§ 2.45 p.m.
§ Lord ORR-EWINGMy 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 to break down the figure of £680 million to which the Minister referred in column 1380 of Hansard of 17th June; and what percentage of this figure was of benefit to United Kingdom shipbuilders as distinct from shipowners.
§ The PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT of INDUSTRY (Lord Melchett)My Lords, the £680 million represents the total value of guarantees given over the four financial years ending 31st March 1976. Guarantees are given by my right honourable friend the Secretary of State for Industry to the Clearing Banks under Section 10 of the Industry Act 1972 in respect of loans advanced to United Kingdom shipowners to enable them to finance the construction of ships ordered in United Kingdom shipywards. The guarantees benefit both parties, and the extent of the benefit cannot be apportioned between them.
§ Lord ORR-EWINGMy Lords, will the noble Lord bear in mind that in his first reply it was indicated that this aid was somehow connected directly to the shipbuilders? We were asking about shipbuilders. Is the noble Lord aware that 574 the House will be glad that it has now been corrected? Is it not true—and it has been under agreement with the OECD—that all Governments are allowed to give aid up to a certain amount, so that United Kingdom shipowners, if they build here, get the same aid as if they built overseas? Is it not rather misleading to the House if it is suggested that this is some special aid to the shipbuilding industry of our country when it is only matching the type of aid which every one of our competitors gets overseas?
§ Lord MELCHETTMy Lords, as the noble Lord, Lord Campbell of Croy, said, I did make a mistake in replying to the noble Lord's Question last week, for which I apologise, and I also apologise for the fact that he has not received a copy of the letter I sent him correcting it. However, I do not think I owe him any apology with reference to the supplementary question he is now asking me. I said in reply to him on 17th June, column 1380 of the Official Report:
and the shipbuilding companies have benefited from the home credit guarantees for ships under Section 10 of the Industry Act to the tune of £680 million ".I believe that is the position. If this credit had not been available to shipowners ordering ships in this country, they would undoubtedly have been encouraged by the credit terms available overseas to order ships overseas. As I said in my original reply, I do not think it is possible to apportion benefit between shipowners and shipbuilders, but as similar credit terms are available to shipowners ordering overseas I would have said that, on the whole, this credit is particularly valuable to British shipbuilders.
§ Lord SHINWELLMy Lords, is my noble friend aware that this provision of State aid to shipbuilding firms was not started by a Labour Government but by a Conservative Government several years ago?
§ Lord MELCHETTYes, my Lords; that is quite true.
§ Lord ORR-EWINGMy Lords, I wonder whether the noble Lord could tell us for the record what the figure of 40 per cent. ought to have read, so that we have it down. Secondly, is it not true that under a Conservative Government 575 we rationalised in this country not only shipbuilding but wool textiles, in recent years, and that the rationalisation in aero-space in the last three decades has been immense? None of this was achieved with the help of nationalisation. It was perfectly possible for previous Governments to go right ahead without nationalising the industry as a whole.
§ Lord MELCHETTMy Lords, to take the noble Lord's first point about the figure of 40 per cent., as I have said in my letter to him I gave the figure of 40 per cent. in the wrong context. It represents, in fact, the proportion of the orders taken by United Kingdom yards so far this year which are for United Kingdom registration; and it is a provisional figure. The figures which I gave in percentage terms would have been better given in terms of tons, in that United Kingdom owners ordered only 44,000 tons from British yards in 1975 whereas they appear to have ordered 96,000 tons so far this year—that is in the first two quarters of 1976. It was those figures which I gave in percentages for which I apologise to the noble Lord because they were misleading percentages.