§ 3.31 p.m.
§ THE PARLIAMENTARY SECRETARY, MINISTRY OF TRANSPORT (LORD CHESHAM)
My Lords, it might be a convenient moment for me to make a statement similar to that which my right honourable friend the Minister of Transport is making in another place in reply to a Question.
The Cunard Steam Ship Company have proposed that the "Queen Mary" should be replaced by a ship of 58,550 gross tons which, in addition to operating on the North Atlantic express service, would spend about three months of each year cruising. The ship would cost about £22 million. The company propose to put up £4 million of this and have asked the Government to lend the remaining £18 million over 25 years with interest at 4 per cent. The House will recall that Cunard's previous proposal, for which the North Atlantic Shipping Act, 1961, provided, was for a 75,000 ton ship to be employed all the time on the North Atlantic express service. That ship would have cost £30 million. Cunard would have put up £12 million and the Government £18 million, but at 4½ per cent. The new proposal is therefore very 712 different and, in general, a much less satisfactory one from a number of standpoints, including that of the taxpayer. Nevertheless, the Government have been anxious to consider all reasonable means of bringing a new and modern British ship into this important service which this country has pioneered and developed. We have therefore studied the new proposal closely and with sympathy. But we have felt obliged to decide that it is not acceptable. The company have been so advised.
The Government appreciate that some of our shipbuilders will hear this news with particular regret. But I am very glad to say that the Shipbuilding Credit Scheme has been going very well and will bring much useful additional employment to our yards. My right honourable friend has already approved the making of firm offers of loans of £13½ million to build approximately 170,000 deadweight tons of shipping. In addition to this, applications for about another £27 million of loans to build about another 500,000 tons are under consideration. Since it is clear that we shall need more than the £30 million originally allocated, the Government have decided to increase the amount available to a total of £60 million within the terms of the Scheme as already announced. This will I am sure bring the most welcome relief to our shipbuilding industry. But your Lordships will realise that this relief will be only temporary, and my right honourable friend is already discussing with the shipbuilders what action they propose to take to secure the industry's future.
§ LORD SILKIN
My Lords, we are very grateful for this statement. My first reaction to it is that I cannot blame the Government for not having been able to make satisfactory arrangements with the Cunard Company. They are asking for a larger loan on a smaller expenditure and at a lower rate of interest. I should be grateful if the noble Lord could tell us on what specific point this application broke down. Was it on the amount of the loan, or on the rate of interest, or on both? It strikes me as interesting that this is a commercial undertaking and that this would have been a subsidy to a shipping company. I cannot help contrasting what the Government have 713 seriously considered as a possibility—namely, an advance over 25 years of a loan at 4 per cent. interest, or earlier at 4½ per cent. interest—with loans that they make in respect of housing, which are at a rate of not less than 5 per cent.: and housing, after all, is a social service. I cannot help feeling that if the Government had been prepared to make loans to local authorities for housing purposes as they were contemplating for a shiping company, we should have had a substantial reduction in rents and a greater supply of housing. But somehow the Government did not feel able to subsidise this social service to the extent of a lower rate of interest, whereas they have been prepared to consider a lower rate of interest in respect of a commercial undertaking. But, generally speaking, as I say, my first reaction is to feel that the Government are right in not having been able to come to terms with this particular proposal.
My Lords, I, too, should like to thank the noble Lord for his statement, and I am inclined to agree with the noble Lord, Lord Silkin, that the Government probably have made the right decision in this matter. If the noble Lord, Lord Silkin, will forgive me, I think he made one slight slip in saying that there was more money requested this time than last time. I think in each case it is £18 million required from the Government, and in this case the Government have not been able to accede to the request. In the present position of the shipbuilding industry, with so many shipyards in such dire distress, it is probably wise at the moment to disburse whatever funds may be available over a greater area than to concentrate, as was suggested in the original plan, and, indeed, in the plan which may come up again. As the noble Lord, Lord Silkin, pointed out, we have not really had time to consider the matter in detail, but, like him, my first reaction is to congratulate the Government on having taken a very sensible decision.
§ LORD LUCAS OF CHILWORTH
My Lords, I cannot help feeling that the deciion of the Government is a wise one. The noble Lord quoted figures as to the approximate allocation of the initial £30 million. I could not quite catch the figure, but evidently firm commitments have been made for a sizeable amount, and inquiries 714 have already been in excess of the original £30 million and have tempted the Government to increase it by another £30 million. Would the noble Lord help the House, in consequence of the most interesting debate we had yesterday, by giving some indication of the type of ship which has attracted inquiries for this favourable loan, and the shipyards of the country which are likely to benefit from the building of those ships?
§ LORD CHESHAM
My Lords, I am grateful to the three noble Lords who have spoken for their broad approval of this decision. I do not think I can be very informative to the noble Lord, Lord Silkin, on his query as to precisely on what this application broke down. I think one has to look at the proposal as a whole; it would probably be misleading to talk of individual features of it. The proposal as a whole is an unacceptable one, for more reasons than those he hazarded a guess at. It is just, in our view, a proposal which is "not on". I do not want to take up the noble Lord's point about money available for housing. I would only re-emphasise the fact that the proposal to lend money at this rate of interest was turned down. It was not just the loan in isolation that was being considered, but, as I said earlier, the proposal as a whole. The noble Lord, Lord Rea, quite rightly pointed out that it was the same amount of money as was proposed under the earlier Bill, although the point is that it represents a far greater proportion of the total cost of the proposition.
I am not in a position to tell the noble Lord, Lord Lucas of Chilworth, the facts for which he asked, because I do not think there are yet enough applications sufficiently far forward for me to be able to draw conclusions and make a fairly detailed analysis of the type of shipyard where the work might be placed; but I hope before long it will be possible to do so.
§ LORD LUCAS OF CHILWORTH
My Lords, unfortunately we go down for our holidays very soon, and we shall not have the opportunity of questioning the noble Lord. Would he be able to make a statement before the Recess in reply to the question I asked him? I feel that he, the Government, and all of us, must view with sympathy and some alarm the 715 promised demise of such an old shipping company on the Clyde as Denny's, a household word for years in the British shipping industry. Can he give us some hope that the Government will find a way of diverting some of this building, to keep the traditional home of British shipbuilding on the Clyde less depressed than it is at the present time?
§ LORD CHESHAM
My Lords, to start with, I do not agree with the noble Lord that it is unfortunate that we are shortly going down for our holidays. That apart, while I have great sympathy with the question he has asked, it would not be right for me to stand here and say that I shall be able to make a statement within the next week. I will certainly bear in mind what he has said and endeavour to see whether it is possible. But the noble Lord must not be disappointed if there is nothing that I can add in that short time, and if it may be necessary to wait for a later period in the year.
§ EARL ALEXANDER OF HILLSBOROUGH
My Lords, would it be possible, if we put a Question down, to give us some firm information as to the effect of the proposals on the voluntary liquidation of Denny's, and how this will affect the project upon which they were engaged, the hovercraft?
§ LORD CHESHAM
My Lords, I will gladly look at the point the noble Earl has raised, as I always endeavour to do. But, again, I am afraid that I could not conscientiously stand here and say that I could make a further statement within that period about how the proposals in general might affect one particular shipyard.