Government's loan is raised from 7 per cent. to 7½ per cent.
"The security for the Government's loan will be as recommended by the Chandos Committee.
"A formal agreement between the Cunard Company and the Government will be prepared as quickly as possible and will then be made available to Parliament. Legislation will be introduced."
VISCOUNT ALEXANDER OF HILLS-BOROUGHMy Lords, I am obliged to the noble Lord for the statement by the Minister which he has passed on to this House. There will, of course, be an 152 opportunity, when legislation arrives, to have a final debate, and obviously in the kind of Amendment to the Address in reply to the gracious Speech which will be before the House on Monday and Tuesday reference will have to be made to this matter. We will study the statement. I think your Lordships may feel that we could give a much more efficient examination to the statement on Monday or Tuesday if we could have access to the Report of the Chandos Committee. So far as I know, it has not been laid, and if it is not going to be laid before Monday, then we ought to have a specific promise that at least it will be laid in its entirety before we come to discuss actual legislation on what is quite an important financial contribution by the Government.
§ LORD MILLSMy Lords, I thank the noble Viscount, but I would remind him that as far back as June 1 of this year my right honourable friend advised the other place that it was not proposed to issue the Report but only the recommendations; and these were then issued. The reason for that is that this is a highly technical problem and there is in the Report a mass of technical and financial information which it was agreed at the time it was secured would be kept confidential.
§ LORD OGMOREMy Lords, may I ask the Minister, since a grant of £3¼ million is being made to a private company, whether any foreign shipbuilding firm will be allowed to tender, or whether we have to take only tenders from British shipbuilding firms without any comparison? Secondly, may I ask the noble Lord whether it is not a fact that some opinion, at all events, feels that it would be better to have a smaller ship than the one proposed, which in present conditions is probably too large for the traffic?
§ LORD MILLSMy Lords, to answer the noble Lord's second question first, the matter of the size of the ship was one of the principal questions into which the Chandos Committee inquired, and all the technical operating advice they could get was to the effect that the size they recommended was the right one. In reply to the first question, I would be prepared to give the noble Lord a specific reply in the debate on Monday, but I 153 have never yet heard it suggested that we should go to foreign yards for this ship.
§ LORD LUCAS OF CHILWORTHMy Lords, while I agree with my noble friend Lord Alexander of Hillsborough that it is preferable to debate this matter on Monday, and not this afternoon, may I ask the noble Lord whether I am right in saying that the Chandos Committee, when it made its recommendations to the Government, had the advantage of an economic survey which was made on the prospects of trans-Atlantic travel for a number of years ahead? It was this economic survey which enabled the Chandos Committee to formulate some of its proposals. We may agree with the noble Lord that there are perhaps good technical reasons for not producing the Chandos Committee's Report, but would it not be possible to give the House the benefit of this economic survey so that noble Lords could judge this with all the relevant factors at their disposal?
§ LORD MILLSMy Lords, the noble Lord is quite right. There was an economic survey as well as numerous technical surveys. I will look into the question of how much information I should feel able to give him from that economic survey and will reply when we debate the Amendment on Monday.
§ LORD OGMOREMy Lords, may I ask why it is thought improper to throw out this very important contract to international tender? If our shipbuilding yards are highly efficient, would they not get the contract? Why should it be improper to do this? In view of the money we are putting into, it, I suggest that it is the right course to pursue.
§ LORD MILLSMy Lords, the noble Lord is putting into my mouth words that I never said. I merely said that had not heard it suggested; but I will give a reply on Monday.
VISCOUNT ALEXANDER OF HILLS-BOROUGHMy Lords, from the point of view of using public assistance for British industry and employment, may I say that I hope the noble Lord will not accede to the request of the noble Lord, Lord Ogmore?
§ LORD MILLSI thank the noble Viscount.