The Mercantile Marine

HL Deb 15 July 1987 vol 488 cc1072-105

5.40 p.m.

Lord Carmichael of Kelvingrove rose to call attention to the state of the mercantile marine; and to move for Papers.

The noble Lord said: My Lords, I rise to draw attention to the state of the mercantile marine. I am most grateful to have been given the opportunity of this short debate to raise such an important subject

I believe that it is slowly dawning on more and more people that when we speak of the state of our merchant marine we are really talking about its very serious decline. The basic figures are becoming all too well known. They have been described in another place and in many writings as disastrous. In another place one dominant member of the Opposition who is an old-established parliamentarian said that there was a vacuum in policy.

Obtaining the figures is easy enough except that they tend to vary depending from which source they are taken but we can feel fairly sure that the figures of the transport committee of another place and those given by the General Council of British Shipping are roughly reliable. I do not wish to bore the House with too many statistics. In 1975 the total merchant fleet was 50 million deadweight tonnes. In 1982 that figure had come down to 29 million deadweight tonnes and in 1987 it was down to 18 million deadweight tonnes.

I am aware that the Minister may object that 1975 was a peculiar year in that the figure for that year of 50 million deadweight tonnes was a very high figure. But even given that, in 1982 the figure was 29 million deadweight tonnes and only five years later according to the statistics I have been able to get hold of the figure was 18 million deadweight tonnes. Of that 18 million deadweight tonnes only six million are now registered in mainland Britain. The remaining 12 million deadweight tonnes are registered in the Isle of Man, British overseas territories or elsewhere.

The Minister was quite right to pull me up on one point and that is that the statistics I have deal with ships that are over 500 tonnes. If we want the full picture there are also, according to the evidence given to the transport committee by the General Council of British Shipping, about 180 trading vessels of between 100 and 500 gross registered tonnes. There are 400 non-trading vessels which are mainly on offshore and oil supply work and about 150 ships registered outside the UK but owned by UK companies.

I have tried to keep the figures as digestible as possible and I am well aware that your Lordships will know very well how to go about getting the very large and I believe damaging mass of statistics to fill out the crude numbers that I have given. Perhaps the best reference available is in the Interim Report on the Decline of the UK Registered Merchant Fleet published by the House of Commons transport committee on 13th May. However I have another way of looking at this matter. Sometimes statistics are not the only way of grasping something. I was brought up on one of the world's great and busy rivers. It was a great river not merely because of its shipping traffic but also because it was one of the most important rivers in the world for its shipbuilding.

Aesthetically since the demise of our merchant marine the Clyde is probably a much prettier river now than it was then, at least as it meanders through Glasgow. However I believe that the River Clyde is a sharp pointer to our maritime decline. As I have said, some things speak louder than mere statistics and one of the things that everyone who was brought up in that area will remember well was that up until about 10 or 15 years ago on every 31st December—which is a rather important day in Scotland—at midnight there would be dozens of ships in the Clyde all sounding their hooters at once. People used to throw up their windows to hear the ships' sirens. Now I am sad to say that the Clyde Port Authority tries to arrange for a dredger or a tugboat to come up and be available high up the river for when the bells sound at midnight.

Many of the problems of such rivers as the Clyde are technological. They are due to technological developments. I understand for instance that the biggest ship that can come right up the Clyde is 27,500 tonnes. That in its day was a fair sized ship but nowadays in world terms it is not a large vessel at all. What happens is that the bigger ships are not able to come up river so the docks move down river. The docks on the Clyde, the Mersey, the Thames and various other rivers have moved down river where there is easier and quicker berthing which speeds up the turnround of ships.

A faster turnround has also been achieved through the use of containers which brought in a totally new era, particularly when linked to modern heavy articulated lorries or specialised container trains. Turnround time is now much faster. So much more work is possible for each ship. It became economical to make fewer port calls and to use road and rail for the last part of the journey. I believe that technological change is something that we cannot dodge completely but that we must look at it and accept its benefits as well as its disadvantages

Larger, faster ships, containerisation, new purpose-built docks, changes in world trade patterns and better inland transport facilities allowing for fewer landfalls are all factors in the decline of our merchant fleet. Although I believe that technical changes are of major importance there are other aspects which we must look at which make very significant contributions to the problem.

We have all seen photographs of the hundreds of vessels in mothballs in some of our Scottish lochs and in the Norwegian fjords which show that there is a worldwide surplus of ships. That has increased competition over the last 20 years. To put it no stronger, there is a feeling in many areas of British shipping both from the shipowners and from the National Union of Seamen and the NUMAS (National Union of Marine, Aviation and Shipping) that competition is not always completely fair. I understand for instance that crew costs and capital costs can vary very widely from country to country according to the attitudes of different governments towards intervention.

I am told, for example, that the United States and most EC countries reserve their coastal trades to their own nationals while we allow ships of any nationality to compete for off-shore oil supply work. Again many countries give generous loans for the purchase of ships. Many countries allow the money that a shipping company receives from the sale of a ship to be used tax-free so long as the company is using it to buy another ship. That is obviously a considerable advantage.

Some countries help with the cost of flying crews back home for leave or for rest. On 10th December last year the Secretary of State for Transport said in another place that that aspect was something that he would be looking at very favourably. He said that some of the proposals that he was thinking of which would be helpful to British shipping would be: assistance in training of seafarers, assistance with repatriation costs (which I assume is the same as the Norwegians are doing) and also the possibility of setting up a Merchant Navy reserve. That must be given a cautious welcome. Can the Minister tell us how much progress has been made on this suggestion? I should be grateful if he can indicate also when the proposals for the dependent territories register will be put before Parliament. It is hoped that we shall be able to use that constructively for other purposes. There is, for example, the worrying and complicated question of flags of convenience, which I believe merits a separate debate, although it may be possible to include it elsewhere. I hope that the Minister will seriously consider including the question of flags of convenience in the dependent territories register proposals.

There is a whole host of subjects that I have not even mentioned. It was not until I started looking at the subject in some depth that I appreciated where my apparently simple title would lead. I look forward very much to hearing the views of those experienced in shipping matters in your Lordships' House. I remember from consideration of the Bill on ports and navigation how much knowledge there is in the House on the subejct.

I have not mentioned defence, which is obviously tied up with the merchant fleet. In a debate in the other place that I recently read, I noted that one honourable Member—a member of the Minister's party—said that it was necessary for Britain to charter Danish vessels to move British troops and stores to Norway for a naval exercise. The Minister of Transport was present at the debate, but did not interrupt the honourable Member to correct him, so I assume that this is indeed what happened.

I am particularly concerned about the training of seafarers. In Glasgow, in a new building, we have a very long established school of navigation. In my younger days there used to be many schools of marine engineering. This gave rise to the old story that, whenever they shouted down the fo'c's'le for a chief engineer, a Scottish voice came back. We had many large and small colleges of marine engineering, and we have now the old established but new and up-to-date school of marine engineering. There is some hope for the future in that the Minister is talking seriously about increasing the training of marine deck and engineering officers. I know that a number of groups in Glasgow, have already moved in to continue the old tradition of the Clyde.

The general reaction of the Select Committee which examined the question of merchant shipping was that the situation was getting ever more complicated and that it was essential to do something. Although its deliberations were cut short by the general election, the committee made a strong plea for its successors to take up the subject again and bring to Parliament detailed and comprehensive recommendations.

In conclusion, the committee's interim report, in its final sentence, said that, central to that enquiry must be the question of whether the United Kingdom needs a merchant fleet and, if so, whether the United Kingdom Government should provide support for the shipping industry beyond that which it provides for other industries".

I beg to move my Motion for Papers.

5.54 p.m.

Lord Geddes

My Lords, I must declare two matters. First, as is customary in this place, I declare an interest in transport in that I am a director of a British transportation company and chairman of its shipping subsidiary. Secondly, I admit to a sense of some unease at being unusually and unexpectedly high in the batting order.

We must—inded, I do—congratulate the noble Lord, Lord Carmichael of Kelvingrove, not only on instigating the debate but on the comprehensive way in which he introduced it. I agree with a great deal of what he said, although my emphaisis may vary from his.

The noble Lord has already given the facts. Indeed, I was able to score those out of my ill-prepared speech. There is one figure I should mention on the question of reduction of tonnage. British registered tonnage has dropped from the 1975 level to 18 million deadweight today; that is, by 64 per cent. in 12 years—a staggering figure. The noble Lord mentioned the number of British seafarers employed on British registered ships. It is interesting that the number has dropped in the same period by an almost identical percentage; that is 62.5 per cent., from 80,000 to 30,000.

Of much greater concern—here I very much support what the noble Lord said—is that, according to statistics I have, there are currently only 500 deck and engine officer cadets employed in the industry. Of these only 107 are serving on British flag vessels. On plain statistics, let alone anything else, that is too few to maintain a supply of qualified officers.

The existing shortage is clearly being felt in the junior ranks. That is problem enough in itself. But, statistically, it must flow through to the senior ranks. When that happens, there will be a real problem—not only a factual one, but a legal one—in that by law British ships must have senior officers of British, Irish or certain other Commonwealth countries' nationality. I feel sure that the noble Lord, Lord Murray of Epping Forest, among others will enlarge on the overall subject of manning. In the time allowed, therefore, I shall concentrate on more direct financial matters.

To some extent—I shall not be popular in the industry after this remark—the British shipping industry has been its own worst enemy. It has cried wolf so often that its credibility, in political circles at least, is not great, to put it at its minimum. However, I believe most sincerely that the decline in the British fleet must not be allowed to continue much further. Historically, shipping has not been a high profit industry, although—and I have had experience of this—there have been some exceptional years. For 30 years until 1984, in general it received government help for capital costs, which significantly bridged the gap between its profitability and that of other industries. As your Lordships will be aware, that was lost with the reform of corporation tax in the Finance Act 1984 when the 100 per cent. first year allowance that shipping had enjoyed was eliminated.

What may not be so well known is that investment by British companies in British shipping has plummeted from 300,000 tonnes deadweight in 1983—the year before that Finance Act—to 5,000 tonnes in 1986. I know that I am not the first to raise the question. Clearly, my noble friend the Minister is well prepared tonight with what I might call the party line. Even so, I urge him to give renewed and urgent consideration to two specific changes in fiscal policy, one of which the noble Lord, Lord Carmichael of Kelvingrove, has already mentioned. It is the drain of funds from the industry when a fully written-down ship is sold and tax reliefs on its sale price have to be repaid to the Inland Revenue. If those moneys could be reinvested in shipping effectively tax-free, it would make an enormous difference. The other change is that at least 50 per cent. first-year allowance for investment in ships, on top of the 25 per cent. allowance on a reducing balance basis that is available to all industries, should be available shipping industry.

To illustrate the highly precarious state of the industry, perhaps I may mention some facts and figures concerning the offshore supply vessel sector. I have mentioned that matter in your Lordships' House before and I make no apologies for doing so again. As at the middle of last month, there were some 280 supply vessels operating in the North Sea, of which 57 per cent. were on charter, 17 per cent. were on the spot market living from day to day and 26 per cent. were laid up. Of those working, 114 were in the UK sector and 58 were in the Norwegian sector. So far so good. But the interesting point is that of those 114 vessels in the British sector, 75 per cent. were British and 25 per cent. were obviously not British. That 25 per cent. represented 28 vessels, of which 15 were Norwegian.

If we look at the other side of the coin which was represented by the 58 vessels in the Norwegian sector, 97 per cent. or 56 ships were Norwegian. The remaining two ships were Danish and there was not one British flag vessel there. That is not coincidental. There is protectionism in the Norwegian sector, albeit covert. Much as we may dislike it, we have come to the point at which we must say, "If you can't beat them, join them".

More than any other request I may have of my noble friend this evening, I would say, "Please do not tamper with or in any way reduce the powers and effectiveness of the Offshore Supplies Office." Over the past 18 months the OSO has operated a system of monitoring foreign involvement which has at least had the effect of restricting the amount of term charter business available to non-British flags. Until foreign sectors can prove that they have opened up a genuine competition, such restrictions are surely entirely reasonable.

I have used this expression before, and I make no apology for using it again: the offshore supply vessel industry cannot haemorrhage indefinitely. How long can a company survive and how long can a parent company allow a subsidiary to survive when gross revenue does not even cover operating costs, let alone finance charges and appreciation? I can assure your Lordships that those are proven facts.

More generally, I am a declared devotee of the free market economy, provided it does not put dogma ahead of overall national interests. The outline proposals that I understand are to be contained in the merchant shipping Bill are welcome. But to put it bluntly, they do not really start to address the problem. I do not believe that a still smaller British fleet, employing still fewer British nationals, can be in the nation's best interests. For a number of reasons—not least, as the noble Lord, Lord Carmichael, has said, for reasons of defence, balance of payments, employment and trading strength—the question which now has to be answered is whether the prospect of a fleet still further diminished matters enough to the country for the Government to take action to defeat it.

6.5 p.m.

Earl Attlee

My Lords, I should like to begin by saying how sorry I am that my noble friend Lord Simon is not here to take part in this debate. Unfortunately he has had a domestic accident. He has much experience of the merchant navy, the running of a large shipping company and the operation of docks, while I was a humble merchant navy sailor. I spent five years in the merchant navy. Perhaps I may quote these few words: They that go down to the sea in ships and occupy their business in great waters". Even noble Lords who are not ex-sailors will know those words.

I ask your Lordships: what ships? Before I went to sea, I went to the King George V docks in London, to the rigging loft, and an old boy who had sailed square-rigged ships taught me every knot, every splice and all the old sea trades—the round sennet, the square sennet and the half-round sennet. You name it and I could do it. That was not 100 years ago; that was 1944. At that time, on both sides of the King George V docks there were ships. When you go down there today, you see nothing but desolation.

In 1946 I was in Singapore and we were anchored in the roads. There were 36 ships flying the Red Ensign. Sixteen of those ships had blue funnels and belonged to one shipping line, which happened to be the line for which I worked. If one goes to Singapore today, will one see any British ships there? I very much doubt it.

The saying is: "Once a sailor, always a sailor". In my case, that is certainly true. Since joining your Lordships' House, I have been privileged to go to sea in HMS "Illustrious", an aircraft carrier, and in HM Submarine "Triton", which is a hunter-killer nuclear submarine. Although I was ex-merchant navy and those were Royal Navy ships, we were all sailors. A short time ago, I went on to the training ship "Steadfast" in Kingston. I saw young lads who were so smart and so keen. Many of them have joined the Royal Navy. We still have enough sense to have some Royal Navy ships. If those lads had wanted to join the merchant navy, where would the ships be? They hardly exist. I have sailed down the Clyde. My home port was Liverpool. As the noble Lord, Lord Carmichael, has rightly said, it is almost non-existent. I feel very strongly about that.

I have mentioned to your Lordships previously that I am dyslexic and I therefore try not to quote figures. The noble Lords, Lord Geddes and Lord Carmichael, have given your Lordships facts and figures. If I try to do that, instead of saying 15 million tonnes I shall say 5 million tonnes, or whatever. However, I do have one or two figures. The British Maritime League has said in a memorandum that scrapping without matched rebuilding is fatal. It also says that if world profitability is to be restored, all the measures being put forward by sectional interests here and in other ship-owning countries, particularly Europe and the United States, will be needed. It is rather a long document and I do not wish to bore your Lordships by reading too much.

So far as concerns the Alliance party, we stated our maritime policy in our policy document. We claim we are, and always have been, a maritime nation. But, are we much of a maritime nation now? I doubt it. Much has been said concerning flags of convenience. It is not only flags of convenience, but also foreign crews. Foreign fishing vessels fly the Red Ensign so that they can fish in our waters, because of a technical loophole. Our fishing fleets are depleted—inshore, middle and overseas fishing— everything is going to pot. As the noble Lord, Lord Carmichael, said, when discussing maritime policy it is not possible to ignore defence. I believe I am right in saying that in the Falklands War there were as many merchant ships as ships of the Royal Navy. If there were to be another Falklands war, do we have those ships? Do we have the trained personnel? I doubt it.

As the noble Lord, Lord Geddes said, if we are not training junior officers now, where are the mates and captains to come from in the future? We must do something about this situation. If we have to use ships in a future war, will we have to borrow vessels from the French, Germans, Norwegians and the Japanese, because we would not have the ships?

6.14 p.m.

Lord Greenway

My Lords, I am most grateful to the noble Lord, Lord Carmichael of Kelvingrove, for the opportunity to discuss the problems besetting the British Merchant Navy. It is a problem to which we have addressed ourselves on several occasions fairly recently in your Lordships' House. I do not propose to go over much of the ground that I have covered before.

We have heard about the substantial reduction in the British merchant fleet over the past 13 years. The reductions have been due to many different factors; namely, over-tonnaging, oil price rises, and not least, to the container revolution which has displaced a very large number of traditional merchant ships. With those ships have gone a large number of seamen who had to be paid off, and that redundancy has cost the shipowner dearly.

It has been a sign of severe retrenchment not only for the UK industry but also for Western Europe as a whole. Many firms have found themselves unable to compete and they have either merged with other companies or have gone to look for pastures greener. Only last week another famous name in British shipping, Ellermans, merged with Cunard. Yet another famous name disappears from the British shipping scene.

Thankfully, we have not seen any large bankruptcies in the British shipping industry such as has happened in other parts of the world, in particular, the United States Lines, the Sanko Line in Japan, and Tung in Hong Kong. Those who are left, the survivors, are leaner and more streamlined and therefore more able to meet the undoubtedly stiff competition which exists in shipping today, especially from the Far East.

As the noble Lord, Lord Geddes, said, during the hard times the industry has been going to the Government and crying for help—although he put it in slightly different terms. In the main, the Government have resisted such pleas; and in particular, I should like to congratulate them on resisting any form of protectionism because that would undoubtedly be the road to ruin.

However, more recently the Government have been taking some action to try and help shipowners, for example, reforming UK pilotage. We debated that matter at great length in your Lordships' House before the election. It still remains to be seen whether the newly-formed pilotage service will result in reduced cost to the shipowner. Another point raised recently—another sore point so far as concerns the UK shipping industry—is light dues. No doubt we will be discussing them again before long.

The Strange Report, recently commissioned by the Lights Advisory Committee, has argued that modern electronic navigational aids have rendered the traditional lighthouses and light vessels redundant, and that in fact some 70 to 80 per cent. can be done away with. Trinity House have studied this report and undoubtedly their reply will be forthcoming shortly. Here I must declare an interest as a Younger Brother of Trinity House.

To make a piecemeal reduction in traditional navigational aids would not be the right way to approach the matter. There is a lot of danger attached to that. Standards at sea generally (I am not talking about the British merchant fleet) have reduced considerably over the past few years. It is important to have some kind of long-stop navigationally. The modern electronic technology is all very well, but it does not always work; nor indeed do those who operate it always know how to operate it. The Government should think very carefully before bringing about any large reduction in traditional lights. It may be better left to Trinity House, who have their own programme for reducing the number of lights and buoys, to do it in their own way. That would be the better way to continue.

While talking about Trinity House, I should like to mention the tender service and the Arthur Young report which is being considered at the moment. The report talks about a reduction in the number of lighthouse tenders from the present four or five to only two. I am talking about England—two tenders for England, one for Scotland and one for Ireland. Two tenders for the United Kingdom coast is too few. For example, if there were one on the North East coast and one on the North West coast and there was an accident in the Straits of Dover, what would happen if wreck buoys had to be laid? There could well be problems.

It also seems rather strange that pressure from the UK shipping industry to help it reduce its costs is, in a round about way, also reducing yet another part of our merchant navy. If Trinity House were to lose two tenders, and each tender has two crews, that would be 100 seamen gone as well. That is another way of looking at the problem which not many people have thought about. Cabotage in the coastal trade is a pressing problem. At the moment there seems to be somewhat of a statement in discussions in the EC. I hope that the Government will make all efforts to pursue this matter.

As your Lordships know, we have a new Merchant Shipping Bill coming forward, it is hoped shortly after the summer Recess. I do not expect the Minister will wish to pre-empt anything in the Bill by saying too much about it this evening. However, I shall look forward to it with interest.

The noble Lord, Lord Geddes, talked about ships and fiscal matters, and I fully support what he said about that. These days the average merchant ship needs replacing after a period of about 15 years. Ships are extremely expensive and any help which the Government can give in fiscal matters would be greatly appreciated by the shipping industry.

The other side of the coin is seamen and cadet training, as has already been mentioned. In traditional times companies had their own cadet ships and trained their own seamen. This has dwindled now and I believe there are only two or three companies which still have sea-going cadets undergoing training. However, there are hopeful signs. I believe that P & O is seriously looking at the possibility of re-establishing a cadet system for its cruise ships. The training of cadets is a subject which the Government must look at very carefully and I hope the Minister will be able to tell us something about it this evening. I understand that the Nautical Institute— the professional body for seafarers—may be involved in a consultative role, and I would welcome that. The general feeling in the industry is, I believe, that a per capita training grant with as few complications as possible would be the best course of action.

Finally, I refer to the merchant naval reserve, which the Government have said they intend to set up. That too I welcome. However, I wonder whether the Minister is able to give us any indication this evening of what form this merchant naval reserve will take. Are the Government actively going to pursue an active merchant reserve such as that which is evidenced by the TA and the RNR? Based on the concept that training should be fun, that is an avenue that should be pursued by the Government.

In the last seconds which are available to me I should like to mention an imaginative scheme that I heard about today. It comes from a small shipping company called Kernow Shipping of Cornwall, which has, I believe, put forward a proposal for operating a 300-berth ro-ro passenger ship on a monthly schedule between the UK and ports in the Eastern Mediterranean or the UK and the Azores. The proposal is that the manning scales of the ship would be such as to ensure that members of the merchant naval reserve would have more than understudy roles to perform.

The central tenet of the scheme is for the ship to pay her own way. By operating to a schedule the part-timers can be assured of when they can return to their substantive jobs and also whether, when on the ship's company for 14 or 27 days, they can take their families along with them as well. That is an imaginative proposal and one that should be looked at by the Government. Trinity House also is considering proposals for making cabin space available on its tenders for the training of young people.

There is a ray of hope on the horizon. Our economy at long last appears to be firming up, and a merchant shipping fleet thrives on a strong economy. If the improvement continues the merchant navy will be able to look after itself and will not need the sort of help it has been crying for. As its fortunes improve, so will that of the nautical infrastructure that goes with the shipping industry. That is very important.

6.24 p.m.

Lord Murray of Epping Forest

My Lords, I too am grateful to my noble friend Lord Carmichael for initiating this debate, for his panoramic survey of the situation and, indeed, for his description of the plight of the merchant navy.

The noble Lord, Lord Greenway, has reminded us there are two issues. First, are we going to have enough ships to meet our needs, and, secondly, are we going to have enough men to man those ships? Ninety-eight per cent. of UK trade is still carried by sea, but no longer predominantly by UK ships. Britain may not be unique in the fact that its merchant fleet has contracted because so have the fleets of many other countries, but certainly we have been hit by far the hardest. Our share of world tonnage now is less than 3 per cent. We are not in the top 10 of the world's merchant fleets; we are now barely in the top 20.

The number of vessels has halved in the past five years and the General Council of British Shipping—which I think has now been renamed the British Shipping Federation—has forecast that by 1995, unless present trends are changed, we shall have less than 100 ships of more than 500 gross registered tons.

What is more, on present prospects, by that time there will not be enough British crews to man even a fleet of that size. That is the aspect upon which I wish to concentrate. I declare my interests, too. I am a trustee of the National Union of Marine Aviation, Shipping Transport, the union catering for merchant navy officers. However, I speak tonight for myself. These are the men who have served Great Britain well in war—most recently in the Falklands—and they have served us well in peace. Their case for preserving a significant British merchant fleet is not based on a desire for gratitude but on basic national interests, on the protection of British trade, the balance of payments and defence needs. I shall leave others to develop those arguments.

My concern is that we should have—that we must have— men to man the ships unless we are going to resign ourselves to having British ships officered by Polish officers and crewed by Filipinos. The noble Lord, Lord Geddes, reminded us that at the end of 1975 there were 80,000 officers and ratings. I have news for him. That figure is now not even 30,000; it is slightly over 25,000. The number of merchant navy officers on the GCBS register has fallen in the same period from 40,000 to 11,000.

What is more, the rate of loss is increasing. Last year alone we lost 2,500 officers and in the first five months of this year another 1,400 officers left the British seafaring establishment. That is not the end of the matter because, as the noble Lord, Lord Geddes, reminded us, over the past 18 months the number of engineering cadets has halved. The number of navigating cadets has also halved. My understanding is that at the present time there are six radio cadets in training.

One of the main reasons for this trend is flagging out. Shipping lines argue that they need to flag out in order to save some jobs. The officers accepted flagged out jobs with lower pay, poorer conditions and very often with lower safety standards. The experience of members of NUMAST has been that there were three phases. First, there was full UK manning on gross salary conditions. The next stage was the manning of senior posts only and the third stage was the complete loss of officer manning.

That means not only jobs lost, which is bad enough, but it means skilled, trained and experienced men lost to the fleet to come ashore and to become— as a recent survey by NUMAST has shown— publicans and dustmen. Those are splendid occupations, but what a waste of skills and what a waste of the experience required to man British ships. The noble Lord, Lord Greenway, reminded us that we still have a great number of seafarers, but action is urgently needed to stem the losses and to encourage recruitment.

It can be said that both sides of this industry have faced up to the harsh realities which have been described by the noble Lord, Lord Geddes, and others. The officers have reluctantly accepted that in many cases flagging-out was inevitable, accepting reductions in pay and conditions. They are now saying that the time has come for the Government to accept their responsibilities. Reference has been made to the Government's offers of assistance in training, repatriation and the establishment of a merchant navy reserve. Any offer of help is welcome and a welcome change, but at least it is a beginning of what I hope is a changed attitude on the part of the Government towards our merchant fleet.

However, the proposals that have been made so far are very much only a beginning. I believe that we need a commitment by the Government to accept full responsibility for training. I shall come back later to a more specific proposition. To emphasise this, as the purpose of the new initiative is to ensure the availability of trained and experienced officers, assistance should be given to individual officers as regards examination and course fees to enable them to progress through the certification structure.

On repatriation, I hope that the Government will be able to give a firm assurance that the arrangements for assistance will not lead to a deterioration in conditions; to even longer tours of duty (of six months or more) or to block crew changes that would adversely affect continuity and operational efficiency. Assistance should be given at the end of tours of individual duty of not more than four months. Finally, in relation to the proposed merchant navy reserve the proposal seems to me almost to put the cart before the horse, but perhaps the stern before the bow would be a better way of putting it. The point is that such a reserve will be unnecessary if the Government will commit themselves to maintaining a UK flag and a UK-manned fleet. But in any event any such scheme will work only if British seafarers are being recruited and trained. The new initiatives are welcome as an indication of willingness to make a fresh start, they need to be improved and they need to be incorporated in a total approach.

My noble friend Lord Carmichael, the noble Lord, Lord Geddes, and others have indicated some of the things that need to be done in terms of the provision of ships. On the manpower front two further steps are needed. First, as your Lordships' committee reported some months ago, action is needed to reduce the tax and other social security burdens on seafarers, given the highly favourable tax regimes for seafarers operated by some of our most formidable competitors, for example, Norway. The Government's decision to withdraw the concessions to seafarers in the Finance Act 1984 needs to be reexamined. Secondly, we desperately need to convince young men that when they join the Merchant Navy they are taking up a skilled job with good career prospects at sea and with the prospect of a decent livelihood when they eventually come ashore.

I suggest that the Government, in consultation with the British Shipping Federation and the unions concerned, should consider the establishment of a special tripartite maritime employment agency which could take on responsibility for recruitment, for training and for promoting lifetime career opportunities for Merchant Navy officers, and possibly ratings.

First, such an agency could undertake a fundamental review of the objectives and the methods of training of merchant navy officers. Secondly, it should accept overall responsibility for promoting the training required for entry, for the acquisition of qualification and for promotion. Thirdly, as an integral part of that, the agency should ensure that the training curriculum incorporates the acquisition and development of skills that will help an officer to take up an appropriate shore-based job if he leaves the sea before pensionable age. Fourthly, it should assist in helping to place such men in shore jobs and should provide or arrange training or retraining which might be necessary for that purpose. If the Government pursue their idea of a merchant navy reserve, the agency might be given responsibility for administering that as well.

In the gracious Speech we were promised that the Government would initiate measures to assist the merchant navy—

Lord Beaverbrook

My Lords, perhaps I should remind your Lordships that this is a time-limited debate and that any noble Lord speaking for more than nine minutes is speaking at the expense of noble Lords who follow.

Lord Murray of Epping Forest

I am grateful, my Lords. I rest my case.

6.36 p.m.

Lord Mottistone

My Lords, I shall endeavour to recover the three minutes we have lost on the last speech and the two minutes we lost on the previous speech, but I do not know that I can complete my speech quite in time. I should like to add my congratulations to the noble Lord, Lord Carmichael of Kelvingrove, on initiating this debate which is so very important. I should also like to congratulate the General Council of British Shipping on the most realistic brief that it has produced in many a long day. It has been given to us all. I shall not cover much of what I intended to say because it has been much better covered by many other noble Lords.

I have great sympathy with what the noble Lord, Lord Murray, has been saying, and I understand his concern. But I remind your Lordships that in 1965 I commanded a ship and a squadron in the Far East. I was there for 14 months and some of my ships were out there for 18 months without relief. The merchant navy at that stage had negotiated an arrangement by which I believe they were relieved by air after four or five months. That was as far back as 20 years ago at a time when other merchant navies were not doing anything of the kind. We have been at a disadvantage on crew costs ever since. That is an underlying factor which we must not forget.

I repeat again what the noble Lord, Lord Greenway, said. The result of what has happened with the reduction of our merchant navy in the past years is an efficient, streamlined merchant fleet with a competent, competitive management. If that is truem—and if what the noble Lord, Lord Greenway, said he was hoping would come out of the change in the economic situation of the country is also truem— perhaps we have hit a bottom level and we can climb again. But we must not be too greedy about terms and conditions for our merchant navy if we are to compete in the world today.

My noble friend Lord Geddes quoted the particular financial support that the General Council of British Shipping is currently seeking. I gave notice to my noble friend the Minister that if nobody else raised those points I would ask him to comment upon them. I repeat that now.

Now that the tonnage and British crew members have sunk to such low levels, it is beginning to become a matter for concern, as other noble Lords have said, that the traditional taking up of shipping from trade by the Royal Navy in times of war— such as was the case in the Falklands War in 1982— might be jeopardised. Your Lordships probably had a chance to look at the Statement on the Defence Estimates for this year. I should like to quote from page 27 where there is a paragraph on merchant shipping. It states: Together with the Department of Transport, the Ministry of Defence is Monitoring the availability of merchant shipping to meet the various needs of the armed forces. Over the last decade there has been a very substantial reduction in the number of ships on the United Kingdom register, and British shipowners are continuing to sell vessels or transfer them to dependent territory and foreign registers. This does not mean the ships are lost for defence purposes. The Government already has the power in time of tension or war to requisition ships on dependent territory as well as United Kingdom registers—a power used quickly and effectively at the time of the Falklands conflict in 1982—and it would be possible by legislation to extend this power to ships on foreign registers which are beneficially owned by British operators". That seems to show that the Ministry of Defence is confident that given a situation like the Falklands war again, it could get the ships. The problem, however, is the crews, a point which the Ministry does not mention in that section of the defence review. I have raised this point with my noble friend.

I turn here to the brief of the General Council of British Shipping, which says: It would be possible to run British-owned ships entirely with foreigners. Many governments which have spent heavily on training officers and ratings are anxious to see them employed. Taiwanese, Korean, Indian and Filipino crews are more than adequately competent as are the Poles who are even cheaper— little more than one-third the cost of British crews"— because they are not so greedy— for a typical tanker or bulk carrier". It goes on to say: But British shipowners much prefer to employ their own compatriots and it must be in the national interest for them so to do". I suggest to my noble friend— and I have given him notice of this point too— that it would be interesting to know what is the Government's view, bearing in mind that they have covered the ship position but not the crew position. It must be a fact that, in any conflict in which we would want to be involved, we could not have a foreign crew because one could not rely on it at all. This is almost an Achilles' heel of the situation as it stands at the moment.

I agree with the worry of the noble Lord, Lord Geddes, about the shortage of cadets under training. The noble Lord, Lord Greenway, referred to the reduction in lights and lighthouses. I have to confess that in conjunction with my half-brother who at one stage was the chairman of the Blue Funnel Line, a fact which the noble Earl will be very pleased to hear, I have been trying to press the general council for some time to reduce the number of unnecessary lights and buoys. Its report has at last come out. It goes too far in my opinion but it is a good starting point. It is much better to go too far in the first place. I hope that there will be a great economy and that in the future Trinity House will cost the state less.

6.43 p.m

Lord Hatch of Lusby

My Lords, my interest in and concern about the merchant navy stems from travelling by ship for the past 37 years and in particular from recent journeys with seafarers in the Baltic. I came back appalled at what they told me. I am talking here about the opinions and views of everyone, from deck hands to masters. As a result of those experiences with the men involved I have raised this matter in this House on a number of occasions.

On 7th June 1985 I asked the noble Lord who is to reply to give the figures for ships under the British flag, their tonnage and the number of seafarers working on them. The noble Lord may remember my Question. He gave me these figures. In March 1980 there were 1,297 ships, representing 42 million tonnes. In March 1985 that figure had fallen to 758 ships. The tonnage had exactly halved to 21 million tonnes. I pursued the Question this year. On 2nd April I asked the noble Lord a similar Question. The figure of 758 ships in March 1985 had fallen to 523 ships in 1986. This figure represented a reduction of 70 per cent. since 1980.

In March 1980 there were approximately 71,000 seafarers on British ships. The figure had fallen to 37,000 in March 1985 and to 29,000 last year. In 1980 United Kingdom flag ships carried 34 per cent. of United Kingdom trade. In 1985 the figure was only 23 per cent. This represents in stark figures a haemorrhaging which, if it is not stopped, is bound to lead to the final death of the merchant navy, which has played such a large part in the economic and social life of our country.

In 1985 I asked the noble Lord what the Government were going to do about it. He could not answer but he promised to write to me. He wrote to me and in the course of that letter he had this to say: The Government see no need for further investigation". On that occasion. 7th June 1985, there had been demands from all parts of the Chamber, including the Benches behind the Minister, for the setting up of a Select Committee of this House to look into the reasons for the decline of the British merchant navy and the consequences of that decline. That Select Committee has not been set up. We were told by the present Leader of the House that there was not the staff to do it.

The noble Lord told me this year— and he was referring to a speech made by the Secretary of State for Transport last December—that the Government's proposal was to set up a merchant navy reserve and to provide assistance for the training of seafarers and assistance with crew relief costs. This is all very welcome, but what is the good of training seafarers if we do not have the ships? We do not have the ships because we are not operating in the same world as that of our competitors. Perhaps I may refer to the report of the Select Committee on Overseas Trade, of which I was privileged to be a member. It refers to the way in which industry in this country has suffered, in comparison with our competitors, from lack of government support. This surely is obvious in the whole field of shipbuilding and of the organisation of the Merchant Navy.

Are the Government not yet concerned about the economic costs of what everybody who has spoken so far in the debate has exposed as the collapse of the British merchant navy? Perhaps I may remind the noble Lord who is to reply that during the period about which I have been talking United Kingdom seaborne trade increased by 20 per cent., but during that same period the contribution of United Kingdom controlled seaborne trade fell from a surplus of £141 million in 1980 to a deficit of over £1 billion in 1985. Are the Government not concerned at this haemorrhaging now of their budgetary resources and the bearing this has on what the Government would call the taxpayer? Are the Government not concerned that in 1985— not even last year—there was a deficit of £1 billion? What is the Government's attitude to this? Are they still saying that they see no reason for any further investigation?

I suggest to the Government and to the House that this is a crisis in a vital part of British industry. It is a crisis which, if it had occurred under a Labour Government, would have been blazoned abroad as a waste of the taxpayers' money. It is time that the Government faced up to something for which, I accept, they are not entirely responsible. A major responsibility for them is to halt the decline, to find out the reasons and to publish them, and to get those who are concerned with a critical situation to pool their knowledge, their wisdom, and their resources in order to let the nation know the future of what was once one of our greatest treasures, the British merchant navy.

6.52 p.m.

Lord Moran

My Lords, all of us must thank the noble Lord, Lord Carmichael of Kelvingrove, for providing this opportunity to discuss a problem which I have believed for some time is extremely serious and urgent. I was delighted when I saw the sentence in the gracious Speech which said: Measures will be introduced to assist the merchant shipping industry". I do not know what the Government have in mind; perhaps the noble Lord who is to speak for the Government will give us some idea. I am concerned that the noble Lord, Lord Geddes, thinks that proposals will not be adequate.

I was a member of the Sub-Committee on European Maritime Transport which reported in March 1986. Two members of that subcommittee—the noble Lords, Lord Geddes and Lord Murray of Epping Forest—have already spoken most eloquently and persuasively. I fully support what both have said. We published in that report a rather grim table at paragraph 34 about the decline in the United Kingdom merchant fleet between the end of 1975 and the end of 1984. We said, for example, that tramp ships had declined in that period from 307 to 170, tankers from 478 to 276, and so on. We debated the report on 2nd May 1986.

In the debate, I said that it did not seem acceptable that, dependent on the sea as we were, we should have to rely on others—and indeed on our competitors—to bring us the great bulk of our imports and to take away our exports. I still believe that. I also said that the Government should give urgent thought to measures aimed at arresting and reversing the decline in British shipping and shipbuilding. I hope that they have done so, and that the Bill that we shall see later this year will show this.

There is no doubt, as many noble Lords have said, that the rate of decline has been catastrophic, and that the merchant fleet is now only a shadow of what it was. We have fewer than 500 ships of 500 tonnes or over flying the UK flag. We have also seen the withdrawal of capital from the industry, an ageing fleet, flagging out—which of course is natural because, on an average ship, it can save something like £1,000 a day—and the sale of many ships.

Hand in hand with that has gone a decline in shipbuilding which is even more drastic. A background paper was produced by the library research division in another place in July 1985. I shall quote the first two sentences: In the 1950s the UK was the largest merchant shipbuilder in the world. It now aims to increase its share to 1.25 per cent. of the world market". That, I think, says it all. But there are signs of a recovery. Many of us have been impressed by the splendid work done by Mr. John Parker of Harland and Wolff. He has really put that shipyard on the map; it is doing some first-rate work.

Even more serious is the decline in the number of seafarers, mentioned by the noble Lord, Lord Geddes. The noble Lord, Lord Murray of Epping Forest, gave some alarming details. The decline is at both ends. Senior officers are leaving and recruitment has, not unnaturally, fallen off. Although ships can be built comparatively quickly, the sophisticated vessels of today need highly-trained officers to run them. To train those officers can take anything between nine and 12 years. You cannot suddenly press a button and resuscitate your trained manpower.

I should like to make a brief mention of the admirable work of the Marine Society, a private body that has commissioned a training ship to provide practical sea training. It has prepared a sea careers guide and funded scholarships, and is now refitting a second training ship. But of course the problem is far beyond the resources of a private body. We must look to the Government to provide solutions.

I should like to repeat a suggestion that I made last year. The Government should sit down with shipowners and the unions to see what can be done to make British crew costs more competitive. Another suggestion is a development corporation funded by the Government to try to put the industry on its feet again. I still believe that it would help a great deal if we had a Minister of Maritime Affairs responsible for shipping and the oversight of shipbuilding, ports, lighthouses, marine reserves, and all aspects of our maritime affairs. As a maritime country, we ought to have such a Minister who could get things done.

Fairly drastic measures are now needed, perhaps some of the taxation measures set out clearly in his speech by the noble Lord, Lord Geddes. The objective of the Government should be to maintain a British merchant fleet of adequate size and a reservoir of trained maritime manpower.

6.59 p.m.

Lord Mulley

My Lords, I also should like to pay tribute to my noble friend Lord Carmichael for introducing this important debate. The noble Lord, Lord Moran, made some suggestions as to what might be done by way of trying to resolve the problem. I should tell him of course that we already have a Minister for Shipping. We have the privilege and pleasure of having him among us in your Lordships' House. Whether it will solve all the problems in the way that the noble Lord, Lord Moran, suggested, we shall have to wait about an hour to find out. However, I certainly welcome the fact that we have a Minister for Shipping. When I was Secretary of State for Transport the department did not include shipping. We made recommendations that shipping should come under the Department of Transport. That came about after I had left.

However, if we need a recommendation I should like to suggest another Rochdale Report of the character produced by the noble Viscount, Lord Rochdale, in 1970. It is true that that was at a time when the industry was expanding but more recently he chaired a sub-committee of your Lordships' House. In the House of Lords Report 106 in 1985–86 it said very clearly: There is a strong case for a wide-ranging examination of the major problems in the shipping industry and of its suppliers and users, taking into account its importance in times of emergency". Perhaps that can serve as a text for the short debate that we are having today. The noble Earl, Lord Attlee—in an extremely moving speech based on his personal experience—referred to the contribution of the merchant navy at the time of the Falklands conflict. While I should have preferred—as we did at an earlier stage—to have dealt with that problem in a different way, no one can have the slightest reservation or doubt about the excellence of the contribution that all parts of the armed services, and not least the merchant navy, played in a most remarkable achievement at that time.

The noble Earl expressed a doubt which I think would be shared by many noble Lords about the position if we had an emergency of that kind today. Quite apart from such emergencies, which we hope will not recur, I should remind noble Lords that we have within the North Atlantic alliance very substantial naval responsibilities both for the Channel command and in the Eastern Atlantic. I happen to think that they are probably too onerous. But in view of the statistics we have had from very great authority, from the noble Lord, Lord Geddes, and the noble Lord, Lord Murray of Epping Forest, I ask myself the question whether we shall retain the shipbuilding capacity in the country to build ships for the Royal Navy, or whether in an emergency, we shall have the trained manpower reserves to man them? I submit to your Lordships that this is a very serious matter indeed.

We have had all the statistics that we need but the broad fact is, whether it is plus or minus a few percentages, in the last 12 years there has been approximately an 80 per cent. fall in both the numbers of deadweight tonnes of UK registered shipping and in the number of vessels. I believe in round figures these have declined from 1600 to 500. As the noble Lord, Lord Geddes, pointed out there has been an almost exact relationship in the decline of numbers of officers and ratings in the merchant navy and the number of tonnes. The noble Lord talked of a figure of 60 per cent. plus. That is a very serious matter indeed.

The gracious Speech indicated that we should be having a merchant shipping Bill in the autumn which we welcome. However, it seems to me most unlikely that it will reverse this very serious decline that the House has been considering tonight. Indeed, the noble Lord, Lord Geddes— who has far more knowledge and experience of these matters than I do—put his doubts rather more forcibly. I should like to have the reaction of the Minister for Shipping to those comments when he replies. This may be a little unfair on the Minister, but many of us may agree that the real problem is a matter of finance—fiscal and taxation.

I should like to quote from a very experienced and independent gentleman, Mr. James Sherwood, the chairman of Sealink British Ferries and Sea Containers Limited. It is from a statement that he made in April last in connection with the inquiry into the decline of the registered merchant fleet. He said: The United Kingdom has a great maritime tradition, a large pool of management and seafarer expertise, the support organisations for shipping such as the Baltic, Lloyd's, Lloyd's Register, ship mortgage banks, the leading shipping journals, the leading shipping lawyers and shipping arbitration procedures. I, as a US citizen, have watched with amazement a succession on governments who have ignored shipping and let this great strength of the country be sapped. It seems to me unlikely that the UK's merchant marine will see growth again until there is some determination of the part of the Prime Minister, the Chancellor of the Exchequer and the Secretary of State for Transport to see this growth happen. I include the Chancellor because the Treasury has got to understand that the UK flag must become tax free as is the tax regime of most of the world's fleet today, and that taxes must be collected from the profits generated in the UK from the maritime support services which employ hundreds of thousands of people, and not from the shipowners". As my noble friend Lord Murray of Epping Forest pointed out, instead of helping in this regard, in 1984 the Government withdrew tax relief from seafarers serving abroad and removed the depreciation allowance on new ships. This led to a further flood of ships being flagged out to foreign nations. I feel certain that it is very much in the national interest, if we carrot fully reverse the trend, at least to halt the rate of decline.

I am bound to say, particularly because of the defence implications, not only is the matter serious, but it is an instance where it is not safe to leave it to the free force of a market economy.

7.8 p.m.

Lord Gray of Contin

My Lords, I should like to join with those who have already spoken in offering my thanks to the noble Lord, Lord Carmichael of Kelvingrove, for giving us the opportunity to discuss this very important matter this evening. My interest in the subject is principally in connection with the offshore supply industry. I feel that the rest of the subject has been very widely covered this evening and it is no indication that I do not consider it equally important if I restrict my contribution to the North Sea and the relationship of those who operate on the offshore supply industry therein.

Surprisingly, the main problem which those who operate there come up against is not caused, as many people assume, by the fluctuation in oil prices, with the recent drop in oil prices in recent months, but by the appallingly inept attitude which successive governments have taken towards the whole principle of flagging. This may seem a harsh thing to say. I do not in any way intend my noble friend to feel that I am getting at him. It did not happen overnight.

I remember only too well when I was a Minister at the Department of Energy prior to 1983 that this subject was raised on a number of occasions. Although I have not gone to the trouble of seeking the papers which existed at that time, my memory seems to remind me that the principal objection at that time came from Foreign Officer sources. I would suggest to my noble friend that, now those at the Foreign Office have had a further period of years to witness just what a disastrous effect the present policy is having on British ships which seek to operate in the North Sea, it may be an opportune moment to raise the subject again. Indeed, I would go further and suggest to my noble friend that the merchant shipping Bill which will shortly come before your Lordships' House might be a very appropriate vehicle in which to legislate appropriately in this matter.

The Norwegian sector is protected so effectively that, as my noble friend Lord Geddes pointed out, only two vessels presently operating in that sector do not fly the Norwegian flag. Surely this is covert protectionism in operation. Many countries within the European Community operate overt protectionism—for example, France, Italy, Spain and Greece—while the United States is equally rigid in its attitude.

Perhaps I may suggest to your Lordships that you should let your imaginations run away with you for a moment or two. Can you imagine what would have happened if oil had been found in French waters instead of in British waters? Can we really see the French Government being as understanding and as sympathetic to vessels flying flags other than the French flag in such circumstances? Can you imagine a British fleet of supply vessels operating in the Gulf of Mexico? I do not think there would be very much sympathy shown towards them down there.

In many areas overseas British operators would require foreign partners. They would require to offer foreign equity participation in their operations before they would be accepted. Over the past 18 months, as my noble friend Lord Geddes pointed out—he and I have obviously been briefed from the same source, I suspect—the Offshore Supplies Office has operated a system of monitoring foreign involvement in the North Sea and that has at least had the effect of restricting the amount of charter business available to non-British flags. I take the view that until foreign sectors can prove that they are allowing genuine competition such measures are wholly reasonable for us to adopt.

I do not accept the reasons the Government have offered for not legislating in this matter. I consider it is really pointless for the Government to argue, as they have done in the past, that such a measure is contrary to our inward investment policy. Of course I agree that inward investment is very important and is to be encouraged, but this concept has no relevance in the context of flagging in foreign-built, foreign- owned and foreign-controlled supply vessels to meet a transitory variation in market demand.

My recollection of the attitudes of the different departments is that within the Department of Transport there was, as there was in my own old Department of Energy, a genuine sympathy towards taking action in this matter. I trust that sympathy still exists. I feel sure that my noble friend will represent the matters which have been raised in the House this evening to the Secretary of State and his colleagues in the department. I hope, certainly so far as concerns the North Sea, that there will be a realisation on the part of the Government that if we are to see our own supply vessels adequately rewarded for the investment which has been made in building them, the time has come when serious thought must be given to legislating for their benefit.

7.14 p.m.

Lord Shackleton

My Lords, the noble Lord, Lord Gray of Contin, has saved us three minutes, as did the noble Lord who spoke earlier. I shall try to add my quota of two or three minutes so that the Minister will have plenty of time to reply to the very eloquent speeches that have been made.

I make as my first point the fact, as the noble Lord, Lord Geddes, said, that we do not just want the party line on this matter. We really want some recognition of the facts; and the facts are quite indisputable. We have heard the speech of my noble friend who opened the debate, the speeches of the noble Lord, Lord Hatch of Lusby, and others, and they have all spelt out the facts. I do not propose to spell them out again myself.

The Government's proposals so far really amount to nothing. I accept what the noble Lord, Lord Gray, said: all governments must take responsibility in this situation. But really what has been offered is very little indeed. It was depressing to hear the noble Earl, Lord Attlee, in a very heartwarming and sad speech referring to the danger that there might not be enough ships to deal with the Falklands issue on another occasion. The noble Lord, Lord Mulley, referred to that point but he gave us a rather cryptic throwaway line when, as I understood him, he said that he would deal with the Falklands in another way. I cannot think what other way one can take in the face of aggression, but—

Lord Mulley

My Lords, if my noble friend will allow me, I would say that the thing to do is to avoid the aggression as we did in 1978—by taking preparatory steps.

Lord Shackleton

My Lords, I am very glad to hear that. In other words, we would have anticipated the problems. I know the noble Lord is a patriot and a former defence minister. However, we will not go further into that. As I say, the facts are there and there is no point in arguing. I sometimes wonder whether we ought not to have foreseen this; but we did not. I must confess I remain fairly gloomy, although there are encouraging noises from the General Council of Shipping and other bodies.

It is a question of how much we can save and this is where I should like the Government to look very carefully at the interim report of the House of Commons Transport Committee. I hope the noble Lord will look at all the figures which they will have in his department referring to what facilities are provided in other countries. One looks at the degree of support which the French give, together with that given by other countries. Could we not try at least to equal it? I am not suggesting—indeed, no one is suggesting—large-scale subsidies but I think that there should be at least some equality of suffering.

We have had discussion on lights. Incidentally, if I may correct the noble Lord on this point, Trinity House is not government funded—

Lord Mottistone

My Lords, I must just rise to say that I made the mistake but I thought to myself, "I am trying to save time and so I will not correct it: I hope nobody will pick me up".

Lord Shackleton

My Lords, I am grateful to the noble Lord for saying that. In view of the time factor I must say I hope that the short debates do not prevent us from actually debating as well as making speeches. In talking about the Strange Report and the great economies that perhaps could be made with the introduction of electronic navigation and so on, I would not altogether agree that it might be better to go too far at first and perhaps cut back later. Of course I hope we shall not go too far and that we shall take the advice of Trinity House in this area.

I think the point really has been very fully made. I believe the Government have a very difficult problem but I would say to the Minister that their policy is really not conducive to providing a solution. If the objective is primarily to reduce taxes—and we are all in favour of cutting taxes—at the expense of perhaps research and development, shipping and so on right across the board, then we are going to lose out.

Whether in five years' time things will be better we do not know. This matter is urgent and there are some steps that could be taken now. I would ask the noble Lord not just to rest on the position that he has already taken up and that the Government have taken up about a merchant navy training reserve. Can he perhaps see whether there are some areas such as lights and other things where particular allowances could be made in order to redress the balance a little bit for the shipping side? However, I am not hopeful that the Government will adopt that line and I must say that I leave this debate, less the three minutes that I am giving to the House, with a good deal of gloom.

7.20 p.m.

Lord Monkswell

My Lords, I hope that I shall not take up too much time, which is running short. Perhaps I may say that it would be very easy simply to castigate the Government for their lack of emphasis on national defence in that they have allowed the merchant navy to decline to such a sorry level. However, I do not think that there is anything to be gained simply by pointing the finger and laying blame, even though it may fall squarely upon them.

It has been a very interesting debate and there has been virtually wholehearted consensus that our merchant navy is too small, needs enlarging and that we need to ensure that it has the manpower to operate effectively. My fear is that although the Government may provide some measure of support, they will not provide enough measure of support. My contribution is to suggest that they demonstrate a long-term commitment to the merchant navy by ensuring that we have a shipbuilding industry which can provide the ships which constitute that navy. In order to do that, they must provide a steel-making capacity in this country that will feed the shipbuilding industry.

When one considers the steel-making capacity of this country, one notes that there are three bulk steel producers: Llanwern in South Wales, Redcar in the North-East and Ravenscraig in Scotland. Over the past few years it has been sad to see that Ravenscraig has been threatened. However, I suggest that we must completely reverse that trend. Those three bulk steel-making plants provide less than 75 per cent. of the steel requirement of this country at the present level of demand. We need to build another bulk steel-making plant, which I suggest should be built at Liverpool.

There are tremendous benefits to be obtained. It would provide work in an area of high unemployment, utilise the skills that are available in that region, provide the raw material for the shipbuilding and engineering industries in the North-West and—dare I say it?—also contribute to the engineering industry in the Midlands and Birmingham. It would enable us to provide virtually 100 per cent. of the bulk steel that we require at the present level of demand and ensure that there would be an adequate supply of steel for British shipbuilders to build the ships that we need for a British merchant navy.

7.23 p.m.

Lord Underhill

My Lords, the one thing that stands out clearly from this debate that has been initiated by my noble friend is that there is no doubt whatever about the tragic decline in the British merchant fleet both in numbers of ships and in the number of seafarers on UK registered ships. That fact has been emphasised by every speaker. The relevant figures, with which all largely agree, have come from the General Council of British Shipping, UMAST (the officers' union), the National Union of Seamen and the Department of Transport itself. By and large they all show the same picture, which has been described by a number of noble Lords in challenging words.

In his capacity as Minister of Shipping, the Minister attended the conference on "Perceptions of Maritime Operations in the 1990s" held under the auspices of the National Maritime Museum at Greenwich at the end of October last. I was kindly sent a mass of documents, which I found illuminating and interesting but in some ways rather frightening. The conference was told that unless trends are reversed there could be fewer than 100 ships remaining on the UK register by 1995. The General Council of British Shipping warned: The point is very near when the flagged out fleet will exceed that on the home register. If present trends continue there must be grave doubts about the ability of the reduced merchant navy to fill its defence roles in the 1990s". That same anxiety was also expressed by the First Sea Lord and Chief of Naval Staff as well as by other very authoritative speakers. A similar note was struck in a supplementary memorandum sent to the House of Commons transport committee from the Department of Transport, which stated: There can be no certainty that no deficiency will arise". Reference has been made to the tragic decline in the number of seafarers, and I need not go into the figures again. I hope that the Minister was as impressed as I was with the detailed information given by my noble friend Lord Murray of Epping Forest as to what should be done on the subject of training. The figures that were given of numbers of cadets may have been new to some noble Lords and I am certain that when noble Lords who are not taking part in this debate read the record of our debate in Hansard they will be amazed when they see the numbers of cadets serving in the UK registered fleet.

In the limited time that I have available, which is another six minutes, I shall try to deal with what might be done. Before I do so I should like to read to your Lordships one or two extracts from memoranda submitted to the transport committee in the other place, whose interim report has been referred to by a number of speakers.

The National Union of Seamen states: Unlike Britain. many foreign governments also provide specific aid for their merchant fleets … free trade in shipping is a myth". The General Council of British Shipping says: The world shipping market is not 'free' in a classic sense … it is subject to intervention and distortion by many governments in a host of ways". I think that the Government must take some heed of the remarks of the general council when it comments that: Some observers say that protectionism is so widespread that it cannot be rolled back". The general council listed quite a large number of ways in which other governments give help to their shipping.

The officers' union, UMAST, says: There is a general view that the United Kingdom is alone in advocating and pursuing a policy of laissez faire in shipping". It refers to the support given to their own shipping by our partners in the European Community and by members of OECD.

Those statements are confirmed in the very useful appendices to the interim report of the transport committee of the other place and I hope that all noble Lords will look at them. One appendix lists the government help that is given to shipping in 17 maritime countries. Another details protectionist policies followed by a very substantial number of developing countries. Yet another details governmental intervention and help given by the governments of 13 OECD countries.

I must ask the Minister to tell the House the attitude of the European Commission and what action is being taken by the Council of Transport Ministers? We find that EC countries are following lines that are totally opposed to general EC policies. We have spent much time in this Chamber discussing the need to deal with aviation matters, but what is being done by the Council of Ministers and the commission about the aid that is given in various ways to our partners in the EC?

Naturally the unions have been extremely concerned about flagging out and my noble friend Lord Murray dealt with this subject. From the information given to me, the unions have co-operated fully in manning arrangements to deal with flagging out and with coping with modern technology in the British fleet. I do not think that any criticism can he levelled at the unions in that respect.

It is reported that the International Federation of Transport Workers is to review the campaign that it has been carrying on for some years on the question of flags of convenience. We on these Benches would give support to any international action to tackle the serious problem of flags of convenience. One point we should make clear is that any shipping companies which receive investment incentives or tax reliefs should he required to retain their ships under the United Kingdom flag. That we would regard as absolutely essential.

My noble friend Lord Murray referred to the fact that 98 per cent. of our freight transport goes by sea. I noticed that in a speech which the Minister made to the conference of the International Cargo Handling Association in November, he said that 95 per cent. of our tonnage and 80 per cent. of the value of our freight is still transported by sea. That is a massive figure. Therefore might we not consider more vigorous inspection of foreign ships entering UK ports to ensure that there is full compliance with ILO standards, in the light of the enormous trade which we still have in respect of UK freight?

We would also urge that consideration be given to tax incentives for scrapping older vessels and building new ships in United Kingdom yards for use with United Kingdom crews. It seems to me that all three matters—scrapping older vessels, preserving the shipbuilding industry to some extent and using United Kingdom crews—should be packaged together. Why not also consider grants to improve coastal shipping facilities on the lines of Sections 8 and 36, under which grants are given for rail sidings and inland waterways freight facilities? Also, should not government cargoes only be carried in British ships?

Reference has been made by both the noble Lords, Lord Geddes and Lord Gray of Contin, to the problem of offshore vessels in the North Sea. Allied to that, the noble Lord, Lord Greenway, referred to cabotage. Should we not take a serious look at that? I know that the Government have said before that they believe in complete freedom and letting market forces work. But should we not reserve coastal shipping for United Kingdom ships, or ships of other countries which allow UK vessels access to their coastal shipping? This seems to me a common sense approach which we might look at.

The National Union of Seamen's memo in the documents submitted in evidence said that without Government intervention there is no prospect of shipping's decline being arrested, never mind reversed. I would conclude with a paragraph from the evidence of the officers' union, which is in one of the documents submitted to the Commons' committee. It reads: We do not believe that the decline of the fleet can be halted or reversed without the political will for it to happen. The 'hands off' approach adopted by the Government will not stop the decline and the Government has to accept the responsibilities. That is the message which I believe most speakers have voiced tonight in this useful debate. I hope that the Government will say something more than the noble Earl, Lord Caithness, was able to say about what might be the contents of the merchant shipping Bill which is to come before Parliament very shortly.

7.34 p.m.

The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara)

My Lords, this has been a valuable debate on a very important subject and I am most grateful to the noble Lord, Lord Carmichael, for having taken the opportunity of raising the issue this afternoon especially as, as has been pointed out, I have responsibility for shipping within the department. Therefore it is particularly useful for me to be able to listen to your Lordships' view on this subject.

It is natural and right that, with our unequalled history of maritime influence and merchant service, the decline in the size of our fleet in recent years has given rise to anxiety and questioning. As has already been pointed out by several noble Lords, the Select Committee in another place during the last Parliament engaged on an inquiry into the decline in the UK registered fleet. A great deal of valuable evidence was given to that committee, but I could not hope to summarise its main features. However, I think that I should deal very briefly with what have been the causes of the reduction in the size of our fleet.

The main factor has of course been the massive imbalance between supply and demand for shipping; too many ships have been chasing the cargo available. As a result, charter rates have been depressed well below the level needed for an adequate return on capital and have often been little above minimal short-term operating costs. That surplus can be attributed to unwarranted optimism on the part of ship operators and bankers in seeking new ships, and to the political pressure on shipbuilders and governments in all countries to keep their shipbuilding yards in work. While there is now more realism among governments, shipowners and bankers worldwide, it is too early to say that the lessons have all been learnt by all concerned. The noble Lord, Lord Greenway, was quite right to point out that at least in this country we have avoided the bankruptcies in the industry which have been prevalent in other parts of the world.

The problems of oversupply were exacerbated by increased competition from third world countries whose lower crew costs enabled them more easily to trade at low rates. The UK shipping industry was also affected by changes in trading patterns, such as the switch to the Community as our major trading area, and more than some by the reduction in long-haul oil cargoes.

It is no excuse but a fact that has to be recognised that these principal causes of the decline of our fleet have been, and remain, beyond the control of this Government or of governments in other developed countries whose fleets have been similarly affected. It is a fact too often overlooked or ignored by those who express concern about the situation. The Norwegian fleet has fallen in size as precipitately as ours and the Norwegians have had to introduce an entirely new register that will rely on the use of foreign seafarers. Over half of the fleet owned by shipowners in the Federal Republic of Germany is registered in other states despite the financial help given to German flag shipping. I should also say that the fall in our tonnage appears considerably less dramatic when allowance is made for the unjustifiable and unsustainable expansion which took place under the UK flag in the early 1970s, much of it by companies beneficially owned abroad.

I have been talking about the United Kingdom fleet broadly. It includes of course a great variety of vessels of different technical characteristics, trading in different markets with different experiences and different prospects. Much the greater part of the decline in UK tonnage has in fact been in tankers and bulk carriers. It is in these most difficult sectors that many owners have opted for re-registration of their vessels abroad in order to retain a significant interest in the trades. The Government do not encourage such flagging out but the alternative would in most cases be far less attractive—to get out of these trades altogether. All developed country fleets have found it most difficult to compete under their own flags in these sectors and the move to new registries often created quite artificially has been, and is, widespread.

Other sectors of the fleet have fared differently. Our container fleet has maintained its tonnage at mid-1970 levels and, while accounting for only 25 per cent. of UK gross tonnage, it accounts for 54 per cent. of our international freight earnings. This month P & 0 is celebrating its 150th anniversary. The continuing success, and indeed the growth, of its deep-sea cargo liner operations as well as its cruise business shows that unrelieved gloom about UK shipping is quite unjustified. The noble Lord, Lord Greenway, referred to the takeover of Ellermans by Cunard-Trafalgar House. I think there is a tendency to treat news about change in the fleet as always being bad news. But this merger, far from being a matter of regret, is a matter for congratulation of those concerned.

One of the problems of the British shipping industry is that there has not been enough structural change of that kind to meet the competitive challenge of even larger units of international shipping. Total UK earnings of over £800 million from passenger business, which accounts for 25 per cent. of our international shipping earnings, are being achieved by passenger ships which account for only 8 per cent. of gross tonnage.

I said earlier that the factors that have led to the numerical decline in the United Kingdom tonnage were not basically within the Government's control. That does not mean there is no scope or importance for action on shipping policy. Of course there is, and we are dynamic and successful in its prosecution. Much of it is in the international field, and much of it of particular importance to the liner trades, to which I have just referred.

Our policy is to break down barriers and prevent the construction of new ones, and to promote fair competition. Let me start with barrier demolition. As noble Lords are aware, the first stage of the Community shipping policy has been achieved. Under the United Kingdom's presidency four regulations were agreed last December. They provide powerful weapons for promoting competition and securing freer markets. A key element in the package is the competition regulation. This provides the necessary exemption for liner conferences from the general competition rules of the treaty and makes that freedom conditional on the scope for independent shipowners to challenge the conference. So it protects users as well as independent carriers. One regulation enables the Community to act against predatory pricing; that is the dumping of excess tonnage, arising from government help. It came into force on 1st July. It is a tough power. European shipowners are on the point of lodging the first unfair pricing case with the Commission, which must be good news.

Two other regulations are concerned with opening up external markets and with combating protectionism. One requires the bilateral cargo-sharing agreements, which some Community countries have with third countries, to be phased out, and that no more be made. The other provides for Community action against moves by third countries to restrict EC carriers' competitive access to trade. That measure too came into force on 1st July. My hope is that the long shadow which this regulation casts will dissolve barriers. If it does not then the Community must act.

The noble Lord, Lord Underhill, asked what we were now proposing within the Community. We are already preparing for the second stage of the Community shipping policy. I referred earlier to fair competition. The Community now needs to tackle the difficult question of harmonisation of aids given by Community governments to their merchant fleets and to assess other ways of strengthening the position of the Community's shipping industry. The Commission is studying, for example, possible scrapping schemes. Since overtonnaging is a world wide problem, such schemes will have to be considered in a fully international frame.

Noble Lords, notably the noble Lords, Lord Carmichael, Lord Greenway and Lord Underhill, referred to the problem of the coastal trades. Negotiations on the EC shipping policy dealt with many problems but not unfortunately with that situation. It is one that we take seriously. I want to reassure your Lordships that the Government are working hard on an alternative strategy to secure the opening of the European closed cabotage trades. I hope we shall be able to make an announcement shortly.

The noble Lord, Lord Underhill, suggested, if I understood him correctly, that we should consider closing our coasts. That is not the view which has been expressed to me by the shipping industry. It would prefer that we did all that we could to open up other people's coasts rather than close our own.

Lord Underhill

My Lords, what I actually asked was: would it not be wise to restrict our coasts to British shipping and to the shipping of other countries which gave us access to their coasts? In that respect we would be opening up.

Lord Brabazon of Tara

My Lords, I take the noble Lord's point. That is a possibility. It is not as good as trying to open up all coasts within the Community. As I say, it is a situation which we take extremely seriously.

I wish it were as easy to deal with the problem facing the offshore supply vessels sector as my noble friends Lord Gray of Contin and Lord Geddes implied. For the moment I am not ruling out any options, but in relation to the proposal to legislate to ban non-British-owned vessels, there are many aspects to be considered; not least the Treaty of Rome which is one, and the prospects for opening up other protected offshore markets such as that of Italy, which is another. One or two offshore supply owners have emphasised that they would like to see other coasts opened to them. What I can say is that the need for drastic measures would be greatly reduced if the Norwegian offshore supply fleet were to be cut back in line with the recent contraction of the market. I believe there may now be a prospect of this and I propose discussing it with the responsible Norwegian Minister when he visits London later this month.

Meanwhile—my noble friends have given credit for this—the action of the Offshore Supplies Office in giving the sector special attention under the full and fair opportunity policy has resulted in a substantial reduction in predatory foreign activity. The majority of the vessels now operating in the UK sector of the North Sea are British-owned and 80 per cent. are on the British register and are fully manned by British seafarers. I have met BOSVA on several ocassions, and I can assure my noble friends that we take its problems seriously. But, of course, other factors need to be taken into account.

To secure an environment in which trade can flourish we need to look beyond Community influence, important though it is. I was pleased to read the generous tribute paid by the incoming General Council of British Shipping president to our liberalisation efforts both in the Community context and other international fora. The president rightly recognised the important contribution made by the Consultative Shipping Group chaired by the United Kingdom and the shipping work of the Government in the OECD, UNCTAD, the International Maritime Organisation, the International Labour Organisation, and in bilateral negotiations with the USSR and elsewhere.

Several noble Lords, notably my noble friends Lord Geddes and Lord Mottistone and the noble Lord, Lord Murray, have talked about the taxation of shipping. The question is often raised, more particularly, the rate at which ships may be depreciated for taxation purposes. Front-loaded depreciation produced poor results for the United Kingdom industry generally and may not have served shipping that well, for the fleet's decline began well before the 1984 fiscal reforms. The present rates of depreciation allowed are reckoned to be on average rather more generous than would be available under a strict regime of commercial depreciation, and provide an effective eight-year writing-down period—a good deal shorter than the normal life expectancy of a ship. The Government have given shipowners special flexibility in the new regime, and helped in other related ways such as widening of the Business Expansion Scheme criteria to include ship chartering. I was pleased to see the other day that a 150,000 tonnes tanker was flagged in from Liberia under the Business Expansion Scheme. That is encouraging.

Corporation tax rates are now lower, and ships can be written off over a shorter period in this country than under the regimes of many of our competitors. Owners investing in United Kingdom newbuilds continue to be eligible for loans under the home shipbuilding credit scheme on a par with the terms generally available in other OECD countries.

The foreign earnings deduction which was withdrawn in 1984 had been introduced at a time of penally high income tax rates. It was not introduced primarily to help seafarers and its withdrawal was of course general. The Government's policy, as noble Lords will be aware, is to move towards a simpler and fairer taxation system for everyone, and considerable reductions have been made in the burden of personal income tax since the withdrawal of the foreign earnings deduction.

A number of noble Lords referred to the defence and strategic importance of the merchant fleet. The actual and potential use of the merchant fleet to support the armed forces in conflict and war has long been a matter of continuous planning by successive governments, and has probably been so for at least 50 years. The Ministry of Defence and my department continue to monitor closely the requirements for support of Her Majesty's forces against ships on the United Kingdom and dependent territory registers. We believe that we can today very generally meet those requirements, and that any problems we now might face can be dealt with either by minor modifications to ships we have or by some minimal support from our allies. Noble Lords who are sceptical of this should reflect on the nature of the tonnage that has left the fleet in recent years. This has been predominantly the large tankers and dry bulk vessels—important in pure tonnage terms but of little significance in supporting the Royal Navy.

Of course, the needs of the economy more generally during crisis and war have also to be considered. In the early stages of war there would probably be sufficient British shipping to meet civil supply requirements related to restricted war-time commodity demands. But we do not expect the United Kingdom flag to meet the full demands of civil supply. That was not possible in the Second World War when non-UK registered ships were used for this purpose. The first answer here is the well developed NATO plans to pool ocean-going shipping. The adequacy of shipping for this purpose must therefore be considered in alliance rather than in national terms. Although the merchant fleets of the alliance—like the United Kingdom merchant fleet—have been declining, the potential resources of NATO, on which we have a right to draw, would be substantial. At the initiative of the United Kingdom the alliance is now mounting a NATO-wide study of shipping supply and demand. The increased incidence of flagging out to dependent territory and foreign registers has emphasised the importance for defence purposes of British-owned and other NATO-owned vessels on foreign registers.

The Government's powers of requisition would stem from the use of the prerogative and—if the government of the day decided—emergency legislation. The prerogative extends to ships on the United Kingdom register and the registers of the dependencies. Powers of requisition could be extended to foreign-registered ships beneficially owned by UK nationals and companies through emergency legislation. The Government are making arrangements with certain states that have substantial British-controlled tonnage on their registers to avoid possible difficulties from conflict of laws which might arise in respect of this latter group if the Government sought to requisition such ships in time of war.

Consideration of the availability of ships naturally brings in the availability of crews for them. That point has been made by several noble Lords, particularly by my noble friend Lord Mottistone who, when he referred to the defence estimate, should have perhaps turned a couple of pages on to pararaph 5 of page 29 which makes specific reference to that matter and indeed to the measures which the Government propose.

We expect that the crews serving on British ships, whether registered in the United Kingdom, the island dependencies or the dependent territories, and on ships registered in other NATO states would continue to serve on them. Looking beyond them to British ships registered in foreign territories, the Government accept that there could be difficulties in availability or suitability of crews. Measures could of course be taken for the most effective use of current active UK crew. And one of the three measures the Government have announced and intend to cover in a merchant shipping Bill later this Session is the introduction of a merchant navy reserve.

Our intention is to provide a pool of experienced seafarers who could be called upon to crew merchant vessels needed for the defence of the realm. Members of the reserve will be paid a bounty in exchange for a commitment to serve if called upon to do so. The existence of such a volunteer reserve force will provide a back-up for serving merchant navy personnel should the need arise.

The reserve is only one of the three related measures that we propose to help maintain adequate shipping resources for use in emergency. The Government will be providing assistance towards the cost of training seafarers. We are particularly concerned to arrest the recent decline in the number of officer cadets undergoing training. That point was made by the noble Lords, Lord Murray of Epping Forest and Lord Underhill and others. The merchant navy must have a regular injection of new blood to ensure that there will be enough seafarers to man a fleet that will be able to meet the strategic needs of the United Kingdom in years to come. Present levels of cadet recruitment—only 100 or so this year—are plainly not sufficient to meet the future needs of the fleet and the shipping industry. We therefore propose to provide financial assistance to encourage the recruitment of trainees and halt the decline in numbers entering the profession.

A further measure however is designed to encourage our own shipping industry to employ United Kingdom crews. The more nationals there are on UK vessels the greater the certainty that those vessels will be made available promptly for service in war time. But shipping companies have a strong, and entirely understandable, financial incentive to employ third world crews. Such crews may be up to 50 per cent. cheaper than equivalent United Kingdom crews. An important reason for the competitive disadvantage of ships with UK crews is the often substantial cost of crew changes for ships which operate for a long time away from the United Kingdom. The Government therefore intend to provide financial support towards these crew relief costs by meeting a proportion of the expenses of flying crews to and from ships operating in distant waters. The availability of this assistance will be a factor for shipping companies to consider in making crewing decisions. It should enhance the employment prospects for our seamen and the readiness of our merchant fleet.

These three are carefully targeted proposals, designed to ensure that our merchant navy, including the trained manpower, remains adequate to carry out its vital role in supporting the armed forces and supplying the United Kingdom in time of need. The Government will lose no time in giving effect to these measures. The intention to introduce the necessary legislation was announced in the gracious Speech. This legislation is now well in preparation and will be brought forward as early as possible in this Session.

To answer a question of the noble Lord, Lord Carmichael, the legislation will also introduce new registration arrangements for dependent territories' shipping. In that way, as with the new arrangements for pilotage enacted in the last Session, the Government are continuing to update the legislative framework for shipping, that is, modern measures that provide what is necessary.

I have overstayed my time but I have a few minutes more and I should like to answer one or two points which have been made. The noble Lord, Lord Carmichael, referred to the use of Danish ships for an MoD exercise off Norway. There are indeed occasions when no suitable UK registered ships can be chartered for use in exercises because they might be fully employed on valuable commercial business elsewhere. On those occasions it is the policy of both my department and the MoD to take up ships which are registered in the countries of the alliance. The Danish ships to which the noble Lord referred would have been chartered on that basis. That is not at all of course the same as what might happen in time of war. Presumably, in time of war, the tourist trade would have suffered somewhat and our own ships would be available.

The noble Lords, Lord Greenway and Lord Shackleton, and my noble friend Lord Mottistone mentioned the subject of lights. It is a subject which crosses my desk with frequent regularity. We have received recently, as has been referred to, the report of Dr. Strange, the Keilly Report and the report into tender vessels. That subject would almost merit a debate on its own. I can assure noble Lords that I am looking carefully at all and that no precipitate action will be taken. Indeed, as regards England and Wales, the responsibility is that of Trinity House and it is up to Trinity House to make recommendations. I shall look forward to hearing its views. There is undoubtedly scope for savings to be made and we shall want to talk closely about that. It is something that we take extremely seriously.

The noble Lord, Lord Monkswell, talked particularly about shipbuilding. I must admit that shipbuilding is not one of the responsibilities of the Department of Transport. I am bound to say that sometimes I feel, I am sure not rightly, that there is a direct conflict between those who wish to build ships and those of us who would somehow like to see no shipbuilding take place anywhere in the world for quite a long time. However, I had the pleasure of visiting the Govan yard recently just before the new North Sea ferry left, and I wish to pay tribute to British Shipbuilders for the work they have done.

I hope I have made it clear that the Government are determined to see the British merchant fleet prosper. We have done a great deal already on the international front to uphold its interests and we are about to introduce legislation to allow us to assist financially.

To talk about a vacuum in policy or a simple laissez faire approach betrays ignorance on the part of those concerned. It certainly does not do justice to the programme of work on which we are engaged. I have no doubt that, with the backing that it is getting from the Government, the British merchant fleet can and will continue to play a major part in the world scene.

Lord Carmichael of Kelvingrove

My Lords, we are all grateful to the Minister and all those who took part in the debate, which was most enlightening. The Minister's contribution, because the debate was so well-disciplined in terms of time, we shall be able to study because it was possible for him to include a great deal more than he would have done had he been limited to 20 minutes. I look forward to reading what he said with greater care than I was able to listen to it. In the meantime, I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.