British Shipping Industry

Part of the debate – in the House of Commons at 6:25 pm on 17th December 1984.

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Photo of Mr David Mitchell Mr David Mitchell , North West Hampshire 6:25 pm, 17th December 1984

I am glad to have the opportunity of responding to the motion that was so ably moved by my hon. Friend the Member for Romsey and Waterside (Mr. Colvin). In the terms of his motion, he recognises the importance of shipping to our trade and our defence, and the importance of our fleet in its own right. I agree with him. It is overlong since the House gave time to this important industry. It is perhaps surprising that the Opposition have not chosen the indusry as the subject of an Opposition debate, so I am doubly grateful to my hon. Friend for choosing this subject. The motion follows his recent valuable contribution to the debate about the future of the United Kingdom merchant marine in the document produced by the Centre for Policy Studies entitled, "British Shipping — the Right Course." The hon. Member for Wigan (Mr. Stott) paid tribute to that document, although he did not agree with everything that it said.

The Government naturally share the concern expressed in the debate by hon. Members on both sides of the House about the decline of the United Kingdom merchant fleet. It has been a cause of understandable concern to me and my colleagues, as I know it has been to seafarers and their unions, the shipowners, the General Council of British Shipping, and to others concerned with our island's interests and our maritime history.

The decline in the merchant fleet looks especially dramatic if it is measured against the exceptionally high figure to which the fleet had grown in 1975. It may be useful to the House if I restate some basic facts about our fleet. Its high reputation, the skills that are brought to bear by the officers and men who man our ships, and the high calibre of the ships are all known and give us a world-wide reputation. But it is perhaps sometimes overlooked that, despite the decline, the United Kingdom fleet is the seventh largest in the world. That puts us well above our natural position in relation to our total trade. Among European fleets we rank as third, and within the EC as second. Therefore, although I recognise fully the deep concern which the Government share about the decline in the fleet, it is right to put it in perspective.

My hon. Friend the Member for Romsey and Waterside was right to draw attention to the various roles in which the merchant fleet is involved. It is clear from the debate that the House shares his anxiety in three areas: first, in terms of enabling us to carry on our import and export trades where we are so dependent on the sea and ships for bringing in and taking out so much of our trade; secondly, the vital area of defence, which several hon. Members mentioned; and, thirdly, the realisation that the United Kingdom fleet is a major national asset, a major investment, a source of jobs and an industry in its own right.

Perhaps I may mention the projections about the rate of decline of the United Kingdom fleet. My hon. Friend the Member for Romsey and Waterside referred to projections that would lead to the fleet's being extinguished. The General Council of British Shipping has suggested that the 700 vessels which now form the United Kingdom-owned and registered fleet will have fallen to 400 by 1986. Others, further projecting the current rate of decline, declare that by the year 2000 there will be no United Kingdom fleet. Even the hon. Member for Wigan who spoke on behalf of the Opposition, referred to the time when there would be no fleet left. It is far too simplistic just to extrapolate the recent level of the decline and suggest that there is an inevitable progression to the sort of figures that have been spoken about. I do not demur from the concern expressed by my right hon. Friend the Member for Taunton (Mr. du Cann) about this matter. He is chairman of the all-party maritime group, and I hope that we can have discussions about this matter.

My hon. Friend the Member for the Isle of Wight (Mr. Ross) will know that I am not responsible for shipbuilding. However, does he not recognise some inconsistency when he complains about uneconomic freight rates, because of the glut of shipping, in the same breath as he calls for subsidies for shipyards to build more ships, even in his constituency? The truth is that the fleet is not a single fleet; it is many separate fleets. For the House to judge the seriousness of the decline, where it comes, where the shoe is to pinch and what the causes are, we need to look more closely at the different mini-fleets that make up the total of the United Kingdom merchant marine against the background of the changes in our pattern of trade, which themselves lead to a different demand pattern for our fleets. For example, the change to membership of the Common Market has meant that a much larger proportion of our trade is no longer long distance, to the Commonwealth, but is on short haul from the east coast to European ports.

I commend to the House the analysis of the reasons for the decline given by my hon. Friend the Member for the Isle of Wight. He analysed brilliantly, as one might have expected from his experience of the industry, what is going on. He said that seven or eight ships of the old fleet are now replaced by one container vessel. That is one of the many signs of the extent to which there are forces at work that are not within the control of any Government and that are leading to a decline in the number of vessels.

The development of containerisation has meant fewer and larger ships with smaller crews, and the oil crisis of a decade ago has had a dramatic effect on the pattern of the oil trade. For example, 55 per cent. of all the tonnage lost over the last decade—the largest proportion of all reductions in the United Kingdom merchant marine—has been in tanker tonnage. That has not been through any failure on the part of the Labour party when it was in government or of this Government. Principally, the tonnage has fallen because the world trade in oil shrank with high prices and we became self-sufficient from North sea oil being brought ashore by pipeline.

The huge surplus of tankers looks as if it may be coming to an end. One can contrast that with what has happened with regard to containers. We have one of the largest container fleets in the world, but Evergreen and United States Lines are proposing giant, round-the-world, minimum stop operations, which will present a huge challenge to our fleet. The prospect of a freight war developing, with massive surplus tonnage, is horrifying. My hon. Friend the Member for Boothferry (Sir P. Bryan) referred to its devastating potential.

I hope that my right hon. Friend the Member for Taunton will accept that there are many complex factors at work in the decline of our fleet. Happily, roll-on/roll-off and ferries are operating in a more buoyant and steady market, which shows that, while the total size of our fleet has declined and some further decline is on the cards, it would be wrong to extrapolate the figures of the past decline and assume that we shall end up with nothing.

The Government's strategy falls into three parts, all of which were referred to by my hon. Friend the Member for Romsey and Waterside. First, there is the need of our island for ships to import and export goods; secondly, there is our defence strategy; and, thirdly, there is the help and encouragement that we can give to our ship operators. The House may expect me to start by saying that we must have a fleet of a given size to be able to carry goods to and from the United Kingdom, but that is not the case. Our fleet is important because of the jobs and the overseas earnings that it provides in itself. However, in terms of our imports and exports, the important factor, which relates directly to our competitive position and therefore to our national need, is that we should have efficient shipping services, able to get in and out of our ports with the minimum of burdens, to enable our exporters to compete. That is true in the changed pattern of trade, as so much of it lies with Europe. Our principal competitors are in Europe where they have land frontiers, while everything that we have has to be dragged across the sea and through our ports.

In this connection, it is important that we should minimise the burdens that are imposed on our shipping industry and those who use our ports. We have a continuing dialogue with the General Council of British Shipping about the burdens imposed by the Government, and we are seeking to do what we can to minimise them. For example, the cost of lighthouses and buoys around our shores is an expensive burden, amounting to £43 million a year, which is paid by ships using our ports. For some time, shipowners and the Public Accounts Committee have expressed concern as to whether the money was being most effectively spent. I am pleased to be able to tell the House that Trinity House has now invited the Government to nominate four business men to serve on the reformed Lighthouse Board, which has responsibility for this function under Trinity House.