HL Deb 16 June 1989 vol 508 cc1645-6

11.18 a.m.

Lord Underhill asked Her Majesty's Government:

What are their plans for the withdrawal by all European Community member states of discriminatory assistance given to their merchant shipping industry.

Viscount Davidson

My Lords, the admissibility or otherwise of state aids to shipping lines of member states is now the subject of proposals by the European Commission and we are studying these carefully. The Government's objective is to secure open, competitive and non-subsidised shipping markets and to oppose discriminatory assistance.

Lord Underhill

My Lords, I thank the noble Viscount for that encouraging reply. However, may I follow it up with two questions? Has the noble Viscount seen the document issued as recently as May this year by the General Council of British Shipping? That sets out all the fiscal advantages and the amount of discrimination practised by a number of Community states. Does he realise that British shipping does not want retaliatory measures? What they want is, as the document says, a level playing field for merchant shipping. Can there be some assurance that this will be secured in time for the single market?

Viscount Davidson

My Lords, I have indeed seen that document, and I can tell the noble Lord that it does not make economic sense for the UK Government to match the subsidy policies of others. The Playing Field—I believe that is the title of the document—needs to be levelled down, not up. The Commission's proposals for the second stage of the Community's shipping policy were made on 5th June. We are studying these carefully. However, we support the proposed opening up of the cabotage markets. As I said in my original Answer, we endorse the need to tackle the state aids question.

Lord Cledwyn of Penrhos

My Lords, is it not an extremely sad matter that the British Merchant Navy, which was until fairly recently the greatest the world has ever seen, has been allowed to decline to a pathetic level? Will the Minister take account of what my noble friend Lord Underhill has said about the assistance which is given by our partners in the Community to their shipping industries? I mention the example of assistance by way of large investment subsidies. Will the Government not be a little more constructive and forthcoming and enter into talks with our partners in the Community to see whether some better solution can be found and a little more encouragement given to the British sailor and to our Merchant Navy?

Viscount Davidson

My Lords, I can paint a slightly different picture to the one that the noble Lord the Leader of the Opposition has painted. It is wrong to suggest that either European or British shipping is not a potent force in world shipping. The rate of decline of the UK fleet has decreased. British flag tonnage, including dependent territories, is some 35 million tonnes. That is the fifth largest in the world. European-owned shipping represents some 25 per cent. of world shipping, and under the Merchant Shipping Act 1988 we are providing assistance towards training Merchant Navy officers amounting to £3.5 million a year. We are also assisting with crew travel costs of £5 million a year. A Merchant Navy reserve of seafarers to serve on merchant vessels in time of war was inaugurated in May 1989. The intake of new officer cadets nearly doubled to 279 in the 1988–89 academic year, helped by government funding. I think that the noble Lord will be pleased to hear those figures.

Lord Boyd-Carpenter

My Lords, is my noble friend aware that merely to say that the rate of decline has reduced is not particularly encouraging to those of us who greatly care about the decline in British shipping? Are the Government prepared to take really determined action against the various subsidies which our friends in Europe and elsewhere give to their merchant shipping? I believe that that is the major cause of the relative and absolute decline in our shipping.

Viscount Davidson

My Lords, I can tell my noble friend that new orders by the UK shipping industry in 1988 were 66 per cent. higher than for 1987.

Lord Peyton of Yeovil

My Lords, does not my noble friend agree that we cannot take any satisfaction from the fact that the steep decline of the past 30 years has just slowed down a little? Does he not agree that the major trouble comes not from within Europe but from outside it?

Viscount Davidson

My Lords, I can only say to my noble friend that I shall draw his remarks to the attention of my right honourable friend.