HL Deb 28 January 1976 vol 367 cc915-8

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they are giving urgent consideration to the problems arising from the different methods used by the Soviet Union, compared with the United Kingdom and other non-Communist countries, in fixing freight rates for cargo trade and other commercial practices.


My Lords, we are well aware of the concern felt by the shipping industry about competi- tion from the Soviet Union and are giving the most careful consideration to this problem.

Baroness WARD

My Lords, while thanking the noble Lord for that Answer, may I ask him whether he is aware that if the present system is allowed to continue it will do untold harm to our vital and industrious shipping industry because a great deal of unemployment will occur? May I ask whether, in the debate to be held tomorrow in another place on unemployment, the Minister concerned will be in a better position to say what action has resulted from whatever effort has been made—although I am not certain what it is—on this very important issue regarding the Soviet Union?


My Lords, as the noble Baroness will know, I cannot answer for what will happen in another place, but I can tell her that Her Majesty's Government are well aware of the problem. But it is not a problem for this country alone; it is one for all the maritime nations of the West. The OECD are discussing it today and the Consultative Shipping Group, which consists of 12 European maritime countries, plus Japan, are discussing it tomorrow. This is a problem that can be tackled only by international action. Her Majesty's Government are taking preliminary steps by preparing a unified approach to the Soviet commercial initiative, which has not yet been proved to be anything other than proper commercial competition.

Baroness ELLES

My Lords, may I ask the Minister whether there has been any co-operation, in relation to this question of Russian freightage, with those countries who signed the Helsinki Agreement and also whether he is able to confirm that the Russians are undercharging by enormous amounts on tramp freight, which is, I understand, not controlled by international agreement? Especially where there is surplus shipping tonnage at the moment, will he bear in mind that this will cause grave hardship not only to dockers and those involved in dock work but also to the shipping industry as a whole?


My Lords, we were talking about the Conference lines: that was the nature of the Question put by the noble Baroness. There is an Anglo-Soviet Merchant Shipping Agreement, Article 5 of which lays down that the parties will follow the principles of free and fair competition in international shipping. Whether or not competition is fair has to be proved in negotiations between sovereign Powers and it is not easy to get this; but Her Majesty's Government are well aware of the implications of the development of the Soviet Merchant Fleet and, in consultation with our commercial friends in Western Europe, we are preparing a joint approach to the Soviet Union.

The Earl of ONSLOW

My Lords, referring to the Conference line, may I ask whether the Minister will tell us what the difference is between the Soviet freight rates and the English freight rates?—so that the House might then be better informed as to whether or not there is a problem about this matter.


My Lords, the situation is not unamusing. The Soviet Union is working to a set of these Conference lines. Therefore, the rate is the same from that point of view. On the other hand, there may be occasions when attitudes change.


My Lords, may I ask the noble Lord whether he agrees that, unless the situation is checked, within a matter of five years Western European trade could become dependent on Eastern bloc ships and when this monopoly has been obtained there will be nothing to stop the Eastern blocrates being put up to whatever level they wish? Also, could the noble Lord please give the figures for the United Kingdom exports to Russia in 1973 and say what proportion of those exports was carried in Russian ships and in United Kingdom ships?


My Lords, the second part of the question is another matter and I cannot answer it now; but I am sure that Her Majesty's Government will defend the interests of the British shipping industry.


My Lords, the noble Lord said that we could not act unilaterally in this matter, but is it not a fact that, as regards trade between this country and the Soviet Union, the Soviet Union insist on the bulk of the trade being carried on their ships? Would the noble Lord agree that, if that is the case —as I believe it to be—surely we could retaliate?


My Lords, I did not say that Her Majesty's Government could not act unilaterally. I said that we thought it better to act in concert with our trading colleagues in the West.


My Lords, is the noble Lord aware that the Soviet Union completely ruined the flax trade in Europe and in this country through direction of labour and undercutting? May I ask him whether there is not a danger that they might do this with shipping? In fact, they can undercut any country in the world if they wish, because of their direction of labour.


My Lords, I think that was a statement and not a question.


My Lords, would the noble Lord be kind enough to tell me why Her Majesty's Government have not acted before but have waited until the Chamber of Shipping have become extremely anxious over the present position? While thanking the noble Lord for having said that action appears to be about to take place, may I ask him why have we waited until the matter has become so very urgent?


My Lords, we have been in contact; there have been regular meetings between ourselves and the Russians on this matter, and we have put up a marker that we are concerned over the affair. Damage has not yet been caused, but it is a subject for concern, as the noble Baroness has rightly pointed out. It is being discussed today by the OECD and tomorrow by the 12 European nations plus Japan.