Lords Sitting of 3 April 1968

Preamble
The House met at half past two of the clock: The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Winchester.

HONG KONG SCHOOL TEXT BOOKS
2.35 p.m.
LORD BEAUMONT OF WHITLEY: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether the Hong Kong Government intend to make grants towards the cost of text books and stationery for children occupying places in Government-aided primary schools.]
THE MINISTER OF STATE FOR COMMONWEALTH AFFAIRS (LORD SHEPHERD): My Lords, the Colony's Financial Secretary indicated in his Budget speech on February 28 that the Hong Kong Government are considering assistance to children who have free places in Government and aided primary schools to help meet the cost of text books and stationery. I am unable to add to that statement at the present time.
LORD BEAUMONT OF WHITLEY: My Lords, I thank the noble Lord for his satisfactory reply. May I ask him whether he is aware that the cost per child for books and stationery can at the moment amount to between 40 and 50 Hong Kong dollars per year, and that in a large family this can cause great hardship? I would further ask, therefore, whether Her Majesty's Government would be prepared to use their influence with the Hong Kong Government to see that a decision is taken to go ahead with this reform?
LORD SHEPHERD: My Lords, the noble Lord is aware that there is a Government in Hong Kong with an Executive
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Council and a Legislative Council, and I do not think it would be right to use influence, if by "influence" we mean pressure, on decisions that they must make in taking into account the needs of these schoolchildren and the moneys that are available. But I can assure the noble Lord, from my own experience of the Government there, that this is a matter which they have very much in mind.
LORD BROCKWAY: My Lords, I welcome my noble friend's reply, which confirms what he said on December 19 when we had a debate on this subject. In view of the wretched standard of wages of the mass of the people in Hong Kong and their enthusiasm for education, would he press for a decision on this matter as rapidly as possible?
LORD SHEPHERD: My Lords, this matter is under very active consideration.
VISCOUNT DILHORNE: My Lords, would it not be wise to leave questions of pressure on the Hong Kong Government to the Liberal members of that Government?
BARONESS SUMMERSKILL: My Lords, can my noble friend tell me what is the degree of literacy in Hong Kong?
LORD SHEPHERD: My Lords, Hong Kong is now a Colony of some 4 million people. It has come to that figure from 600,000 in 1945, and I should not like to hazard a guess about what the percentage is. I believe, however, that it is relatively small.

SCHOOLCHILDREN AND VIOLENCE TO TEACHERS
LORD BEAUMONT OF WHITLEY: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they have any records of incidents of violence offered by pupils to teachers in schools and, if so, what are any relevant figures for the immediate past.]
BARONESS PHILLIPS: My Lords, Her Majesty's Government have no such records.
LORD BEAUMONT OF WHITLEY: My Lords, I thank the noble Baroness for her Answer. May I ask whether she is aware that there is considerable feeling among teachers and others that there is a problem here? If this is so, the best way of dealing with this feeling is to make quite certain that there are records of incidents which, if they were common, would amount to a very distressing and disturbing symptom.
BARONESS PHILLIPS: My Lords, as the noble Lord may well know, matters of school behaviour are the responsibility of the governors, the teachers and the local education authority. If the matter were of sufficient seriousness, it might well come within the purview of the local court. I note that the noble Lord says that there is growing disturbance among the teachers on this question. If he would care to communicate with me later I will convey his comments to my right honourable friend.
LORD BALFOUR OF INCHRYE: My Lords, would the incidence of violence of the Young Liberals to the elder teachers in the Party be included?
LORD BYERS: My Lords, is the noble Baroness aware that it is very welcome?
LORD BEAUMONT OF WHITLEY: My Lords, I welcome the obvious interest of the noble Baroness in what I think is becoming a problem. May I ask whether the Government are aware of the necessity for dealing with this kind of behaviour before it becomes a problem, as, unfortunately, was not done by learning a lesson from, say, what happened in America in a similar way over racial problems?
BARONESS PHILLIPS: My Lords, the noble Lord may be reassured that the recommendations of the Plowden Committee in relation to certain areas where there was social deprivation are now being studied very carefully and will be followed through. Her Majesty's Government have no record of an increase in the violence which the noble Lord has mentioned.

GIBRALTAR CONSTITUTION TALKS
2.41 p.m.
LORD MERRIVALE: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows.
To ask Her Majesty's Government, in view of the outcome of the latest talks in Madrid on Gibraltar, whether they will make a statement on the proposals for constitutional changes contained in the recent Report of the Gibraltar Constitutional Committee under the chairmanship of Mr. P. J. Isola, Deputy Chief Minister.]
LORD SHEPHERD: My Lords, we are paying close attention to the Report of the Constitution Committee, but it would not be helpful for me now to make any statement about it.
LORD MERRIVALE: My Lords, I thank the noble Lord for that very brief Answer. Now that the Anglo-Spanish talks are over, and in view of Gibraltar's need for stability and security, would not the Minister agree that the final talks for constitutional changes should be held at the earliest opportunity; and can the noble Lord now say when these talks will take place?
LORD SHEPHERD: My Lords, I indicated when we last discussed Gibraltar that I hoped we should have the more formal constitutional discussions early in the summer. We are working very carefully on the proposals that have been put to us by the elected members from Gibraltar, and on some of our own proposals. I should not wish to hurry these forward until at least we have been able to get most of the "t's" crossed and the "i's" dotted, so that when we have a conference we can get a proper and satisfactory solution.
LORD MERRIVALE: My Lords, as the noble Lord said, Her Majesty's Government are working on these proposals. Can he say along what guide lines they are working as to the form this new Constitution will take? May I ask him one final question regarding Part III of the Report concerning the link with Britain? Does he recognise that there is a strong and persuasive recommendation that on

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decolonisation the Commonwealth Immigrants Act should not apply to Gibraltar? Would he not agree that Gibraltar is a unique case, being the only Commonwealth territory which is in Europe and which is hampered by the Treaty of Utrecht?
THE LORD PRIVY SEAL (LORD SHACKLETON): My Lords, we all share the noble Lord's interest in this question, but I think he is taking the question form of a supplementary a little too far. Questions are designed to elicit information.
LORD SHEPHERD: My Lords, in regard to the guide lines to which the noble Lord first referred, perhaps he would look at what I said in our last debate, when I set them out in some detail. As to how we see the Constitution developing, I should not wish to go any further than what I have said in my original answer. In regard to the Commonwealth Immigrants Act and its application to Gibraltar, I am sure the House is well aware of the views of Her Majesty's Government. While they may not necessarily be accepted in Gibraltar, I think that they are understood and appreciated.

GIBRALTAR FRONTIER RESTRICTIONS
LORD MERRIVALE: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether it is true that Spain intends to apply new frontier restrictions against Gibraltar from April 15 next; whether they will affect British tourists and the economy of the Rock; and what counter-measures they propose to take.]
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (LORD CHALFONT): My Lords, the Spanish Minister of Information stated on March 22 that the Spanish Government had decided to apply progressively certain clauses of the Treaty of Utrecht, which he said
"guaranteed Spain's defence against any possible attempt at expansion of the Gibraltar colonial situation."
This might foreshadow new restrictions. But the Spanish Government have not explained the statement or commented on
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various Press reports to this effect, and I do not propose to speculate either on their intentions or our own reactions. Our views on the question of frontier restrictions at Gibraltar have been made absolutely clear to the Spanish Government.
LORD MERRIVALE: My Lords, I thank the noble Lord for his reply, but as a new situation would appear to be emerging, would the noble Lord be prepared to reaffirm the assurance made by the noble Lord, Lord Beswick, on July 27, when he said:
"If the economy of Gibraltar were to suffer further restrictions, we should then confront a new situation which Her Majesty's Government would then consider, in close consultation, as is customary, with the Government of Gibraltar"?—[OFFICIAL REPORT, 27/7/67; col. 1318.]
Should there be new restrictions on April 15, would Her Majesty's Government implement the assurance of the noble Lord, Lord Beswick?
LORD CHALFONT: My Lords, of course I reiterate what my noble friend said on that occasion, but I think it would be unwise of me, as it always is unwise, to comment on what would be the action of Her Majesty's Government in a hypothetical situation.
LORD ROWLEY: My Lords, may I ask my noble friend whether he will make clear that the Government do not accept the interpretations which are apparently put on the Treaty of Utrecht by the Spanish Government and that if the Spanish Government insist on implementing their own interpretations, the responsibility for the consequences will rest entirely upon the Spanish Government?
LORD CHALFONT: My Lords, I am in considerable sympathy with what my noble friend has said. We have already made it plain on a number of occasions, most recently at the talks which took place in Madrid last month, that we regard restriction at the Gibraltar frontier as completely unwarranted. But I think that our action in this matter should be, as it has been in the past, to keep open our offer to submit the specific question of Spain's legal obligations about the land frontier to the International Court of Justice and to independent adjudication.
LORD MERRIVALE: My Lords, does the noble Lord not think that this is just

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wishful thinking, hoping for something impossible, when as a result of the failure of these discussions the official comment on the part of the Spanish Government was that the only thing Her Majesty's Government were interested in was the question of better facilities regarding the use of the British military base, without taking into account the interests of the people of Gibraltar? Does that not appear to be a curious official comment on the part of the Spanish Government after the breakdown of these talks?
LORD CHALFONT: My Lords, it is up to the noble Lord to place his own construction on the comments he has heard and on reports in the Press. I can only say that from our point of view we have had no official comment from the Spanish Government upon the Press reports and we have had no gloss placed on anything that has been said by them since the talks in Madrid. I can only reiterate that we do not accept that Spain can justifiably prevent communications that have been allowed and exercised for over 250 years. But I think that the noble Lord and the House generally would agree that it usually is unwise in a situation like this to say what we would do if certain circumstances came to pass, when we do not even know that they are going to come to pass.

MALTA DOCKYARD
LORD BESWICK: My Lords, at a convenient moment after 3 o'clock my noble friend the Leader of the House will be making a statement about Malta.

CONSERVATION OF SEALS BILL [H.L.]
THE EARL OF CRANBROOK: My Lords, I beg leave to introduce a Bill to provide for the conservation of seals in England and Wales and Scotland, and in the adjacent territorial waters. I beg to move that the Bill be now read a first time.
Moved, That the Bill be now read 1a.—(The Earl of Cranbrook.)
On Question, Bill read 1a, and to be printed.

THE SHIPPING INDUSTRY
2.50 p.m.
LORD GEDDES LORD GEDDES rose to call attention to the shipping industry; and to move for Papers. The noble Lord said: My Lords, in drawing your Lordships' attention to the shipping industry I must first declare an interest, both as a director of a shipping company and as this year's President of the Chamber of Shipping of the United Kingdom. It is now just over eight years since this subject was last debated in this House. This in itself is an indication of the extent to which, in peace time, shipping is a forgotten industry, or at least one which is taken too much for granted, except of course during a strike of seamen or dockers, when the industry's services become all too conspicuous by their absence. Whenever on such occasions shipping is mentioned in public, words like "vital" and "lifeline" are freely and sincerely used. But it is not mentioned nearly enough in ordinary times, or in the right quarters.
There is a further justification for inviting your Lordships to consider this subject once more after so long a time, and that is the fact that a Committee of Inquiry are now examining the industry, under the expert chairmanship of the noble Viscount, Lord Rochdale, whom I am glad to see here in his place to-day. Perhaps I should make it clear that this time I shall confine myself to shipping, as distinct from shipbuilding. It is true that, in a sense, these are sister industries; but they are quite separate, and shipbuilding has problems of its own which have been widely publicised. Similarly, I shall not refer to another industry with problems of its own—the fishing industry. This has always been regarded as distinct from the merchant fleet, and is indeed quite different in terms of operation, ownership and the legislation which applies to it.
My Lords, eight years ago the outlook for British shipping, as many speakers then said, and as indeed I said myself, was black. The picture which I have to paint to-day is not one of unmitigated gloom, but rather of change: of great changes that have already taken place, and of more to come. At the time of the last debate world seaborne trade amounted to 970 million metric tons. By

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1965 this figure had increased to 1,600 million tons, and it is still rising. But a large part of this increase has been in the quantity of oil being shipped, which is now substantially greater than all other cargoes put together. This has had a profound effect on the structure of the world's merchant fleets, including our own. The world merchant fleet has risen over the same period from about 104 million to about 167 million tons gross. The fact that it has not increased at quite the same rate as world trade is partly because the newer ships tend to be faster, and partly because of the reduction in the number of ships laid up as a result of lack of employment. In January, 1960, there were 6¼ million tons laid up, including nearly 1 million tons of British shipping; in January of this year the world figure was down to 750,000 tons, including only nine quite small British ships, totalling 60,000 tons. But the most dramatic increase in ships' tonnage has been in tankers. The world's oil carrying capacity has risen during this period by well over half, and the ships themselves are bigger. At the time of the last debate, only 10 of the tankers on order had a deadweight tonnage of more that 100,000 tons—the first of many of the "Torrey Canyon" size. Now throughout the world there are already in service 30 vessels half as large again; and there are at least 170 of these under construction or on order, mostly in the 200,000 ton class, and including some of over 300,000 tons. In sheer size tankers have now taken the place of the passenger liner, and in far greater numbers.
Where does the British merchant fleet stand in all this? It has increased, but at nothing like the same rate as the world fleet, and it now stands at 20½ million tons gross. Its share of world tonnage, however, has fallen over these eight years from 19 per cent. to just over 12 per cent. This is a very different picture even from 1939, when we could claim 28 per cent. of the world's tonnage. We have in the past year lost our place at the head of the league table to Liberia; and although Liberia—in this context only, and with all respect—is a paper tiger, for ships under her flag are mostly owned either by American or Greek interests, we are no longer very far ahead of Norway and Japan, both of whose
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fleets have increased dramatically in the past few years.
There are many reasons for this relative decline, but the main one has been the switch from coal to oil as a source of energy. In 1913 we exported 77 million tons of coal, mostly in our own ships, well over twice the weight of our total exports last year, though of course only a fraction of their value. By 1938 the figure was down to half of this, and by 1967 it had dropped to less than 2 million tons. By contrast, our imports of oil and oil products have risen in weight by over eight times since 1938 to the present figure of well over 90 million tons. In these 30 years we have changed from being exporters of one form of energy to being importers of another, and on even a vaster scale. So it is not surprising that the pattern of our shipping operations, and the nature of the ships themselves, should have changed. It is significant, too, that the countries whose fleets have increased at a faster rate than ours are for the most part untrammelled by the demands and precedents of other industries.
Nevertheless, our shipping industry continues to play an unobtrusive but vital part in our economy as, in almost every sense, an invisible exporter It is sometimes difficult to grasp what those words mean, and perhaps an example might help. Last week, a 20,000 ton British flag ship of my own company brought a cargo of oil into London. She last sailed from a British port in December, 1962. During these 5¼ years she steamed over 390,000 miles or, to put it another way, she carried roughly 8 million ton-miles of cargo, and always in the so-called cross trades far away from home. She has been truly an invisible exporter during the whole of that time.
The net contribution of United Kingdom shipping to the balance of payments is about £140 million a year, or a quarter of the whole of our invisible earnings. But this is not the whole story. British ships help to carry our own exports and imports, and if there were no British ships the net cost to our balance of payments would be of the order of £300 million a year. The industry achieves this result on a dangerously narrow margin of profitability, though this is characteristic of shipping throughout the world. According to the Economist, the overall return

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on capital employed by United Kingdom shipping companies in 1967 was a mere 0·9 per cent.; and a report on European liner operations not long ago suggested that an increase of 20 per cent. in freight tariffs would be needed to ensure a reasonable return.
There are, of course, times when at least some types of shipping enjoy a boom, but the lean periods in between tend to be protracted. In spite of this, our fleet has been transformed, and for the better, in the past few years. In the last debate, the noble Viscount, Lord Runciman of Doxford, concluded by saying:
"If we have not in the years to come to the same extent the biggest mercantile marine in the world, at least let us try … to have the best."—[OFFICIAL REPORT, 3/2/60; col. 925.]
The first part of that is already true. We have not yet quite succeeded with the second—for example, our ships are on average slightly older than those of Norway and Japan—but we are well on the way towards it.
The most obvious change has been to fewer but larger ships—from just over 3,000 to slightly under 2,200, but with an average tonnage of just under half as much again. Conventionally, our fleet is divided into three main classes of ship—liners, tramps and tankers—and each of these, in turn, into ocean-going, which is much the larger part, and coastal. Liners are those ships which ply on fixed routes to fixed schedules, like buses, and the great majority of them are concerned wholly or mainly with cargo, including refrigerated cargo. Because of the withdrawal of so many passenger liners, as a result mainly of competition from the air, the tonnage of ocean-going liners as a whole has decreased, and now represents about 42½ per cent. of the whole oceangoing fleet, compared with 52½, per cent. eight years ago. This trend will be accelerated by the emergence of container ships, a specialised form of liner of which I shall have more to say later.
The next group, the tramps, are rather like hire-cars, in that they can be chartered either for a single trip or for a period, though the latter is becoming more usual. Their tonnage has increased a little in these eight years, and now represents 20 per cent. of the ocean-going
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fleet, but they include an increasing proportion of the large new ships known as bulk carriers, which are used for such commodities as iron ore. The third group, the tankers, are owned mainly by the oil companies for the transport of their own raw material or products. Their numbers have fallen by about a third, but their average tonnage has doubled, and their proportion of the ocean-going fleet has risen from 30 per cent. to 37 per cent. The contrast will be still more marked in two or three years' time. At the beginning of 1960 there were only four United Kingdom owned and registered tankers with a carrying capacity of more than 40,000 tons; but of the 200,000-tonners that I have mentioned as being on order to-day, 25 at least will form part of the United Kingdom fleet of to-morrow. So much for the oceangoing vessels.
The coastal and short-sea fleet, on the other hand, has declined both in number of ships and in total tonnage, as a result largely of the continued falling away of the seaborne coal trade. Although there is the same trend towards larger vessels, this is limited by the capacity of the ports and the terminals to which they trade. These broad divisions tend to conceal the emergence of highly sophisticated types of new ship, such as roll-on, roll-off ships in the short sea trades, methane carriers and bulk chemical carriers, oil-rig service craft, and so on. These are all evidence of increasing specialisation, and they bring me back to the most revolutionary of the specialised vessels of to-morrow: the big container ships which will soon begin to take over the role of the conventional cargo liner in the deep-sea trades. The revolution here is not so much in the idea of pre-packing cargo in enormous boxes of uniform size, instead of stowing it in the holds of a ship item by item or bale by bale; it is in the concept of through-transport from inland depot to inland depot, with the minimum of handling and delay at the ports and with a single operator responsible for the entire movement.
Britain is often accused of having bright ideas but failing to exploit them. Here the reverse is the case: we cannot claim to have invented containers, but we have seized the opportunity they offer and are developing the idea further and on a larger scale than anyone else. Next

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year, in addition to existing short-sea container services and to transatlantic services operated by British and foreign shipowners in collaboration, nine specially-built ships will come into operation on the Australian run, doing the work of fifty or more conventional cargo liners. It may not be long before the principle is applied to other routes where the volume of cargo justifies the very heavy capital investment.
I propose to touch only very briefly on the all-important human aspect of these changes. Bigger ships, with sophisticated equipment, mean, ton for ton, smaller crews. Since the last debate, the number of United Kingdom-domiciled seafarers has fallen from about 140,000 to about 110,000, and it must continue to fall as the industry becomes more and more capital-intensive. At the same time, the modern officer or rating is becoming increasingly professional and versatile. Higher standards of entry are being set, and more and more emphasis is being placed on training at all levels. The recent introduction of degrees is one example, and the opening last year of the magnificent National Sea Training School at Gravesend is another. One extremely interesting development is the gradual and planned breaking down of the traditional divisions between deck and engine room, and even between them and the catering department. The master of a ship and his officers are coming to be regarded as managers, and increasing use is being made of work study and other management techniques.
These developments bring new responsibilities. One of them is safety, and perhaps I may touch briefly on tanker safety, since I have been particularly concerned with it. In so doing, I can hardly avoid mentioning the ill-fated "Torrey Canyon". This was an incident of the most unlikely kind, and the result of sheer ineptitude. But it happened, and it has been followed recently by two further incidents with similar results on the other side of the Atlantic. As I have pointed out, the world has come to rely for its energy mainly on crude oil, and in doing so it has exposed itself more and more to a new kind of hazard, the extent of which we have realised only gradually. A great deal of work needs to be done, and is being done, to minimise this hazard. But cool judgment is
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required where restrictive measures are concerned. It would be wrong for example, to be panicked into restricting the size of tankers. Collisions are a greater risk than strandings, and fewer and bigger ships, provided that they meet the highest standards of manning, actually reduce the chances of collision. Above all, in an international industry like shipping such measures must be concerted internationally. Not only is it pointless and dangerous to have ships of different nations obeying different rules, but it is also merely quixotic and economically suicidal to impose on one's own ships restrictions from which those of other flags are exempt.
Possible measures arising out of the "Torrey Canyon" episode, such as recommended sea lanes, are being thoroughly worked out by the Inter-Governmental Maritime Consultative Organisation. This United Nations organ could easily have become a forum for mere sectional theorising, but in this case it has shown itself to be a well-balanced and powerful instrument with considerable potential for the future. I only hope that IMCO's work will not be undermined by hasty unilateral action by the United States as a result of the recent incidents, and, more generally, that it will resist the temptation of reaching out too far into fields of responsibility which are the province of established institutions, such as the classification societies in the field of ship design.
It is somewhat ironical that Britain should have been the first sufferer from a discharge of crude oil on the "Torrey Canyon" scale, for we have taken the lead in promoting international agreement to limit the far more common cause of oil pollution, the discharge of wastes after tank washing, and a British tanker company has developed a system, which is now widely adopted, which eliminates practically any discharge at sea at all. We have also our own tanker safety code for the avoidance of fire and explosion, which is now being adapted for international application, and is to be followed by a similar code for the carriage of bulk chemicals. Only last September tanker owners from all over the world met in Brighton to exchange information on the causes of casualties. And, although this is my special field, there are similar developments in other trades. It may well be that the time is not far off when it will

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be necessary to reach international agreement on at least the minimum qualifications for those who are entrusted with the command of ships which may enter the harbours of any nation in the world.
In a commercial sense, shipping the world over is peculiarly vulnerable to factors outside its own control. Some of these are quite unpredictable, like gluts and famines: others result from the actions of Governments, including our own. One example has been the closure of the Suez Canal for the second time in a dozen years, with 15 ships, including four valuable British liners, bottled up inside it for the past ten months. The disturbance to the pattern of trade has been profound during this period, and the cost has been heavy to shipowners and consumers alike. One thing is certain: if and when the Canal reopens to shipping of all nations, as of course we all hope it will, it will never resume its old importance. Before last year's hostilities just three-quarters of the Canal's revenue was from tankers carrying crude oil from the Persian Gulf to Europe and returning in ballast. The largest vessel which could traverse it fully loaded was about 70,000 tons dead weight; but the Canal authorities had laid plans for straightening and deepening it to take a 200,000-tonner by about 1975. But at last year's level of Canal dues it would already have been more economical to take a loaded 200,000-tonner, a number of which were by then on order, round the Cape. Now, with the uncertainty about the future of the Canal, many more vessels of this class have been ordered, with the result that by the early 1970s there will be sufficient of them in service to carry all the oil that used to go through the Canal. The flow of oil through the Canal to North-West Europe may well be reduced to a trickle; and it is by no means certain that the big tankers will want to use it even if, and when, several years later, it is deep enough to take them. If meanwhile the Canal dues are increased, to compensate either for this loss of revenue or for the cost of deepening, they may become prohibitive even for a large proportion of dry cargo ships, including the new container ships. It will be a sad thing for everyone if the Canal, which has been of such profound service to trade and humanity for a century, should fall into disuse; but it could happen.
Then there is the deliberate action by foreign Governments in restraint of trade. Much was said during the last debate about flag discrimination and cargo preference—devices by which certain nations reserve a proportion of their trade for their own vessels. These practices, often associated with subsidies, are kept within bounds only by endless negotiations on the part of British and European ship-owners and their Governments. Again, some nations encourage the use of flags of convenience, which enable their nationals to enjoy tax concessions and other benefits which they could not and would not enjoy under their own flag. Finally, there is increasing interference, most strikingly by the United States' Federal Maritime Commission, in the pricing mechanism; and arbitrary criteria are being opposed to the free play of market forces.
A new factor since the last debate is the emergence of the United Nations Conference on Trade and Development, which has an active Committee on Shipping. The underlying purpose of this organisation, to help the developing countries to help themselves, is unexceptionable; but where shipping is concerned it tends to takes the form of encouraging the growth of national fleets, in part at least for reasons of prestige and with insufficient regard to commercial realities. This could lead to uneconomical services driving out the established ones and leaving the country concerned with a liability rather than an asset, in spite of cargo preference. There are several cases where improvement of port facilities would reduce or stabilise the cost of the existing services and be a much better investment in the long run.
Our vulnerability is equally marked where the actions of our own Government are concerned. The effects of devaluation, for example, are by no means clear, but a very high proportion of the disbursements of British shipowners is in non-devalued countries; and many owners face substantial additions to the cost of ships they are having built abroad. So far as taxation is concerned, the industry has enjoyed the benefits of free depreciation. At the same time, however, there was the change in the basis of company taxation, which has largely nullified those benefits. In a very different field, ship-owners are gravely concerned at the im-

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pending withdrawal of the Navy from East of Suez, believing that all kinds of lawlessness may develop without the often unseen presence of the "policemen on the beat".
In the last debate the noble Earl, Lord Jellicoe, referred to "an increasing need for a real and fruitful partnership between industry and Government". A partnership of a kind has existed between the shipping industry and the Government for much longer than with most other industries. It has always been friendly, but at the present time it is not, I believe, as fruitful as it could be. Although the Government usually appreciate the special problems which we have as an international industry, they are not always successful in taking up the cudgels for us against other Governments whose approach is more restrictive.
In other spheres, particularly where the Ministry of Transport is involved, our relations are less harmonious. In recent months the Minister has taken two major steps without apparent regard for their effects on shipping. The first is the proposed nationalisation of the ports. This, we believe, is a purely doctrinaire decision, and one taken at the worst possible time. The second is the Transport Bill, which could affect shipowners in two ways. First, it would restrict our customers in their choice of inland transport, and this is of special importance with the through-transport of containers. Secondly, the massive support accorded to the railways cannot fail to have an adverse effect on coastal shipping. According to the White Paper, The Transport of Freight, the Government
"recognises the contribution which coastal shipping can make to the national transport system and accepts the principle that competition between coastal shipping and the railways must be fair."
But the effect of the Transport Bill is to nullify the safeguard, such as it is, provided by Section 53 of the 1962 Act; and it is difficult to see how competition can be fair when one competitor is given orders, and resources, to secure traffic regardless of specific comparative economics.
My Lords, I hope that I have painted a picture of an industry which is at once vital, virile and vulnerable. Vital, in the sense that our balance of payments would
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be in a far more parlous state without it; virile, in that it is responding promptly and positively to changing pressures and demands; and vulnerable, in that it is subject to a greater array of unpredictable external factors than any comparable industry. My plea is that Governments of this country, of whatever political colour, will, by paying special regard to the industry's special problems, help to add yet another "v", for viable. My Lords, I beg to move for Papers

MALTA DOCKYARD
3.20 p.m.
LORD SHACKLETON: My Lords, with permission, I should like to acquaint the House with the present position in relation to the talks with the Prime Minister of Malta about the Malta Dockyard which were concluded last Sunday. These talks were essentially concerned with the financial help which the Malta Government sought in respect of certain proposals which Dr. Borg Olivier will be making to the Malta Parliament in the next few days. These proposals will have the effect of ensuring the continued operation of the Dockyard and will enable it to be developed for the benefit of the Maltese people and for fill who work in the Dockyard. This is of the utmost importance for Malta and, I believe, for relations between our two countries.
The House will understand that until the proposals of the Malta Government have been made public in Malta it is not possible for me to make any detailed statement on this subject. I thought it right, however, to inform Parliament that the talks last week about the contribution which the British Government could make to a settlement of this problem were entirely successful. I hope to be able to give the House the details in a further Statement before the Easter Recess.
EARL JELLICOE: My Lords, I should like to thank the noble Lord for making this Statement and making it in your Lordships' House, and to congratulate him on this agreement. At least I am virtually certain that I should be congratulating him, although until we know the details of the settlement it is of course difficult to comment on it. In any event,

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I am sure that your Lordships admire the strenuous efforts which the noble Lord the Leader of the House, not for the first time, has deployed in extremely difficult international negotiations, and this time I think the diplomatic talents of the noble Lord have been employed to an end which commands wider assent in this country than last time. We all gladly acknowledge our great debt to Malta and its people, and many of us feel that hitherto that debt has not been adequately discharged. Knowing the importance, as I do, of the Malta Dockyard to Malta, and subject to more knowledge of the facts of the settlement, I am sure that I am speaking for my noble friends when I say that we are very glad that it has been possible to reach this settlement.
LORD BYERS: My Lords, I should like to add my thanks to the noble Lord for making this Statement in the first instance in this House, and to congratulate him very sincerely indeed on what we believe he has achieved in these negotiations. I hope that it may give a stability to the Dockyard which will inspire the confidence of the potential users of the Dockyard and help the economy of Malta in a very big way. The noble Lord will then be able to take great credit for what he has achieved.
LORD BROCKWAY: My Lords, joining in the congratulations to my noble friend, may I ask him whether, in these negotiations, any estimate has been made about the degree of unemployment which there will be in the docks, and of any alternative development in Malta which will provide for those who become unemployed?
LORD SHACKLETON: My Lords, I am most grateful to all three noble Lords—to the noble Earl, Lord Jellicoe, and the noble Lord, Lord Byers, especially—for their kind remarks. I would echo what the noble Earl said in regard to the feelings that we in this country have for Malta. This is a feeling which I strongly share, and despite the somewhat arduous nature of the negotiations my affection and admiration is certainly in no way diminished. I very much regret not being able to give the House much information at this stage. Your Lordships will appreciate that this is very much the responsibility of the Malta Government. There
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is always the possibility of legislation in Malta, and it would therefore be wrong to go into details. Any picture I could give at this moment of our contribution would be incomplete without the whole details.
I may tell the noble Lord, Lord Byers, who I realise has recently established a degree of residential status in Malta, that his prospects will also be excellent in the future. All noble Lords are of course concerned about the possibility of the solution of this problem. Let us not minimise the fact that difficulties do lie ahead, and not least in the Dockyard itself, but on the wider question of employment it is not for me now, or indeed for the British Government, to comment on the prospects actually within the Dockyard beyond saying that we hope that, with efficient management—it is a very fine dockyard indeed—it will become more prosperous. But of course the British Government have taken a number of steps—for example, the appointment of the Robens Mission—to assist the Malta Government in regard to diversification and other activities. This is part of a wider problem, one that is also associated with the run-down. So I fear that, without going into it at greater length, I can give no answer to my noble friend Lord Brockway beyond saying that while in the wider context of run-down his remarks are very relevant, we are hopeful that there, too, good progress will be made.

THE SHIPPING INDUSTRY
3.27 p.m.
Debate resumed.
THE MINISTER OF STATE, BOARD OF TRADE (LORD BROWN): My Lords, I am grateful to the noble Lord, Lord Geddes, for having given us the opportunity of debating such an important subject as our shipping industry, and for setting out for us so lucidly the changes which have taken place and are still taking place in the industry and in sea transport as a whole around the world. There can never have been a time when there were so many, and such fundamental, changes in the techniques of sea transport over comparatively few years. The only possible paralled could be the period just over a hundred years ago, when the iron, screw compound steamer gave man the power to carry

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paying cargo at will almost to the ends of the earth, without being at the mercy of winds and water. It is therefore very salutary that we should have this debate at this time. I believe the noble Lord, Lord Reith, once remarked,
"Let us get the facts straight before we all begin distorting them."
Lord Geddes has set out the situation very objectively and I am grateful. The noble Lord also, early in his speech, stated his intention to confine his remarks to shipping. For this, too, I am grateful, because the Government are well aware of the problems of the related industries of shipbuilding and fishing; but shipping is by itself a subject of great range and complexity, and I am sure it would only detract from your Lordships' consideration of it if we were to try to extend the debate to these other industries as well.
I will not seek to put any gloss on the very interesting and detailed description which the noble Lord, Lord Geddes, has given of developments in world sea-borne trade and world shipping, and the relative position occupied by our own merchant fleet. Many, of course, deplore the change in its position from 28 per cent. in 1939 to 19 per cent. in 1960 and 12 per cent. to-day—just over that figure—but, as the noble Lord has pointed out, the circumstances of world seaborne trade have changed greatly over these years, and there is a case for saying that these changes have been almost inevitable. What is more important than pure size is profitability. However large a merchant fleet, it risks becoming a burden if it is not profitable. At a later point the noble Lord referred to the impact of taxation on the industry, but the Government's attention to this issue is of limited value to the industry if it is not making profits. If you do not earn profits, you do not pay much in taxes, and the benefits arising from tax relief where these are appropriate is correspondingly reduced.
Let me stress at once that the Government are in no doubt about the true nature of the contribution which the shipping industry can and is making to invisible exports and the balance of payments. In the course of his speech the noble Lord gave the net contribution of the United Kingdom shipping industry to the balance of payments as about £140 million a year. That was the figure for
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1966. For 1967 the latest estimate is that this contribution will have risen to £246 million, due to higher freight rates and earnings mainly from tankers. I believe this sharp increase is not yet public knowledge, and clearly the industry is to be most heartily congratulated.
The whole of the industry's net earnings contribute visibly in our balance of payments. This was one of the considerations which influenced the Government when the corporation tax system was introduced to include in the 1965 Finance Act a provision which allows the shipping industry to write of fully their new ships for tax purposes against profits at any time after they are acquired. This is known as free depreciation. In saying that corporation tax nullified the benefit of free depreciation it seems to me that the noble Lord is to some extent putting the cart before the horse. I suggest, too, that we should consider the fiscal position of the shipping industry in all its aspects. Shipping was not the only industry affected by the change to corporation tax, but only the shipping industry has the privilege of free depreciation. Moreover, under the Industrial Development Act investment grants are payable in respect of ships. Previously ships qualified for investment allowances along with all other manufacturing and transport equipment, although at a higher rate, but now that these allowances have been abolished ships are the only form of transport equipment, apart from certain specialised vehicles and port equipment which qualifies for investment grants. If the shipping industry's profitability were to improve, which we sincerely hope it will, then the benefit of free depreciation might be much greater than it is at present. With all these arrangements the industry may well find as its profits improve that it is better off under corporation tax than it would have been under the previous arrangement.
The noble Lord has referred to the activities of foreign Governments in restraint of shipping and has suggested that we have not been tough enough in trying to secure the limitation of these actions in the interest of our own shipping industry. Many noble Lords in this House will be aware of a problem which frequently arises over inter-governmental discussions. A very tough line may in

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fact be taken by our negotiators, but because such negotiations are essentially confidential those affected by their outcome in the United Kingdom are often left to assume that too little has been attempted in defence of their legitimate interests. I am not saying that we are always sufficiently tough, but I think that often we are a good deal more trenchant than is accepted as being the case.
There is no doubt that the practice, for example, of flag discrimination causes grave concern to shipowners and that the extension of it could be damaging to the shipping industry and to its contribution to the balance of payments particularly, because over 50 per cent. of the earnings of United Kingdom shipping is derived from the cross trades. In conjunction with other maritime nations we have consistently and vigorously opposed the practice, and at the recent UNCTAD Conference we were able to secure the withdrawal of a resolution which would have condoned the use of it by developing countries. At the same time it must be recognised that the effect so far of flag discrimination on world seaborne trade overall is small, and the same is true of the seaborne trade of the United Kingdom. In recent years our imports have amounted to about 157 million tons, of which a little over 60 per cent. has been carried in foreign ships, but the greater part of this was in bulk commodities of which oil was the most prominent; and the amount of all this trade which was affected by flag discrimination was indeed small. Nevertheless, we recognise that the extension of flag discrimination must increase the cost of transportation both for the countries which practise it and for their trading partners.
The Government are well aware also of the difficulties which the Federal Maritime Commission's regulations can create for British shipping. Shipowners are compelled to dissipate time, effort and money in coping with the requirements of United States law, although they are, of course, no worse off in this respect than their competitors, including United States shipping lines. And in addition to the commercial implications, there are difficulties of jurisdiction and International Law. Her Majesty's Government and the Governments of many other countries
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have on many occasions pointed out very firmly indeed that some of the functions which have been committed to the Federal Maritime Commission cannot be carried out without encroachment on their own national jurisdiction. I hope that in the last year or so we have achieved reasonable working arrangements on a number of issues. I believe that British shipping would have found its position even more irksome had it not been for the sometimes very rigorous work which goes on through diplomatic channels. I can end on this matter only by saying that there is no easy solution to this problem, as the noble Lord knows only too well.
I have noted comments made about the threatening danger of oil pollution, with which, of course, the Government entirely agree. We are pursuing the matter with vigour through the Inter-Governmental Maritime Consultative organisation. I know of the interest in this matter of the noble Earl Lord Jellicoe, as Chairman of the British Committee.
The noble Lord referred to the human aspects of the remarkable developments which are now affecting shipping and indeed transport in all its spheres. It is difficult to exaggerate the importance of coming to grips with the problems which these cause. Nearly every new technical development means that fewer men are required to do the same amount of work, while those who are still required have to be ever more professional and versatile. Unless we can find satisfactory solutions to these problems it is no exaggeration to expect that the benefits from the new technical developments may be lost or almost entirely nullified. We have, in the first place, to see that as far as possible the problems created by the falling off in the numbers required, whether as seafarers or elsewhere in the shipping and transport industry, do not take us by surprise. It is just as important to plan ahead in manpower as it is to plan for investment and marketing.
Secondly, we have to see that the opportunities presented by new techniques and labour-saving devices, whether manifested in the size of ships or automated control systems or in new methods of cargo handling, are not frustrated by out-of-date anachronistic management-labour relations, unreal industrial agreements, bad methods of remuneration or by Government regulations which fail

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to take account of the changes that are taking place. The whole question of the conditions under which seafarers serve, and the relations between seafarers, shipowners and the Board of Trade in so far as it has responsibilities for these matters, were very fully covered in Lord Pearson's Report, which was published at the beginning of last year. The recommendations in that Report have been generally accepted by all the parties concerned; and the Board of Trade, in consultation with the seafarers and shipowners is now developing proposals for the legislation which the implementation of Lord Pearson's recommendations require.
We are a nation which tends to under-emphasise the need constantly to analyse and reform the many varied social and administrative institutions through which we administer our affairs in the realms of government, the law, commerce, industry and elsewhere. Unfortunately, in some ways I think this is a general characteristic of our society. The wind of change is now blowing through the industry, and we should all hope that our love of tradition, which is so easily but falsely translated into a love of carrying on with out-dated practices, will not prevent the many changes which are so essential to match the rapid technological changes in the shipping industry. It would be unfair to finish that comment without acknowledging the bold innovations which some companies in the industry have already introduced.
The noble Lord made a plea for a closer partnership between the shipping industry and the Government in terms which were just a little reminiscent of the early stages of a take-over bid. He then went on to list some of the directions in which present Government policies are not wholly acceptable to the shipping industry. He mentioned first the proposals for the nationalisation of the ports. I know he is opposed to the policy of my right honourable friend the Minister of Transport in this regard, but I am sure he would not wish to complain of any lack of candour or fairness on her part. The Chamber of Shipping was invited to comment on the Government's provisional proposals, and he and other representatives of the Chamber received a fair hearing from the Minister of State when they gave him their views—views which the Government were most glad
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to receive and which they have studied most carefully.
The noble Lord suggested that the reorganisation of the ports is being undertaken for doctrinaire reasons. This is a field in which I can claim to speak from a little personal experience First, as a Minister concerned with exports I am besieged with complaints of slow passage of goods from factory to overseas customers, and there is no question that our manufacturers are in many cases entitled to expect a faster movement of goods through many of our ports. Secondly, as Chairman of the National Modernisation Committee for the Port Industry, I have learned much of the administrative, managerial and labour situations in the ports. Nobody who read the Devlin Report could deny that they have been completely out of date. Whilst it is fair to point to the devoted efforts of both employers and trade unions which led at last to the elimination of the curse of casual labour and of a drastic reduction in the number of employers, brought about voluntarily by them, it is clear that these changes were long overdue and that the industry would have done very much better had they been introduced by joint agreement at a much earlier date.
In the light of all the changes in the physical nature of the ports and of the new methods of handling cargo which are already with us, it is clear that more and far-reaching changes will be essential. Bearing in mind all the difficulties; which have held up essential reforms in the past, it is now clear that planning and policy must be guided on a national basis in future. The noble Lord, Lord Geddes, must excuse me, but his use of the term "doctrinaire" stings me to a retort. Nationalisation is simply one form of organisation, to be used only in circumstances where it seems to the Government in power best to suit particular circumstances. It is therefore one of the organisational options available for consideration and, with great respect, it is those who decry its use in any circumstances who are the doctrinaires, net those who use it with discrimination where it seems to be appropriate.
The noble Lord also referred to two respects in which the Transport Bill will raise difficulties for the shipping industry.

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I acknowledge that this is a tortuous problem, but I find some difficulty in accepting that the licensing provisions in the Bill will mean any appreciable restriction on the use of road transport by shipowners. The quantity licensing scheme would not apply at distances up to 100 miles, except for certain bulk traffic, and recent research has indicated that a proportion of the order of 75 per cent. of exports originate within 100 miles of the port of shipment and that nearly all imports are delivered to the first consignee within the same distance. With great respect to the noble Lord, I feel that the anxiety he has expressed can be exaggerated.
The noble Lord has also suggested that there is nothing in the Transport Bill to secure that competition between coastal shipping and the railways will be fair, after the changes in the railway financial arrangements provided for in the Bill, and that my right honourable friend the Minister of Transport is somewhat blinded to the economic facts of life. I cannot let the noble Lord get away with that. Great industries come into being, rise and then sometimes fall in accordance with changing conditions. When liquidation follows, their assets are purchased for a fraction of their balance-sheet value. It was clearly not in the national interest after the last war to allow our railway system even to approach liquidation, and nationalisation followed, as it has in the railways systems of most countries since the advent of the motor vehicle. But British Railways have since carried on their back—as a result of valuing their assets not on the basis of the motor age in which we now live, but on compensation terms—an uneconomic burden of debt which has distorted their competitiveness. Deficiency payments have therefore had to be made. It makes economic common sense that they should be relieved of their debt burden and that deficit grants should cease. It is only by such a change that an equilibrium between rail transport and coastal shipping based on fair competition can be achieved.
The pressure on British Railways to break even in the future will be a powerful discipline that future operations will be conducted on a strictly commercial basis, for they will no longer be able to
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cut rates on the expectation that a deficit will be met by Government grant. I cannot, however, leave the subject without commenting that, in spite of what I have said, the Government note and understand the anxiety of many of our coastal shipping companies, and that the representations recently made by the noble Lord, Lord Geddes, to both the Ministry of Transport and the Board of Trade are currently being given serious consideration.
My Lords, I hope I have left no doubts that the Government are fully alive to the immense importance of our shipping industry to the nation, both as an earner of invisible exports and for the regular service which it provides for our traders to and from all quarters of the globe. I apologise for having spoken for too long, but I shall be attempting a reply later to some of the many points which no doubt will follow from other noble Lords who will take part in the debate. I also look forward to hearing the maiden speeches of the noble Lord, Lord Hill of Wivenhoe, and the noble Lord, Lord Somerleyton. Perhaps it will be some compensation to your Lordships for having had to listen for rather too long to me in this contribution that, by covering as much ground as possible, I hope to render my later effort rather shorter than would otherwise have been the case.
3.45 p.m.
THE LORD BISHOP OF LONDON: My Lords, I should like to begin by expressing my apologies to the noble Lord, Lord Geddes, for the fact that, owing to a slight miscalculation of traffic conditions South of the Thames, I was not present during his speech. We are grateful to the noble Lord for initiating this debate on this very important subject which should be the concern of all who live in these Islands, whose prosperity must continue to depend upon the maintenance and improvement of our heritage as a maritime nation.
My only reason for speaking in this debate, which I am sure will range over a large number of technical questions, is a concern—which I know is shared by all your Lordships—for the men who man our ships. In the last resort, our Merchant Navy will depend not merely on technical improvements, but on the quality of our sailors and the satisfaction which they find in their calling. The

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right reverend Prelate the Bishop of Winchester will, I understand, be dealing with this aspect also, and I hope not to anticipate the points which he will make.
The Church's concern, as far back as one can discover, has been with the pastoral and charitable aspects of maritime affairs, even though early maritime law seems to have a distinctly ecclesiastical flavour. In this pastoral concern my predecessors in the See of London seem to have been rather specially involved in the choice of licensing of ships' chaplains, and probably from that fact the parish church of St. Dunstan, Stepney, has had a special responsibility for, and long association with, the registration of births and marriages at sea.
But that is in the past. We are now concerned with the welfare of seafarers, which involves their whole life while at sea and while they are ashore; and this must include also a concern for their wives and their children. This was realised, perhaps for the first time, when the British Mercantile Marine sank into a deplorable condition in the early part of the 19th century. The Governments of that period saw that safety at sea demanded a far more rigorous control of the training of officers, and thus a compulsory system of examinations for masters and mates was incorporated in the Merchant Shipping Act 1854. At the same time, private charity saw the need to provide for the well-being of sailors ashore. The Sailors' Home and Red Ensign Club, now in Stepney, was one of the earliest of its kind and still performs a most valuable service.
In the ports of the United Kingdom there were many local sailors' homes and clubs, and these were gradually joined with the Missions to Seamen, itself an official voluntary organisation of the Church of England, the British Sailors' Society, a non-denominational society and over the past forty years the Apostleship of the Sea, which is an official organisation of the Roman Catholic Church with its headquarters in Rome. Of course, other maritime nations have established their own corresponding charitable concerns, and we in London have the pleasure of acting as a host for a great many of them. Since 1936 the work of the voluntary societies has been supplemented by the Maritime Division of the International Labour Organisation
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and, in this country, by the Merchant Navy Welfare Board. I know from a great deal of personal experience the extremely valuable work done by these societies in caring for seamen w bore in ports all over the world.
But, as has been pointed out, the pattern of life at sea is changing very rapidly, and this creates new problems so far as the seamen are concerned. The bulk carriage of oil, involving the rapid turn-round of tankers at terminals, themselves often remote from cities, has called for new kinds of service to the tanker crews during their short time ashore. I have seen, for instance, a good deal of the work of the Missions to Seamen at the oil port at Pernis, near Rotterdam, and I know how much it has meant to, sailors and, perhaps most of all, to apprentices. But the growth of the container system, the bulk carriage of grain, oil and other products, may mean that before long an increasing number of merchant ships will have only a very short time in port. What will be the effect of this on the home life of sailors, and on the relationship between husband and wife? If we are to have an efficient mercantile marine it must clearly be a happy and a satisfied one, and this problem must be faced not only by the societies and by the companies which support the societies so generously, but perhaps also by the State.
Will the answer lie in having to change a whole ship's company after one or two voyages, or in residential provision for wives at the terminal ports? And, if so, who is to be responsible for that provision or even in provision for wives to said with their husbands—a step which will no doubt create other problems? We do not yet know the answer to this problem, but it is clear that the voluntary societies themselves must meet it by a much greater degree of association than has prevailed in the past. They must share facilities, especially where new ports are being built. There is no reluctance on the Dart of the societies to move into increasing co-operation, but they will need not only good will—and that exists without any doubt—but also increased support from the shipping companies, the Merchant Navy Welfare Board and the Government.
There are other rapid changes to which reference has already been made; which are affecting those who sail in ships—for

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example, the development of automation and the consequent reduction in size of a ship's company. These changes also will have their effect upon the attitudes of the seafarers themselves. Obviously, the profession of the sailor is becoming increasingly a highly technical one, involving not only specialised skills but also an increasingly integrated ship's company. The various nautical schools that are providing, with the shipping companies, for the training of navigating and engineering cadets, the training ships, and especially the National Sea Training School at Gravesend, are providing for the new skills demanded by the new conditions and new equipment.
I believe that something like £4 million a year is being, spent on training, but it seems that there is also a problem of wastage. I have been informed that, of approximately 600 boys assisted by the Marine Society to enter the Merchant Navy in the years 1962, 1963 and 1964, only 54 per cent. went on to obtain their Second Mate's Certificate; and the rest may well have abandoned the profession. Does this suggest that there is an increasing need for maritime service to be regarded as a profession, in the fullest sense; perhaps one which sets its own standards and regulates its activities?
There has been in recent years a significant movement in this direction, especially in the long-established work of the Institute of Marine Engineers. Obviously, this is a matter which sailors themselves, on the bridge or deck or in the engine room, must decide for themselves. But is there any doubt that the prosperity of British shipping will depend increasingly on a spirit of professional pride in all connected with it, and that this is something which the general public should understand and welcome and encourage? Something is being done by voluntary effort to increase what might be called the educational standard of seafarers, through the College of the Sea and the Seafarers' Education Service. Not much is known about this organisation, but the fact that it is necessary for it to buy not fewer than 1,000 books a week in order to keep ships' libraries stocked is an indication of the demand and of the possibilities for development.
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I have touched on only one issue—the well-being, satisfaction and pride of profession of our sailors. They are the concern of the industry and of the governmental agencies. I do not wish it to be thought that in anything I have said I have been criticising what is being done. Nevertheless, in this rapid change and development it should perhaps be realised more fully that the whole nation ought to be involved. The public should know more of the work of the mercantile marine, of the men who accept loneliness, isolation from family life, and still physical danger, as part of their contribution to this nation's well-being. For, my Lords, what they do here, and in other countries in whose ports they show the Red Ensign, they are in fact doing for the nation.
3.56 p.m.
LORD HILL OF WIVENHOE: My Lords, this is the first occasion on which I have had the pleasure of addressing this House, and I hope that I shall maintain the high standards which prevail. I want to congratulate the noble Lord, Lord Geddes, on his address to the House, which was, quite naturally, what I should call a typical shipowner's speech. As a representative of the trade union movement, I want to talk about our workers' side, because we look at the situation in a much more serious light than do some other people.
We must look back over the past to get the real history of this industry. We are not unmindful of the booms and slumps during the last century. The first slump we had in this century was in 1904, and it lasted until 1911; there was another from 1929 to 1939, and then there was the recent setback when there was a drop in tonnage of 6 million tons. Peculiarly, during the recession from 1904 to 1911 the tonnage of British shipping increased by 2 million tons, but in the next recession from 1929 to 1939 the tonnage reduced by 2 million tons. It may be argued, and perhaps correctly, that the 1929 to 1939 slump was more serious than the previous one, although there may have been other reasons for the reduction. Since the last war—and I remember that the noble Lord, Lord Geddes, said that the figure of 6 million tons laid up is now reduced to half a million tons—we have increased our

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tonnage by about 1 million tons, according to Lloyd's Register of Shipping.
But when I look at the Shipbuilding Inquiry Committee 1965–66 Report, which is known as the Geddes Report, I see with some amazement on page 39 that 25 per cent. of the shipping registered in Britain is foreign-owned. If that is true we must deduct from Lloyd's figure of 21·7 million tons the 25 per cent. which is foreign-owned, and then we find that there are only 16½ million tons of British ships. Since we had 19 million tons before the first World War, we are "down the drain" by nearly 3 million tons, and that is what the worker is concerned about. He can see the tonnage of shipping going down and down, and he wonders where it is all going to end—and of course I do, too—because there must be some day of reckoning for this. We cannot keep on going down when everybody else is going up.
Let me deal with the depression from 1929 to 1939. Here I must bring in other industries, not in the sense that I want to discuss their future but in so far as shipping affects other, feeding industries, like shipbuilding, marine engineering and, for that matter, the steel plate works in the steel industry. In the serious recession of the 1930s, while you had a certain number of unemployed in the shipping industry it was much more serious in the feed industries. In shipbuilding, unemployment went up to over 63 per cent.—the highest figure that any industry in this country has returned in the last century. In iron and steel, which was very much dependent on shipping, the number of unemployed went up to 51 per cent. It is difficult to say precisely what the marine engineering figure went up to because that is in the engineering industry, but in the engineering industry the figure went up to 35 per cent. This was colossal unemployment. So in these industries we are very much concerned, and we do not want to see it happen again.
Then there is another tendency when there is a recession. I am not going to blame all shipbuilders for this, but there are a number of shipbuilders who are rather irresponsible and who allow their ships to get into a bad state of repair. It was during the 1934–35 winter that the "Blairgowrie", "La Crescente", the "Usworth" and the "Millpool" went
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down, and when one reads the report of the inquiry into the loss of those vessels one realises that some British shipping was not up to the standard it ought to have been. I can understand some of this because of the economic circumstances. I know that very little profit was being made; and it is at such times as these that one has to ask for assistance from the Government, in order that we may maintain the high standards which are necessary. So we are concerned that this industry should be protected. At one time, of course, the shipowners were a law unto themselves, like the shipbuilders. They did not want anybody to interfere; and I can understand that to some extent. But there are times when you must have somebody to assist you, and I am sure that in tile future it will be necessary to have some assistance to overcome the difficulties.
Now let me look at the growth of the shipping industry. In 1914 we had 19 million tons out of a world fleet of 49 million tons—that is, approximately 40 per cent. of the tonnage at that time. By 1939 we had gone down to 18 million tons, which was 25 per cent. of the world tonnage at that time, which was 69 million tons. In 1967, if we take the Geddes Report as being correct, we find that we had 16¼ million tons, representing 9 per cent. of world shipping, which at that time was 182 million tons. During this period the world fleet increased by 375 per cent. It must be understood that when the workers see these figures produced and submitted to them, they are not pleased about the position. They are not pleased when they see the British mercantile marine fleet going down in tonnage year by year. If it is true that the British people own only 16¼ million tons, then we are in a very sad way, because we owned 19 million tons before the First World War. So the situation is a very serious one.
Let us look at what happened in other countries overseas during that period of growth in the world fleet and reduction in our own fleet. Germany, which is now a small country in comparison with before the First World War, has increased its shipping by only 9 per cent. That can be understood. But if you added the shipping of East Germany to that of the West German fleet, you would probably find that it had increased much mote. But

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let us look at all the other countries. France has increased its merchant fleet by 200 per cent.; Belgium and Spain by 250 per cent.; Holland, 300 per cent.; and the United States of America by 350 per cent. But if you take into account the 9 million tons of American shipping flying under 17 different flags, then they have increased their fleet by 500 per cent.
Denmark and Italy have increased their merchant fleet by more than 350 per cent.; Brazil, over 400 per cent.; Sweden and the Commonwealth, over 400 per cent.; Argentine, over 550 per cent.; Norway, over 700 per cent.; and Greece, over 900 per cent. But here again, if you add the 13 million tons of Greek-owned shipping which is carrying the flag of convenience, the total becomes 2,500 per cent. The last country, Japan, has increased its fleet by 950 per cent. How can workers in the industry be happy when they read these figures and see that when every other country in the world is increasing its shipping fleet we are going down? After all is said and done, I would not expect us to retain the 40 per cent. of world tonnage that we enjoyed in 1914. I would not expect us to retain even 25 per cent. of the world tonnage. But I would expect our fleet to increase above that of 1914. This is a very serious matter, and it is on this basis that the workers are very much concerned.
When we talk of growth, we have to ask ourselves why is it that these other people, these other nations, can increase their fleets in the way they have. Let me give one example. Norway, with a population of less than 4 million people, has 18·3 million tons of shipping. If shipping does not pay, how can a small country like Norway afford to have a huge fleet, bigger than that of this country, if, as I have said, the figures in the Geddes Report are right? It is very difficult to argue, "We are not so badly off, anyhow", because we are. I think we have to increase our fleet, not to the tonnage we formerly enjoyed, but to beyond what it is now.
May I look at another aspect of shipping? I have been dealing, by and large, with ocean-going shipping, but let me look at home trade and coastwise shipping. In 1939 we had 1,500 ships employed in this type of service, representing 1·7 million tons. In 1967 there were
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742, totalling 886,000 tons—a reduction of 50 per cent. If any of your Lordships go into our small harbours or up our rivers or alongside the jetties, you will be amazed at the number of foreign ships which are now doing the trade which we formerly enjoyed. It is really amazing that our home trade and coastwise shipping has slumped by 50 per cent. There are other figures here, too. In 1939 the number of foreign ships employed in our coastwise trade was only 1½ per cent.; to-day it is 25 per cent. These figures frighten workers. They say, "When are the foreigners going to take us over?"—because our fleet is going down and down. At some time or another we shall have to deal with that problem.
The other problem that worries the workers in the industry—and I am not speaking merely for seamen; I am talking about officers, too—is that they are very much concerned about these flags of convenience. I have said that shipowners who use a flag of convenience are rascals of the first magnitude. They do not make a contribution to the well-being of the sea or to the well-being of a nation. They are like mongrel dogs: they run round the world cocking their legs on everybody's doorstep, leaving other people to clean up the mess. I think it is appalling.
When, in 1958 or 1959, the workers in the industry put an embargo on ships carrying flags of convenience, we hoped that the shipowners would fall in behind and that the maritime Governments, too, would do so; because we had the workers in the frame of mind to tackle this problem. But instead of the Governments and the shipowners falling in behind the workers to solve this problem once and for all, all we got was a Geneva conference—where they said that there must be a genuine link between the owner and the State. You can understand now what the chances are of getting a mongrel dog to think about a genuine link. It is absolutely hopeless. Nobody has been able to decide, or at least to interpret, what is a genuine link. Nothing was done on that occasion. So what do we now see? We see that the number of ships carrying flags of convenience has increased by over 100 per cent. since that time. It is true that the Geneva conference frightened one Greek shipowner into putting some of his ships

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back under the Greek flag; but that was all. So to-day we have over 29 million tons of shipping carrying flags of convenience—more than double what it was only ten years ago.
At some time or another this problem must be tackled; for in ten years' time, if it is not tackled, there will be 40 million tons; in another ten years, 50 million tons; and, before we finish, the whole industry will be mongrel dogs. We cannot allow this to go on. I think it probable that the time has come when the workers will have another go at this. They are quite unhappy about it. They know it is bad for the industry; they know it tightens up competition; they know that when there are small profits, wages and merit money and so on are kept down; they know it is a menace to them. At some time or another the maritime Governments will have to deal with this problem. It may be that they will have to exempt shipowners from taxation, to put them on the same level as the owners of those ships which are carrying flags of convenience. In addition to exempting them from taxation they may even have to give them a subsidy, to drive the flag-of-convenience ships off the Seven Seas, to get ships back under their national flags, to become good citizens again. Only Governments can do that; and, sooner or later, it will have to be done. Otherwise our shipping industry will fall to pieces, as it has been doing over the past few years.
My Lords, I do not want to speak for too long. I hate long speeches; they are obnoxious at times, especially when there is some repetition. Let us look at the future of the shipping industry; for, after all, that is what the workers are concerned with. And one must appreciate this: you cannot get rid of ships and throw people out of work and expect them to be happy about it. When you look at some of the facts and figures which are brought forward day by day, when you remember that 62 per cent. by weight and 60 per cent. by value of oil imports into this country are brought in by foreign ships, then you know that we are in a bad way. The noble Lord, Lord Geddes, mentioned that manpower was down from 140,000 to 110,000. That 30,000 fall in manpower is not merely because to that extent our shipping has been rationalised,
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and probably mechanised and improved; that is not the full story. The reason why manpower has gone down from 140,000 to 110,000 is that British shipping has gone down in terms of tonnage. We have to pay regard to that.
We are of the opinion that the shipowners, like the shipbuilders, from time to time have been a law unto themselves. I mention this again because about eight years ago, I think, when Mr. Ernest Marples was Minister of Transport, I was on the Shipbuilding Advisory Committee. We tried to persuade him to give a subsidy to the shipping industry so that they could give us orders to build more ships. But when the shipping industry was offered a subsidy it was turned down. Why it was turned down I do not know. Nobody was more annoyed than the workers in the shipbuilding industry, who badly wanted to build ships.
Of course, when one accepts subsidies or Government assistance one must expect some public accountability. One cannot evade that responsibility. I do not suppose the Government would have interfered much in the running of the industry; but having regard to the worldwide situation in the shipping industry, you cannot get along without assistance from the Government. As the industry becomes more intensely capitalised you will get into further difficulties; and I see the day when ships—and now we are talking about 250,000-ton tankers—will be costing £6 million or £7 million apiece. As ships become more expensive you will not be able to afford them—as you did when they were of 10,000, 20,000 or 30,000 tons. You may have to get some assistance from somewhere.
I do not believe in the nationalisation of ocean-going ships; but I feel there must be some way to provide the shipbuilding industry and its servicing industries with a fair volume of work on a steady basis. I believe the time has come for the Government to look at the problem of building ships themselves, under the guidance of a shipping board, jointly with a shipbuilding board and the British Shipping Research Association, and chartering them to the shipping companies. By that method we might get a "scrap and build" policy that would give a steady flow of orders to the shipbuilding industry—which will suit the

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maritime engineering industry and the steel-plate workers. That is the kind of future I foresee; because I cannot imagine, unless we get rid of flags of convenience and cut some of the keen competition in the industry, that the shipping industry can give us the necessary ships to build and the necessary work to the associated industries.
I hope we shall look at this problem. I want to see the shipowners getting some assistance; I want to see more orders given to the shipbuilding industry to build more ships. I want all these things to happen and I sincerely hope that everybody will make a contribution and will try to see the light. If the shipping industry is in financial difficulties and it cannot replace its ships on a regular basis to suit the other industries, at least it ought to say so. And it should try to persuade the Government in the interests of all concerned to build the ships.
4.20 p.m.
VISCOUNT RUNCIMAN OF DOXFORD: My Lords, my first duty this afternoon is the extremely pleasant one of congratulating the noble Lord, Lord Hill of Wivenhoe, upon a well-informed and informative maiden speech, delivered with at any rate some of that vigour of expression which we have learned to associate with him in other places. I hope, as I am sure all your Lordships do, that he will give us the benefit of his views on many occasions in the future.
My second duty, my Lords, is to declare an interest in the shipping trade, in which I have been more or less actively engaged for something over forty years. This of course renders one liable to the accusation of being out of date, but at least it gives one some historical knowledge; and I should like, if I may, to put before your Lordships this afternoon one or two very general considerations in the most general terms about the economic situation of the shipping industry, partly in the world at large and particularly in this country, about which the noble Lord, Lord Hill, had a good deal to say. If I cover again in part some of the ground which has already been so ably covered by the noble Lord, Lord Hill, and by my noble friend Lord Geddes, I hope that your Lordships will forgive me.
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The first point that I should like to make is that, as has been said already this afternoon, British shipping is not, by comparison with a number of other British industries, a very profitable industry, certainly if profitability is expressed in terms of the return on the capital employed. If this were true of British shipping alone, there might be an explanation for it in the greater competition for investment which is exercised by shore-based industry; and it might be argued, of course, that it was due to some peculiar inefficiency in British shipping itself. But, in fact, I do not think it is true of British shipping alone; I believe it to be true to a very large extent, and within very much the same limits, of the shipping industries of nearly all the traditional maritime countries.
It is perhaps worth considering for a moment why this should be so. I think the answer is really quite simple. Shipowners in all countries are subject to very much the same costs in the running of their ships, costs which are mostly outside their control—bunkers, provisions, repairs, cost of building and depreciation on building, insurance and the like—so that as between one and another there is probably not much to choose. If, therefore, generally speaking they are unprofitable, the only conclusion one can reach is that they are unable to secure a sufficiently high level of freight rates to meet the costs which they cannot effectively reduce. I am afraid that this sounds very elementary, as indeed it is, because I think that in its essence the problem is extremely elementary. If, as I believe to be the case, the general level of freights in the world is too low to enable most of the shipping industries of the world to have a profitable existence on a strictly commercial basis, it is worth going a little further and trying to see why this should be so.
I think that there are two main reasons. One, and perhaps the less important, is that which applies particularly to ships whose freights are regulated by agreement and published in tariffs—the liner trades, in short, in general terms. Here one is more conscious than elsewhere of the influence of Government. In a great many parts of the world, in a great many trades, Governments repeatedly intervene to try to arrange the level of freight rates, and always in an attempt to get them down and not

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to get them up. I think that this is perhaps a reflection of the very common human characteristic, which we all share, that while we dislike very much paying more for anything, we mind much less paying more for something we can see than for a service that we cannot see. There is no doubt, curious as it may seem, that there are Governments in the world who will face with some equanimity an increase in the costs of their physical imports; who will be positively glad at an increase in the price which can be obtained for their physical exports, but who will resent quite strongly any attempt on the part of their national shipowners to raise the freights from which those shipowners make a contribution to the national economy. It is an extremely paradoxical situation, but I have met it too often in my own experience to disregard it entirely.
I do not think, however, that this is the main root of the problem. The real reason, in my view, why shipping freights have remained, with certain ups and downs, pretty consistently for quite a number of years at a level which is really below the true full cost of providing the service is, quite simply, that over the greater range of shipping—tankers almost entirely, bulk carriers, the tramps—in fact almost everywhere where there are not specific agreements, the rates of freight are determined by absolutely unrestricted bargaining on an unrestricted international market, and therefore move almost exactly, and very swiftly, as the supply of tonnage moves in relation to the demand for it. The truth is that, judged by this standard, over quite a number of years—I should say probably most of the time since the early 1950s —there has been more tonnage available in the world than the world at any particular time has needed to employ.
It is true that there have been occasions when this has not been so: there are always moments when there is some disruption of the general pattern. A notable example was the closing of the Suez Canal twelve years ago, and also, to a slightly lesser degree, the recent closing of the Canal this last summer. Such disruptions inevitably create temporary shortages, or local shortages, from which astute men can profit. But through and by, I think it remains true that there are more ships in the world than the world
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is able to digest. If this be so, one begins to wonder why the shipowners of the world at large should persist it spoiling their own market by over-supplying it.
What is it that gives rise to this whatever one may call it—this folly, lack of planning, or even sheer incurable optimism? I think that there are again two main reasons for it. One of them—not unimportant, though perhaps not the more important—is that, in the ordinary way, if people find they have to go on trading at levels of profit which do not enable them to keep their capital intact, or even to increase it, they will, sooner or later, be forced by sheer shortage of money to stop trying to acquire further capital assets. What has happened in recent years is that every shipbuilding country in the world, I believe without exception, has for the sake of its shipbuilding industry been offering terms of cheap credit to shipowners, whether domestic or foreign. This has he d the effect of removing the corrective of the shortage of funds which would otherwise have begun to operate.
It seems an odd and a sad thing to say that shipbuilding credits are the enemy of shipowners. I should not like to be responsible for so crude a statement in those terms; but there is a point here, and it is one which cannot be wholly overlooked. But, much more important, and more noticeable when one is considering, as the noble Lord, Lord Hill of Wivenhoe, did, the comparative decline, if not the absolute decline, of British shipping among the fleets of the world, is the fact that the shipping industries of very nearly every other country (indeed, at the moment I cannot think of any exception) enjoy advantages in one form or another which are not enjoyed to the same extent by the shipping industry of this country. That would seem to be a fairly clear reason why British shipowners should have been less anxious than their foreign rivals to contribute to an over-supply of tonnage in the world.
These advantages are of various kinds. Subsidy is perhaps the most obvious, as it is the crudest. Another is discrimination in various forms. The noble Lord, Lord Brown, referred to these, and I agree with him that of themselves they are certainly not the greatest, and I doubt

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whether they are the major, difficulty in this respect because their application is necessarily limited. Nevertheless, there are countries which seek, by one or other of these methods to increase their national fleets, for reasons not strictly related to the profit which these ships, when brought into existence, would normally earn in the free commercial market. One reason is prestige, the achievement of a sense of security, a sense, one might say, of dignity on the part of a number of emergent nations. Perhaps one of the strongest reasons is the use of their shipping services as a means of earning foreign exchange. Such countries are probably earning their foreign exchange in this way even if it means doing so at the expense of their home industries and taxpayers in other directions. I think it is possible that this is one of the reasons which accounts for the rapid growth of the shipping of Communist countries.
Other countries, notably Norway and Greece, give their shipowners important taxation advantages—more important, I think, than some of us sometimes realise, So, what with the subsidisers, the discriminators and the tax-benefiters, we are already up against quite a lot. When we add to that the problem of the flags of convenience, we are coming somewhere near to the root of the matter. I suppose that shipping is the only international industry in which a company, by carefully choosing the flag, the nationality under which it will work, can avoid paying any tax as a company, and in which the owners of that company, if they are intelligent enough in choosing their domicile, can further manage to avoid paying any tax on profits which they derive from the business. This state of affairs must inevitably give such companies and owners a competitive advantage that cannot be enjoyed by those in another country who are required, in greater or less degree, to make some contribution to the taxation needs of the land in which they live and have their being. The man who pays no tax will always be able to undercut the man who pays some tax, because he will not have to take that tax into account when he reckons up what he is ultimately going to get out of the exercise of his trade. I think that the matter is just as simple as that.
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I largely agree with what the noble Lord, Lord Hill of Wivenhoe, said. If British shipping is not to decline proportionately—even absolutely—still further in the world, it must be put in a position in which it can get at any rate some of the advantages employed by its foreign rivals, or something like equal terms. I do not think (here I would differ from the noble Lord) that this can be effectively done by subsidy. Subsidy is in itself a bad thing. It is enervating; it always tends to reward the inefficient rather than the efficient. It is extremely difficult to work out equitably in practice, and perhaps more than any other form of aid a invites immediate retaliation by counter-subsidy. I do not think that the experience of the United States subsidy system, or the slightly different system, combined with some degree of nationalization, that is in operation in France and in Italy, is such as to encourage us to think that its adoption would be to the advantage of British shipping; and certainly it would be extremely expensive to the British taxpayer to try to meet the cost. By the same token, discrimination cannot effectively be met by discrimination. The noble Lord, Lord Brown, gave extremely good reasons for this, and I shall not attempt to "paint his lily". I entirely agree with what he had to say. That, as a method of assisting British shipping, is out. So we come back again to the question of taxation and its incidence.
Assistance to shipping by means of what are commonly called capital allowances is probably the least expensive to the giver, and the most stimulating to the recipient. As the noble Lord, Lord Brown, said, they are no good to anyone who is not making at least a cash profit; but in fact, since the servicing of his capital and the depreciation of his assets represent so large an item in the costs of any shipowner, he will often be making, a cash profit when he will not be making anything like a true profit. So I do not think that the limitations of allowances are quite so severe as the noble Lord, Lord Brown, suggested. They are particularly useful because, if we look at their effects briefly, we see that they tend to reward enterprise rather than sloth or stagnation; and in a sense they regulate themselves, since they tend to disappear when big profits are being earned. At all events, they cease to be necessary.

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In a trade like shipping, where movements are generally rather slow, though the ups and downs are fairly extreme, allowances afford a method of evening things out which, without going into technical details, is extremely convenient and relatively simple in its operation.
It is generally said that in every ten years' cycle in shipping there are seven lean years, for which three good years have to be made to pay. For so simple a generalisation that statement is surprisingly accurate historically, when we look back. The problem for the shipowner, perhaps more than any other, is how he may carry on in the lean years, when he cannot hope to be making substantial profits but has still to attend to the servicing of his capital, to the depreciation of his fleet and, if he wishes to remain in business for more than a short time, to being able to give some return on their investment to those who have invested their capital in his enterprise.
For all these reasons the general system of relaxation of taxes by way of allowances is the best way, I think, of helping British shipping in conditions in which I hope I have suggested to your Lordships some reason why it needs help. I am very far from saying—because it would be both ungrateful and untrue to say so—that this matter has been neglected, so far as British shipping goes, by successive Governments. Indeed, I would go so far as to say that in the eight years, more or less, before 1965 the operation of the investment allowance and the general nature of the taxation system at that time were such that, at any rate so far as new British ships were concerned, the British shipowner was being put in a position where he was at least within sight of the position enjoyed by even his flag-of-convenience rivals. That was not true, I think, of ships already in service, or at any rate not quite so true, but the position was not bad.
The 1965 Act—I am sorry if the noble Lord, Lord Brown, thinks that we attach an undue importance to that Act, and if he does I will still venture gently, but firmly, to join issue with him on it—substituted for a system which, whether by accident or by design, was peculiarly well adapted to a shipping industry, a system which, however well adapted it may be to other industries, is curiously ill adapted to the needs of shipping. This arises in two ways, one of which is not
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perhaps of great practical importance now—and, to be fair, I think the noble Lord, Lord Brown, suggested it might have been working advantageously—namely, that whereas previously allowances were against income tax, they are now against corporation tax. So long as income tax is higher than corporation tax the shipowner loses by the change. If the happy day should arise when income tax is greatly reduced, it is true that the reverse will be the case, but I doubt if any of us can at this moment look forward to that day with any high degree of confidence.
The other change—and this is what really matters in lean times—is that whereas under the old system the tax for which a shipowner was accountable to the Revenue on the dividend which he may have distributed to the shareholders could be satisfied against his allowances, he now has to find it in cash. Since, as I have said, unless he can go on paying some sort of dividend he cannot go on indefinitely remaining in business, there is inflicted on him under this system a cash drain in lean years, when he can least well afford it, which was not there under the old system.
It is true that the effect of investment grants is very much the same in cash in the end as the effect of investment allowances, but they are more rigid in their application and take longer to work through. To that extent, they are not perhaps, a change for the better. I do not underestimate the advantages of free depreciation—the ability to write off what you will in the end be allowed to write off your ship in toto as and when you please in the period of time. This is something which can and does help to even out the ups and downs. But even with those advantages, I think the position, while not perhaps so bad as regards ships not yet built, is still a great deal below the comparable position of the shipowners of other countries in respect of ships that are now in existence. It is perhaps here that some change would be most welcome.
I would not venture in your Lordships' House to make suggestions with regard to taxation, certainly not in any great detail, but the kind of change that I should have in mind would be, in the first place—though I know this would be

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most offensive to the taxation purists—that it should again be made possible for the tax for which the company is accountable on dividends to be met by allowances, and not have to be met in cash; and further, that the general range and scope of those allowances themselves might be looked at again with a view to their (I hope) increase, and also to their rearrangement in the manner more particularly suited to the needs of the trade which they are designed to benefit.
I have tried to suggest that there is inevitably a decline, and there will inevitably continue to be a decline, in British shipping, and, indeed, in the relative profitability of British shipping, so long as British shipping is at the sort of disadvantages which I have tried to indicate compared with the shipping of the rest of the world. That decline may be very slow; it will, I think, be masked, and possibly, to some extent, arrested by the ingenuity and enterprise of shipowners in technical developments, some of which have been mentioned this afternoon, such as containers, where this country is happily, and I think I may say naturally, taking the lead.
There will be periods, no doubt, when everybody is prosperous; and when everybody is prosperous perhaps it does not so much matter if you are not quite as prosperous as the next man. But through and by, I do not think there is any escape from the conclusion that an international industry, operating in an international market against competitors of more or less equal efficiency, will inevitably decline if those competitors start off with advantages which it has not got. We do not ask for anything more than a fair field. If we get that, I should have no fear at all for the future of British shipping, whether in the manpower it would employ, in the return which it would make to those who invest in it, or the benefits, whether in foreign exchange or otherwise, which it could bring to our country. But we have not got a fair field. We do not need more than a fair field, but we really cannot get on with less.
4.47 p.m.
LORD SOMERLEYTON: My Lords, I am the second of the two vessels to be launched this afternoon on a maiden
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voyage in your Lordships' House. I have heard with gratitude that such an occasion is one which here, as in the shipyard, is looked upon with kindness and benevolence by all those present. I feel that I am very dependent to-day upon your Lordships' customary good wishes in what I have to say.
As your Lordships may know, the part of East Suffolk in which I live has become much more prosperous and industrialised since the end of the war, and, among other industries, we have been fortunate to have two medium-sized shipyards, employing together about 2,000 people. These shipyards have not only built large numbers of trawlers for the fishing industry, but have done a considerable amount of work for export. One of these, for instance, has a magnificent export record, including building ships both for the U.S.S.R. and the U.S.A., although not simultaneously.
As we all know, the shipbuilding industry has had its ups and downs since the war, and it is to the lasting credit of these two yards that, not only have they kept going, but they have re-equipped and re-invested large sums of money. It is no exaggeration to say that they are vital to the future welfare of the Lowestoft area, and they have played a most important part in our newly-formed prosperity. Most of the shipbuilding industry lies within development districts and, as such, can enjoy the many advantages which the Government have placed in their way—the regional employment premium of 30s. per man per week, the selective employment tax premium of 7s. 6d. per man per week, the £100 grant for all apprentices, the increased grants for buildings, et cetera. Of course, I realise the importance of a development area policy. The problem is that in this case the drawing of geographical areas on what has to be an arbitrary basis has excluded a very few of the shipyards in the United Kingdom. The fact is that about 90 per cent. of the shipbuilding industry will receive benefits, and the other small proportion constituting the remainder will be excluded.
In the case of one particular yard of which I know the discrimination against them over the next few years will be as follows. With 1,200 men on its payroll this year, the shipyard could lose £120,000 per annum in subsidies from regional

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employment premiums, selective employment tax, grants for apprentices, and on investment. This could mean a 12½ per cent. disadvantage in direct labour costs to that yard. The converse of this can be seen in very human terms. If that yard were to close, it is estimated that 70 per cent. of the men employed, who are mainly skilled, could face long-term unemployment. From these figures it will be realised that there is really no earthly reason why these yards should ever get another order. After all, they are being asked to compete on quite unequal terms, and have, so far as one can see, no compensating advantages at all. It could be said that if they do manage to obtain orders this will be because of their greater efficiency and the relative inefficiency of the yards which compete against them. In other words, we shall be subsidising the inefficient and penalising the efficient—a state of affairs which can hardly be conducive to increasing our competitive position.
That competitive position is particularly important in the realm of exports at a time when all industry has been urged to take advantage of devaluation. It must, however, be realised that a shipyard cannot exist entirely on the somewhat fragile prospects of continued export orders. A competitive position in the home market is an essential base for any business which wishes to continue. This can turn into a vicious circle, for without its firm base at home a shipyard may well cease to be able to tender for future export orders, and there is then no guarantee that these orders will be fulfilled in the country at all. In any case, in an industry such as shipbuilding it must surely be right that the industry should be treated as a whole. Failure to do so could have very serious consequences for my area, among others.
My Lords, I must say quite plainly that Government policy will not succeed if it merely results in helping one development district at the expense of another area which will promptly qualify if this discrimination is continued. What national purpose can be served by allowing all the investment of the last few years in the Lowestoft shipyards to be lost, by creating a depressed area out of a prosperous society, just because of inflexibility in applying the rules? Many of the characteristics of a development
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district already apply in Lowestoft. It would be a tragedy indeed if, in their desire to help one area, the Government did so at the expense of another one.
It may be suggested that we should wait for the Report of the Hunt Committee on the intermediate areas. But I venture to say that unless this Committee report fairly soon, it may prove too late. I realise that. Her Majesty's Government cannot commit themselves to acting upon their Committee's Report in advance—even if the Report supports what I am saying! But I hope that when he comes to reply, the noble Lord, Lord Brown, will give the House some indication when their Report may be expected. It may be thought that the matters of which I have been speaking are of a relatively minor character by comparison with some of the large topics upon which other noble Lords have already touched. I expect that others, too, will be raised. They are, however, matters which are of very great concern in East Suffolk, the Humber, Bristol, Leith and the Solent, and the combined effect could, I think, be important in a consideration of the shipping industry of this country.
4.57 p.m.
LORD MANCROFT: My Lords, my first duty is, as one or two of my predecessors have already done, to declare an interest in the subject of this debate, in that I am a director of a shipping company. My next duty, and a very pleasant one, is to congratulate the noble Lord, Lord Somerleyton, on a most sincere and informed maiden speech. By happy coincidence, my battery was stationed on his property during the war. I remember well an unfortunate episode with some Muscovy ducks. I also remember well the port of Lowestoft, concerning whose fate and fortunes the noble Lord, Lord Somerleyton, has spoken to us with such authority and such knowledge. This was a matter which might possibly have been passed by in the wider scope of the debate, and I think we should therefore be grateful to him for bringing his specialised knowledge, and bringing it in such a clear and lucid way, to our notice. I hope that the Government also will take careful note of what he has said.
I should like also to acid my ward of congratulation to the noble Lord, Lord Hill of Wivenhoe, on his maiden speech.

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He brings to your Lordships' House a wealth of authority and experience over a lifetime in the industry and in trade union affairs. He also brings to your Lordships' House a certain degree of scepticism. I note from the Daily Express of two days ago this quotation from him:
"Mind you, some great statesmen are thrown up by the hereditary Peers. But for each good one you get ten dumb-bells".
My Lords, I have been called many things in the course of the 27 years I have had the honour to serve in your Lordships' House—indeed, I well remember one occasion on which the late Lord Lucas of Chilworth sufficiently forgot his customary good Parliamentary manners as to call me an old Etonian—but I have never before been called a dumbbell, and I can only hope that the noble Lord, Lord Hill of Wivenhoe, who has been a regular attender in this House for some time, will attend sufficiently frequently to allow us "dumb-bells" of both sexes some small chance of getting the ratio into proper proportion.
I have been connected with the shipping industry for only two years, and the noble Lord's association has been for 52 years. I listened with particular interest to his remarks concerning the reduction in the size of our fleets. I must say that I have some considerable sympathy with what he had to say. It so happens that shortly after I joined Cunard I was moving into my office, which is in the old South-Western Hotel (which many of your Lordships will remember) in Southampton. While I was clearing out a desk I came across an old and faded photograph from the local newspaper, taken, I imagine (I am not certain of the date), towards the late 1920s. It showed from the roof of the South-Western Hotel 21 passenger ships —that is, ships carrying 12 passengers or over—in Southampton Docks. Out of idle curiosity, I went up to the roof as soon as I had seen that photograph and stood and looked from exactly the same place as it had been taken. The view made the very point which the noble Lord, Lord Hill of Wivenhoe, was making. Instead of 21 passenger ships in Southampton, there were, on that day, four. One realised the implication of that, not only on life in Southampton but
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on life at sea and throughout the shipping lanes of the world.
Incidentally, among those four ships was the "Queen Mary". Two or three weeks ago I was in Long Beach and was delighted to find the care and skill and affection which the City Fathers of Long Beach are lavishing upon her conversion. They are turning her into a conference centre and a marine museum, and she is fully booked for the next three years. I hope your Lordships will soon hear of an equally satisfactory final destination for the "Queen Elizabeth".
In his interesting speech in opening this debate the noble Lord, Lord Geddes, drew our attention to the fundamental changes which have occurred since this matter was last debated, some eight years ago. He wondered why it should have been such a long time. I believe the reason is that there is no Shipping Vote. There is a Mining Vote, and there is an Agricultural Vote; but there is no Shipping Vote. However, as we cast our minds back to 1960, we recall that there were then about 150 passenger liners in service, and to-day there are only 76— a decline of nearly 1 million gross tons.
I wonder whether your Lordships realise that there is a risk that in the near future it may not be possible, for several months of the year, to cross the Atlantic at all by sea—and this for the first time in 500 years. Most ships which are to pay as passenger liners, certainly on the Atlantic routes, now must be dual-purpose ships, cruising and holiday-making for some of the year, and in the more fruitful time of the year travelling to and fro across the Atlantic. If they cannot do that they will never be able to pay. These are facts of life which must be faced, much as we sympathise with the noble Lord, Lord Hill of Wivenhoe, in his anxiety. The reason for this change is to be found in one quite short word—"jet". What has been the triumph which we have all so greatly admired in Rolls Royce is, unfortunately, no great comfort to those who ply the Atlantic.
Another change which I believe may come over the passenger service in the world is the introduction of a new system of holiday-making, based roughly on the American plan of paying for your meals on board. I mention this small point to

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illustrate the major point that I want to make. I believe that a whole revolutionary series of changes is on the way. Management are facing a revolution, and I think they realise this; but I do not believe that the users of sea transport, the public—or indeed labour—fully realise the revolutionary changes which are facing the shipping industry.
Quite naturally, the noble Lord, Lord Geddes, dealt at length—because this is his particular field of expertise—on the new huge tankers. At the other end of the scale there are small hovercraft, ferries and school ships, "roll-on" and "roll-off" transport. All these represent, in small and varying ways, a revolution in sea transport. But the biggest revolution of all is containerisation. This hideous word embodies a radical change in the whole concept of communications. It means that a system of door-to-door delivery is now coming into practice, in contrast with the old operation by which there might be as many as 16 handlings of goods between producer and user. The sheer artistic beauty of the container operation has to be seen to be believed, and the repercussions will be enormous throughout the whole of our commercial life.
The noble Lord, Lord Geddes, mentioned the 100 or so conventional ships now on the Britain-Australia-New Zealand trade run which, in quite a short time, will be replaced by 9 container ships and a few conventional ones. But the cost of these 9 container ships will be about £70 million, and their owners will naturally require a bigger return on their capital. The noble Viscount, Lord Runciman of Doxford, talked about over-tonnage. I think that this may also happen sooner than we expect with the containers. We may find this new—"craze"' is perhaps too vulgar a word; this new enthusiasm for the whole principle of containerisation may land us almost immediately with an over-supply of container ships.
How is the British shipping industry facing all these challenges? I do not take such a gloomy view as some noble Lords have taken this afternoon. This is primarily a debate on shipping, but inevitably these challenges have repercussions on the shipbuilding industry, which seems to be going through a small boom at the moment, and thus have repercussions
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also on finance, banking, insurance—in fact, right through our whole commercial life. They will have repercussions on the handling of goods at ports, on the livelihood not only of men afloat but of men ashore as well; and on this aspect we were glad to hear the contribution of the right reverend Prelate the Bishop of London. Meeting these challenges will call into being a sharp reaction from organised labour, and I was glad to hear the view of the noble Lord, Lord Brown, on this subject. Of course there will be difficulties. We had difficulties with liner-trains. Let us hope to heaven we do not have similar difficulties with containerisation. If there should be any who differ from me I would only ask them to tear in mind the words of the redoubtable Harry Bridges, of the International Longshoremen's Association of California, who said that any waterfront employer who wished to introduce a system which would prevent his men from spending their days as beasts of burden with sacks and cases on their backs would have his full support. And so it should, my Lords.
Shipping is becoming completely industrialised. Are the minds of those of us connected in any way with the shipping industry becoming equally industrialised? We are admittedly a conservative industry, but radical changes in technique and approach are required. One thing that has not changed in recent years, however, is the desire of British shipping to be able to get on with its job of earning its living and making a significant contribution to the balance of payments. So far as reasonably possible, this contribution needs to be untrammelled by restrictions overseas of foreign Governments or by unnecessary legislation by our own Government at home. Some of the situations which would prevent us from taking full advantage of this revolution are not entirely of our own making. We have heard mention of strikes. One more like the last shipping strike and the shipping industry will be broken, and the union with it.
The noble Lord, Lord Geddes, spoke about nationalisation and crossed swords with the noble Lord, Lord Brown. Naturally, I am powerfully on the side of the noble Lord, Lord Geddes. If one wants to commit suicide he has suggested a very good way to do it. In the foreign sphere there are other things which we

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cannot entirely settle ourselves. There is Suez. Of course, big tankers can solve the problem. Some ships, like those of my own company's Port line, which ply direct between Australia, New Zealand and this country only have to spend an extra day or two going round the Cape, but some of us want to trade in the Mediterranean, some of us want to bunker at Aden, and some of us are rendered practically speechless—and it takes a lot to render me practically speechless—by the ridiculous farce which is now going on in the Suez Canal as a result of the activities of the brigands' benevolent club. How much longer are we to tolerate this? There are 15 ships bottled up in the Suez Canal, four of our own—and I again declare an interest because one of them, my own company's ship, the "Port Invercargill", has been bottled up for ten months. She carries, among other things, a large cargo of pears, and none of the experts we have consulted has been able to tell us what exactly is the chemical effect on a cargo of pears after a long period of refrigeration. If any of your Lordships should happen to be nearby when she finally comes home and docks, my private advice is to stand well clear.
As a final postscript to this ridiculous situation in Suez, the "Port Invercargill" also carries a poor young seaman who recently was afflicted with toothache. The only way in which he could be relieved from his pain was by putting him in the hands of an Egyptian dentist. I, for different reasons, would not like to put myself in the hands of a dentist from any member of the United Arab Republic. This young man had to do so and, to make matters worse, to add insult to injury, he was "caught" and was made to pay £98 for having his tooth taken out.
Noble Lords have mentioned unfair discrimination. I would strongly support the words of praise the noble Lord, Lord Brown, gave to our Embassy in Washington for the staunch work they have done in helping us in these difficult matters. Here we have two separate interests, protection—the American protection lobby is growing stronger every day —and a natural desire for safety at sea. The two are not related as closely as one would think. Of course, we are all in
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favour of the greatest degree of safety at sea. Since the Motion in 1960, to which the noble Lord, Lord Geddes, referred, losses at sea have risen from a quarter of a million tons to one million tons to-day, particularly from fire in port. Our own safety record is high, and so it should be. The worst, I believe, is that of the Lebanese flag, mostly Greek owned, which is 26½ times as bad as us. So the Americans are perfectly right, in view of one or two very unhappy disasters they have undergone, to be fussy about fire and safety regulations. But I must confess that they seem to have acted, as they did with our motor car industry, in such a way that they use the natural desire for safety to allow a little element of protection to creep into their campaign.
My duties as Chairman of the American Committee of the British National Export Council take me to America about eight or ten times a year, and I cannot help noticing there the increasing aggressiveness of American shipping. There have been a series of takeovers of major United States shipping lines by industrial groupings backed by almost limitless funds. We can accept the challenge of aggressive promotion of American shipping, but we may be faced with the absurd situation where American companies in competition with us are heavily subsidised in order to do what American companies show they can do without a subsidy. A continuing subsidy plus limitless capital, plus a vicious cargo preference law would create a very difficult situation for us in Europe, and one from which ultimately neither European nor American shipping would benefit.
I need not repeat the arguments put forward about flag discrimination or about the troubles that will arise from "have-not" countries wishing to have their own shipping and being reluctant to have their goods carried in the ships of "have" countries. This breeds insecurity and resentment. This breeds uneasiness about the whole Conference system, and this is going through a searching inquiry at the moment.
So if we are asked what conclusion we draw from the arguments that the noble Lord, Lord Geddes, has put before us, I would say this. I think this radical and revolutionary situation demands new thinking and new action, not only in the shipping industry but in all the

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ancillary industries and the country at large. I believe exciting results lie before the shipping industry in the next decade. I do not take the gloomy view that some of your Lordships have expressed. But in a capital intensive industry, an industry where the relation of capital to labour is so high, results take time. When your individual capital assets take about three years from planning to delivery and are then expected to have a life of about fifteen to twenty years, you cannot change course overnight. So we have a revolution in sea transport, and revolutions are seldom comfortable. I think there is cause for satisfaction in that we in this country are in the lead of that revolution. Inevitably it will lead, I think, to world shipping breaking up into financial groups, and such grouping is not subject to the directions of any one Government. It will lead to closer co-operation with our colleagues in Europe.
The noble Lord, Lord Brown, has given us his views, and he is going to speak again at the end of this debate. We are entitled to ask ourselves what we look for in the Government. We ask the Government to keep our political sea lanes clear; we ask them to keep clear of our propellers; we ask them to help eliminate or minimise various overseas Government subsidies or preference laws so that British shipping, vigorous and competitive as it is becoming, can work out its destiny in open and fair competition on the trading routes of the world.
5.15 p.m.
VISCOUNT SIMON: My Lords, if the noble Lord, Lord Geddes, needed any justification for initiating this debate—and I am sure he does not he would have had it in the speeches we have so far heard, including, of course, his own. As he said, this is a matter of vital importance to this country, and it is indeed strange that we have not had a debate on this subject in your Lordships' House for eight long years. I have no technical interest to declare, but I have the same interest that we all share in the prosperity of the shipping industry, because it is so bound up with the prosperity of the country. And I have perhaps a personal interest through having been engaged in the shipping industry for over thirty years, and also that my son is now serving in the Merchant Navy, although in fact he is for
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the time being employed by an Australian and not a United Kingdom company.
I do not intend to say anything about the political aspects of the shipping industry, except perhaps one thing, which arises out of what several noble Lords, starting, I think, with the noble Lord, Lord Geddes, and the noble Viscount, Lord Runciman, said about subsidies. I agree very strongly with them that subsidy is a useless form of assistance, and it is in that connection that I thought I ought to say—it is known, I am sure, to some of your Lordships—that the system of investment grants now given is regarded by many of our competitors, and indeed by our friendly competitors like the Scandinavians, as being in effect a subsidy. Only the other day I was talking to a Norwegian friend of mine who made this very point. He asked whether we were giving up our view that subsidies were unsound in this country. It seems to me this strengthens the case made by the noble Viscount, Lord Runciman, for same reconsideration of the basis on which assistance can be offered by fiscal means to the shipping industry.
On one other point perhaps I may make this comment. Reference was made to the encouragement given by UNCTAD, if we may call it so shortly, to the development of merchant fleets in some of the developing countries, largely, I think the noble Lord, Lord Geddes, said, for prestige reasons. I do not think we ought to forget that some of these countries suffered very severely during two world wars because they found that the regular supplies of shipping for their needs were withdrawn. This, I believe, has influenced a number of them, and may indeed have influenced the organisation which is now encouraging them to develop some degree of self-support in this matter. None the less, I recognise that these fleets are often established with little hope of viability. They lead to cargo preference and other forms of help, and indeed do nothing to free world trade.
I should like to turn to the problems of the men on the ships, to which the right reverend Prelate We Bishop of London referred. We have heart that with bigger ships, with more sophisticated ships, there will be—there has been already, shall I say?—a fall in the total number of British seamen employed, and

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there is likely to be a further fall. As the noble Lord, Lord Hill of Wivenhoe, said in his most moving maiden speech, this faces us with serious problems which have to be tackled. But even with the reduced number in manpower required to man our fleet, there is some difficulty in getting, and above all in keeping, the right type of man. Seafaring is not just another job; it is really a way of life. The men on our ships have to live and work together at close quarters for 24 hours a day, and for long periods on end—closer quarters, I think, than they would find in the Armed Services, except perhaps in the Royal Navy; but generally speaking Royal Navy voyages are much shorter than Merchant Navy voyages. There are fewer opportunities for the men in the Merchant Navy to get away from their fellows, and it needs a special type of approach for men to serve happily at sea for long period5 in that sort of company.
In years gone by our Merchant Navy was manned by many people who were traditionally sailors. Their fathers, their uncles, their grandfathers had all been sailors. It was often a local tradition. We know that certain parts of the country have always produced a large number of seamen. Now the local traditions are breaking down under the influence of the mass media of communications, and tradition is perhaps not so much in vogue to-day. Then there are other difficulties. There has always been the pull of homelife on the men at sea, but I think it is intensified to-day, perhaps by the fact that young people are marrying younger than they used to, perhaps too early for them to be able to assess in the long term what the advantage would be. So this rather impatient generation tends to throw up what is a most promising career for the sake of—shall I say?—instant domesticity. Then we have to recollect that there are far more opportunities for employment ashore than there used to be. At the moment the situation is not so good as it has been until recently; nevertheless, broadly speaking, there are —and we are grateful for the fact—far more opportunities for employment ashore.
Finally, there is the question of discipline. I am not sure that the young
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people of to-day are quite so keen as they used to be to accept a career that demands discipline. I shall have a little more to say about that later; I merely mention it in passing. All these difficulties have resulted in perhaps rather slower recruitment than the industry would hope for and, above all, to difficulty in retaining men at sea. As has already been said, the wastage rate has been high in this industry.
What is being done to overcome these built-in difficulties? The life at sea is not without natural attractions. There is the opportunity to see a lot of the world. It provides an opportunity to be part of a joint adventure, to work in a team, which I think has great attraction; and, of course, there is plenty of interest in the job. Certainly in the case of officers, there can be few industries in the world to-day in which responsibilities can be gained so young. Think of a young man of 20 years old who has just passed his second mate's certificate, so that he finds himself for 8 hours out of the 24 in charge of the ship, its crew and its cargo. Admittedly, the master is in his bunk asleep and can be called if he is needed. Nevertheless, this young man has that full responsibility on his shoulders. As I say, there are few industries where the excitement of responsibility can be achieved so young.
The industry has also done a great deal in the matter of training. The accommodation provided for seamen is much better than it used to be. I am told that now in the vast majority of cases every rating on a ship has a single berth cabin. That certainly was not so thirty or forty years ago. I admit that the hours are long, and the opportunities for relaxation on board, although much better than they used to be, are perhaps not all that good. The general impression I have is that the men do not really resent the hours that they are required to work, nor the fact that they have to work seven days a week, for which, by negotiation, they have additional leave opportunities on their return to this country.
I believe that the opportunities for advancement are now nearly as good as in any industry. It has been suggested that the ordinary seaman on deck has little chance of becoming an officer, but

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I am told that quite recently arrangements have been made to pick out promising boys at the National Sea Training School at Gravesend, to which the right reverend Prelate has already referred, and to put them in the way of officer training. This matches the opportunities that occur in many industries ashore towards promotion to managerial rank. After all, the masters and officers of ships are in fact the managers of those units. There are special difficulties about training because there is not opportunity for following further education ashore, except of course during periods of leave. You cannot have anything comparable with day-release, and it has been pointed out that shipboard life is not altogether conducive to correspondence courses. Nevertheless, provision is made.
I think the right reverend Prelate also referred to the College of the Sea, which has done so much to encourage men at sea to improve their intellectual capacity. Reference has already been made to the National Sea Training School. I will say no more about it, except that it is proving a great success, and I am told that in this field there is a large waiting list. But, as the right reverend Prelate told us, there is, unfortunately, a substantial wastage later. This school aims to provide, as well as a sound, technical education, some preparation for boys for the kind of life that they will lead at sea. The training of officers is through what is really an apprenticeship scheme. Here again, new facilities have been provided recently. There is an ordinary national diploma course in nautical science, and those who pass well in that can go on to a degree in maritime studies. So undoubtedly there is a steady raising of the educational attainments, and I hope of the mental developments, of the officers and ratings at sea.
There is one matter which was brought to my notice. I apologise to the noble Lord, Lord Brown, that I did not mention this to him in advance, and perhaps he will not be able to say anything about it. I am told that from the middle of this month there is being withdrawn from the shipping industry a concession under which unemployment benefit is paid to seafarers during their training ashore while awaiting employment. The industry spends altogether £4 million a year, or 3½ per cent. of the wage bill, on training.
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As was said by the noble and learned Lord, Lord Pearson, in his report, this is a fine record and compares favourably with that in any other industry. I am told that the result of this decision, if this unemployment benefit is to be made up to men undergoing training, will cost the industry another £500,000 a year. The noble Lord, Lord Pearson, suggested in his Report that the Government should give serious consideration to the whole question of giving support to training. A very large amount is spent by the industry, and it also has to take into account its inability, because of the circumstances, to benefit from many of the facilities in the country supported by public funds.
I should like now to say a few words about industrial relations in the industry. The National Maritime Board, representing both sides of the industry, was set up as long ago as 1920, so that it was almost a prototype for the National Joint Councils which have been set up in different industries since that time. For many years the National Maritime Board was able to settle all the problems of terms and conditions on the friendliest possible terms. This was done by having a completely free discussion in the Board between the owners and the representatives of the men. But I feel that this pioneer development carried with it a seed of danger. I wish that the noble Lord. Lord Hill of Wivenhoe, had been speaking after me, since I could have asked him to comment on this matter but perhaps the noble Lord, Lord Brown, with his great experience of industrial relations, may like to say something on the subject. The danger, as I see it, is that the more successful such an institution is, the greater the danger that the men's representatives will not be able to retain the confidence of those whom they represent.
To put it in its simplest form, if, after free and open discussion, the men's representatives are satisfied that the state of the industry is such that they should not press a claim beyond a particular point, and a settlement is made on that basis, they have then to put it across to their members. In the nature of things they cannot explain to their members all that they have heard. The whole point of confidential discusions is that the men's representatives are told the inner secrets,

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shall I say, of the industry, the nakedness in which the industry is standing; and in an industry like shipping, which is open to the winds of foreign competition, these matters cannot be noised abroad. Therefore one has the very real difficulty that a just and proper settlement can be agreed, but that the men's representatives find themselves in difficulty when presenting such a settlement to their members and justifying it.
This is particularly true in the shipping industry where the union members are scattered all over the world. It is not just a case of getting them together in a factory, explaining things, and perhaps answering some questions. In the shipping industry all this has to be done by circular letters, and so on, which have to be worded cautiously, and it is easy to understand that the men's representatives may lose the confidence of their members. I remember a conversation which I had twenty years ago with a leading official of the National Union of Seamen on this very point. I asked him if he did not feel that the danger of the very close relationship between the representatives of the owners and the representatives of the unions—and it was a close personal relationship of friendship—might weaken their influence. He felt sure that it did not. But I wonder whether after-events have shown that he may not have been right.
Your Lordships may remember that during the unhappy strike of 1966 the Prime Minister said in another place that he thought it was partly due to the fact that the owners had the unions in their pocket—I do not think they were his exact words, but they gave that impression. I confess that I felt a little annoyed when this was said. I thought that it was unfair to the leaders of the National Union of Seamen and the others who had co-operated inside the National Maritime Board. I could have understood it if he had said (and perhaps this is what he meant) that it appeared to the men that the union leaders were in the pocket of the employers, since this would have echoed the fears which I have expressed. I believe that this is a problem which will face trade unions and management in the future, when we all hope that we shall come closer together and have more negotiations of this type.
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I hope that all concerned, on both sides of industry, will give careful consideration to this aspect.
Briefly, the answer is clear. It lies in improved communications. In the shipping industry this means communication between the unions and their members; it means communication between the managers at home and their captains. I emphasise that aspect, since for many years there was a great lack of communication between the owners and their captains so that in industrial matters the captains did not know what the policy was or what the owners were trying to do. It also means improved communications between captains, masters and their men, and vice versa.
The noble and learned Lord, Lord Pearson, in his interesting Report criticised the National Maritime Board because he felt that it led to centralised negotiations and left a complete absence of any kind of industrial relations on board ship. This was perhaps fair comment, but I believe that it was due partly to the circumstances which I have tried to describe and partly to one other matter to which I shall refer in a moment, the application of the Merchant Shipping Act. The difficulty on board ship no doubt stems partly from the authoritarian position of the master, who for a long time was virtually separated not only from the crew and from his mates, but also from his owners. He lived in a world by himself, in a cabin by himself, and he ate his meals by himself. This situation, based as it was on tradition, undoubtedly led to a situation in which the master was too far removed from the men whom he was supposed to manage.
It is interesting to find that the master was not always in quite such an isolated position. In the Law of Oleron, of which noble and learned Lords will have heard, one of the earliest maritime laws of the 13th or 14th century, there is a delightful law which runs as follows:
"A ship is lying in a haven and Tarryeth for the freight and the time to sail, the Master ought to take counsel with his fellowes and say 'Mates, how like ye this weather?' Some will say, It is not good—let it overpass'— others will say 'The weather is good and fair'. The Master ought to agree to the most, or else if the ship perish he is bound to restore the value as it is appraised, if he have wherewith."

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That was in the 14th century, and in the absence of life-saving equipment the chances were that if the ship perished the master perished too; so perhaps the admonition at the end of that Law was not very successful.
Over the centuries that position clearly changed. The master, no doubt remembering the wording on the bill of lading that he was "Master under God", started considering that he was much nearer to God than to his fellow men. Please do not misunderstand me, my Lords. There were many very fine, good masters, and they were not by any means ill-treating their crews or anything of that kind, but there was simply the one man in command of the ship. This went on, I suppose, until steam was invented and the chief engineer arrived. Then the master found that there was somebody he had to ask about the boilers, because the chief engineer knew more about boilers than he did.
As the noble Lord, Lord Hill of Wivenhoe, will know, this led to a feud between the navigators and the engineers of ships which lasted well into this century, though I am happy to say that it is disappearing now. But the master is still remote, and perhaps one of the reasons for this is because of the working of the Merchant Shipping Act. I was very glad to hear the noble Lord, Lord Brown, say that progress was being made in preparing the amendment of this Act. As your Lordships know, the main Act is dated 1894, but that incorporated many sections from much earlier Acts. The archaic procedures and formalities are no longer necessary, and they tend to create an image of an industry which is strangled by out-of-date practices. Moreover, I think that the paternalistic attitude of the Board of Trade under the Act—the fact that the seaman does not look to his union, which of course had not been invented at that time, to protect him from injustice; he looks to the Board of Trade—results in the régime of the ship being established by law. It seems quite possible that one of the reasons for the lack of any form of normal industrial relations on board ship is that both the master and the men say, "Here is the law. The law says we may do it—we do it. The law says we may not do it—we do not do it. What else is there to talk about?"
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This brings me to mention one other matter arising under the Merchant: Shipping Act, and that is the question of discipline. The disciplinary provisions of the Merchant Shipping Act are quite clearly, on the face of them, archaic. Your Lordships may or may not know that misconduct or neglect endangering ship or person is a criminal offence. That is a very serious thing, and perhaps it is right that it should be a criminal offence. Desertion is also a criminal offence—although in other industries it might be called absenteeism or withdrawal of labour—which is punishable by imprisonment. There is in addition a system of fines on board for breaking regulations approved by the Board of Trade, covering such matters as assaults, drunkenness and disobedience to lawful orders. One must wonder whether this form of discipline and the methods of enforcing it are really necessary in the present day. It is certainly unique in twentieth century industry in Britain, but, of course, a sea voyage is I very special kind of enterprise.
I should like to read what the noble and learned Lord, Lord Pearson, said about the matter in his Report. I do not know whether any of your Lordships have brought the Report with you, but paragraph 287 is worth reading. It says this:
"In our opinion—"
the opinion of Lord Pearson and his colleagues—
"…it is clear beyond doubt that a special disciplinary régime of some kind is required by the special conditions of seafaring life. Discipline is necessary in the interests of safety, in order to secure proper co-ordinated action by the crew on any occasion of emergency for saving the ship, crew, passengers and cargo from the perils of the sea. Discipline is necessary in the interests of efficiency, in order to secure the proper operation and handling of the ship and its equipment at all times. Also, discipline is necessary for preserving law and order in the confined and inescapable conditions, because the ship is a total institution in which the seaman works, eats, sleeps and spends his leisure time in the same limited area with approximately the same people as his workmates, companions, and neighbours. Good discipline must be maintained somehow."
I think your Lordships will agree that there is a clear case for some form of discipline. But I think that the system that is now enshrined in the Me.-chant Shipping Act is such as, perhaps, to frighten some people away from the sea and, perhaps still more, to provide the

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sort of point which men who want to make trouble can so very easily make into trouble. I doubt very much whether in recent years the disciplinary provisions of the Act have ever been enforced unreasonably or harshly, but there it is. The provisions are there, and they are just the sort of thing that people who want to make trouble can so easily get hold of.
In conclusion, I want to say this. As I said at the beginning of my speech, I spent 34 years working in this industry, but I hope I can still look at it objectively. I believe there is no industry in this country in which management is more concerned with the safety and the welfare of those who serve it. The cynic might say, "Well, they have to be". But certainly there is a tremendous amount of thought given to this by the managers of all our shipping companies. In spite of what the noble Lord, Lord Hill of Wivenhoe, said about certain cases a good many years ago, the good safety record of British ships speaks well for this. The noble Lord, Lord Mancroft, mentioned some figures, which were quoted the other day, of annual losses expressed as a percentage of tonnage in service. It was interesting to find in that analysis that this figure, which fell until 1959, has been rising steadily since them. But whereas the world figure for the ten years up till last year was 0·45 per cent., the United Kingdom figure was 0·15 per cent. That I think, makes the point that I was seeking to make.
May I conclude with a personal note? I had the great privilege to serve under one of the greatest leaders of British shipping in modern times, Sir William Currie. I remember the tribute paid to him by Earl Alexander of Hillsborough, when he was Leader of the Opposition, after Sir William's death. There was a man who never took a decision without having in the forefront of his mind what that decision would mean to the men who served the company. There were many others like him, and I am happy to think that in the shipping industry to-day many leaders, if they did not have the privilege as I had of working under him, were influenced by him and by others of like mind. If our shipping companies are managed in that way and are served by the splendid men who go to sea in our British ships, then I have no
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doubt that the shipping industry, if it cannot command success, deserves it—and is not that more than half the battle?
5.48 p.m.
THE LORD BISHOP OF WINCHESTER: My Lords, sailing a dinghy, one of my holiday joys, may seem a very inadequate qualification for contributing to this debate. However, from my boyhood the sea and ships and seafaring men have had a great attraction for me, and I am particularly happy to have had in my former diocese—that of Chelmsford—the ports of Harwich and Tilbury and much of London's dockland, and to have in my present diocese the port of Southampton. During my few years at Winchester I have paid two official visits to the docks at Southampton, watching with interest the latest developments and talking with men at their work. I have also spent a day at the Esso refinery and watched tankers unloading. On my most recent visit to Southampton, a few weeks ago, I was particularly interested to see the four new roll-on roll-off terminals, the construction of the new 1,000 ft. quay for providing facilities for the berthing of the largest container ships, and the most modern, mechanical appliances for handling containers. Interested, however, as I am in the technical side of these modern developments, it is the human aspect, radically affected by these developments, that is my particular concern this afternoon. The well-being of man is ultimately of greater importance than the efficiency of the machine he operates. So, my Lords, I venture to say a few words about seamen's welfare.
The shipping industry is now witnessing, as we all realise, the break-up of an old and archaic system of industrial relations. Its replacement, at least in some sections, by something more in keeping with modern industrial practice is to a large measure due to the Pearson Report. Before any change could take place it was necessary for employer and employee to meet, man to man, and for the problems of men at sea to be understood and taken into account. Perhaps for the first time for centuries, seamen are being brought back into the main stream of British industrial life instead of being treated as a race apart.
In the past, the more the employers clung to an image of a solid front the

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more the unions clung to traditional demarcation lines between deck crew, engine room crew and catering staff, in order to preserve their jobs. Because of those demarcation lines, many men were idle for a lot of the time and unable to help out their colleagues. As a result of this job structure, British shipping in terms of profitability lagged behind European standards. Moreover, the division between "officer" and "crew" on board ship, to which the noble Viscount, Lord Simon, has just referred, often led to bad relations. In July, 1965, the system was started of "liaison representatives" on board ship. This was a big step forward from the old tradition of absolute rule by the officers. But the great change recommended by the Pearson Report was that the solid front of employers should be eased to allow individual companies to
"plan, develop and implement effective personnel policies".
The first two companies to act under this recommendation have been the two oil companies, Esso and Shell. If I choose Esso rather than Shell to illustrate the new approach, the sole reason is that I happen to have closer contact with Esso in view of their special link with Southampton. As many of your Lordships will know, Esso have done considerable research on human relations and sociological problems. It was found that among the causes of dissatisfaction among seafaring men were these. First, sailors like to work at sea rather than idle about. Therefore, the dispute on the 40-hour week was about money, not hours. Secondly, sailors and officers need to see a lot of each other if retraining is to take place, and the practice of transferring crews from ship to ship is not compatible with retraining. Thirdly, the major problem was the insecurity of the sailor's life—once at sea, forgotten by everyone. If this latter cause of dissatisfaction could be removed, a major cause of intransigence would go. Fourthly, sailors would favour a more permanent relationship with their employer, instead of their present nomadic existence.
As a result of this research, a new policy was thought out and eventually agreed between the National Union of Seamen and Esso providing conditions for a new and closer relationship between the company, its seafarers as employees of the company, and the union.
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The agreement is known as the Green Book Agreement of July, 1967, and is entitled A New Marine Personnel Policy An important part of this new agreement is what is called the integrate I crew system. This dispenses with the traditional division of labour between deck, engine and catering, to which the noble Lord, Lord Geddes, referred. As far as possible, all men will have an equal share of all work to be done, and more uniform earnings. In September, 1967, the first ship to sail under a new agreement was the "Esso London". Besides granting fairer pay related to training and experience, many human factors were taken into acount, among them being the lowering of social barriers between officers and men; additional shore leave; better amenities; flexibility between deck, engine room and catering crews (for which training was given); and the crews to become permanent employees with a permanent ship. The system also provided for a genuine career with promotion opportunities, each ship to be run in like a business operation on land with a management committee.
This new approach will, Esso are confident, create the conditions for a dramatic breakaway from the tradition of casual employment at sea. As a cooperative effort on the part of the company and the trade union, it should lead to a rise in the status of seamen, and improvement in the conditions of employment, the development of a wide range of skills and an increase in technical proficiency. I understand that about 16 other companies are interested it introducing a similar policy for what are otherwise called general purpose crews, but such ventures are not low in cost and it may not be possible for smaller companies running on lower profit margins to introduce schemes of this kind. I mention this new approach, my Lords, because it seems to me to be a timely reminder that problems of human relations and sociological issues must be faced if the shipping industry is to prosper in the future. An environment must be provided in which men can satisfy their desire to "belong"—to be members of a community, each able to make a valuable and essential contribution to its daily life and work.
I turn now from the welfare of seamen on board ship to the welfare of

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seamen ashore. The right reverend Prelate the Bishop of London has already drawn attention to the invaluable service rendered to seamen by the various voluntary societies and organisations. May I put in a plea for a realistic attempt on the part of these societies to plan and work together in meeting newly-emerging needs in the new and remote port areas at home and overseas which are being rapidly brought into being as a result of the development of containerisation, bulk carriers, et cetera? It would be manifestly absurd for The Missions to Seamen, the British Sailors' Society, the Apostleship of the Sea and the Norwegian Seamen's Mission, not to mention the Swedes, the Danes and the Finns, to try to jostle each other for sites and opportunities of work in these new areas. In two South African ports, Durban and Port Elizabeth, experiments are already being made in co-operative action between The Missions to Seamen, the British Sailors' Society and the Apostleship of the Sea, and further possibilities are being examined for the vast new port area of Antwerp. There must be rationalisation, there must be joint consultation and there must be co-operation, if service of the very first quality is to be offered to men of an honourable profession whose work is of the lifeblood of this country and of the world.
Hitherto I have omitted any specific reference to what I regard as the most important aspect of a seaman's welfare, and to this I now turn briefly. I refer, as the right reverend Prelate the Bishop of London has already done, to a seaman's relationship with his wife, home and family. If we are considering the welfare of the seaman, we must be concerned with the wellbeing of the whole man, including his family relationships. From time immemorial the sea has called men to make voyages which take them away from home and family for weeks, or even in the old days for years, at a time. The disruptive effect on husband/wife and husband/family relationships to-day, as in past times, is easily realised. The major calls on chaplains and welfare workers in this field are for counselling in matrimonial difficulties, of which alcoholism and drug-taking are sometimes the symptoms. To-day, containerisation and automation, as we have already been reminded this afternoon, are some of the
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factors which result in so quick a turn-round of a ship in port that the seaman may not be able to go home to visit his wife and family.
It is vitally important that every possible solution should be explored with a view to preventing the complete disruption of a seaman's home and family life and to enabling a seaman to see as much as possible of his wife, and the wife as much as possible of her husband, within the limitations inevitably imposed by a merchant seaman's life to-day. What can be done? The Dutch and the Scandinavians have already tried to overcome the problem of separation by enabling seamen's wives to accompany their husbands on occasional voyages. This lead is being to some extent followed by British shipping companies, although there are obvious difficulties in the way and the experiment as yet has largely been confined inevitably to the officer class. Even if such a solution proves impracticable on a wide scale, the psychological effect of enabling wives who can extricate themselves from their home and their children to share occasional voyages with their husbands would be great. Again, much good can come from the payment by the shipping company of travel costs for wives to visit their husbands at United Kingdom ports and for men to return home from their port of disembarkation for however brief a The most valuable way of helping in this family problem is to ensure that a seaman has a reasonably long period of leave possibly twice a year.
I have been delighted to find that emphasis is laid on this in the new policy of Esso. I quote:
"We believe that time available to our seafarers at home with their families is extremely valuable to them and it is our intention to arrange the planning of seamen's work with these factors in mind. The leave entitlement has therefore been increased and is proposed to be 72 days per annum compared with 48 days. The intention would be to allow for leave to be taken at 5-monthly intervals where possible."
In order to facilitate the carrying out of this intention as well as the fostering of the integrated crew system, the Esso plan is that on a 90,000 tonner, while there should be a total self-relieving crew of forty-four, the actual crew for any one voyage should be only thirty-one.

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My Lords, I commend these various attempts to solve a problem that must be solved if this noble profession is to continue to attract in the future, as it has attracted in the past, some of the finest of our nation's youth, and not to lose its attraction as the years go by.
6.1.p.m.
LORD TEYNHAM: My Lords, the right reverend Prelate the Bishop of Winchester has given us a most interesting exposition on the welfare of seamen. I think he mentioned the British Sailors' Society, of which I have the honour to be a director. This Society has hostels in most of the main ports of the world and is very much appreciated by the seamen. The noble Lord, Lord Geddes, referred to the opening last year of the National Sea Training School at Gravesend, which is proving a very efficient organisation. Perhaps I may mention that I am concerned with sea training as chairman of the Prince of Wales Sea Training School at Dover, and I can confirm the gradual breaking down of the traditional divisions between deck and engine-room training which is in evidence at this school. I am sure that this is a great development, one which I think was touched on by the right reverend Prelate. As a professional seaman, I am very interested in the training of the young for the sea. In fact, I provide a number of boys for Lord Man-croft's shipping company, the Port Line. Very many of them who went to sea as deck boys are now masters of their own ships.
I suggest that it is very appropriate that we should have this debate on the shipping industry at this time, in view of the fact that the Committee of Inquiry is, I understand, still sitting and studying all the aspects of the shipping industry. I wonder whether the Minister who is to reply for Her Majesty's Government can indicate when the Committee is likely to make its Report. I would emphasise the fact that the shipping industry contributes no less than £140 million a year to our balance of payments, and if there were no British ships the net cost to our balance of payments would be of the order of £300 million. I was glad to hear from the noble Lord, Lord Brown, that Her Majesty's Government fully realise the true nature of the benefits which the ship-
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ping industry gives to our balance of payments.
I should now like to touch on an aspect of British shipping which I think has not so far been mentioned in the debate this evening. I am sure that all your Lordships realise that without this lifeline of British shipping this country would, with the advent of war, quickly starve. I, and many other noble Lords, are very concerned at the proposal of Her Majesty's Government to withdraw our presence East of Suez. This may well have a serious effect on our merchant fleet, even in peace time. This matter was referred to in the recent defence debate but, I would say, was rather brushed aside, There is no doubt that the shipping industry is disturbed about the absence from official Government statements on defence policy of any clear commitments to the importance of defending merchant shipping.
Shipowners believe, and rightly so, that the visible presence of the Royal Navy in areas East of Suez has undoubtedly assisted in preventing mischievous activities against merchant shipping. If we look back to the Defence White Paper of 1966 we find these words:
"Royal Naval vessels give a visible British presence throughout the world, often where other British forces are seldom seen."
Has all this been forgotten by Her Majesty's Government? I should like to ask Her Majesty's Government whether they are prepared to give an assurance that they recognise the importance of giving protection to our merchant feet. I should like them to provide a clearly defined policy as to how this is to be done East of Suez when our presence has been withdrawn. I should like to know, also, what is to be done to provide merchant ships and their crews with the capability to protect themselves against likely forms of attack.
I suggest that it is not generally realised that the whole conception of NATO and American defence policy has recently undergone a fundamental change, and that this has a considerable bearing on our merchant fleet. The former Defence Secretary of the United States, Mr. McNamara, in a message to Congress, envisaged that the United States might have to fight an all-out war at sea which would last many months and which would threaten their allies' shipping as well as

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their own. In fact I would say that since the advent of the nuclear weapons a conventional war at sea is contrary to official doctrine. I do not know if Her Majesty's Government subscribe to this policy; but if they do it is all the more reason to provide adequate protection for our merchant shipping in the sea lanes of the world. I would say that the greatest danger to this country is a conventional war at sea. We have seen the naval buildup of Russian forces in surface craft and submarines, and I would say that we are in a perilous position to maintain our lifeline across the oceans. There is no doubt that the British shipping industry is disturbed at the inadequacy of our defence support at sea and that anything Her Majesty's Government can say to allay this fear will be welcome.
6.6 p.m.
LORD SANDYS: My Lords, we should be deeply grateful to the noble Lord, Lord Geddes, for having introduced this Motion this afternoon. It has given an opportunity for two particularly thoughtful speeches on the shipping industry. My reason for intervening in this debate is largely a hereditary one. One of my forbears was Secretary of the Virginia Company and a charterer of the "Mayflower". In much more recent times I had the extremely good fortune to have an uncle who was a sailor and responsible for the escort of merchant ships on the Western Approaches—to which the noble Lord, Lord Teynham, has referred. I had the special privilege of visiting him at his headquarters at Greenock during the war and of seeing at first hand how the incredibly important role which the Royal Navy had to play was worked out in practice.
Special mention has been made this afternoon of the importance of shipping among our invisible earnings—earnings which contribute in no small measure towards our balance of payments. But we could do very much more if the climate of opinion in public understanding were more favourable. Visible exports occupy the centre of the stage and enjoy the full benefit of Government measures while shipping, prominent among invisible exports, suffers the full disadvantages of, principally, the positive and obvious disincentives of S.E.T. in shore establishments in the United King-
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dom; the crushing blow of devaluation, especially in hired freight tonnage from overseas; the effects of exchange control; and, in particular, something that has been mentioned by the noble Lord, Lord Geddes, and others, the export rebates. A section of Chapter 25 of the Geddes Report takes up this subject in very much greater detail than I propose to do.
The noble Viscount, Lord Runciman of Doxford, dealt in extreme detail with the question of investment grants, and I would not presume to add one word to what he said on this subject. Finally, I turn to a subject concerned not with taxation but with incentive, the disqualification which the shipping industry has in competing for the Queen's Award. I think it especially unfortunate that the shipping industry should suffer this handicap. I have verified to-day with the Board of Trade that this is so. This is a sorry recitation of some of the many difficulties from which the shipping industry suffers. All of them could have been either avoided or modified to some extent by the intervention of Her Majesty's Government.
For several centuries our foreign policy, our trading policy and our shipping policy have all been closely intertwined. Royal charters were granted to trade in various parts of Europe, the Levant, Russia and, in the case of my noble forbear, in the Americas. The roles of Ambassadors and merchants were closely intertwined. In those days we knew just where we were going as a maritime Power, and over the centuries we have developed a commercial, relationship of which we may be justly proud. Recently our interest in the European Economic Community has been the focus of attention, but it seems to me that our vision is being restricted, and we should look to our partners in the Commonwealth, in E.F.T.A. and very probably in the North Atlantic Free Trade Area, with whom we have a natural affinity and a very close understanding.
To return, my Lords, to invisible earnings: there are behind the decline in our net earnings deeper causes, some of which I feel we could redress. Failure to deliver goods to the right place; goods held up for months on quaysides and lost, accruing very heavy demurrage charges; contaminated cargo, or goods which in some

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way have failed to give satisfaction, are a growing cause of deep concern among British exporters and their customers overseas. Orders have been lost to foreign competitors. The story has a weary inevitability about it. But is this the fault of British shipping? I think it is only in part so. It is the system of handling our cargo freights which needs radical alteration, and not the basic principle of sending goods by sea. The old pattern of cargo, what we might term the Masefield era of "coal out—grain in" has now diminished from a torrent to a trickle. Traffic in "firewood, iron-ware and cheap tin trays" has largely been replaced by a very much lighter, more fragile and more specialised group of exports: electronic equipment, machinery, highly processed goods, based on a whole new range of skills of which British industry can be extremely proud.
This is a challenge to our historic, British maritime expertise which for centuries we have looked to and relied on for our trade. To meet it a new skill in handling cargo must be acquired through containers. The container concept is not a new one, but the application of it to the British shipping industry may well prove, in my humble opinion, to be the turning point in our quest to hold and retain foreign markets. If the Government will give the container industry their full backing by reducing restrictive regulations and time-wasting procedures, including, in particular, the Transport Bill, they will go a very long way to earn the respect and admiration not only of noble Lords on these Benches but of a very much wider community.
The inception in February next year of the first joint enterprise of two British companies, Overseas Containers Ltd. and Associated Container Transport will open an entirely new phase in cargo handling. This new container way to Australia from the six container bases, scattered as they are between Scotland and the South of England, passes through the new ocean terminal at Tilbury and will have the effect of bringing Sydney 16 days closer in the turn-round because of vastly improved load schedules. As has been mentioned earlier, it brings an entirely new door-to-door service of through transport which will link exporters in both countries with their customers, and
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it offers five special advantages over the normal trade handling.
First, damage, pilferage and contamination are virtually eliminated. Secondly, there is simplified documentation (I feel sure that the burden of documentation upon exporters is so well known, as to need no explanation) and the problem of customs clearance, demurrage and insurance is eased. Thirdly, there is the substantial saving to be obtained through overall delivery time. Fourthly, exporters will now have a special advantage because they will be able to quote a delivered goods price and not cost, insurance freight or free-on-board prices. Fifthly, and most important of all, is guaranteed delivery. Action by Her Majesty's Government could greatly improve inland transport in the United Kingdom, which could speed the containers upon their way to a terminal base. In this respect the road improvements programme, about which an announcement has been made to-day that £325 million has been placed in the preparation pool, will be welcome. Nevertheless, we should remind ourselves that this is for the early 1970s and that the container service in fact starts in February, 1969, so that, in the initial stages anyway, the road improvements will just not be there.
My Lords, I would repeat a special plea, which has been made earlier by several noble Lords, that we should drop the 100-mile regulation. This regulation will be a most confounded nuisance. Suppose that the distance between the port and the factory of origin or entrepôt for goods is 106 miles or some similar figure, is it really going to be necessary to obtain a special certificate or document provided by the Board of Trade for this purpose? That would seem to be the height of foolishness.
Containers can play a big pert in improving the loading and unloading of raw materials. Take timber, for example. We import into this country some 5 million tons of sawn softwood every year. The Timber Research and Development Association has just been carrying out a survey. Unfortunately the report will be published in about ten clays time, so I do not feel that I should comment on it except in one special respect: that the savings through the use of palletised and

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containerised cargo, or the use of packaged timber, to put it in its broadest sense, will be up to £10 per standard on the Canadian trade and £6 per standard on the Scandinavian trade. These savings will be of very real value, not only for the importing houses but especially for the British building industry, at a time of great problems in this country. We look forward to the publication of this report and we should be particularly glad to have it publicised to a wide extent. My Lords, at this late hour I do not feel that I should continue to go into great detail about containerisation problems, and I am content to leave it at that.
6.18 p.m
EARL JELLICOE: My Lords, no one in this country is better equipped to initiate our debate this afternoon than my noble friend Lord Geddes, as his admirable survey has shown. He is doubly qualified, not only by his personal and deep knowledge of this industry but also in his present capacity as President of the Chamber of Shipping. I am also glad for another reason that the noble Lord decided to put down his Motion. As he said, it is now eight years since we last debated the shipping industry, and that is far too long a delay. In my view, we need much more frequent debates and we should pay more consistent attention to this important industry. We have the time, if we so wish, and we have the expertise too, as is shown by the array of shipping talent, both lay and ecclesiastical, which we have witnessed to-day.
My Lords, two bright new "vessels" have joined your Lordships' fleet to-day. Having been observed for some months by the noble Lord, Lord Hill of Wivenhoe, we have had the pleasure to-day of hearing him break his silence. Like the remainder of your Lordships, I greatly enjoyed his maiden speech, and I very much hope that, having found his voice in your Lordships' House, he will not lose it. Precisely the same applies to my noble friend Lord Somerleyton. I should like to congratulate him most warmly on his informed, thoughtful and very specific maiden speech.
I cannot claim anything like the special knowledge of this industry which is
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possessed by so many speakers who have gone before me. All I can claim is a certain hereditary interest, having had as my paternal grandfather a merchant seaman and as my maternal grandfather someone who helped to found what has become one of Britain's greatest shipping companies. But it struck me, listening to your Lordships' debate this afternoon, that five main themes have emerged from it.
The first, on which I do not intend to say anything in summing up, but which I feel profoundly, is the importance of the human factor in this industry. The second is the vital part which shipping plays in our balance of payments, its contribution to the economy and the handicaps under which it is labouring. The third is the theme of change. The pace of change within this industry has never been faster than it is to-day. The "winds of innovation", to borrow Lord Brown's phrase, are sweeping through it. The fourth is that since this industry is in every sense international, it creates problems which inevitably demand an international solution. The fifth theme is that this is an industry which in the past successive British Governments, and perhaps the British people, too, have tended to take too much for granted. I believe that in to-day's conditions Government can do a great deal to hinder it and a great deal to help. There is scope for valid and fruitful collaboration between Government and industry here.
As I have said, in the days when our industrial and maritime supremacy was taken more or less for granted we could afford to take our shipping industry more or less for granted. With our backs against the economic wall, we can no longer afford to do so. Our future depends on whether we get our balance of payments right— and very quickly. As anyone who has read the Clark Report on Invisible Exports knows, invisible exports play a large part in our balance of payments, and to these invisible exports the shipping industry made a net contribution in 1966 of nearly £150 million sterling. But this is not the whole story. There is also the shipping account as a whole. Here again, as the Clark Committee pointed out, some £200 million were spent on time charter power

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from abroad in 1964, and a further £200 million on import freights in foreign ships. As the Report states:
"Insufficient is known at present to be certain why there are not sufficient British ships to enable those two main items of expenditure to be substantially reduced."
A number of noble Lords—my noble friends Lord Geddes and Lord Runciman of Doxford, and the noble Lord, Lord Hill of Wivenhoe—have spoken about the falling British share in the world mixed fleet, as did the noble Lord, Lord Brown. I thought that he did so with undue complacency. I was impressed by what the noble Lord, Lord Hill of Wivenhoe, said on this matter. I was also impressed by the forecast which I saw in a recent article in the Financial Times by a Norwegian expert, Dr. Svensen, of the Institute of Shipping Research at Bergen. We have heard from my noble friend Lord Geddes that we have just been overtaken by Liberia at the head of the shipping league. In his article Professor Svensen forecast the likely pattern, as he saw it (this was only a personal and subjective forecast), of the world's mercantile fleets in 1980, only twelve years ahead from now. According to his forecast, Japan and Liberia would then be equal first, with 35 million tons, and Norway second, with 30 million tons. By then we should have dropped to fourth position, with perhaps 25 million tons, with the Americans and Russians pressing hard on our heels. I should like to know whether the Government accept this forecast, broadly speaking, and whether they think there is a point at which this decline in our relative shipping position (I am not talking in absolute terms) should be arrested. I do not wish to dwell further on this point. My noble friend Lord Runciman of Doxford had a great deal of value to say on it.
I listened carefully to what the noble Lord. Lord Brown, had to say about the taxation changes since 1965 and how they affected the industry. I hope that he, in his turn, will study carefully the measured words of my noble friend on fiscal matters. I believe that these, if followed up, could serve to arrest the present steady and inexorable decline in our relative shipping position. I am concerned about this. I say frankly, as a sentimentalist, that I do not like it, but
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I am much more concerned about this for the reasons given by the Clark Committee.
I do not wish—nor, I think, would any of your Lordships—to sound an unduly pessimistic note in this matter. I believe that there is much cause for optimism in viewing our Shipping industry at the present time. We have heard a great deal this afternoon to bear this out. There is a real chance that British shipping is going to be right in the van of the revolution that is now in progress in the handling of dry cargoes. For once, as my noble friend Lord Geddes remarked, we seem to be reversing the usual process with which we have all become only too drearily familiar in the post-war years. Usually it is we who invent something, we who get or to the thing first; but it is others who cash in on it commercially. This time, thanks to the energy and enterprise of all those concerned in the consortia, about whom my noble friend Lord Sandys as just spoken, we may be on the verge of being able to show a clean pair of commercial heels to our nearest competitor.
It has often been said that containerisation (to use this vile word) involves not just a change in the technique of transport of goods by sea, but also a sea-change in transportation as a whole. It holds great promise for British industry, since it means that delivery dates, to which the noble Lord, Lord Brown, so rightly attaches importance, can be forecast with far greater certainty than is possible at present. Moreover, it means that the exporter and the producer have far less stock tied up in transit at any one time. But, of course, it involves great initial capital expenditure and vast changes throughout the whole system. It involves changes in banking practice, in insurance practice, in documentation, in the role of the forwarding agent, in marketing and in customs procedure. And I should like to pay tribute to the flexibility and imagination which our customs experts have shown in bringing themselves abreast of, and coping with, these new developments in rail transport, in road haulage, in port handling, in shipping design, and not least, as my noble friend Lord Mancroft has remarked, in management.

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All this is still in its very early stages. There are many variables and many imponderables. I think that a real breakthrough in the whole of our external trade, or a large part of it, is on the cards. But as I see it, this is essentially an experimental time when all those concerned need the maximum amount of flexibility and manœuvre. This is, above all, a time when the essential criteria should be economy and efficiency. That is one reason why I share the concern which has been voiced in your Lordships' House this afternoon about some aspects, as they affect shipping, of the Transport Bill. Like my noble friend Lord Sandys, I am especially concerned about the rigid and arbitrary maximum of 100 miles. But this is not perhaps the time to go deeply into the Transport Bill: we can kill "Transport Bill", or savage it, on another occasion. The noble Lord, Lord Brown, suggested in his opening and very thoughtful remarks that the anxiety which some people entertain about this clause of the Transport Bill is possibly exaggerated. I would only say that that anxiety is, to my certain knowledge, entertained, and sincerely entertained, by some of the best and most lively brains in the shipping industry—those who are driving forward this container revolution. I would assure the noble Lord that we shall take a particularly close look at this part of "Transport Bill" when he or it reaches us, if he does, and if it does, later in this Session.
I wish to touch only briefly on the international aspects of the shipping industry. I do not propose—I am not really competent—to say anything about the real problems of flag discrimination, UNCTAD or the United States Federal Maritime Commission. Perhaps on the question of oil pollution, to which my noble friend Lord Geddes referred, and about which he knows so much, I can say this. I have a special axe to grind here as Chairman of our National Committee on Oil Pollution. I am delighted that this is being handled by IMCO, and handled so responsibly. I believe it is extremely important to maintain momentum in this field, and momentum sometimes flags when the immediate spur of urgency is removed. I would just remind your Lordships that part of the international progress which has been
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made in this field is due to informal international conferences held in London in 1953 and in Copenhagen in 1959; and I hope I shall not unduly alarm my noble friend when I say that it is the expectation that another informal and responsible international conference is likely to be held this year further to consider this whole field.
I should like to say, also, how entirely, in dealing with the international field, I concur with what my noble friend Lord Geddes said about Suez. Whether or not the Canal is reopened, it will certainly never regain its former capital importance. This makes it inevitable that the present importance of the Cape route will remain, and will indeed be steadily enhanced in the coming decade. This underlines once again, if any further underlining is necessary, the importance for this essentially maritime country of ours of the Simonstown Agreement, the importance of the ports and the sea-lanes of southern Africa, and, above all, the importance of maintaining sensible relations with one of our most important trading partners, the Union of South Africa.
Likewise, I endorse wholeheartedly what my noble friend Lord Teynham said about the need to protect our merchant shipping. One of the great changes which we have witnessed in the last decade has been the growth in Soviet maritime influence—that land animal which is rapidly becoming a very ubiquitous sea animal. Another great change has been the growth right across the world of important medium-sized navies. All this poses a potential threat to our shipping, since there are innumerable ways, well short of overt hostilities, by which our shipping can be interfered with. Given the decline in our international position and prestige, given our intended withdrawal from East of Suez, it means that our ability to counter this threat when it is growing is seriously diminished. I hope that the Government will be able to tell us, now or later, rather more than they have been able to tell us hitherto about how they propose to ensure world-wide protection of our ships upon their lawful occasions.
I should like to turn, in conclusion, to one area, and one area only, where I believe the Government can help this industry, and that is our ports. I hold

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it essential that our ports, whether they are required to cope with conventional or bulk cargoes, should be as efficient as we can possibly make them. I had some direct experience of some of our ports in the fifties, and I found it a depressing experience. I realise that a great deal has been done since then. I know that investment has been speeded up. There are major developments in hand, like the Tilbury development under the ægis of my noble friend Lord Simon. We have had the Rochdale Report, and we have had the 1964 Act and the 1966 Act. Nevertheless, I think it would be a rash man who would claim that any of our major ports are as yet as efficient as, say, Rotterdam, the premier port of Europe.
There are two points which I should like to impress upon the Government here. The first is the point to which my noble friend Lord Sandys referred; namely, the importance of road communications. Anyone who has tried to get down to London Docks or, say, to Birkenhead when they are busy knows how grossly we have neglected in the past our road communications to our ports. Doubtless much container traffic to our ports will move by rail—freight-liners and so on. Nevertheless, a vast amount of cargo, containerised or not, will move to our ports by road, and it is really vital that our road communications to and from our ports, and to and from our inland loading depots, should be vastly improved. I have not seen the new announcement about the road programme, but I am not convinced that there is, as yet, proper co-ordination at the highest level between our road development programme and our ports development programme. This is precisely the sort of strategic planning upon which the Ministry of Transport and the Minister of Transport should be concentrating. This is precisely the sort of planning which I fear tends to get neglected in the press of, perhaps, more doctrinaire legislative detail.
I should like to take just one example. If we are to have only two container ports in this country—and that is quite possible—Southampton could well be one of them. Yet what is being done about that motorway—the Midland-Southampton motorway—which was, I think, advocated in the Rochdale Report? When is it planned? I hope that
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the noble Lord may be able to tell us. All I know is that the present position is really absurd, when one sees long queues of heavily laden lorries with precious, vital cargo held up, for example, at a level crossing at Sunningdale on the A.30. It is a travesty of modern transportation.
My other concern, my Lords, is the cloud of uncertainty and the threat of nationalisation that is at present hanging over our ports. The 1966 White Paper Transport Policy, foreshadows the organisation of our ports on the basis of public ownership. We learnt rather more about the Government's proposals in the document which was published by the Ministry in July last year. I must say I found this document an extraordinarily unconvincing piece of literature. It argued that our ports should be viewed nationally and planned positively, it called for positive central planning; it demanded a strong controlling agency at the centre. I would not for one moment dispute all this. What I do dispute is the leap which the Government make from these bold, big phrases to the assumption that what we need is a National Ports Authority having overall control over a small number of regional port authorities, under which, as I understand, all our major ports would be grouped in public ownership.
I do not dispute the need for unified control, strategic control, over our ports policy. What I do dispute is that this carries with it the need for unified ownership. We have, I think, 15 major ports in this country, some controlled by public boards, like the P.L.A., some already nationalised, and some municipally owned. I believe that there is a great deal of benefit in this variety and in the competition between ports which it encourages. I very much doubt whether rising ports like Shoreham and Felixstowe would have shown so much enterprise in recent years, would have expanded as they have, had they been under a single unified ownership. When one sees how private foreign enterprise has been able to make a go of the Southampton-Le Havre short-haul sea route, which our nationalised British Railways abandoned in despair, one is not impressed by the theoretical benefits of public ownership in this sort of industry. At best I would

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hold it to be an irrelevancy, and at worst exceedingly harmful.
I am equally foxed (if I may use the colloquialism) by the Government's apparent attachment to this ideal of regional port authorities. I was myself attracted by the Rochdale plan for estuarial authorities: that seemed to me far more suited to the facts of geography. I cannot see why, just when these estuarial authorities are getting into their stride, the Government now wish to interpose a third tier of authorities. Thirdly, I read with some despair that one of the responsibilities of these new-fangled regional authorities will be to keep under review not only ports but also port facilities which are not at present nationalised, with a view to recommending them as victims for nationalisation. I can think of no surer way of making it difficult for those who are anxious to make a real go of our ports in the new and very exciting conditions into which we are moving than to have this threat suspended over managers and management.
When I expressed my disquiet about all this two years ago, the noble Lord, Lord Champion, who was then replying for the Government (and we miss him very much on the Front Bench opposite), told us:
"it may be several years hence before this Government, which clearly have before them a life of anything up to twenty years, could work out these proposals and eventually introduce them".
I suppose, my Lords, that it is just conceivable that the Government's life will not, after all, endure for that further twenty years. In any event, I hope that the Government will pause before proceeding with this proposed legislation.
I do not claim that Rochdale, as enacted by a Conservative Administration, was perfect. I should have preferred a Ports Council with far stronger and sharper teeth. But it would be a quite simple piece of dentistry, one of which even a U.A.R. dentist would be capable, to supply the Council with stronger teeth without embarking on all this controversial and complicated paraphernalia of more public ownership and more bureaucratic top hamper. In his opening speech the noble Lord, Lord Geddes, quoted some words that I was rash enough to use in our debate eight years ago. I
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think that I then referred to the need for a real and fruitful partnership between this industry and Government, Governments of whatever political complexion. I hold to those words, my Lords. I agree with my noble friend Lord Mancroft that Government will often be advised to keep clear of the industry's propellers. Nevertheless, there is much scope here for co-operation, much that the Government can do to help. Quite a number of ways, I believe, have been suggested in this debate to-day, and I think that the Government would be well advised to ponder, and to ponder carefully, those suggestions.
6.46 p.m.
LORD BROWN: My Lords, I think this has been a particularly good debate because of the quality of the contributions, because of the start that was given to it by the noble Lord, Lord Geddes, which was essentially practical and factual, but particularly because we are holding the debate in the presence of the noble Viscount, Lord Rochdale, who happens to be Chairman of the Committee which is going into areas perhaps even beyond those we have discussed to-day; but certainly I think that nothing that has been said this afternoon in this debate lies much, if at all, outside the ambit of their terms of reference.
May I start with some earlier remarks which the noble Earl, Lord Jellicoe, made. He asked some fundamental questions about whether the Government were concerned about the size of the shipping industry, and at which point a reduction in size, if there is to be a further reduction in size, should be halted, et cetera. These were fundamental questions, and I am not brushing them aside by saying "et cetera": I simply do not want to repeat all he said. This seems to me a problem analogous to the other problem which the Government have been trying to tackle—not only this Government but their predecessors—and that is the problem of rail and road transport.
Here we have sea and air transport, and this is made more complex by economic factors, such as the ability to earn foreign currency overseas, fiscal matters connected with overseas subsidies and preferences given to other shipping companies, international problems, with flag discrimination, and priorities for investment. It even goes into the question of

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internal divisions of labour. Shall we be able to be carriers on the high seas to the world to the same extent that we used to be, if ships in future are to be manned by other countries, who may not have the same high standard of living. These questions all face us. Lastly, I sympathise with the noble Earl: we have the sentimental aspect because—I nearly said every Englishman loves his ship, but as a Scot I will not allow myself that liberty. Also, of course, the question of national security in time of war is important. I cannot attempt to answer the noble Earl's questions to-night. We have asked Lord Rochdale to go into these matters. I think it has been very interesting that these matters should have been raised in this way in his presence.
EARL JELLICOE: My Lords, I am sorry to interrupt the noble Lord so early in his reply, but could I ask him this question? I did not expect him to be able to say that we should arrest this relative decline at x level, but would he agree with me and, I think, with his noble friend behind him that there is a level at which we should be wise, in our own interests, for a number of reasons, to arrest it or do what we can to arrest it?
LORD BROWN: My Lords, I should agree with that. I think the noble Earl used the phrase "apparently complacent". Since I have become a Minister in this Government I have learnt that one of the dilemmas of politicians is this: if you are critical of a situation you are denigrating it; if you are less than critical you are complacent about it. I do not know where the intermediate point is. However, I will agree with the noble Earl and accept his words. There could come a time when very rigorous action would have to be taken to see that the decline was arrested. I should not like to offer an opinion as to where that point is.
May I now turn to the related debate which took place, really, between the noble Lord, Lord Hill of Wivenhoe, whom I congratulate most heartily on a very interesting maiden speech, characterised by that controlled steam pressure we associate with his name, and the noble Viscount, Lord Runciman, who I thought made—I will use the word "brilliant" because it was a brilliant analysis which led in strict logic, in which
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I did not detect any flaws, to what looked like a relatively simple solution to the growth problems of the industry. He rejected subsidies, and I agree with him. He rejected the idea of facing the discrimination of others with discrimination by ourselves. On the whole I agree with him, although there comes a point when one has to retaliate in kind. But God forbid! that it should come too early, because this is the way in which to lead the world into a thorough mess.
If I understood him rightly, the noble Viscount came down in favour of a retention of the withholding tax. If I were the Chancellor I might have had the courage to say that I was impressed; as I am not the Chancellor, I definitely have that courage, but whether the noble Viscount's arguments will be as convincing to the Chancellor after they have been processed by the noble Viscount, Lord Rochdale, I do not know. Although he drew attention to the growth in the size of the Norwegian shipping fleet, and said that the Norwegians were better off, those who have brought me to the point of knowledge required to take part in this debate have assured me that the Norwegians are only marginally better off than British shipping companies in respect of the whole nexus of taxation. There is an argument there, and no doubt it can take place between those who know more about it than I do. But it seemed to be a slight flaw in the noble Viscount's argument.
Turning to the argument on the other side of the penny, from the noble Lord, Lord Hill of Wivenhoe, I do want. want to introduce a controversial note, but I must say that some of his statistics really surprised me. As he was speaking, I pulled out the Report of the Chamber of Shipping and the Clark Report, and there was no consistency between the figures which the noble Lord was quoting and those I was looking up. I would be happy if the noble Lord would accept a letter from me, picking up some of the statistics he has quoted, and giving what we in the Board of Trade, with respect, regard as the proper figures. It seemed to me that his main argument got a little near the point of chauvinism. I have great sympathy with an industry employing men of the sea who watch the size of the industry shrinking in the way it has been doing in recent years, but the

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comments made by the noble Lord, Lord Geddes, were an adequate explanation of at least a major part of the reason for this shrinkage. If in the past we have been a major exporter of fuel to others and, by the changes in the way in which we create our energy, we become a major importer instead, this must have a great influence on the size of our fleet.
I do not want to sound complacent, but if one looks at the comparison with other countries I think it will be apparent to the noble Lord, Lord Hill, that his anxieties are inflated, at least. One has to face the fact that a country like Norway, for example, clearly does not have the same alternative options for their investment as this country. In an intuitive way we may have chosen to invest less in shipping than other countries, and history may show that we have made the right choice. Aero engines may turn out to be a good way of investing money in this country, and certainly the advancing front of electronic technology is a good one. A country like ours cannot go on being the best at everything, as it has sometimes been in the past. It has to choose its objectives and be good at those. Whether shipping will remain one of these, I do not know, but I certainly agree with the noble Earl, Lord Jellicoe, and hope that it will remain one of our long suits. I am sure the noble Viscount, Lord Rochdale, will help to guide us in the future.
Turning to the questions of personnel and manning, we have had contributions by the right reverend Prelate the Bishop of London and the right reverend Prelate the Bishop of Winchester and, if I may say so, an excellent contribution from the noble Viscount, Lord Simon. We have also had some comment from the noble Lord, Lord Teynham. I can answer the noble Lord's question on the subject of unemployment benefit while people are undergoing training. It has been withdrawn, in spite of arguments by the National Maritime Board, who saw the Minister of Labour. Those arguments were not accepted, and the industry is now paying people while they are in training. This is completely consistent with the general attitude to industry, and the shipping industry has had a quite unique benefit in this respect, which has now been withdrawn. As one who is very
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much alive to the value of training, I am in a sense disappointed that this should have happened, but it is in accordance with Government policy, so far as possible, to treat industries alike. The noble Lord was quite right to draw attention to this as a material point in this debate.
The noble Viscount, Lord Simon, drew attention to the serious problem which applies not only in the shipping industry but in most other industries—namely, the problem of loss of faith by those who elect representatives when those representatives, in the light of circumstances disclosed to them, fail to attain the objectives which it had been hoped they would achieve. I cannot indulge in a long lecture on this subject, much as I should like to because it is a topic very dear to my heart. I do not think this is a matter of communications; I think that that is merely a bromide word which enters into this sort of discussion. Communications are a function of the existence of clear-cut social institutions, and it is the setting up of clear-cut social institutions which leads to good communications.
By waiting for good communications I think we miss the point. We want proper constitutions setting out the rules. when people meet, in shipping as elsewhere, not so that when crises arise people can be called together and given for the first time the responsibility of facing a problem which hitherto has been dealt with by management—in this particular case unsuccessfully—but so that management and those employed in industry can regularly spend time devising policies within which management can manage that industry. These discussions, which go on with regularity, should be concerned with initiating the creative things in the industry as well as with dealing with the problems that have been brought to it. This is a general comment on which I could expand. Indeed, I have written books on the subject, but I will leave it at that.
LORD CHAMPION: No advertising!
LORD BROWN: The noble Lord, Lord Somerleyton, gave us a very interesting maiden speech, and I congratulate him on the content of what he said. He drew attention particularly to the problems of shipyards in the non-development areas. I do not want to say too much about

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that to-night, because the shipyards are not the only industries that feel themselves to be the victims of living in "grey" areas—and I think the House knows what I mean by "grey" areas: those near to, or possibly feeling themselves to be in, similar conditions to those of the development areas themselves. I think noble Lords are aware that the Hunt Committee has been set up particularly to look at this problem, and it is hoped sincerely that it will report in late summer or early autumn—but, as with all these prophecies about dates of reports, one cannot be precisely certain that that is when we shall see it.
The noble Lord, Lord Sandys, with respect, gave us a contribution that was more largely based on bitterness than any of the other contributions this afternoon. I felt at times, when he was referring to the failure of our exports and the failure of almost everything he mentioned, that perhaps he had been paying too much attention to our Press. I heard somebody at lunch to-day make what I thought was a rather brilliant remark worth repeating. He said that so far as getting attention by the Press is concerned, nothing succeeds so well as failure. That is extremely true, and many of the matters to which the noble Lord, Lord Sandys, drew our attention were expressed in rather more pessimistic terms than I would use. I hope he is not right. He referred to shipping companies and the problem of selective employment tax. The shipping companies do get refunds if the number of seafarers exceeds the number of office staff. He also referred to the problem of the invisible exporters not qualifying for the Queen's Award. This is generally true owing to the enormous difficulties of coming to a basis of assessment, but the shipping companies can qualify on the basis of technical innovation, and I should like to see one get an award for some of the new forms of transportation which are being evolved.
Turning now to the problem of security at sea, I think I can do no better in answer to the noble Lord, Lord Teynham, and the noble Earl, Lord Jellicoe, than repeat part of a statement which my honourable friend Mr. Foley, the Under-Secretary of State for the Royal Navy, made as recently as March 11 in another place:
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"I know … that some of the British merchant shipping community are worried lest the recent defence announcement leaves them more exposed to piracy.… I appreciate their anxieties, but coastal piracy poses no immediate threat on any scale to British shipping and, as I have explained, for many years now the Royal Navy has not been able to patrol continuously all the sea lanes East of Suez. …Piracy … is, however, primarily a problem for the commercial shipping community as a whole.… Aid to merchant shipping in distress is a duty which the Royal Navy has always accepted and will continue to accept. It is important, however, not to get a false impression of the demands which this makes on the Royal Navy. Over the last five years the Royal Navy has assisted merchant ships on 36 occasions. None of these was an instance of piracy. … The White Ensign will not disappear from the oceans of the world after the Navy withdraws from the Gulf and Singapore and concentrates itself in the European and Atlantic areas. Apart from the naval forces which may be available elsewhere from this general capability as in our judgment circumstances demand, there will continue to be opportunities for Visits and exercises outside what we may call these two home theatres."—[OFFICIAL REPORT (Commons), cols. 1017–8; 11/3/68.]
May I add this? I think we must keep a firm grip on ourselves; emotion and sentiment can run away. I do not think the Norwegians and Greeks have been specially bothered by the fact that they have not got a Navy safeguarding their growing shipping in many areas of the world. If this is to become a problem in terms of piracy or interference, eventually it must become an international and not a national problem. If we are to take on the burden for our ships by providing protection in all the sealanes which they use, and see other countries escape the duty because they cannot face it but with their growing fleets rely on us or the Americans or on international co-operation, we are going, to put ourselves in a very unfortunate position. It is appealing to feel the Royal Navy is there to help the Red Ensign whenever the need arises, but I fear very much that this is an image that will fade. I think we have got to face this.
My noble friend Lord Hill of Wivenhoe, the noble Viscount, Lord Runciman of Doxford, and the noble Lord, Lord Mancroft, have all expressed deep concern about subjects associated with flag discrimination, subsidies, slanted safety regulations at sea, preference laws and so on. When the Kennedy Round was recently completed and brought into

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being, most of the major countries of the world, I think, had come to the conclusion that the great danger brought about by reduction of tariff preferences between countries was an insidious attempt to substitute something else for the protection which has disappeared in this way. Non-tariff preference is a very wide term and the sort of practices to which reference has been made fall within its ambit, and there is a growing international sentiment—indeed, there are discussions behind international action—to deal with non-tariff preferences of a wide sort. I can only say that these are clearly international matters, and the interest of Her Majesty's Government in an international discussion of non-tariff preference will include the sort of anxieties expressed in this debate. And I hope that international meetings on these subjects will come as early as possible. I cannot at this moment of time say any more about the possibility of this arising.
I come now to almost the last point, and that is the point made by the noble Earl, Lord Jellicoe, on our ports. I cannot reply to the points he has made about road transport to our ports. As an exporter myself, I think it is an extremely important point. I think that the delays at our ports are becoming a very serious impediment to continued exports to some markets. Some markets depend on speed, particularly for consumer goods, and these delays are dreadful. But a debate on shipping did not give me the necessary intuitive warning that it might spill over into the road transport field, and I have not armed myself to talk intelligently on this subject. Perhaps the noble Lord will excuse me. Nevertheless, I share his anxiety.
On this matter of nationalisation, I am afraid that the hour is fairly late, and we shall have to agree to differ. I am not myself, I hope, prejudiced in this matter, but two years on the National Modernisation Committee brought me a long way towards the belief, reluctantly perhaps, that it would be better to get this into national hands. After all, we must remember that a very large proportion of the physical assets of the ports are already publicly owned, in one form or another and that integration of some of
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these will be essential. The noble Earl is, I think, worried about the fact that the sort of progress that has been made since the war by a port such as Felixstowe, will be stifled in the future. I think it would be fair to add that the fact that a port like Felixstowe can make such progress has been due to some extent to the appalling problems created by casual labour in the other ports. If the other ports had had a firmer grip on the situation, with the smaller number of employers having a permanent labour force attached to them, the efficiency of those ports might have been such that these smaller ports would never have developed, because in one sense they are not economic—that is, in the sense that industry cannot be sure of the frequency of sailings from the smaller ports that is demanded for rapid passage of exports. The case for a large number of small ports has not, in my view, been made out. However, on this issue the noble Earl and I will have to differ.
It has been a source of great satisfaction to the Government that such a wise and experienced Member of your Lordships' House as the noble Viscount, Lord Rochdale, has agreed to chair the Committee that has been set up. I close, therefore, on this note. The terms of reference of his Committee are wide and cover our debate. I hope that the members of his Committee will read their Hansard thoroughly, because your Lordships' House has spent getting on for five hours in giving evidence in one sense; and I count myself as fortunate to have been put in the position, on this, I think, the first Wednesday debate I have dealt with, of giving evidence, so to speak, instead of having to try to answer all the many deep and searching questions which have been asked, because they do need deep interrelated consideration.
7.12 p.m.
LORD GEDDES: My Lords, I shall not detain your Lordships any longer this evening, other than just to say how grateful I am to all those noble Lords who have contributed to this debate. I believe that we have had a most valuable afternoon, one which I know will be treasured by the shipping industry,

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and one for which all those who serve us at sea will be grateful to your Lordships. I should particularly like to say "Thank you" to the two noble Lords who made their maiden speeches this afternoon. It was a great tribute to the shipping industry that they should choose this occasion to make their maiden speeches. It only remains for me to beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

UNIVERSITY OF SALFORD BILL ROYAL COLLEGE OF ART BILL
Brought from the Commons; read 1a, and referred to the Examiners.

EPPING FOREST (WATERWORKS CORNER) BILL [H.L.]
Returned from the Commons, agreed to with Amendments.
House adjourned at thirteen minutes past seven o'clock.