§ Mr. Hendersonasked the Minister for Trade if he will make a statement, further to his reply to the hon. Member for Fife, East on 30 March, Official Report, c. 54–55, 154W concerning shipping rate disparities between the United Kingdom and the Continent; and whether the Government propose to take any action.
§ Mr. SproatThe Department of Trade has been investigating freight rate disparities between the United Kingdom and the Continent in great detail. Its investigations confirm that disparities are widespread and, in general, are of considerable concern to exporters, some finding them significant enough to make the difference between winning and losing an order. The Department's investigations have also confirmed that while there are a variety of causes for the disparities, the two most significant are higher United Kingdom port costs and the greater competition conferences face from non-conference lines on the Continent.
My right hon. and noble Friend, the Secretary of State therefore considers that the Department's investigations demonstrate the importance of ensuring competition in liner shipping from United Kingdom ports. My right hon. and noble Friend has decided that this can be best achieved through the proposed European Community regulation applying the competition rules in the Treaty of Rome to shipping, subject to certain changes in the Commission's proposals. The draft regulation is currently under discussion between member States in Brussels.
The Government consider that the regulation should:
- (a) impose certain restrictions on the exclusive patronage contracts with which a conference can currently bind its shippers, thus making it easier for a non-conference line to enter and compete in a trade.
- (b) ensure against the risk of conferences driving non-conference competitors from the trade by predatory practices, and the danger, if non-conference lines are excluded from a trade by another Government, of a conference using its monopoly position to the detriment of shippers.
The details of the Government's objectives in relation to the draft regulation are explained in detail in its recent evidence to the House of Lords Select Committee on the European Communities, copies of which have been placed in the House of Commons Library.