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Orders of the Day — European Community (Shipbuilding)

Part of the debate – in the House of Commons at 12:00 am on 4th July 1975.

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Photo of Dr Dickson Mabon Dr Dickson Mabon , Greenock and Port Glasgow 12:00 am, 4th July 1975

I hope that my hon. Friends will not oppose the take-note motion. The directive is important. A number of excellent points have been made in this debate and I hope that the questions put by the hon. Member for Cheadle (Mr. Normanton) will be answered by the Minister.

We are all concerned about the 2 per cent. shipbuilders' relief arising from the Finance Act 1966. The major matter is that the present directive is a better document than that which was published in draft in Ocotber 1973 largely because of the British Government's insistence that support for the British shipbuilding industry must be realistic and seen as a whole. The shipbuilding unions have not been over-active so far as I am aware in making clear their attitude on these directives. If this directive were turned down, our Briitsh ship owners' credit scheme would be in danger. I know that my hon. Friends would not wish that to be the case at the present critical time. They really must not oppose the directive.

I do not accept the argument advanced by my hon. Friend the Member for Renfrewshire, West (Mr. Buchan) that there is any nationalisation bogy in the directive—that is to say, that the directive is against any form of public ownership. It is not. Any reference to the Italians is a reference not to the "nationalisation" of their industry but to "rationalisation". That, if anything, is a misprint which perhaps the Scotsman and The Times have misjudged in their assessment. I do not think that the directive has anything to do with public ownership or with inhibiting its application to the shipbuilding industry. However, this third directive presupposes the existence of a fourth directive. It is by no means the last word and cannot be.

The third directive in its preamble describes a situation which although true last year is not true now. I hope that it will be a springboard for a fourth directive which in turn will be based on the proposition that we are no longer discussing the essence of competition in the Common Market but must recognise that the Common Market is one economic unit competing in the world.

My hon. Friend the Member for Renfrewshire, West referred to the active and well-organised effort by Japan to remain the shipbuilding nation of the world. References have been made to agreements with the OECD but I doubt whether they are fully respected. Certainly Japan has made the most extraordinary progress since the end of the Second World War. Despite all their difficulties, the Japanese are still managing to maintain the pre-eminence of their position in world shipbuilding.

My hon. Friend has said, as so often before Ministers with responsibility for the shipbuilding industry have done, that there are no direct subsidies to shipbuilding in Japan. If that is the position, they have developed one of the best indirect ways of going about it that any country has devised.

In the Financial Times of 1st July 1975, an article by Peter Duminy from Tokyo stated: The Japanese Ministry of Transport wants $950 million to be earmarked to fund the shipbuilding industry's deferred payments next year, an increase of $620 million compared with funds expected to be available from the Export-Import Bank in 74–75. I am in favour of competition, but not of unfair competition or of our having all the rules and trying to stick to them with others doing the cheating. That is quite wrong. Even if the Japanese were the best shipbuilders in the world, and the Europeans the worst—which is not true—it would be strategic nonsense for the Common Market to cease building ships and to rely on other nations to build ships for Community trade. After all, the Common Market generates the largest sector of world trade. I cannot remember the precise figure but it represents far more than the United States or the Soviet Union. It would be madness for us not to build our ships. I repeat that I do not accept that we Europeans are the worst shipbuilders.

Unfortunately, the British disease of knocking each other and of constantly parading all our defects and never mentioning all our successes affects shipbuilding more than any other industry. We have half a dozen, or maybe more, first-class shipbuilding yards in the private sector in this country. We have other good yards in the public sector which could also be enterprising and successful. It is high time that we began to build up on what we can do in Great Britain.

My plea is that when the Minister goes to discuss this matter and the future of later directives they should concentrate on what Europe should do for its own shipbuilding yards about its strategy for aid, grants and development, whether direct through shipbuilding or indirect through the regional fund, the research unit or anything else. They should be directed to the proposition that Europe must have a shipbuilding industry and be a large shipping power.

I should like to refer to a speech made by Commissioner Spinelli, not the one quoted by the hon. Member for Cheadle, but the one mentioned in the Financial Times on 30th June 1975, at the beginning of this week in Brussels. Commissioner Spinelli laid out his three propositions for a new industrial policy. He said that the new industrial policy would recognise that in major industrial sectors that are vulnerable to over-capacity new investment plans should be notified in advance to Brussels, in the same way that investments in the coal and steel industries have to be notified under the European Coal and Steel Community. He specifically mentioned those sectors in which he was interested—namely shipbuilding, artificial fibres and glass.

I am not an authority on the latter two, but I do know about the shipbuilding industry. It is high time that within the Common Market we had a new shipbuilding policy looked at through European eyes. I have no doubt that with this directive and a directive to follow of that complexion, we could have a most successful shipbuilding industry, not only in the other eight fellow member countries of Europe but in countries outside the Community. Great Britain must try to get back the preeminence that it once had in this great industry.