Shipping and Shipbuilding Industries (Assistance) (Hansard, 9 June 1980)

§ Mr. David Price
asked the Secretary of State for Industry if he will publish in the Official Report the aids offered by the Government to prospective buyers of British-built ships ; and what are the

ASSISTANCE TO SHIPPING/SHIPBUILDING INDUSTRIES WITHIN THE EEC

Country^* Aid to domestic shipowners (for orders placed in any EEC yard)† Aid to domestic shipbuilding (for home or export orders)

United Kingdom … Home credit scheme 80 per cent. over 8½ years at 7.5 per cent. (on orders placed in United Kingdom yards only).† Production subsidy maximum 25 per cent. of contract price—includes 2 per cent. Shipbuilders Relief.

Belgium … Home credit scheme 70 per cent. over 15 years. Interest relief subsidy.‡ Nil.

Netherlands … Investment subsidy of 15 per cent. plus investment premium of 5.5 per cent. (subsumed June 1979 under general investment aid scheme). Home credit scheme 80 per cent. over 8½ years, interest rate variable but no : less than 8 per cent. Scheme, linked to restructuring pro gramme, for Government to meet 75 per cent. of losses taken on orders in a limited number of yards.

France … Subsidy of up to 15 per cent. of contract price. Production subsidy (maximum 25 pet cent. of contract price—or 22 per cent. when cost escalation insurance applies).

Italy … Interest subsidy (50 per cent. of market rate) for loans up to 15 years. Production subsidy scheme (30 per cent. of contract price) lapsed September 1978. Renewal under negotiation with EEC for 25 per cent. subsidy plus possible measures to reduce interest payments. Individual cases are being cleared by the Commission on an ad hoc basis.

West Germany … Subsidy of 12.5 per cent. of contract price. Interest relief subsidy (maximum 2 percentage points). Production subsidy (20 per cent. of contract price to be reduced to 15 per cent. as from 1 January 1981).

Denmark … Home credit scheme 80 per cent. over 14 years at 8 per cent. interest. 4 years moratorium. Nil.

Ireland … Home credit scheme 80 per cent. over 8½ years at 7.5 per cent. interest. Subsidy of up to 30 per cent. of contract price.

^* All the countries listed are participants in the OECD Understanding which limits the terms of officially supported credits. The current OECD terms are a maximum of 80 per cent. of the contract price to be repaid over a maximum of 8½ years, at an interest rate no more favourable than an effective rate of 8 per cent. (in some cases, including the United Kingdom, the actual rate is 7½ per cent., plus certain charges). The OECD terms do not apply to credit given upon aid terms to developing countries.

† There are no international agreements limiting the terms of officially supported credit which may be offered to domestic shipowners. However, within the EEC such assistance must be available on orders placed in any EEC shipyard. In the United Kingdom assistance to domestic owners (the Home Credit Scheme) is restricted to ships built in United Kingdom yards (Industry Act 1972, section 10) and thus discriminates against other EEC shipyards. It comes within the EEC rules only on condition that the terms do no more than match those which a United Kingdom owner could obtain by ordering elsewhere in the EEC (i.e., OECD Understanding terms).

‡ This scheme has recently been revised. Details of the been announced by the Belgian Government.

54W
comparable aids offered by the Belgian, Dutch, French, Italian and West German Governments, respectively.

§ Dr. David Clark
asked the Secretary of State for Industry if he will publish details of the domestic credit terms offered to shipowners by each of the EEC countries, including the United Kingdom.

§ Mr. Michael Marshall
The following table contains the information :
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§ Mr. David Price
asked the Secretary of State for Industry if he will publish in the Official Report the output of the British shipbuilding industry for each of the last 10 years, giving the break-down

SHIPS COMPLETED IN BRITISH YARDS; 1970–1979

Merchant Ships (100 GT &over) Compensated Naval Vessels

Number Gross Registered Tons Estimated Value Number Displacement Tons Estimated Value

'000 £ million '000 £ million

1970 … … 140 891 166 NA NA NA

1971 … … 131 868 164 21 29 74

1972 … … 136 836 201 31 18 46

1973 … … 135 893 216 12 18 73

1974 … … 132 669 211 10 9 46

1975 … … 142 656 240 7 8 30

1976 … … 137 702 316 34 27 134

1977 … … 102 590 333 20 22 120

1978 … … 93 580 335 17 28 156

1979 … … 92 518 367 NA NA NA

Sources :
Business Monitor PQ370
Department of Industry
NA not available

ASSISTANCE TO SHIPPING/SHIPBUILDING INDUSTRIES WITHIN THE EEC
Country^*	Aid to domestic shipowners (for orders placed in any EEC yard)†	Aid to domestic shipbuilding (for home or export orders)
United Kingdom	…	Home credit scheme 80 per cent. over 8½ years at 7.5 per cent. (on orders placed in United Kingdom yards only).†	Production subsidy maximum 25 per cent. of contract price—includes 2 per cent. Shipbuilders Relief.
Belgium	…	Home credit scheme 70 per cent. over 15 years. Interest relief subsidy.‡	Nil.
Netherlands	…	Investment subsidy of 15 per cent. plus investment premium of 5.5 per cent. (subsumed June 1979 under general investment aid scheme). Home credit scheme 80 per cent. over 8½ years, interest rate variable but no : less than 8 per cent.	Scheme, linked to restructuring pro gramme, for Government to meet 75 per cent. of losses taken on orders in a limited number of yards.
France	…	Subsidy of up to 15 per cent. of contract price.	Production subsidy (maximum 25 pet cent. of contract price—or 22 per cent. when cost escalation insurance applies).
Italy	…	Interest subsidy (50 per cent. of market rate) for loans up to 15 years.	Production subsidy scheme (30 per cent. of contract price) lapsed September 1978. Renewal under negotiation with EEC for 25 per cent. subsidy plus possible measures to reduce interest payments. Individual cases are being cleared by the Commission on an ad hoc basis.
West Germany	…	Subsidy of 12.5 per cent. of contract price. Interest relief subsidy (maximum 2 percentage points).	Production subsidy (20 per cent. of contract price to be reduced to 15 per cent. as from 1 January 1981).
Denmark	…	Home credit scheme 80 per cent. over 14 years at 8 per cent. interest. 4 years moratorium.	Nil.
Ireland	…	Home credit scheme 80 per cent. over 8½ years at 7.5 per cent. interest.	Subsidy of up to 30 per cent. of contract price.
^* All the countries listed are participants in the OECD Understanding which limits the terms of officially supported credits. The current OECD terms are a maximum of 80 per cent. of the contract price to be repaid over a maximum of 8½ years, at an interest rate no more favourable than an effective rate of 8 per cent. (in some cases, including the United Kingdom, the actual rate is 7½ per cent., plus certain charges). The OECD terms do not apply to credit given upon aid terms to developing countries.
† There are no international agreements limiting the terms of officially supported credit which may be offered to domestic shipowners. However, within the EEC such assistance must be available on orders placed in any EEC shipyard. In the United Kingdom assistance to domestic owners (the Home Credit Scheme) is restricted to ships built in United Kingdom yards (Industry Act 1972, section 10) and thus discriminates against other EEC shipyards. It comes within the EEC rules only on condition that the terms do no more than match those which a United Kingdom owner could obtain by ordering elsewhere in the EEC (i.e., OECD Understanding terms).
‡ This scheme has recently been revised. Details of the been announced by the Belgian Government.

SHIPS COMPLETED IN BRITISH YARDS; 1970–1979
	Merchant Ships (100 GT &over) Compensated			Naval Vessels
	Number	Gross Registered Tons	Estimated Value	Number	Displacement Tons	Estimated Value
		'000	£ million		'000	£ million
1970	…	…	140	891	166	NA	NA	NA
1971	…	…	131	868	164	21	29	74
1972	…	…	136	836	201	31	18	46
1973	…	…	135	893	216	12	18	73
1974	…	…	132	669	211	10	9	46
1975	…	…	142	656	240	7	8	30
1976	…	…	137	702	316	34	27	134
1977	…	…	102	590	333	20	22	120
1978	…	…	93	580	335	17	28	156
1979	…	…	92	518	367	NA	NA	NA