HL Deb 24 November 1987 vol 490 cc553-94

4.2 p.m.

House again in Committee on Clause 4.

On Question, Whether Clause 4, as amended, shall stand part of the Bill?

Viscount Simon

I wish to ask one question to clarify my mind. I find the clause difficult to follow. Under Clause 3, we see that among the persons who can be owners of British ships are: bodies corporate incorporated in the United Kingdom". If a body corporate incorporated in the United Kingdom is owned completely by foreigners, as it may be, are its ships still entitled to be registered as British ships?

Lord Brabazon of Tara

Yes. Provided that the company is incorporated in the United Kingdom it does not matter who owns the shares in that company. The ships are eligible to be registered here.

Clause 4, as amended, agreed to.

Clause 5 [Representative persons]:

Lord Underhill moved Amendment No. 15: Page 4, line 20, leave out ("an individual") and insert ("a British citizen").

This noble Lord said: This is a small amendment, but it is of some importance. Clause 5 deals with the appointment of representative persons in relation to the ship, where the ship is owned by persons not resident or established in the United Kingdom. Subsection (2)(a) provides that, the representative person is either—

  1. (i) an individual resident in the United Kingdom, or
  2. (ii) a body corporate incorporated in the United Kingdom".

The amendment seeks to lay down under subsection (2)(a) that the representative person should not be an individual merely resident in the United Kingdom. The additional wording is important, and I hope that the Government will accept it. I beg to move.

Lord Mottistone

In practice, most people who are likely to be representative persons will be British citizens or companies incorporated in the United Kingdom, and having their principal place of business here. However, there may be individuals resident in the United Kingdom who are foreign nationals anxious to be in a position to be representative persons. The amendment would introduce an unnecessary degree of inflexibility.

Lord Brabazon of Tara

I am grateful to my noble friend for his remarks because I am not going to be able to deal with the proposal in all that friendly a manner. The amendment imposes an unnecessary requirement. As I said on Second Reading, the representative person is not responsible for the owner's acts or omissions, but provides a means whereby legal documents can be served on the owner. If the owner fails to respond, then certain consequences, including removal from the register, can flow. What matters for the service of documents is that the individual or company appointed should be resident in the United Kingdom. Subsection (2)(a) provides for that.

I fail to see why the nationality of the representative person is material, provided that he is resident in this country and can have legal documents served upon him. I hope therefore that the noble Lord will see that it is not necessary for such a person to be a British citizen and will feel able to withdraw the amendment.

Lord Underhill

I am obviously going to have no sympathy from the Government on this matter. From his first sentence, I thought that the noble Lord, Lord Mottistone, was going to agree with me. Despite what the Minister says, I still think that there is something in our suggestion. It is not the type of issue upon which to divide the Committee. I shall look carefully at the Minister's words to see whether we shall return with the proposal in some form on Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Underhill moved Amendment No. 16: Page 4, line 25, at end insert ("and such regulations shall not be made unless a draft of them has been laid before Parliament and approved by resolution of each House.").

The noble Lord said: Amendment No. 15 dealt with representative persons. Subsection (2) explains the requirements in connection with the appointment of a representative person. However, sub-paragraph (b) provides, such other requirements as the Secretary of State may by regulations prescribe". That is an important provision that should not be left merely to the negative procedure of the annulment of any order that may be tabled by the Secretary of State should he wish to prescribe other requirements. It is an important issue because other requirements for the representative person could be laid down. The purpose of the amendment is to ensure that that is done by affirmative resolution of both Houses of Parliament. I beg to move.

Lord Brabazon of Tara

Under Clause 47 any regulations made under the Bill, including those relating to representative persons in this clause, are placed before Parliament for approval under the negative resolution procedure. The amendment would require regulations made under this clause to be subject to affirmative resolution. The regulations deal with the technical details of the requirements for a representative person for ships owned by qualified persons not resident in the United Kingdom.

I am not convinced that all regulations on those details would necessarily warrant taking up time in debate in both Houses. I hope that the Committee will agree that we have struck the right balance by providing for the negative resolution procedure, thereby ensuring parliamentary scrutiny and giving the opportunity for debate if necessary, while avoiding unnecessary demands upon parliamentary time.

I have no doubt that many of us have found ourselves debating affirmative resolution orders in the dinner hour and that some of us have wondered why the orders were made subject to affirmative resolution in the legislation. I should prefer to stick with what we have in the Bill at the moment. I hope that the noble Lord, Lord Underhill, will not feel so strongly about this matter that he will press it to a Division.

Lord Underhill

The noble Lord, Lord Underhill, certainly will not press the matter to a Division! The fact that the matter is technical is no reason for us not to have regulations by affirmative procedure. The noble Lord said that we have listened to some boring debates in the dinner hour. Only a few of us listen to boring debates during the dinner hour; most other people never hear about them.

We do not know what the Minister may prescribe. He will be left with, such other requirements as the Secretary of State may by regulations prescribe". In our view this is not a technical matter of no consequence. Although we shall not press it to a vote, I hope that the Minister will reconsider carefully what he has said because there are sound foundations for the course that we suggest. Merely because a later clause provides that regulations shall be by the procedure of annulment does not mean that we should not have this; and, indeed, there are some later amendments that we believe are equally important. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 5 shall stand part of the Bill?

Lord Geddes

I should like to ask my noble friend the Minister what is in effect a supplementary to the question asked by the noble Viscount, Lord Simon on Clause 4 stand part. The same point arises under Clause 5(2)(a)(ii) in regard to, a body corporate incorporated in the United Kingdom and having its principal place of business there". To take the example that the noble Viscount gave, if the subsidiary of an overseas entity is itself a body incorporated in the United Kingdom, is it that subsidiary which has its principal place of business in the United Kingdom or is it the parent of the subsidiary?

Lord Brabazon of Tara

It is the subsidiary which has its principal place of business in the United Kingdom. There are many examples of shipping companies into which category would fall a company such as that represented by my noble friend.

Clause 5 agreed to.

Clause 6 [Refusal of registration]:

[Amendment No. 17 not moved.]

4.15 p.m.

Lord Carmichael of Kelvingrove moved Amendment No. 18:

Page 6, line 2, at end insert ("; or (c) to the national interest,").

The noble Lord said: This may seem a superflous amendment. It is to add to the already long list of provisions under which the Minister may refuse registration the provision to pay attention to or to take into consideration the national interest; or the Minister may merely state that it is against the national interest to include a particular ship on the register.

At a practical level it is necessary for countries to be able to enforce their laws and to exercise jurisdiction over ships in accordance with the 1958 convention on the high seas. This is all the more important since a substantial body of international law has gradually developed to regulate the safety of ships, the prevention of pollution and the training and welfare of seafarers. These international conventions place onerous duties on flag states that have adopted them. The United Kingdom is a party to all these conventions. It is therefore of paramount importance that regulations can be applied and enforced effectively on all ships registered in the United Kingdom and dependent territories.

The main corpus of the amendment is to make the Minister think twice before an automatic reflagging of ships. There is still a great deal of disquiet as to what happens. It may well be in the longer term national interest when suddenly Kuwaiti ships almost overnight have the British flag. As I understand it from reading the background information, this implies an adherence to all the conventions. Immediately there is a reflagging this gives protection under and adherence to the maritime conventions. The Minister should have the power to say that a particular ship may satisfy all kinds of conditions but something is not quite right about it and in the national interest it would be wrong to reflag the ship. I beg to move.

Lord Brabazon of Tara

I do not believe that it would be helpful to introduce this wide element of discretion into the registration process. Under the present law and under the Bill as introduced a ship is entitled to be registered if it meets the statutory criteria which are clearly laid down. The grounds on which registration may be refused under the Bill are equally clear. They are: failure to meet the eligibility requirements, the condition of the ship in so far as is relevant to its safety or to any risk of pollution, and the safety, health and welfare of persons employed on board. These requirements are important and specific. To these the amendment would add a consideration that is very broad and quite different in character: the national interest.

The amendment offers no guidance as to how the discretion might be used. It would apparently give Ministers the right to move the goal posts at a late stage in the game and to say to people who have met all the statutory requirements making them eligible to register: "Sorry, you have met all the rules, you are fully eligible to register as a British ship, but I have decided to invoke the national interest to stop you registering". That would put Ministers in a very difficult position. On the other hand, they will be beset by lobbies and special interests and asked to use their discretion to refuse registration in particular cases. They may be asked to do so in conditions of considerable political sensitivity. If they decide to use that discretion, they will be removing rights from people who met all the requirements that the statute lays down, and no doubt there would be legal challenges as to whether the Minister had used his discretion reasonably. All this risks subtly changing our registration process from one which is sensibly administered according to statutory criteria and where people know where they stand, to one which is clouded with uncertainty and introduces a political element into the process.

The noble Lord, Lord Carmichael of Kelvingrove, referred to the events over the summer in the Gulf. In the past some very alarmist things have been said about that. I should like to make one or two comments to set matters in perspective. First, there has been a long history of foreign investment in the British merchant fleet, which we welcome. Noble Lords referred to it earlier in Committee. One thinks, for example, of Canadian Pacific and Esso tankers. These well-known names are ultimately owned by foreign countries, but we welcome their investment in the United Kingdom flag and the employment and shore-based business that they bring. There are other perhaps less-well known names besides. We should think very carefully before speaking as if we think that foreign ownership of UK flag vessels is somehow a bad thing.

Secondly, it has been suggested that there has been a flood of tonnage to the UK register. I almost wish that there had. In recent months some half dozen vessels owned by interests in the Gulf have joined the United Kingdom and Gibraltar registers. That is all. That is hardly the stuff to justify a major change in direction for our registration policy. It has also been suggested that the present arrangements are piling obligations on the Royal Navy's Armilla patrol. It is simply not the case that entering a ship on the British register entitles it to summon up a Royal Navy gunboat at the drop of a hat. Protection is not an entitlement. No particular level of protection is guaranteed. The Armilla patrol provides a carefully defined presence in a limited area, not a close escort.

The amendment represents an exaggerated response to a point that received a great deal of publicity in the summer but which we can now study from a cooler perspective. I do not believe that it would be in the interests of our shipping register to introduce an ill-defined element of discretion which in practice represents an element of uncertainty. For all the reasons that I have given in rejecting the amendment, I hope that the noble Lord will he able to withdraw it.

Lord Mulley

I agree with the noble Lord the Minister that the amendment confers a wide discretion on Ministers. I do not think that that is necessarily a bad thing. I happen to believe that Ministers should exercise discretion in the national interest.

What disturbed me enormously was that the noble Lord was speaking of going outside the statutory requirements for registration. However, if we provide this in the Bill it is a statutory requirement.

The other very alarming remark he made was that some people might seek to go to the courts to question the Minister's discretion. I share his concern on this very recent doctrine of judicial review. We see what is happening in the National Health Service. If we are not careful we shall have lawyers who have no competence for anything except interpreting the law and dealing with one version of events as against the other deciding these matters. If the Government are worried about this, as the Minister indicates, I share that worry. I wish that they would do something about it and stop the courts having the power to go beyond statute. Where the statute gives the right of recourse to the courts, that is fair enough. But let us take the example of the tolls on the Severn Bridge. The matter was challenged because a letter had been sent to the wrong person, and many people then claimed refunds. The Court of Appeal very sensibly said that this was nothing to do with the courts and threw the matter out. The authority then had to try to recover the money from the people to whom they had repaid it.

One cannot run the country if Ministers are afraid to take responsibilities in the national interest because they are afraid that somebody may sue them in the courts and question the exercise of their discretion. In this context the issue may be regarded as small, but it raises very substantial questions indeed.

Viscount Massereene and Ferrard

It is surely in the interests of Britain that ships owned by nationals of friendly powers should wish to be registered under the British flag. I understand that the largest ship in the world is now registered under the British flag.

Lord Carmichael of Kelvingrove

I am most grateful for the very apposite points that my noble friend Lord Mulley raised about the power of a Minister not being totally delineated in an Act but that he should have a general power to look at the national interest. We hope that the Minister will always do that.

I am interested in the Minister's suggestion that we are giving an opportunity for the goal posts to be moved and that after a person has satisfied all the statutory requirements the goal posts would suddenly be changed. If one looks at the requirements it does not seem as though they can be satisfied overnight, and the Minister would be well aware, long before the final application was made, that this move by the foreign shipowner to have his ship reflagged would not be in the national interest.

I am sure that nods and winks have been given before, or straightforward statements made, saying, "You are not going to be re-flagged no matter how many of the requirements you satisfy". The Minister stated that half a dozen vessels had joined our registers during the events in the Gulf over the summer. If there was little benefit, why did they change? If there was no extra protection from the British Navy, why did they change their flags? What were the reasons for their wishing to change the flag?

I do not think there has ever been an answer for the wider public outside. I have heard no indication in this Chamber as to why there was a sudden change other than the fact that they were given protection by the navy. However, that issue will probably be raised at a later point. I shall look at the point again. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 19 not moved.]

Clause 6 agreed to.

Clause 7 agreed to.

Clause 8 [Offences relating to furnishing of information and duty to comply with directions]:

On Question, Whether Clause 8 shall stand part of the Bill?

Lord Underhill

I am seeking to obtain some information from the Minister. Clause 8 concerns offences relating to the furnishing of information and a duty to comply with directions. Sub-paragraphs (1)(i) and (ii) provide on summary conviction for a fine not exceeding the statutory maximum. The Notes on Clauses state that this is currently £2,000. Paragraph (ii) provides on conviction on indictment for a fine. The Notes on Clauses state that this is an unlimited fine. Should there not be some indication given in this clause of the scale of a fine on summary conviction and some limits of the fine on conviction on indictment? I confess that I have no legal knowledge on this matter but in other clauses we have information of a scale or a maximum. That is not so here, although the Notes on Clauses give us some information.

If I have asked a question to which the Minister cannot readily reply I shall understand. Perhaps he will write to me to confirm the position. We shall then know whether the clause should be amended.

Lord Brabazon of Tara

At the present time I can only confirm the figures which I have given and which the noble Lord has found in the Notes on Clauses. They are £2,000 on summary conviction and an unlimited fine on conviction on indictment. I am told that the Bill uses the normal drafting. However, I shall write to the noble Lord, Lord Underhill, and expand on that.

Clause 8 agreed to.

Clause 9 [Amendments of Part I of 1894 Act]:

Lord Brabazon of Tara moved Amendments Nos. 20 and 21:

Page 7, line 34, leave out ("and")

Page 7, line 37, at end insert— ("(c) references to a ship being entitled to be registered shall be construed in accordance with section 4 of this Act; and (d) references to the ownership of a majority interest in a ship shall be construed in accordance with subsection (6)(a) of that section.").

The noble Lord said: I have spoken to Amendments Nos. 20 and 21 with Amendment No. 6. I beg to move the two amendments en bloc.

On Question, amendments agreed to.

Clause 9, as amended, agreed to.

Schedule 1 [Amendments of Part I of Merchant Shipping Act 1894]:

Lord Brabazon of Tara moved Amendments Nos. 22 and 23:

Page 44, line 25, leave out from ("(iii),") to end of line 27 and insert— ("(b) for paragraph (v) substitute— (v) A declaration that, to the best of his knowledge and belief, a majority interest in the ship is owned by persons qualified to be owners of British ships, and the ship is otherwise entitled to be registered."; and (c) at the end add— In the application of this section to a ship which is not wholly owned by persons qualified to be owners of British ships, paragraph (i) above shall have effect only in relation to persons who are so qualified."").

Page 45, leave out lines 20 and 21 and insert— ("(i) for the words from "by reason" to "British ship" substitute "to be entitled to be registered (whether because a majority interest in the ship is no longer owned by persons qualified to be owners of British ships or for any other reason)",").

The noble Lord said: I have spoken to Amendments Nos. 22 and 23 with Amendment No. 6. I beg to move the two amendments together.

On Question, amendments agreed to.

Lord Underhill moved Amendment No. 24: Page 45, line 40, leave out paragraph 13.

The noble Lord said: This relates to Section 22 of the 1894 Act. It provides for the granting of a provisional certificate for a ship becoming British-owned although abroad. There are subsequent amendments that seek to alter the duration of a provisional registration. I do not want to become involved in those arguments at this stage. The Government suggest one duration, and I believe that the noble Lord, Lord Mottistone, is suggesting a change of that duration. I am suggesting another change. It is therefore best to leave those arguments until we reach the amendments.

We suggest that the present system should be abolished altogether by deleting this reference, because the system is open to abuse. If one refers to the consultative document which was issued in 1984, paragraph 34 states that, although the Government believe that there is a need to retain a provisional registration, the present system is open to abuse: first, because it enables an unsafe ship to sail under the British flag for six months—we shall come to the duration later on—without any survey; and, secondly, because this cheap and convenient method of acquiring British nationality for a ship abroad could be exploited for criminal purposes. Surely there could be no greater justification for suggesting that the provision for temporary registration should be removed altogether. That is what the amendment seeks to do. If it should not be agreed we could deal with the duration of the temporary registration later on. This amendment seeks to remove provisional registration. I beg to move.

The Deputy Chairman of Committees (Lord Alport)

I have to advise the Committee that if this amendment is agreed to I shall not be able to call Amendments Nos. 25, 26, 27 or 28.

Lord Mottistone

It is most unfortunate that the noble Lord should seek to sweep away the whole of this paragraph. There are many occasions when provisional registration is of great value; for example, where a ship has been transferred to British ownership when abroad. It is not uncommon for that to happen. It is perhaps a pity that the noble Lord is not able to listen to what I am saying. It is an unfortunate amendment which should not be supported.

4.30 p.m.

Lord Brabazon of Tara

We need to have a system of provisional certificates to deal with the case of a ship acquired abroad, but the present system, as the noble Lord, Lord Underhill, said, has been the means by which some unsatisfactory tonnage has sailed under the British flag. It needs to be tightened up. The noble Lord, Lord Underhill, may not be aware that the effect of the amendment would be to leave the system as it is at present.

Paragraph 13 would tighten up the issue of provisional certificates by reducing the period of validity from six months to three months and providing that no further certificate may be issued within one year. It would also end the present anomaly whereby provisional certificates can be issued in foreign but not in Commonwealth countries.

These are modest but important changes. I am well aware that the noble Lord did not mean to do what he is doing with the amendment. The amendment would put us back to where we are at the present time and not get rid of the provisional certificates.

Lord Underhill

The noble Lord's last sentence puts me in a quandary. By leaving out paragraph 13 we believe that there would be no provision for provisional registration. If the position is as the noble Lord says, there is no purpose in pressing the amendment. All I can do is to read carefully what he and the noble Lord, Lord Mottistone, have said and in the meantime withdraw the amendment. However we are still of the opinion that there ought to be an amendment to delete the provision, but this may be covered by the period of duration which will follow in subsequent amendments. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Brabazon of Tara moved Amendment No. 25: Page 45, line 42, leave out ("a ship becomes the property of") and insert ("a majority interest in an. unregistered ship becomes owned by").

The noble Lord said: I spoke to this amendment with Amendment No. 6. I beg to move.

On Question, amendment agreed to.

Lord Mottistone moved Amendment No. 26: Page 46, line 19, leave out ("has been") and insert ("will be").

The noble Lord said: Thank heavens I can speak to this amendment! Paragraph 13 deals with the registration of ships that may have been bought overseas and will be far away. The whole point of provisional registration is that a ship is far away and formal registration cannot proceed for the time being. I suggest to my noble friend that it is wrong to talk in the past by saying, accompanying the master's application that an application for registry of the ship has been made", as it has almost certainly not been made because the ship is far away. It seems more sensible and better English, quite apart from realising the facts of the case, to say that, accompanying the master's application that an application for registry of the ship will be made", which will be made as soon as it can be when a ship reaches a position where it can make it. I beg to move.

Lord Brabazon of Tara

I cannot agree that our change to the 1894 Act would negate the purpose of provisional registry. We intend to make it clear in new guidance to consuls and high commissions that a simple letter to a United Kingdom registrar declaring that the owner wishes to apply for full registration will suffice as evidence that such an application has been made. I hope that meets my noble friend's point and that he will be able to withdraw the amendment.

Lord Mottistone

I do not think it does, and with the greatest respect to my noble friend, I do not think he knew what I was going to say. I shall look at what he said but I hope that he will look at what I have said with a view to this matter coming up again at a later stage either from his worthy mouth or mine. At this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Mottistone moved Amendment No. 27: Page 46, line 23, leave out ("three") and insert ("six").

The noble Lord said: This amendment seeks to establish the status quo. The current period of provisional registration is six months. It is not uncommon for a ship purchased abroad not to visit a port where there is a registrar for some considerable time. This can be expected to continue. There seems to be no real point in reducing the present time limit from six months to three months. I am concerned that in Amendment No. 28 the noble Lord, Lord Underhill, seeks to reduce it to one month, which would make the time limit even less practicable in real terms. In this case six months seems a reasonable figure and I cannot see that three months makes all that difference. We may as well stick to the status quo. I beg to move.

Lord Underhill

In moving Amendment No. 27 the noble Lord, Lord Mottistone, referred to Amendment No. 28 in my name and that of my noble friend Lord Carmichael. Therefore I think it would be for the benefit of the Committee if I make observations about our amendment and say why we prefer it to the noble Lord's amendment.

We suggest a period of one month. The Government suggest three months. The noble Lord, Lord Mottistone, wants temporary registration to go to six months.

Lord Mottistone

Not to go to but to remain at.

Lord Underhill

I beg the noble Lord's pardon. I base my argument partly on the consultative document issued in 1984 when the Department of Transport and presumably the Secretary of State at the time contemplated a temporary registration period of one month. I should like to quote from paragraph 34 of the consultative document, which says; It is therefore proposed that certificates of registration he made available for a period of one month only. Another possibility which could be considered is to refuse provisional registration unless the master of the ship can provide satisfactory certificates under the law of the state of previous registration except on condition that the ship will immediately proceed to a British port for survey and full registration". Therefore at that time the department, and presumably the Government, saw all the problems of temporary registration and wanted to reduce the period to one month. I do not know what has happened in the meantime to make it change its view to three months. Perhaps it was persuaded by comments. I do not suppose they were comments from the general council because I believe the view put forward by the noble Lord, Lord Mottistone, of six months is the view of the general council. It may be that the Minister can explain to us why the Government changed from their suggested one month, as in the consultation paper to which I have referred, and now propose three months in the Bill.

The problem is that the ship will not have been surveyed for United Kingdom statutory purposes. If such a ship arrives in a United Kingdom port with a dangerous cargo—and one can visualise various types of dangerous cargo—what steps can he taken to ensure that it can be unloaded or loaded in safety? We all know the position of the owner or driver of a motor vehicle for which a valid MoT test certificate has not been issued. He is only allowed to drive the vehicle to a testing station.

A ship which has not been properly surveyed could be more dangerous than an untested motor vehicle. The need therefore is to have as low a provisional registration period as possible. That is why we propose in Amendment No. 28 that the Government's proposal of three months should be changed to one month, which was the Government's original intention in paragraph 34 in the 1984 consultative document to which I have referred. I cannot move my amendment yet but I give notice that I shall move it at the appropriate stage.

Lord Geddes

In support of my noble friend Lord Mottistone I would strongly urge my noble friend the Minister to seriously consider my noble friend's amendment in this respect and maintain the status quo. Compared with other noble Lords—and I see one in his place this afternoon—I have but a mere paltry 25 years' experience in the shipping industry, but I can assure your Lordships that six months is not too long a period.

As I understand it, this amendment is being moved for purely practical reasons. I know many of your Lordships may find it amazing but it often requires up to six months to effect such a situation: to get into position and get, dare I say it, the red tape untangled sufficiently to get the proper registration made. Three months will be extremely short, and (although I realise this relates to the next amendment) one month would be hopelessly impractical. I strongly support my noble friend.

Lord Greenway

Following on what the noble Lord, Lord Geddes, has said, perhaps the Minister might be able to provide some clarification for me on this. Let us suppose that an English company purchases not a substandard ship—and I think basically that the noble Lord, Lord Underhill, is trying to cut out the substandard ships with his amendment—but a thoroughly modern and efficient container ship that has been built to all the latest international standards and wishes to operate it in the cross-trades (that is, the ship would never normally come to this coast at all). Is that company then duty hound within that six-month period to bring the ship hack to the United Kingdom to re-register it before putting it into its intended service?

Earl Attlee

I should like to support the amendment of the noble Lord, Lord Mottistone. If someone buys a ship and that ship is in a port and that port happens to be strike-bound, which happens, what would happen if you had only one month? I personally have been in the roads of Singapore and been at anchor for six weeks. I admit that that was at the end of the war. I think that three months is too short and I would support the amendment in order to keep the status quo.

4.45 p.m.

Lord Brabazon of Tara

There is obviously a difference of opinion between my noble friends and others and the noble Lord opposite, which leads me to believe that the Government have probably got the period of time about right. As the noble Lord, Lord Underhill, mentioned, it was originally one month in the Green Paper 1984 proposals, but following consultation with the General Council of British Shipping we have put forward the three months that we have in the Bill at present.

Having said that, the General Council of British Shipping has been unable to meet my department's requests for evidence that limiting the duration of a provisional certificate to three months would seriously inconvenience its members' operations. In this day and age I think that it would be unsatisfactory that any British ship should be allowed to sail under the British flag for up to six months without a survey, but if the occasional difficulty arises it would be open for the Secretary of State to grant a renewal under paragraph 13(5) of Schedule 1.

In answer to the noble Lord, Lord Greenway, and the noble Earl, Lord Attlee, our surveyors travel all round the world to conduct these surveys, so it is quite possible for a survey to be done in any port. The ship would not have to return to the United Kingdom for that to happen. On balance I think that six months would be too long, and we have accepted from the General Council of British Shipping that one month would be too short and would cause difficulties, so I hope that we can leave the Bill as it is presently drafted at three months.

Lord Mottistone

I was disturbed to hear my noble friend say that it would be unsatisfactory to have ships steaming around the ocean for six months, but they do that now. Therefore, presumably he is not happy with what is happening now. So far as I can understand from the advice that I have had, it may be that the General Council of British Shipping has not been able to convince my noble friend's advisers that three months would not be good enough, but I am not sure that his advisers have convinced my advisers that the present arrangement of six months is unsatisfactory and that there is all sorts of evidence that this is so. My noble friend did not say that there was any such evidence and nor did noble Lords opposite.

It seems to me that this matter is still open and we need to pursue the question as to why the six months that we have at the moment is not good enough. I hope that there might be discussions between now and Report stage when we can look into that to see whether there really is good evidence that the six months is not good enough.

Viscount Massereene and Ferrard

Will my noble friend Lord Mottistone agree that there are oceans and oceans? The North Atlantic can cause great stress on the hull, whereas other oceans may not. Therefore I cannot agree with my noble friend when he says that six months should be the proper time before the ship is surveyed when newly purchased by new owners. I personally would say three months, but there we are.

Lord Mottistone

My noble friend has his own view. First, may I point out that it is up to six months. Secondly, I do not think there is any evidence of British shipowners buying ships abroad which are in a terrible state of repair and which are liable to fall apart before they have been surveyed. Apart from anything else, that would be commercially stupid. There is much more to this and I am not at all satisfied that my noble friend thinks he has struck the happy medium. There is probably room for something nearer the six months that is the present state of affairs. In the meantime, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Lord Underhill had given notice of his intention to move Amendment No. 28: Page 46, line 23, leave out ("three months") and insert ("one month").

The noble Lord said: In the light of the Minister's statement that he could not accept this amendment, I shall not move it. But I still stand by what the Government said in their consultative document.

[Amendment No. 28 not moved.]

Lord Brabazon of Tara moved Amendments Nos. 29 to 36:

Page 46, line 37, at end insert— (".In section 24 (transfer of ships or shares), for subsection (1) substitute— (1) Any transfer of—

  1. (a) a registered ship, or
  2. (b) a share in any such ship,
shall be effected by a bill of sale, unless the transfer will result in a majority interest in the ship no longer being owned by persons qualified to be owners of British ships.".").

Page 46, line 38, leave out from ("transfer),") to end of line 39 and insert— ("(a) after "transferred" insert "in accordance with section 24(1) of this Act"; (b) for paragraph (b) substitute— (b) a declaration that, to the best of his knowledge and belief, a majority interest in the ship is owned by persons qualified to be owners of British ships, and the ship is otherwise entitled to be registered."; and (c) at the end add— In the application of this section to a ship which is not wholly owned by persons qualified to be owners of British ships, paragraph (a) above shall have effect only in relation to persons who are so qualified.".").

Page 46, leave out lines 43 and 44 and insert— ("(a) in subsection (1)—

  1. (i) for the words from "a person" to "under this Act" substitute "any person by any lawful means other than a transfer under section 24 of this Act and a majority interest in the ship remains in the ownership of persons qualified to be owners of British ships", and
  2. (ii) omit paragraph (b); and").

Page 47, line 1, leave out ("(1)").

Page 47, line 2, leave out from ("person"") to end of line 9 and insert ("for subsection (1) substitute— (1) Where the property in a registered ship or share therein is transmitted to any person by any lawful means other than a transfer under section 24 of this Act, but as a result a majority interest in the ship no longer remains in the ownership of persons qualified to be owners of British ships, then—

  1. (a) if the ship is registered in England and Wales or in Northern Ireland, the High Court, or
  2. (b) if the ship is registered in Scotland, the Court of Session,
may, on an application by or on behalf of that person, order a sale of the property so transmitted and direct that the proceeds of sale, after deducting the expenses of the sale, shall be paid to that person or otherwise as the court direct."").

Page 49, line 10, leave Out ("(1)").

Page 49, leave out line 11 and insert ("for subsection (1) substitute— (1) A person shall not be the managing owner of a registered ship unless he is a person qualified to own a British ship, and the name and address of the managing owner of any registered ship shall be registered by the registrar of the ship's port of registry.").

Page 50, line 23, at end insert— (".In section 69(1) (penalty for unduly assuming British character), for the words from "owned" to "own a British ship", substitute "in which a majority interest is not owned by persons qualified to be owners of British ships, and does so".").

The noble Lord said: I beg to move Amendment No. 29. I spoke to this amendment with Amendment No. 6. This is a large group extending to Amendment No. 36. With the leave of the Committee, I should like to move Amendments Nos. 29 to 36 en bloc.

On Question, amendments agreed to.

Schedule 1, as amended, agreed to.

Clause 10 [Regulation of registration in overseas territories by reference to categories of registries]:

On Question, Whether Clause 10 shall stand part of the Bill?

Lord Underhill

I should like to raise a few points on Clause 10. It deals with the regulation of registration in overseas territories and does so by reference to categories of registries. Subsection (2)(a) lists four such categories. I believe it desirable for the Minister to give details of the categories of ships envisaged in paragraphs (i) and (ii); that is, ships' tonnages or types of ships. There are also the rather vague, additional categories under paragraphs (iii) and (iv). Paragraph (iii) reads: any other specified matter, or", and (iv) reads: any combination of matters falling within one or more of the preceding sub-paragraphs". I have looked at the Notes on Clauses and I have gained no help in understanding the "other specified matters" or the "combination of matters". They state that the appropriate category would relate to the ability to administer and enforce the international safety conventions. Again there is no mention in the clause of the ILO or IMO conventions.

Paragraph 7 of the consultative document states: These international conventions place onerous duties on flag states which have adopted them. For the UK, which is a party to all these conventions, it is of paramount importance that regulations can be applied and enforced effectively on all ships registered in the UK and its dependent territories". Paragraph 10 states: In order to take the duties of a flag state it is now necessary, because of the substantial body of international shipping law, to have a permanent marine administration, including an appropriate number of professional surveyors". Dealing with Clause 10, paragraph 21 of the White Paper states that the new powers under this clause will require: a suitable marine administration". Will the Minister give details of what is regarded as a suitable administration in terms of resources, particularly the number, qualifications and experience of staff? Also, and possibly more important, will he detail the ability to supervise and enforce the requirements of IMO safety conventions and the relevant ILO conventions, including the important No. 147 convention which relates to minimum standards.

Clause 6(3) gives power to the Secretary of State to direct or refuse a registration under specified circumstances. Does the Minister agree that that power to refuse registration should be extended to registration in overseas territories? A refusal to register in the UK would, I believe, not prevent an owner from seeking registration in an overseas territory for a ship which is substandard by United Kingdom standards.

My comments relate to various paragraphs of the 1984 consultation document. For the purposes of the record, they are paragraphs 7, 10, 11, 12, 28, 29 and 30. I believe that points that I have raised are important and I should appreciate the comments of the Minister.

Lord Brabazon of Tara

I am grateful to the noble Lord for raising this matter because it gives me the opportunity to expand on our proposals in this clause and on the criteria which we would use in assigning dependent territories to appropriate categories.

The key question is whether the territory concerned is in a position to enforce the international safety conventions which form the basis of the Memorandum of Understanding on Port State Control. These are the Conventions on Loadline Safety of Life at Sea (SOLAS): Marine Pollution (MARPOL); International Regulations for Preventing Collisions (COL REGS); Standards of Training and Watchkeeping (STCW); and the ILO Convention No. 147 (Minimum Standards in Merchant Ships). In all but the last two cases the original conventions have been supplemented by later amendments and we would take those into account to the extent that the UK has acceded to them and they have come into force.

Enforcement requires two things—appropriate legislation and qualified people to administer and enforce it. As regards the first, we would expect the territory concerned to have in place legislation equivalent to the UK statutes, regulations and merchant shipping notices through which the conventions are enforced and administered in this country. Several dependent territories are now in the process of acquiring such powers and my officials are working closely with them for that purpose.

As regards personnel and resources, steps are now being taken by a number of territories to strengthen their marine administrations, in some cases by the appointment of surveyors from my department. In addition to this strengthening of the headquarters function, there is the very considerable amount of field work, such as surveying the ships and issuing them with the appropriate international certificates and the investigation of casualties. I have agreed to make available surveyors from my department on a repayment basis to carry out this work on ships registered in the dependent territories on behalf of the administrations there.

That will be done for a trial period, to be reviewed after two years of operation. The objective will be for the dependent territory registered vessels to be subject to a survey regime equivalent to that for UK vessels. Dependent territories will be assigned to a category which reflects these points. Those able to enforce the conventions will be assigned to the highest categories with, where appropriate, restrictions on certain types such as passenger vessels. Others will he limited as to the ships they can register; for example, shipping vessels and small ships.

We keep a close eye on resources and I am satisfied that they are sufficient to meet the tasks placed on the surveying services, including the work on behalf of the dependent territories.

The noble Lord asked a question in relation to Clause 6, the extension of powers to refuse registration on safety grounds to the dependent territories. Clause 50 makes provision for extension in provisions of the Bill to dependent territories.

Our aim is that, when all this is in place, the ships registered in dependent territories will be of at least as high a standard as those registered in the UK within the category to which they are entitled to register. I hope that the noble Lord will be happy with that explanation.

Lord Mottistone

I am advised by the General Council of British Shipping, as the Committee and my noble friend know. It welcomes the principle for this clause but is concerned that the regulations might be drawn up too tightly. Of course they must not be too loose. The council hoped that it would be consulted in the drawing up of the regulations. Can my noble friend give me an assurance that the general council will be consulted on the drawing up of regulations?

Lord Brabazon of Tara

We consult the general council regularly on virtually every subject in merchant shipping. I can give my noble friend the assurance that we shall consult it in respect of this matter.

Clause 10 agreed to.

Clause 11 agreed to.

Clause 12 [Separate registration of fishing vessels]:

5 p.m.

Lord Campbell of Croy moved Amendment No. 37: Page 10, line 4, leave out from first ("or) to end of line 5 and insert ("a period of six months beginning with the commencement of this Part,").

The noble Lord said: We come to Part II of the Bill in which the Government seek to introduce a completely new system for the registration of shipping vessels. The Committee will remember that at Second Reading I fully supported the Government in introducing the new scheme. For the benefit of the Committee, I shall briefly put this in context.

Advances in catching techniques, which, so far as the fish are concerned, entails lethal modernisation, mean that stocks of fish which are in demand for human consumption could be wiped out. There is the example of the North Sea herring. A ban had to be imposed on all fishing for about six years—an awesome example of what could happen. As a result, the European Economic Community evolved a system of quotas, which is in the best interests of the fishery industries of all the countries concerned because it means conservation. As part of the agreements, which were reached with difficulty, there had to be clarity on the nationality of the fishing boats involved because quotas are allotted to each country's boats.

In recent years this Chamber has heard me speak about the 50 or so Spanish fishing boats which managed to register at British ports and therefore were taking part in fishing under the United Kingdom quotas. That kind of change in nationality has the effect of upsetting the basis of the agreements. The Government are therefore introducing a new registration scheme, which, as I see it, is an attempt that I applaud to secure certainty on nationality and prevent vessels adopting disguises that happen to suit them at the time.

As part of that system, there is to be a transitional period, mainly for the benefit of vessels that are now on the register but of doubtful nationality, so that if they wish they can attempt to qualify for the new register. That transitional period was spelt out in paragraph 36 of the White Paper issued by the Government at the time of presentation of the Bill, although is not described as a transitional period in the Bill, where it appears at Clause 12(3)(b). The only fault I find is that there is no indication of how long that period is to be. The period of transition is to be prescribed by subordinate legislation to be introduced later by the Government, and it might be six weeks, six months or six years.

My amendment proposes that the period should be six months. I think I can claim that the amendment might be described as the apotheosis of reasonableness because of the timing. This Bill will take at least six months to go through Parliament. The owners of the vessels concerned can see its contents perfectly well and know that it is likely to pass into law. No doubt there will follow a pause before the commencement date for Part II of the Bill and then, if my amendment is accepted, a further period of six months will elapse. There will therefore be plenty of time for the vessels of doubtful nationality to prepare their case and gather supporting documents in an attempt to qualify for the new registration system.

I ask my noble friend the Minister, first of all, why the Government have not specified the transitional period in the Bill and why that period cannot now be made plain? Secondly, if there is some reason for not specifying it now, can he give some indication of what it will be—for example, whether it will extend to months or years? That will greatly reassure British fishermen. The Scottish Fishermen's Federation has been concerned about this matter and has been in touch with me. The Committee will remember that I have referred in the past to the support received from Spain and genuine Spanish fishermen who themselves disapprove of the boats which have been registered in Britain because they recognise that this practice distorts the agreements and does not help them.

I should like to remind the Committee that I was a member of the sub-committee which dealt with enlargement of the EC when Spain and Portugal were applicants to join. That committee reported to this House and in the ensuing debate sea fisheries were seen as one of the most difficult and important issues, particularly as regards Spain. Those difficulties were resolved and agreements were reached. I believe that they were good agreements and they were reached with difficulty. We should not now allow the adoption of disguises which distort those agreements and shake the confidence of fishermen who are expected to stick to the quotas and make the agreements work. I beg to move.

Viscount Massereene and Ferrard

I should like to draw attention to the fact that some years ago Denmark exceeded by about three times its quota of herring from the North Sea and nothing was done about it. Our quota was much larger than Denmark's but Denmark exceeded even our catch.

My noble friend Lord Campbell of Croy has raised the question of agreements. I am sorry to have to say it but I think that some of our partners in the EC are rather inclined to cheat on fishery quotas and exceed them. That may be going a little outside the question of this amendment but I think that if there could be some better policing arrangement on the high seas, we could ensure that such cheating does not happen.

Lord Parry

Obviously, I should much prefer to have on my side the noble Lord, Lord Campbell of Croy. We have always been on the same side during debates on issues with regard to the fishing industry ever since I joined him in this Chamber some 13 years ago. It goes without saying that to speak against an amendment that he has proposed is not an attractive proposition because of his formidable reputation and wide knowledge. However, there are one or two weaknesses in the argument that he has put forward which is not to say that there is not also a major weakness in the argument put forward in the Committee's whole consideration of the Bill as it affects fishing.

It seems to me that should we take to its extreme the argument of the noble Lord, Lord Campbell of Croy, in supporting his amendment, we would eliminate British Petroleum and ICI because 70 per cent. of the ownership of those companies is no longer vested in the citizens of Great Britain. I shall make that general charge first; we must be absolutely certain that when we lay down regulations or propose amendments to a Bill they are logical within the general context of the issues in question.

The Government are very properly seeking inward investment in the economy and doing everything that they can to encourage it. For example in today's Western Mail I read that the Secretary of State has spoken of a bid to woo Japan's banks. In circumstances where there is a definite, supported and long-term attempt to involve other nations in the development of the economy and specific aspects of the economy, perhaps it is quite wrong that we should be taking a nationalistic stance in this particular issue. However, I do not wish to lose support for my argument for the amendment in my name which follows, because I should dearly love to have the Chamber support me on it.

I wish to say that there are Spanish vessels which are vested in people who have established a long-term commitment to the Welsh economy. Those vessels, based where they are, are not simply serving their own interests, although of course these are paramount. I am sure that no one on the opposite Benches will criticise people anywhere in private enterprise for seeking to develop their own interests. But incidentally and directly, there is also a development of the fishing industry, which has been decadent in Wales during my entire lifetime. I have made a number of speeches in this Chamber about the decay of the Welsh deep-sea, middle and inshore fishing industries, and I have been supported by the noble Lord, Lord Campbell of Croy.

The present situation is that one has a number of young and enterprising individuals who see an opportunity to build up companies in both Spain and Britain to the advantage of the Welsh economy. It would be quite wrong if at this stage protectionist attitudes were to prevent their developing the business that they have. If we impose a six months' limitation, how can we expect a company to invest in all the necessary appurtenances for the redevelopment of the fishing industry in a port? Let me declare my interest. I am chairman of the Milford Docks Company. We have brought it through a very difficult period. We have refinanced and restructured it and have looked to the fishing industry—both the indigenous industry and the incoming industry—to help us to create a better economy. So I totally resist a further attempt to limit the Minister's discretion and I speak against the amendment.

Lord Mottistone

There is one point which I think the noble Lord, Lord Parry, overlooks and which my noble friend Lord Campbell of Croy mentioned. That is the very hard-fought common fisheries policy which we had to study at great length in the happy days when I was a Member of European Communities Sub-committee D. There was no doubt about it that that was worked out extremely carefully to meet the needs of all the Community nations. At that stage the Spanish were not part of the Community. They have now come in and have had to accept the rules of the game—of the club, if you like.

It seems to me wrong that we should do something which is potentially driving a coach and horses—such as the argument which the noble,Lord, Lord Parry, has put forward—through the principles by which the current common fisheries policy exists. It could be that in the passage of time other arguments will prevail and we shall move on. We have had two common fisheries policies, one just before we went into the Community, which troubled us, and now another one just before the Spaniards came in, and in 10 years' time or possibly even less the Community will no doubt address its attitude to this subject. But until that happens it is most important that we should safeguard what we have, and I see this part of the Bill as trying to do that. It is a pity to alter it in any way which gives special rights to the Spaniards, just because they were not there when the rules of the game were being drawn up.

Lord Parry

Perhaps I may say in response that the noble Lord, Lord Mottistone, is quite right. I totally applaud that degree of protection for the British fishing industry. I totally applaud, too, the emphasis on allowing the Minister discretion to decide. It is the limitation of that within this amendment to which I object. I am perfectly prepared to debate the other issue in relation to my own amendment when it comes before the Committee after this amendment is disposed of.

Lord Brabazon of Tara

We have probably heard deployed on this amendment some of the arguments that more properly relate to the amendment of the noble Lord, Lord Parry, which will come up next, about the whole issue of the common fisheries policy, quota-hopping and so on. My noble friend Lord Campbell of Croy said that there are about 50 quota-hopping, flag of convenience fishing vessels on the UK register. I have to tell him that the figure at the moment is approximately 129. So it is a serious problem.

Obviously I have some sympathy for this amendment. We shall of course want to avoid a protracted transitional period so that fishing vessels not eligible to register under the new rules will cease to be allowed to fish for profit. But managing the transition and investigating the eligibility of vessels to join the new register will be a major task and it would be rash to write a firm figure into the Bill.

We need flexibility to set the end-date by regulation, but I can assure my noble friend and other noble Lords who have spoken that we shall want to complete the transition as soon as we possibly can. I very much hope that it will be within six months, but I should like to keep the flexibility in the Bill as it is at the moment. I think it could be important in the future. So I hope that my noble friend will feel able to withdraw this amendment.

5.15 p.m.

Lord Campbell of Croy

I am grateful to my noble friend because he has given an indication of the kind of period which he envisages, which sounded similar to the one which I have in my amendment. The noble Lord, Lord Parry, and I, as he said, have taken part in various debates on other subjects on which we have usually been in agreement, and he has spoken on what is really the debate on his Amendment No. 38 which comes next. I shall comment only briefly on what he said.

The noble Lord started by telling us that if this principle were adopted large companies like BP and other corporations would be in trouble. But as I understand it that is the whole reason for Part I of the Bill being different from Part II. Part I of the Bill deals with registration of shipping in general. Part II, because of the problems which we have described, deals with a specialised register for fishing boats.

There is no way of having a workable system for the conservation of stocks of fish, other than by including the identification of fishing boats, being able to see them from the air and to police the fishing of various areas and zones. If boats were able to change nationality, like the Spanish boats have done, it would make a nonsense of the whole system. We would have to start another system. Having agreed on a system of this kind which depends upon the nationality of fishing boats, the registration of fishing boats is a separate subject and is dealt with in Part II of the Bill.

I know that the noble Lord, Lord Parry, has in mind the port of Milford Haven and I am well aware that that port had a fleet of British boats which were involved in distant and middle water fisheries, which have declined and have now virtually disappeared. I can quite understand that that port adopted the Spanish boats that were willing to come in and no doubt they have performed services there. So I understand the reason for his amendment. However, they simply must become British boats, completely UK boats, and shed their foreign nationality completely. If not, then they must be Spanish boats operating under the agreements with Spain.

I am grateful to my noble friend Lord Mottistone for expanding on the agreements which had to be reached on, first, the common fisheries policy and later—which was just as difficult a situation— when Spain and Portugal were joining the Community. Those agreements were successful and it would be absolutely wrong to drive a coach and horses through them now. So while sympathising with the particular difficulty in that port which the noble Lord mentioned, I think that the general principle which the Government are bringing forward should be the acceptable one. Having heard what the Minister has had to say, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 12 agreed to.

Schedule 2 agreed to.

Clause 13 [Eligibility for registration as British fishing vessel]:

Lord Parry moved Amendment No. 38:

Page 11 line 15, at end insert— ("(4A) Where in any case the Secretary of State is satisfied that—

  1. (a) the relevant persons or companies are nationals of an EEC Member State;
  2. (b) the relevant fishing vessel was at the date of the commencement of this Act registered under any of the enactments referred to in section 12(2) above; and
  3. (c) the relevant fishing vessel maintains a genuine and substantial connection with the United Kingdom.
then the Secretary of State shall dispense with the requirements of subsections (1)(6) and (c) above and, so long as the requirements of paragraphs (a) and (c) of this subsection continue to be satisfied, the said fishing vessel shall be treated for the purposes of this Part of this Act as eligible to be registered as a British fishing vessel. (4B) Where a fishing vessel has been treated for the purposes of this Part of this Act as being eligible to be registered as a British fishing vessel pursuant to the provisions of subsection (4A) above, if the owner of such a vessel, being a person who satisfies the requirements of paragraph (a) of subsection (4A) above, purchases another fishing boat to be used in substitution for the fishing vessel referred to in paragraph (b) of subsection (4A) above, or a fishing vessel to be used in substitution for a fishing vessel referred to in this subsection, then so long as the requirements of paragraphs (a) and (c) of subsection (4A) above continue to be satisfied, that substitute fishing vessel shall be treated for the purposes of this Part of this Act as eligible to be registered as a British fishing vessel.")

The noble Lord said: I beg to move the amendment standing in my name on the Marshalled List, and underline again the twin ironies that I do it as an unconvinced man as regards the values of the EC, and also have a life-long record of a deep interest in the British fishing industry as based around the Welsh coast and am supportive wholly of British fishing interests. Having declared my interest already, I do not propose to deal specifically with legal issues.

I understand that there is no dispute—and I shall be corrected by the Minister if I am wrong—about the unlawfulness of the Merchant Shipping Bill and the present draft of the proposed Commission regulations. I also understand that the Commission has started infraction proceedings against the United Kingdom in relation to the Merchant Shipping Bill. Indeed the noble Lord, Lord Brabazon of Tara, in a rather wistful and hopeful ending to his fishing references at cols. 1331–2 of the Official Report of 10th November said—I see that he is baffled— Noble Lords may well he aware that foreign interests—shall I call them? —attempted to take us to court even before this Bill was published, and I do not underestimate the difficulties of the possibilities of further attempted legal action, but I hope that the way in which we have drafted the Bill will preclude that". Precisely because my advice is that the Bill is unlawful and that there will be legal proceedings, I was anxious to put down an amendment which would remove that difficulty for the Minister. I want to deal with what is seen as being a complete failure to appreciate the real and growing links that exist between some of the vessels in question and the United Kingdom, particularly in my home port. It is this complete lack of understanding which lies behind the proposed Commission regulation and the Merchant Shipping Bill as I see it.

In the United Kingdom there are about 85 fishing boats. The numbers mentioned tonight have vied between 50 and 100. Although those boats are owned by United Kingdom companies, in essence very substantial Spanish shareholdings exist in those companies. Of those boats about one third have always been British fishing boats but have been sold by British fishing interests to Spanish fishing interests. Virtually all have been British fishing boats since before the national quotas were adopted and before the British Fishing Boats Act 1983.

Of the 85 boats only three have become British fishing boats since 1983. Therefore there is no question here of any temporary annexation to the British flag. I draw that to the attention of the noble Lord, Lord Campbell of Croy, whom I respect so much in that connection.

All these boats have since 1st January 1986, (which is also the date of Spain's entry to the EC) operated pursuant to licences granted by the UK authorities. In the main they fish off the west coast of Ireland for species of fish such as monk, megrim and hake which are not fished normally by other UK, Welsh or Irish boats. Therefore in many regards there is no conflict concerning the catches.

The basic requirement of the licence is that there should be a genuine economic link between the vessel and the flagged state. The licence purports to do this by requiring that three conditions are satisfied. One of the conditions requires a 75 per cent. UK or other EC crew other than Greek, Spanish or Portuguese. It is provided that such crew only satisfy this requirement if they are resident on shore in the United Kingdom. Thus a fisherman resident in Boulogne would not count. The whole crew must pay social security contributions to the United Kingdom. The vessel must operate from the United Kingdom. That can and is interpreted by the UK authorities as must operate from the United Kingdom. The vessel must make four landings in a United Kingdom port every six months, save that landings less than 14 days apart do not count.

Conditions one and two have been challenged by the owners of vessels. Such challenges include case No. 387, Agegate, and case No. 216, Jaderow, 1987. In both cases the Commission agrees with the contentions of the owners that the conditions are unlawful.

The owners of the vessels in question have not disputed that they must maintain a genuine economic link with the United Kingdom. They maintain that they have always achieved this by the vessels being managed in the United Kingdom, by the owning companies paying tax and VAT in the United Kingdom, and by the fact that they carry out very substantial financial activities in the United Kingdom. In 1986 some £7 million of both ordinary expenditure and capital expenditure was spent on behalf of or in relation to these vessels in the United Kingdom. That has not been disputed by the United Kingdom authorities.

The effect of the crewing condition in particular has in the past kept vessels away from the United Kingdom for fear of the very great penalties for failing to comply with that condition. That has meant that many owners have been unwilling to risk coming to the United Kingdom without some form of protection and having their vessels arrested by the United Kingdom authorities.

In the case of the Jaderow litigation, the owners of the vessels and the United Kingdom authorities came to an agreement. That is known as the Jaderow agreement and it is dated 19th May 1987. By that agreement it was agreed (inter alia) that the vessels need not comply with Condition one-the crewing requirement—until the judgment on Agegate was decided by the Court of Justice. This was again referred to by the noble Lord, Lord Brabazon of Tara, on 10th November. By that agreement it was also agreed that the United Kingdom authorities would not place any reliance upon any alleged breach of the operating condition for the period 1st January 1986 to 30th June 1987.

In return the owners agreed, without prejudice to their contention as to the unlawfulness of that condition, to comply with that condition by calling into United Kingdom ports on at least four occasions in each six month period. This agreement is, at the United Kingdom Government's insistence, to last only until the Agegate judgment.

Consequent upon that agreement the vessels in question have since 1st July 1987 been calling regularly at United Kingdom ports. By early October approximately two thirds of these vessels had made at least half of the required calls. Indeed some vessels had already made all their calls. The owners have no doubt that by the end of the year all the vessels will have performed the required number of calls, except for those vessels which have been tied up for all or substantially all of that period. Those vessels have been landing some fish at the local markets.

As regards the economic ties, I wish only to say one thing. I repeat that I say this particularly because I am happy to see the noble Lord, Lord Crickhowell (who was Secretary of State for Wales for six years), in the Chamber. He was very much responsible for the initiatives which have sought inward investment from foreign sources in the economy of Wales. I must reiterate my tribute to what he did and welcome him to the Chamber although he and I fought three general elections in opposition to one another.

The important initiatives taken to strengthen the economy of Wales are being contributed to by the Spanish fishing boat interests. In my amendment I am asking that we strengthen the position of the Minister. The Minister has already gone a little way towards accepting this. I beg to move the amendment standing in my name.

Lord Campbell of Croy

The noble Lord, Lord Parry, has indeed moved his amendment in a way which was to be expected after his interventions on the previous amendment. I say straightaway that he rightly paid a tribute to my noble friend who is sitting beside me and who has only been in your Lordships' House for a few days and has not yet made his maiden speech. Therefore he cannot speak in this debate. However, the noble Lord, Lord Parry, was quite right to pay that tribute to what my noble friend has done for fishermen in Wales.

What the noble Lord, Lord Parry, has said means that I must dilate briefly on the agreements reached when Spain and Portugal joined the EC. The traditional fisheries which Spanish vessels had prosecuted outside the EC waters were continued. Spain has fished traditionally off West Africa and still fishes in distant places such as the South Atlantic. Every encouragement was given to the Spanish fishing fleets to continue fishing there.

As the noble Lord mentioned, where Spanish boats were fishing for species which are not favoured in this country and are the kind of fish which the British housewife does not buy at the fishmonger's, Spain was able to continue fishing or to fish more, or even not to have quotas imposed. But as regards the fish at risk or the fish which are in demand for human consumption, the common fisheries policy already applied. In that case, we had to negotiate very carefully with Spain and Portugal and reach an agreement. That meant that the common fisheries policy which had already been agreed was virtually untouched. Spain accepted that all the other things which the EC was able to help it with enabled its fishing fleets to continue as before. I think that we are in agreement on that, but it is still essential that the common fisheries policy should be carried out. As one of my noble friends suggested just now, there are suspicions among fishermen that the fishermen of other nations are cheating from time to time. That makes it even more important not to make an enormous loophole in agreements of this kind.

It must be made absolutely clear what nationality the fishing boats are. We must know which vessels are British and which are Spanish. If there are chameleon-like changes from time to time the conservation of stocks will be impossible. It will not be possible to regulate the arrangements in order to carry out the agreement.

As I said just now, I do understand the Milford Haven situation; but I am told that everyone in that area and all the fishermen there do not agree with what the noble Lord has suggested. There is a school of thought which supports the noble Lord; but I am told that there is a contrary view too. I can tell the Committee quite categorically that the fishing industry in other parts of the country is completely behind the Government on Part II and on the registration of fishing boats which will introduce a completely new system.

I can also say the same of Scottish fishermen. Their organisation has made it quite clear that, although they want to ask questions about the system, they approve of the whole principle behind the system. I have also had messages from the fishermen of the South-East of England who, again, are completely in favour of the system and absolutely against what is suggested by the noble Lord, Lord Parry. Therefore, while I have sympathy with his particular point and the port with which he is concerned, I advise the Committee not to accept the amendment.

5.30 p.m.

Lord Greenway

The noble Lord, Lord Parry, moved his amendment in his usual elegant manner. However, has he considered the furore that would arise if one of his Welsh fishing vessels even proceeded near the Spanish coast, let alone tried to re-register under the Spanish flag?

Lord Gray of Contin

It seems almost unfair to rise as another of those who take issue with the noble Lord, Lord Parry, in what he seeks to do. We all appreciate the great sincerity with which he moved the amendment and we share his concern for those who fish from the port which is closest to his heart. Nevertheless, I think that the point made by the noble Lord, Lord Greenway, is extremely valid.

It would be wrong for me to sit silent, having moved earlier this afternoon an amendment which sought to give protection to British offshore supply vessels in their own sector of the North Sea against the invasion by Norwegian, American and other European vessels. That involved the principle which the noble Lord seeks to break by making a special case for Spanish fishing vessels in UK waters.

I know only too well, as my noble friend Lord Campbell of Croy has said, that the Scottish fishermen feel very strongly about the matter. In fact, I can think of few things on which the feeling of Scottish fishermen is stronger than on the intrusion of Spanish fishing vessels into the protection of the British flag. The principal reason that they are so offended by that trend is the quota system which my noble friend Lord Campbell described earlier. We now have Spanish vessels operating under the British flag and using up what British fishermen—not just Scottish fishermen—see as their share of the very hard-won quota fixed in the negotiations which took place a short time ago.

Although I am reluctant to do so, I must add my voice against the amendment which the noble Lord, Lord Parry, seeks to move. I hope that the Minister will not be persuaded by the eloquence of his arguments.

Lord Brabazon of Tara

We all admire the noble Lord, Lord Parry, for the eloquence with which he moved the amendment, and for the deep interest which he has in Milford Haven and in Wales. However, the fact is that the amendment would completely undermine the purpose of this part of the Bill, which is to preserve United Kingdom quotas for United Kingdom fishermen. As noble Lords have said, the EC quota system has worked well, which is perhaps more than can be said for some other parts of the common agricultural policy.

The amendment would give grandfather rights to fishing vessels owned by EC nationals already on the United Kingdom register. It would also give those rights to EC-owned vessels which join the register between now and commencement—an open invitation to more foreign interests to come in and fish against United Kingdom quotas. It would allow substitutes for those vessels so that quota-hopping would continue in perpetuity.

The amendment would require the fishing vessels concerned to maintain a genuine and substantial connection with the United Kingdom. But as it would also disapply the clear requirements set out in Clause 13(1) for the vessel to be managed and its operations directed from the United Kingdom, and for the manager and operator to be British, it is hard to see what the substance of that condition would be. Certainly if those vessels operate as the existing quota-hoppers do, their crews will not be British and most of their catches will be landed out of the United Kingdom.

The noble Lord, Lord Parry, referred to that matter in part of his speech and said that in recent months they have been making some appearances in the UK. However, most of the landings are overlanded to Spain where beneficial ownership resides. The boats are manned mainly by Spanish crews.

The noble Lord, Lord Parry, also asked me about legal actions which have been taking place. We believe that this part of the Bill is compatible with our obligations under the Treaty of Rome. I am not aware of any proceedings by the European Commission against the Government in that respect. There was a legal action in the United Kingdom courts by certain foreign interests—not the Commission—to the proposal to introduce this Bill. That case was withdrawn by the interests concerned and costs were awarded against them.

As regards the point about quota-hoppers who fish for species mainly not fished by United Kingdom fishermen, the quota restrictions have been necessary in recent years for stocks on which quota-hoppers concentrate. In some cases, fisheries have had to be closed prematurely. That has had a serious effect on genuine UK fishermen fishing for those stocks.

As noble Lords have said, the proposals in the Bill have the unanimous support of fishermen all around the United Kingdom. The amendment would allow foreign interests to continue their fishing against our quotas in perpetuity. Therefore I must ask the noble Lord to withdraw the amendment.

Lord Parry

The Committee and the Minister have been very kind. Many nice words have been said, although my amendment has not attracted much support. I shall return to it when I have the opportunity.

I neglected to mention one important point. There is an indigenous fishing industry or a small element of it left in Milford Haven. It has been part of the economy and has underpinned that economy in good times and bad. It would be wrong for me not to refer properly to those people. The noble Lord, Lord Campbell of Croy, is right in saying that they see their interests being threatened when other people deal in that market.

In response to the debating point offered, I can well imagine that at earlier points in our history there might have been a great deal of truculence to the Japanese companies which are now seen as such a vital part of the economy of Wales. Such things change. I prophesy that the owners of those boats will continue to trade and they will help to build up the local economy because they are committed to the British economy and are seeking the right to trade properly. They do not see themselves as quota-hoppers; they see themselves as young, vibrant and strong, with job opportunities to offer. I am sure we shall hear more of them in the future.

Amendment, by leave, withdrawn.

Lord Grimond moved Amendment No. 39: Page 11, line 44, leave out ("75") and insert ("85").

The noble Lord said: Amendment No. 39 is a probing amendment. It seeks to increase the percentage from 75 per cent. to 85 per cent. That is relevant to the designation of boats. The fishermen with whom I am in touch, like fishermen all around the coast, are in favour of the main principles embodied in this Bill. However, I was asked the reason for the figure of 75 per cent. They would prefer a higher percentage. I said that I did not know why the figure of 75 per cent. had been chosen and I rather doubted whether the Government knew. I thought that it was probably an opening shot or a minimum and that it might be increased. However, I see no harm in asking the Government why they have chosen 75 per cent. I emphasise that if that proves inadequate they may increase the percentage that is laid down in the Bill. I beg to move.

Lord Brabazon of Tara

Where to set the relevant percentage is to some extent a matter of judgment. We believe the figure of 75 per cent., which is a stringent one, is as much as is necessary to secure the objectives which we have in the Bill. It would not be helpful either to set a figure which might be thought in Brussels or elsewhere to be disproportionate to the problem we are trying to solve.

Nevertheless, if this figure should prove inadequate there is provision, as the noble Lord said, to increase it in the Bill. I think that situation is covered. For the time being, we think the figure of 75 per cent. is the right level to go for.

Lord Mackie of Benshie

Can the noble Lord tell us in what circumstances it would be inadequate? It seems to me to be curious to put a figure of 75 per cent. and then say that it may be increased to 100 per cent. Can the noble Lord tell us in what circumstances it would be inadequate?

Lord Brabazon of Tara

The answer to that is, I should like to see how the thing works out. If our aims do not appear to be working out that might be the time when we would have to raise the limit.

Lord Mackie of Benshie

I am sorry to be awkward. Does the Minister mean that at 75 per cent. there might be a certain amount of cheating? In other words, you take 25 per cent. and then go on to lend money and thereby achieve control. The Minister really must know more about it than that.

Lord Brabazon of Tara

The object of the exercise is to eliminate quota-hopping. if we find that by setting a figure of 75 per cent. for ownership we eliminate quota-hopping, then we will have achieved our objective. That is really all I can say about it.

Lord Grimond

I am grateful to my noble friend Lord Mackie for putting these difficult and probing questions to the Government. I am satisfied that the Government have indicated that if the main purposes of this Bill are failing—that is to say, that quotas are being abused and that they can be attributed in any way to an inadequate percentage or other unforeseen results—they are perfectly willing to look at the matter again and to increase the percentage up to 100. With that undertaking, with the leave of the House I am prepared to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 13 agreed to.

Clauses 14 to 17 agreed to.

Clause 18 [Transfer of vessel by bill of sale]:

Lord Brabazon of Tara moved Amendment No. 40: Page 14, line 33, at end insert (",unless the transfer will result in the vessel ceasing to be British-owned for the purposes of section 13(1)(a).").

The noble Lord said: This is a technical amendment which has no substantive effect on the requirement of the clause. Our interest is in ensuring that vessels which change hands into foreign control are removed from the register. Clause 22 requires the owner to advise the Secretary of State of any changes affecting eligibility to remain registered and which would apply to a sale to foreign owners. I beg to move.

On Question, amendment agreed to.

Clause 18, as amended, agreed to.

Clauses 19 and 20 agreed to.

Schedule 3 agreed to.

Clauses 21 to 24 agreed to.

Clause 25 [Financial assistance in respect of costs of training merchant navy officers and ratings]:

Lord Underhill moved Amendment No. 41: Page 19, line 39, leave out from ("give") to ("for") in line 40 and insert ("the Merchant Navy Training Board").

The noble Lord said: This clause deals with the financial assistance for the training of officers and crews in the merchant service. Clause 25(1) provides that financial assistance in respect of the cost of training may be given by the Secretary of State to any person or body of persons of any description determined by him. We seek from the Minister some clarification as to what that may mean. In our view, public money should be dispensed by public agencies and not by any charities or by quasi-professional bodies.

When one refers to the Second Reading on 10th November one gets a feeling that there were suggestions that a charity might be involved. We consider it absolutely illogical to involve a charity by way of a careers advisory service because we believe that is the job of industry, the principal parties being the employers and the employees.

I understand that the Merchant Navy Training Board is an industry-funded institution which could perform this function if adequate resources were made available to it. The hoard is composed of employers, employers' representatives, representatives of the Department of Transport, of the Department of Education and Science and education and college interests. That is why in this amendment we propose to delete reference to any person or body of persons of any description determined by the Secretary of State and to put the responsibility on the Merchant Navy Training Board.

The Minister very helpfully gave us some figures of the actual assistance to be given in 1988–89 and in 1989–90. I wonder whether the Minister is in a position to indicate the Government's thoughts as to what proportion of costs borne by the employer will be met by the department. Can the Minister also tell us what proportion of the money available will be used to relieve training costs to employers? The Government must have some proportions in mind in determining the actual figures of assistance. I shall be grateful if the Minister can help on those two points. Meanwhile, I ask leave to move also Amendment No. 42 because it is merely a consequential amendment.

The Earl of Inchcape

I welcome Clause 25, which will provide very useful aid to the shipping industry. All aid for training is welcome when times are hard and all expenditure that is not vital to the running of a ship has to be cut back. In the short term training is not vital and times have been very hard. Now there is a growing shortage of trained officers coming through and this aid should stimulate increased training efforts by companies.

Lord Mottistone

There is a small point I wish to raise purely for clarification. As I remember it from my training board days, the Merchant Navy Training Board was a voluntary one. It was not established by statute. I imagine that with the passage of time, if it so suited the shipping industry, who support it and who created it, to wind it up and this amendment went through, then we would be lost as to who should be given the financial assistance.

It seems to me that the present wording of the Bill provides for "any body", which could be the Merchant Navy Training Board. I hope and expect it to be so as long as that body exists. Surely in statute one needs to be sufficiently broad to take care of eventualities.

Lord Greenway

In following the noble Earl, Lord Inchcape, I should like to add a word of welcome for this clause. As I understand it, it is a general, enabling clause. The exact intentions of the Government have not yet been made clear.

Training is one of the crucial elements, as I see it, for the continuance of a strong merchant navy in this country. I think there are many matters which have to be taken into account, and many different organisations have to be consulted. The clause is a welcome addition.

Lord Brabazon of Tara

We are all agreed on the importance of training to the industry. That was made clear on Second Reading, and indeed again by my noble friends and the noble Lord opposite this afternoon.

This clause contains enabling powers to allow the Government to provide assistance with training. These powers have deliberately been cast in a generalised form to allow a degree of flexibility in the way in which the assistance is to be provided. Noble Lords will be aware that, with all interested parties, we are developing a scheme to provide this assistance. The details, including how the assistance is to be channelled to recipients, have yet to be settled. I am afraid that I have nothing further to say to the noble Lord, Lord Underhill, beyond what I said on Second Reading when I gave the amounts of money available next year and the year after.

I cannot at present say what proportion of training costs will be met by this assistance. However, the intention is to provide those who employ and sponsor trainees with an incentive to increase the number of cadets taken on. The power in the clause, as drafted, would enable this assistance to be provided to any person or body of persons that the Secretary of State may determine. Of course, this would include the Merchant Navy Training Board. I am not convinced that the board would be a suitable recipient and certainly not the sole recipient. The MNTB's main function is to establish the content of training. It does not carry out any training and does not take on any cadets. If our assistance is to be effective in increasing the number of cadets being trained, the assistance must be channelled to those who take on cadets and who currently bear the cost of the training. We are looking at different ways in which the assistance might be channelled to them. However, this would be an administrative executive function and the MNTB is unlikely to be an appropriate organisation for such a task.

The noble Lord, Lord Underhill, mentioned that a charity might be given some of the money to distribute. That was referred to on Second Reading; and, indeed, we hope that that particular charity, the Marine Society, may be ready to help with publicity for the scheme, but I do not believe that it has been suggested—and we are not now suggesting—that it might act as agent in dispersing the grants. I believe I can allay the noble Lord's fears on that point.

I believe that the way we propose to administer this will he the best way; in other words, by paying the money to people actually involved in the training. The amendment proposed would be very restrictive and would inhibit the Government's ability to provide assistance with the training of seafarers—assistance which we are all agreed is worth while and necessary.

I hope that the explanation I have given—even if I have not been able to go into more detail than on Second Reading—will enable the noble Lord to feel that we are going about it in the best way.

Lord Underhill

I am grateful to the Minister for what he said, in particular his assurance that there is no intention that a charitable body as such will be used for the actual administration of the grants. There is no difference between us and other noble Lords in the House. The fact that a proportion of the training costs is to be met by the Government is a very useful addition to the merchant shipping industry. We are all in agreement that that is a very useful provision.

I shall seek further advice on what has been said about the Merchant Navy Training Board. I may come back to it on Report, depending on the advice I receive, but meanwhile I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 42 not moved.]

Lord Underhill moved Amendment No. 43:

Page 20, line 4, at end insert— ("( ) The financial assistance provided for in subsection (1) above shall be granted only to British citizens serving on ships manned by masters and officers holding a United Kingdom certificate of competence.").

The noble Lord said: There are two principles in Amendment No. 43. The amendment provides that any financial assistance should be granted only to British citizens serving on ships which have been manned by masters and officers holding a UK certificate of competence.

The first principle of course is that training should be given only to British citizens and on Second Reading the Minister said: It will be essential for proper supervision of the training programme for training to be carried out on ships manned by senior officers holding United Kingdom certificates". We had in mind to add to our amendment that training should be given only on UK-registered ships; but the Minister continued in his reply—and I quote from the same column: I naturally hope that most of the training will be done on United Kingdom registered ships, but we would not want to rule out the possibility of training on other ships with United Kingdom certificated officers".— [Official Report, 10/11/87; col. 1329.] We have accepted that argument put forward by the Minister and that is why the amendment is in its limited form. We hope that it will meet the Minister's approval and that he will accept it.

Lord Mottistone

In practice, most of those receiving financial assistance are likely to be British citizens and will be serving on ships manned by masters and officers holding a UK certificate of competence. However, nationals of the Republic of Ireland and some Commonwealth countries are also entitled to obtain UK certificates of competence or have their national certificates of competence recognised by the UK. This clause would prevent assistance being given to a cadet resident in the UK who happened to be an Irish national or to trainees serving on ships, any one of whose officers happened to hold an Irish or Commonwealth certificate of competence. I suggest that this clause therefore becomes unnecessarily inflexible.

Lord Brabazon of Tara

As drafted, this amendment would mean that funding in respect of Merchant Navy training could be provided only to British citizens serving on ships manned by UK certificated officers. As I have already explained, our intention at present is to provide financial assistance to those organisations—primarily shipping companies—who sponsor and employ cadets, rather than to the cadets themselves. The amendment would prevent that. But from the comments made by the noble Lord, Lord Underhill, I understand that the intention behind the amendment is to limit the assistance to costs incurred by companies in respect of the training of British citizens on ships manned by UK certificated officers. I appreciate that there may be a case for placing a restriction on the nationality of trainees, although I am not sure that this needs to be done by statute. I am however willing to consider whether it would be possible or appropriate to incorporate such a restriction in the Bill, though I bear in mind what my noble friend Lord Mottistone said on this point.

I am less convinced of the need for a statutory restriction as to the certification of officers. As I explained on Second Reading, it is certainly our intention that training should be carried out on ships with senior officers holding UK certificates. But I would not want to rule out the possibility that junior officers might hold equivalent non-UK certificates. Nor do I think that we should rule out the possibility that in certain special cases exceptions might be made to allow training in other ships. I think therefore that it is important that an element of flexibility should be maintained—the point made by my noble friend Lord Mottistone. Restrictions on the manning of vessels used for training can always be imposed administratively and it should not be necessary to enshrine them in primary legislation. Therefore, with those remarks and the assurance that I should like to look again at the first point made by the noble Lord, Lord Underhill, I hope that he will feel able to withdraw the amendment.

Lord Underhill

I readily do so and I am grateful to the Minister for agreeing to look again at the first part of my amendment. We shall look carefully at the second part and also at the point raised by the noble Lord, Lord Mottistone. That was drawn to my attention after the amendment was put down. It is obviously a point of some importance. I welcome the Minister's assurance that he will look again at the first matter and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Underhill moved Amendment No. 44: Page 20, line 5, leave out ("or a loan or otherwise").

The noble Lord said: This is a probing amendment. We cannot understand why the words, grant or a loan or otherwise", should appear and we are proposing to leave out the words, or a loan or otherwise". If it is to be of assistance to the merchant shipping industry, surely it must be a grant.

I do not know what "otherwise" could be. If one is giving a grant it is to assist the industry and everyone agrees that every little help is welcome, but a loan is taken back. Incidentally, subsection (2) states that, the Secretary of State may impose such conditions as he thinks fit". What are the conditions he may wish to lay down in giving a grant? The main point which I think everyone has welcomed in this clause is that not only will it assist the numbers being trained but it will also be of some limited financial help to the merchant shipping industry. The amendment confines itself merely to leaving out the words, or a loan or otherwise". I beg to move.

6 p.m.

Lord Brabazon of Tara

As I explained on the previous amendment, the powers have deliberately been widely drawn to allow sufficient flexibility in the administering of the assistance scheme which is being developed. In practice I would certainly expect the financial assistance towards seafaring training to be provided in the form of grant. However, I do not think that we should rule out the possibility that other forms of funding might also be appropriate. For this reason it is important that the present flexibility should be maintained.

I am informed that the form of words used in this clause is fairly standard in legislation. That is probably why we have used it again here. However, as I have said, we would certainly expect the assistance to be provided in the form of grants, but we would not want to rule out the possibility of other means as well if that seemed to be appropriate at the time.

Lord Underhill

I understand the desire for flexibility and using the word "otherwise", but I am afraid the Minister has not explained why we need the words "or a loan". I am certain that is not the usual provision when we are talking about giving grants to any bodies or industry. It is the word "loan" that particularly worries us. To give a grant but to say that a body will pay it back hardly seems to be helping the merchant industry. That surely is carrying flexibility a bit too far. Nevertheless I will read carefully what the Minister has said. I have no doubt we will come back on this question of the loan at the next stage. In the meanwhile, I beg leave to withdraw.

Amendment, by leave, withdrawn.

On Question, Whether Clause 25 shall stand part of the Bill?

Lord Underhill

I should like to raise a point here. I recognise I should have given the Minister notice that I was going to ask this. On these matters we not only welcome the briefing that we are given by the General Council of British Shipping, but also the advice which we receive from the National Union of Seamen, and from NUMAS, the officers' union. NUMAS is concerned with one particular matter. I put this in the form of a request to the Minister. Will he confirm that officers studying for higher grade certificates of competency will receive assistance towards meeting the costs involved? Many officers are not covered by industrial arrangements providing for study leave. Alternative entry and course arrangements mean that many officers do not gain exemptions from academic subjects, hence the time ashore, college fees and examination fees are costly. Assistance at the entry and training stage should be carried through to higher certificate levels if the Government aim to achieve availability of sufficient qualified officers is to be fulfilled.

NUMAS are paticularly worried about this aspect. I will readily understand if the Minister feels that he must write to me. Perhaps he can give an answer to this matter now. He has done so very well on other occasions, and it looks as though he might be able to do so now.

Lord Brabazon of Tara

I am able to answer without taking advice. Our primary priority is of course to tackle the shortage of cadets. But I certainly would not rule out the possibility of assistance for officers training for higher qualifications, and of course the powers in the Bill will allow for this. I hope that goes some way to meeting the noble Lord's concern.

Clause 25 agreed to.

Clause 26 [Financial Assistance in respect of crew relief costs]:

Lord Carmichael of Kelvingrove moved Amendment No. 45: Page 20, line 31, leave out ("or a loan or otherwise").

The noble Lord said: This is not, as it may appear, the same as the previous amendment merely because the words are the same. However in the context it appears to me to be quite different. Here we are talking about the relief costs for crews coming from other parts of the world on leave. Therefore it does appear that the cost will be known well in advance, and the crew should be given a note or understand exactly how much is going to be paid—what proportion—regarding the cost of their getting back to the UK. That should be known and told to them. Therefore the question of having a loan involved in it seems to be quite unnecessary. I hope the Minister will agree this is a small point. The Minister is still left with a fair amount of flexibility; but at least a crew member should know exactly the repatriation cost to this country. I beg to move.

The Earl of Inchcape

I should like to welcome this clause as an aid for the industry. Repatriation costs will particularly help companies whose ships are permanently trading abroad. Crews have to be repatriated for leave every four to six months. Costs of flying them back from, say, Japan or Australia and flying crew replacements out to the ship is very substantial. As in the previous case, how the Government's scheme will work still has to be explained to the industry. In principle, this clause will provide help similar to that provided for many years to Norwegian, Danish and Swedish owners by their governments.

The Minister will not be surprised, however, if I warn him that these measures alone will not be enough to stop the decline of the UK-owned fleet. Indeed, the industry is disappointed that the repatriation aid has not been extended to British subjects serving on UK-owned British ships registered in the dependent territories such as Gibraltar or Bermuda. These ships are required by law to carry British senior officers. We cannot see why they should be excluded. Despite that grumble, I welcome this clause. It is useful in its own right so far as it goes.

Lord Brabazon of Tara

My answer to this amendment is really going to be very similar to that on the previous one of the noble Lord, Lord Underhill. The amendment is of course very similar as well.

What we are trying to do here is to allow flexibility for the development of the arrangements for providing assistance with crew leave costs which are currently under consideration. I make one point. I think the noble Lord opposite may have a slight misunderstanding. The money will be paid to the shipping companies, not to the crew members. It will be the shipping companies who receive this subsidy towards flying the crews backwards and forwards, not the individual crew members. They are of course entitled to be flown back at the intervals which are specified in their contracts; so they have to be flown back anyway. It is a question of helping the company with their costs. It is not meant to be a means for the crew members to ask for more trips home in a given year. I think I ought to make that clear.

It is our intention that the assistance should be made available in the form of grants. As I said on the last amendment, we should like to have the possibility of flexibility should another form of financing be more appropriate. As I have said, the intention is to give grants, but it might be that at some time in the future another form of financing was more appropriate.

My noble friend Lord Inchcape, to whom I am grateful for his remarks about the clause so far as it goes, asked why the assistance would not be available for vessels registered in the dependent territories. We have looked closely at this, and we had to conclude that there would be difficulties of administration and accountability in extending the scheme to cover such ships. I am also not sure that it would be an appropriate use of British taxpayers' money to support dependent territory shipping in this way. So it is to be restricted to British, UK and Crown dependency registers at the moment.

Lord Carmichael of Kelvingrove

I thank the Minister for that reply. I am glad that he mentioned accountability. How the money would be lent and how it would he accounted for was causing us some concern. The Minister rightly said that the money would be payable to the company. There will be a transfer from the company to the officers and crew who are being returned. There are a few points in his answer that need looking into; but, in the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carmichael of Kelvingrove moved Amendment No. 46:

Page 20, line 40, at end insert— ("(5) Only shipowners and crew who are liable to pay United Kingdom tax may benefit from the provisions of this section.").

The noble Lord said: From what the Minister said towards the end of his previous remarks, he should agree with this proposal. He made it clear that the Government's object was not to help Commonwealth countries' crews but to help British crews. The amendment merely asks that only shipowners and crews who are liable to pay United Kingdom tax benefit from this clause which gives relief for the repatriation on holiday of British crews. I am sure that the Minister will be only too pleased to approve of the amendment or to take it away for consideration. I beg to move.

Lord Mottistone

In practice, the only shipowners who would benefit from the provision are those who are tax-resident in the United Kingdom. Some of their crew may not be tax-resident in the United Kingdom. However, the crew agreement may still require them to be repatriated to the United Kingdom before they make their own way to their homes in, say, Ireland or the Channel Islands.

I am interested to see that Clause 51 provides: 'Relevant overseas territory' means—

  1. (a) the Isle of Man,
  2. (b) any of the Channel Islands, or
  3. (c) any colony".
The wording makes them sound thoroughly un-British. It would be unreasonable for the amount of assistance to the company to depend upon the personal tax arrangements of its crew, over which it has no control and which are not relevant to their suitability for employment. I hope that noble Lords opposite will take that point into account.

Lord Brabazon of Tara

I appreciate the intention behind the amendment of the noble Lord, Lord Carmichael. There must of course be some restriction on those who may benefit from the assistance which the Government will be providing under this clause. Our intention is that the restrictions should be twofold—a restriction on the place of registration of the vessel, and restrictions on the crew members in respect of which crew relief costs will be made available. The restriction on registration is in Clause 26(1)(a), which makes it clear that the ship must be registered in the British Islands. This means that under Part I of the Bill the shipowner will have to be a person or company eligible to register a ship in the British Islands; that is, the United Kingdom, Channel Islands or the Isle of Man.

Subsection (2) provides the powers which enable the Secretary of State to impose conditions on eligibility. As I said on Second Reading our intention is to limit the assistance for crew changes in respect of crew members ordinarily resident (and therefore paying tax) in the British Isles. This goes slightly wider than the limitations proposed in the noble Lord's amendment. But the effect of this amendment would be to exclude seafarers resident in the Irish Republic, the Isle of Man, and the Channel Isles, as my noble friend Lord Mottistone pointed out, and I am sure that this would be unfair recognition of the part that these seafarers have played and still play in the Merchant Navy in peace and war.

I hope therefore that the noble Lord, Lord Carmichael, will agree that the restrictions we intend to impose strike the right balance and that, in view of the explanation I have given, he will be able to withdraw his amendment.

6.15 p.m.

Lord Carmichael of Kelvingrove

It was always going to prove difficult to achieve an all-embracing amendment when we have to consider Ireland, the Channel Islands and the Isle of Man. From what he said, the Minister accepts the idea of and the intention behind the amendment. With the explanation that he has given, and with the safeguards embodied in the clause, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 26 shall stand part of the Bill?

Lord Geddes

I should like to ask my noble friend one question. He kindly gave us the definition of "British Islands" when he spoke to Amendment No. 46. I understood him to say that it was the United Kingdom, the Channel Islands and the Isle of Man. Will he be kind enough to advise the Committee where that expression is so defined? It is not a familiar one.

Lord Brabazon of Tara

I am not sure where it is defined. The "British Islands" are the Channel Islands and the Isle of Man. They are normally known as Crown dependencies. I cannot read what my note says; but the definition comes from a well-known Act of 1978.

Clause 26 agreed to.

Clause 27 [Establishment of the Merchant Navy Reserve]:

Lord Carmichael of Kelvingrove moved Amendment No. 47: Page 21, line 16, at end insert ("; but no such regulations shall be made unless a draft of them has been laid before Parliament and approved by resolution of each House.").

The noble Lord said: It may be convenient to speak also to Amendment No. 48. This is not the usual amendment where the Opposition always want positive resolution rather than negative resolution. The clause contains highly specialised subjects. They require an informed briefing, and it is therefore important that we are told well before the regulations are presented to this place for ratification so that they can be debated properly.

If the Minister looks at the contents of the regulations that can be made, he will see that they are important and should be debated by this place and not merely put through late at night or in a batch. I hope that the Minister will give this matter serious consideration. It is not merely the Opposition asking that we waste time. We think it is an important matter. I beg to move.

Lord Brabazon of Tara

As I said in answer to an earlier amendment moved by the noble Lord, Lord Underhill, all regulations under the Bill with respect to conditions of service of members of the Merchant Navy Reserve would be subject to parliamentary approval under the negative resolution procedure. I appreciate that many of these regulations are important and may well warrant debate both here and in the other place. But negative resolution procedures does not rule this out and I am not convinced that affirmative resolution procedure would be justified in all cases. I doubt whether minor regulations on, for example, the uniforms of reservists would necessarily require debate in both places but the effect of this amendment would be to make such debates unavoidable. I hope that the Committee will agree that the Bill as drafted provides the necessary flexibility by allowing for parliamentary scrutiny and debate of regulations, if this is thought necessary, while avoiding unnecessary demands on parliamentary time.

Lord Boyd-Carpenter

Is not the advantage of the negative procedure in this case that only those regulations in which someone is sufficiently interested to put down a Prayer would be debated; whereas, if the amendment is accepted, all the regulations, some important and some unimportant, would have to take up parliamentary time by being formally moved? The negative procedure is much more selective, and I should have thought for the purpose of achieving parliamentary control over delegated legislation, much the more effective.

Lord Underhill

I wish to say a word before my noble friend decides what he is going to do about the amendment. Amendment No. 47 contains important items. Although uniform and equipment have been referred to, sub-paragraph (a) refers to call-out notices to be served on members of the reserve. The clause also provides for regulating the conduct and discipline of members. That is an important item. The imposition of fines or the forfeiture of pay are also important issues. This place should discuss such important matters by affirmative resolution. Amendment No. 48 also deals with fines. That is why the amendments are put forward. They are not normal run-of-the-mill regulations but vital regulations. We do not ask that every regulation under the Bill should be treated by the affirmative procedure, but these are important with regard to the Merchant Navy Reserve.

Lord Boyd-Carpenter

While no one disputes that some regulations under the clause are very important, will the noble Lord not face the fact that a great many are not? If we leave it as negative, any noble Lord by putting down a Prayer can have debated regulations that he thinks are important. If we make it affirmative, all of them have to be put through and debated although many may be trivial. This is surely a waste of time.

Lord Carmichael of Kelvingrove

I take the point that the noble Lord, Lord Boyd-Carptenter, has made. I have always found it difficult to have prayers accepted. They are sometimes difficult, particularly in the other place when one's own Whips are twisting one's arm at the same time. I therefore believe that the affirmative resolution is more appropriate. However, this is not the time to push the matter to a Division. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 48 not moved.]

Lord Carmichael of Kelvingrove moved Amendment No. 49:

Page 21, line 33, at end insert— ("( ) Section 102 of the Merchant Shipping Act 1894 (Colonial certificates of competency) is repealed.").

The noble Lord said: I hope that the Minister will accept the amendment. I suppose that it is quite historic. Its aim is to repeal Section 102 of the Merchant Shipping Act 1894, which requires the authority to recognise by Order in Council the Commonwealth certificate of competency. The influx of officers from parts of the Commonwealth in the last few years surely undermines the efforts by means of Clauses 25 and 26 to train and have available qualified UK officers for defence and strategic purposes. Commonwealth officers would not have allegiance to the United Kingdom in time of tension to the same extent that UK officers would.

One of the main purposes of the Bill is to build up our merchant marine reserve and officer corps. I therefore hope that the Minister will accept this fairly modest amendment. I beg to move.

Lord Brabazon of Tara

In fact it is not a question of accepting the amendment because Section 102 of the 1894 Act was repealed under provisions in the Merchant Shipping Act 1970. Perhaps I may go into a little of the background and reply to what the noble Lord has said about Commonwealth officers.

Section 102 was replaced by provisions in regulations under the 1970 Act on the certification of deck and engineer officers which allow the Secretary of State to recognise certificates issued by authorities in countries other than the United Kingdom. At present we recognise certificates issued by certain Commonweatlth administrations and the Irish Republic. Certification arrangements in these countries are historically modelled on our own, and my department maintains close links with the authorities in these countries. As a result their certification arrangements are broadly equivalent to our own. There is no reason on safety grounds therefore why we should not maintain mutual recognition arrangements with these countries. Moreover, many seafarers holding certificates from these countries have provided valuable service in our merchant fleet. To deny them the right to continue serving would be seen as an injustice and would certainly lead to retaliation from those countries whose certificates we no longer recognised. This would mean that British officers serving on Irish or Commonwealth ships under the reciprocal arrangements would no longer be able to do so.

I do not believe that the sort of changes underlying the proposed amendment would be in anyone's real interest. I hope that the noble Lord on reflection will realise that his argument is somewhat flawed. I was going on to say that I hoped that he would withdraw the amendment, but that is not appropriate in view of the fact that it is already in force, so to speak.

Lord Carmichael of Kelvingrove

I can see the flaw in the amendment. Instead of saying that I shall consider it, what I should be doing perhaps is to turn my mind to those who advised me on the point. I have no alternative but to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 27 agreed to.

Clause 28 agreed to.

Viscount Davidson

I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

House adjourned at twenty-five minutes past six o'clock.