Merchant Shipping

– in the House of Commons at 6:57 pm on 17th December 1984.

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Photo of Mr David Mitchell Mr David Mitchell , North West Hampshire

I beg to move, That the draft Merchant Shipping (Liner Conferences) (Mandatory Provisions) Regulations 1984, which were laid before this House on 13th November, be approved.

Photo of Mr Paul Dean Mr Paul Dean , Woodspring

With this, it will be convenient to discuss the following motion: That the draft Merchant Shipping (Liner Conferences) (Conditions for Recognition) Regulations 1984, which were laid before this House on 13th November, be approved.

Photo of Mr David Mitchell Mr David Mitchell , North West Hampshire

Hon. Members will remember that in 1982 the Merchant Shipping (Liner Conferences) Act became law. That Act enabled the Secretary of State to make certain regulations whose effect would be essentially to translate the provisions of the UN convention on a code of conduct for the liner conferences into United Kingdom law. The matter is complex, but I think that it is important that I put the situation clearly on the record. Accordingly, I hope that the House will forgive me if I go into some detail.

The purpose of the present regulations therefore is to enable the United Kingdom to accede to that convention. The convention, which came into force in October 1983, embodies a complex and wide-ranging set of rules governing the relations between shipping lines that are members of shipping conferences and between those lines and their customers, the shippers. The application of this code of conduct in the United Kingdom will be significantly modified by EC Regulation No. 954/79, commonly referred to as the Brussels package. I shall have more to say about that later. The United Kingdom intends to accede early in the new year—we hope to do so at the same time as a number of other European countries. That event will constitute a very significant development in international liner shipping and we have not taken this decision without conducting extensive consultations with interested parties. I am glad to be able to tell the House that the United Kingdom's accession to this convention is fully supported by the General Council of British Shipping and the British Shippers Council.

Although the regulations themselves are quite technical in nature — I am sure that the concern that is often expressed in the House about the state of the British shipping industry will be reflected in today's debate—hon. Members would wish me to explain the relevance of the regulations and of the code itself to the wider shipping scene.

I turn to the Government's objectives in liner shipping. The policy of successive British Governments on liner shipping has been governed by our interests both as an exporting nation and as a major shipping nation. Those two national interests continue to point in the same direction. A third of our national income is derived from international trade, and roughly that proportion of our jobs depends on its success. Most of this trade is carried by sea. Any failure to maintain competitive conditions on our shipping routes would clearly result in more expensive and less efficient sea transport, with inevitable consequences for our trade.

Equally, our shipping industry relies on its own ability to compete in maritime trades worldwide. Opinions may well differ as to the most effective method of arresting the decline of the British flag fleet and what role the Government should play, but one issue on which there is agreement is that it is the Government's task to try to keep the world's shipping markets open to British vessels. Nearly three fifths of the freight earnings of the British shipping industry comes from trading between other countries' ports, and cross-trading earnings represent two fifths of the industry's liner earnings. Free and fair access to cargoes in other countries' ports is therefore vital to the future of the British shipping industry.

I turn to the conference system. The House will know that, in line with the practice of Governments throughout the world, we exempt liner shipping conferences from the provisions of our restrictive practices legislation. We find that liner conferences are generally beneficial in providing reliable scheduled services required by many shippers of different types of cargo. They also help to preserve stable freight rates, although this stability can be threatened when there is an abundance of competition from non-conference lines. The exemption can, of course, only be tenable provided that this competition is present to some degree, or is not prevented from developing; and provided that shippers are effectively organised so as to make their views known to the conferences. In a nutshell, closed conferences are acceptable only as part of an open system.

Thus British industry wants to have access to the regular scheduled liner shipping services provided by the conferences; and a free choice of competing non-conference carriers. British shipping wants to have the widest possible freedom to compete in the world's liner shipping routes, both within and without conferences. The Government's key shipping policy objectives are to ensure that these very reasonable desires of British industry and British shipping can be fulfilled.

But the House will not be surprised to know that a number of developing countries do not share the Government's desire to maintain an open market in liner shipping. They want instead to share cargoes as exclusively as possible between trading partners. It was these pressures for cargo reservation which were a moving force in establishing the UN liner code.

The core of the code is concerned with: first, the relations among conference shipping lines: and, secondly, the relations between conferences and shippers. In dealing with the relations between conferences and shippers, the code states that its objective is to balance the interests of the suppliers and users of liner shipping services". The provisions of the code in large measure reflect the practices that have developed internationally in recent years and are, I believe, broadly acceptable to shippers and shipowners alike.

But in dealing with the relationship between conference lines the UN code sought to impose the very kind of rigid cargo-sharing that the Government have so often fought to resist. Article 2 provided that cargo should be divided equally between conference lines of the two countries that were served, leaving other conference lines to carry some 20 per cent. between them. This so-called 40:40:20 division of conference cargoes was unacceptable to the Government and was the main reason why the United Kingdom voted against the code convention at the diplomatic conference which adopted it in 1974.

Hon. Members who specialise in this subject will know that some OECD countries including France, West Germany and Belgium had voted in favour of the code and other OECD countries had merely abstained. We therefore faced the unhappy prospect that the United Kingdom might be compelled to stand aloof while this new regime was applied without restraint on many of the world's major shipping routes. In that event British shipping lines' cross-trading opportunities would have been severely restricted. I know that hon. Members would be deeply concerned at such a prospect.

Clearly there were, therefore, compelling reasons for OECD countries to adopt a more uniform approach to the code for EC states and, in particular, to agree a common position. That common policy was developed under the last Labour Administration; and the present Government were glad to continue it on behalf of the United Kingdom very soon after we came into office in 1979. The policy is embodied in the Brussels package, which creates directly applicable law in the United Kingdom.

The overall effect of the Community's policy on the code will be that its cargo-sharing provisions will protect the shipping of only those countries, mainly developing countries, that wish them to do so. This is assured by three key provisions. First, when the code applies to a route between a Community member state and a third country, conference lines from all member states will compete on that route on the same footing. Secondly, lines from countries within the OECD which intend to accede to the code will also be able to compete on the same footing provided that they offer reciprocal treatment on routes serving their own countries. Finland, Norway and Sweden have already announced their intention of joining the code and operating it in the same amended way as the United Kingdom and the rest of the EC. Thirdly, the conference shipping lines of other OECD countries such as Australia and the United States of America, which at present do not intend to accede to the code, will also be treated in the Community on the same footing as Community conference lines, so long as those countries do not themselves discriminate against Community shipping. Japan is the only country in the OECD which has indicated an intention of acceding to the UN code without having made clear what kind of reciprocal arrangements will be available, and discussions between the Community and Japan are continuing.

As a result of these fundamental modifications the Department has calculated that the code's cargo-sharing provisions will in practice reserve only cargoes representing between 10 per cent. and 15 per cent. of the world's liner conference trade; the remainder will be free of cargo reservation. I know that the House will welcome that in the light of earlier discussions on dealing with protectionism and access for our ship operators.

As I have mentioned, the code's basic regime concerning the relations between conferences and shippers was altogether more acceptable. The Brussels package contains some modifications to certain of the code's provisions but in the main the provisions which give rights to shippers to be consulted on the basis of full information are welcome.

There are two draft statutory instruments. The first, the mandatory provisions regulations, identifies the code's provisions which are to give rise to rights and duties. The second defines a United Kingdom national shipping line for the purposes of the code and defines those shippers' organisations which will have rights to be consulted.

The Merchant Shipping (Liner Conferences) (Mandatory Provisions) Regulations 1984 implement the code convention. The code's provisions are a mixture of mandatory and recommendatory provisions, and some of the mandatory provisions are ambiguous. It would not therefore have been possible or desirable to import the code as a whole into our law.

Regulation 2 lays down that these regulations apply to conferences which have their seat in the United Kingdom or serve the trade of the United Kingdom.

Regulation 3 lies at the heart of the statutory instrument and sets out in the form of a table those provisions of the code which are to be mandatory. The table identifies those people by whom and against whom these provisions may be enforced.

I do not believe that this table contains any unexpected or unusual decisions. We have sought to reproduce the code's mandatory provisions as faithfully as possible. Some minor clarifications have been made to ensure that the provisions work effectively and, above all, do not inhibit competition. I shall draw the attention of the House to just two.

First, regulation 2.4 (b) is clarified by stating that the share of cargo available to cross-trading lines is a right to acquire a share by commercial means. We wish to avoid any possibility of a cross-trading line seeking to increase its share simply through legal action.

Secondly, regulation 13.1 (2) is clarified to make it plain that conference lines are entitled to charge rates less than the published tariff. Our objective is again to ensure that this provision does not dampen competition.

Regulation 4 ensures that where any conference is incorporated its individual member lines remain responsible in respect of the duties set out in regulation 3, so far as this lies within their power. Regulation 5 contains minor clarifications to chapter VI of the code which deals with Provisions and Machinery for the Settlement of Disputes". The Merchant Shipping (Liner Conferences) (Conditions for Recognition) Regulations 1984 set the conditions for a national shipping line and shippers' organisation.

The code defines a national shipping line, but allows Governments to add further criteria. The code conferred certain privileges on national shipping lines and although these have largely been removed by the Brussels package it is widely acknowledged that national line status will be of some importance. During our consultations with shipowners, shippers and the seafaring unions some suggestions were made which in the Government's view would have imposed unduly restrictive conditions on national shipping lines. Some groups felt that United Kingdom national shipping lines should be British-owned, other groups felt that United Kingdom national shipping lines should be compelled to fly the British flag.

The Government have decided to set criteria to maintain as open a market system as possible for shipping lines operating out of the United Kingdom. Regulation 2 therefore limits national shipping line status only in the following way. Lines will be regarded as national shipping lines only in respect of those conferences of which they are members. And they will have to be of British nationality —which is defined as having their principal place of business in the United Kingdom. The only other limitation is that lines from countries which would refuse similar treatment for British lines will themselves be excluded. I believe that that is agreeable to the House.

The code also allows Governments to decide who should have the right to take part in consultations with the conferences. Here, our objective has been to ensure that those organisations which already have a key role in representing shippers' interests will have the right to be consulted under the code. We have also been concerned to avoid a position where conferences are obliged to consult so many organisations that the process becomes unmanageable.

There are two avenues available to the Government to determine who should have those consultation rights. The first — and the fundamental one — is to set down the conditions for recognition as a shippers' organisation. The code contains a basic definition of a shippers' organisation and allows Governments to add further conditions. These conditions, set out in regulation 3, are necessarily expressed in broad terms. All those whom we have consulted have argued against a very rigid set of conditions. I hope that the House will agree that we are right to respond to consultation in that way.

Regulation 3 allows one national organisation, which is expected usually to be the British Shippers Council, to claim consultation rights in respect of most if not all conferences subject to the code. In addition, other shippers' organisations may claim consultation rights where they can show that they represent shippers of such quantities of goods with that conference that it is reasonable for them to be consulted. If the conference sought to deny that claim it would be for the conference to show either that the shippers concerned were already adequately represented by recognised shippers' organisations or that there were so many other organisations representing more cargo that recognition would be inappropriate.

We look to both shipowners and shippers to operate the consultation procedure in a constructive fashion. With goodwill on both sides I am sure that the shippers' interests can be effectively and efficiently represented.

The second avenue by which consultation rights may be established is designed to benefit large individual shippers and representatives of shippers. Regulation 5 gives the Secretary of State the power to designate these groups.

As the conditions that we have imposed on shippers' organisations represent something of a compromise between competing claims, I think that it would be right at this stage to state that the Secretary of State would use his powers of designation only in exceptional circumstances. He would adopt criteria in line with those laid down for shippers' organisations. The result would be that when large shippers, or a large number of small shippers, using the same agent, such as a freight forwarder, feel that their interests have not been adequately represented to a particular conference they will be able to seek consultation rights. I think that that is a comprehensive set of guidelines. I am sure that the House will agree.

I would now like to say something about non-conference lines and the code. The diplomatic conference that adopted the code convention also adopted a resolution on non-conference shipping lines which stated that such lines should not be prevented from operating provided that they competed fairly. But that resolution is not legally binding and the code itself confers no rights on non-conference shipping.

The problem that we face is that there is an increasing disposition among some developing countries to seek to close their shipping trades to non-conference lines and thus establish a monopoly for the conferences. That position would be unacceptable to the British Government on routes serving the United Kingdom.

We have therefore concluded that the United Kingdom's accession will be subject to the condition that the United Kingdom will be bound by the convention only while our trading partners permit non-conference lines to compete in our mutual trades. We shall make a formal reservation along these lines when we come to accede. In the event that non-conference lines were to be excluded by another contracting party the Government would be able to suspend the operation of the code using section 4 of the enabling Act and would thus be free to use the wide-ranging retaliatory powers contained in section 14 of the Merchant Shipping Act 1974. We have discussed our intention with our Community partners and we understand that other OECD Governments are likely to make similar reservations when they accede.

Finally, let me just touch on other current initiatives in liner shipping with which the Government are closely involved. I have explained that the Brussels package ensures that the OECD's ground rules concerning competition in the provision of liner shipping services are fully respected. But there is clearly a need for the OECD countries to continue to develop unambiguous and positive policies to promote their interests in liner shipping, particularly as more countries come to accede to the code.

I have referred already to the EEC regulations and the United States—Consultative Shipping Group dialogue, so I shall not refer to that again. I have sought to set out the Government's objectives in pursuing the interests of British shipping and its customers. The code, together with the Brussels package, is an attempt—some would say a very ambitious attempt — to reconcile quite different and potentially conflicting aims. But the alternative would have been a series of unilateral or, perhaps, regional initiatives taken by each sovereign state attempting to impose its preferred solutions on the shipping lines of its trading partners. Interference of that sort would have led to inefficiency, increased costs for shipping lines and, not least, the threat of very real disruption to shipping and trading operations where disputes could not be resolved.

The British Government recognise that the code represents something of a challenge and we have equipped ourselves with appropriate defensive powers if things go wrong. We shall do our best to make the code work effectively because we believe it holds out the best prospects for the stable development of liner shipping and that, of the options available, it represents the best course for British shipping and for British industry at large.

I have spoken at some length. It is a complex matter and it is right to put on record exactly what is involved in this important step for our shipping interests. I commend the regulations to the House.

Photo of Mr Roger Stott Mr Roger Stott , Wigan 7:22 pm, 17th December 1984

During the excellent preceding debate hon. Members from both sides of the House made it absolutely clear to the Government that action to arrest the critical decline of our merchant fleet is required immediately. We must judge these regulations, tortuous though they may be, in the light of that criterion.

On the matter of the Brussels package, we have reached the stage when we must question whether it is in the best interests of the United Kingdom to continue to support it. Continued support makes sense only when the United Kingdom's earnings through cross trade exceeds the earnings that could be made from carrying 40 per cent. of our liner imports and exports. Clearly, that position has not yet been reached. However, the changes between 1979 and 1982 show the way in which matters are moving. Great change is taking place. The position is not quite what the Minister alleged. Serious changes are occuring and we must consider whether the package is acceptable to us.

The second set of regulations deal with the national shipping lines. They do not provide adequate defence for the United Kingdom shipping interests, and that applies especially to the definition of a national shipping line. Neither ownership nor the registration of vessels is taken into account to the extent that national line status can be accorded even if ownership and registration are outside the United Kingdom.

While regulation 2(3)—the conditions for recognition —has been included because of EEC regulation 954/79, the Government have not reconsidered that regulation in the light of the changed circumstances of United Kingdom shipping. The decline in the United Kingdom's liner trade calls for the regulation to be amended so that national line status is accorded only to companies with ownership and registration within the United Kingdom. However, recognising the existence of the EEC regulation, national line status could be accorded only to companies using vessels registered in the United Kingdom or in other member states.

Regulations 2(1), (2) and (3) give national line status to existing members of liner conferences. Even if they use non-United Kingdom flag ships with non-United Kingdom crews, such status can be retained by the conference members. For example, a Swiss-owned Liberian flag of convenience ship with a Singaporean or Filipino crew could still be used by a company with national line status. That really makes nonsense of the definition of a national shipping line.

The requirement that reciprocal arrangements exist for a foreign-owned company to receive national line status in the United Kingdom provides some attempt to protect our interests, but it is the very narrow interest of owners, because United Kingdom companies establishing subsidiaries abroad would be using foreign ships and labour, with no benefit to United Kingdom seafarers or to the nation as a whole.

The regulations are clearly aimed at the Comecon countries, because they are regarded as operating unfairly, and I subscribe to that view, but there is no attempt to act against flag-of-convenience operations, which are just as unfair and are a greater threat to British shipping. Overall, the regulations will not help to protect United Kingdom shipping. They will not secure existing operations or promote further opportunities.

I shall not ask my hon. Friends—if they are still around—to divide the House. I merely wish to point out to the Minister that some of us are greatly upset by the regulations. We do not believe that they will in any way deal with the very grave position facing British shipping.

The Government are in the process of undertaking a review of shipping. The Minister of State for the Armed Forces is studying the whole question, but it is limited to the defence requirements for merchant shipping and the capability of the fleet to meet those requirements. The Under-Secretary of State, in answer to a question on 10 December, at column 304 of the Official Report, said that the review would take into account only vessels and not manpower, nor the economic necessities of maintaining a merchant fleet. I hope that the Minister will take that point on board.

I wish to crave your indulgence for a moment, Mr. Deputy Speaker, as I may stray slightly outside the motion. However, I believe that an important matter should be put on the record. The Minister must ensure that the consultants whom he has engaged to consider the matter also consider manpower. He will know from the questions asked by his hon. Friend the Member for Eastleigh (Sir. D. Price) that manpower is important, especially if there is another Falklands-type conflict, where ships that are flagged out may be brought back into Britain, but their crews may not.

In the light of the disastrous state of British shipping and the dire prospects for United Kingdom companies, the Government should undertake a major review of the industry. It is 14 years since Lord Rochdale made his major report on shipping, and a great deal has changed since then. In fact, the Government's lack of concern and their inactivity have condoned the worst decline in our merchant fleet in our history. It is time that we did something about that.

I shall not rehearse the arguments that I used in the previous debate. I am sure that the Minister is well aware of the feeling of hon. Members on both sides of the House about this great industry. I am sure that he is also well aware that something must be done quickly to arrest that decline. I do not believe that the regulations will go any way towards that. Much more positive action is required.

Photo of Mr Michael Shersby Mr Michael Shersby , Uxbridge 7:30 pm, 17th December 1984

First, I must declare an interest as I am associated with an organisation which is a member of the British Federation of Commodity Associations.

Regulation 2 is headed: National Shipping Lines of the United Kingdom". I recognise the necessity for the regulation where there is a definition of a national shipping line. The United Nations liner code enables developing countries to participate in liner conference trade by virtue of having the right to carry in vessels of their national lines about 40 per cent. of the goods generated by trade between them. The countries at the other end would also have about 40 per cent. The remaining 20 per cent. of trade can be acquired by vessels of third countries. That is the so-called 40:40:20 rule.

If my hon. Friend the Under-Secretary of State has read the Second Reading debate on the 1982 Bill, as it then was, he will understand that I have always been opposed to the United Nations liner code, which led to the Merchant Shipping (Liner Conferences) Act 1982. I have opposed it because of its impression and the opportunity which it has afforded to less scrupulous countries to abuse normal commercial practices and to take refuge for their action behind the code. I spoke at length on these matters when the 1982 Bill was being considered in Committee.

I was interested to hear my hon. Friend the Under-Secretary of State talk about the appropriate defensive powers that the Government have taken if things go wrong. I cannot help feeling that I have been reinforced in the view that I took in 1982, that the whole of this bureaucratic and cumbersome apparatus is very much the best of a bad job. My hon. Friend spoke about the problems that would have ensued if we had not decided to adhere to the code. He reminded the House of the difficulties that might have arisen if countries had pursued their separate interests. None the less, I am filled with gloom as I hear once again a description of the way in which the proposed apparatus will work.

I remind the hon. Member for Wigan (Mr. Stott) of what was said in the House on 9 June 1978 by the then hon. Member for Hackney, Central, Mr. Stanley Clinton Davis: But much of the current support for the United Nations code derives from the desire of certain developed countries to increase their share of liner trades by cargo reservation, since it appears that they cannot win a greater share by commercial means. I see no reason why we should encourage any move at all in this direction."—[Official Report, 9 June 1978; Vol. 951, c. 610.] I am glad that after a considerable period my hon. Friend has tabled the regulations, which seek to define important matters. In regulation 2(2) we have a clear definition of a shipping line of British nationality. In regulation 2(3) recognition of a shipping line as being of British nationality is accorded to shipping lines of member states of the EEC. I understand that that provision will operate reciprocally within the Community. However, in regulations 2(4) and 2(5) recognition as a national shipping line of the United Kingdom is accorded to lines of states outside the EEC under certain conditions. In regulation 2(4) there is a requirement for an effective opportunity to ply for trade, and in regulation 2(5) there are requirements relating to the percentage of share capital and directors. Those conditions may be subject to change—possibly to sudden change. For example, the opportunity to ply for trade could be restricted. The percentage of shareholders could change, and so could the number of directors. I should like to know what steps my hon. Friend proposes to take to ensure that when a decision has been made on such conditions there will be a system of monitoring to ensure that the conditions on which the decision was taken are retained.

I have always been worried that the code is vague and imprecise. I understand the problem of drafting regulations that result from a code that has been internationally criticised for being vague and imprecise. However, Britain decided to adopt the code, and it has taken seriously the subsequent legislation. It has attempted to make as good a job of it as possible. I ask my hon. Friend to set before the House the evidence he has that the issue is being taken equally seriously by other code states and that they are taking the necessary steps to draft legislation, especially the developing countries which have adopted the code. Unless all signatories to the code apply equally strict conditions, there is a danger that the code will not work.

Regulation 3 is headed "Shippers' Organisations". In regulation 3(2)(b) there is the right for shippers' organisations to be consulted by the conference under certain conditions. The conference is given the opportunity of saying under regulation 3(2)(b)(ii) that it would not be appropriate to consult". In the debates that took place prior to the 1982 Act, I strongly represented the views of shippers of raw materials which were members of the British Federation of Commodity Associations. The commodities that are traded through London rarely reach the shores of the United Kingdom. The majority of them pass between third countries. However, the commission earned by London trading houses on such transactions is an important part of our invisible earnings. The commodity trades, according to the latest statistics that are available, earned £350 million in invisibles in 1983. The trade associations of London, which cover commodities such as sugar, cocoa, non-ferrous metals and rubber, may have problems from time to time with the carriage of their commodities by liner conference which they will need to discuss with the conferences. It is astonishing that the regulations should contain a proviso that might enable any conference to refuse such consultation on the ground that the quantities carried were not large enough or that the trade concerned belonged to a larger shippers' organisation, such as the British Shippers Council.

When there are real problems it is essential that the trade should be able to consult directly with the conference. It should not have to consult any other organisation, unless it wishes to do so. Representations have been made to my hon. Friend the Minister on this issue and I hope that he will be able to give some assurance when he replies that it is not his intention to deprive any trade of the opportunity of full consultation when a genuine problem arises.

This is the first piece of Government legislation that I have opposed at all stages with both voice and vote. When historians come to plot the decline of the British merchant marine, I hope that one of them will read the proceedings in Standing Committee during April 1982 and possibly the report of this debate. I hope that it will be noted that at least one Member of this place expressed serious reservations and surprise that the British Government found it necessary to accede to the proposal.

Photo of Dr David Clark Dr David Clark Shadow Minister (Business, Innovation and Skills), Shadow Spokesperson (Education) 7:38 pm, 17th December 1984

I take up the rather sombre tone of the hon. Member for Uxbridge (Mr. Shersby), who has argued in the same vein for a number of years. Like many who spoke in the previous debate on merchant shipping, I have no direct financial interest. However, I represent a constituency that contains one of the four designated nautical colleges. As we heard from the hon. Member for Isle of Wight (Mr. Ross) in the previous debate, the colleges are under threat of closure. As the hon. Member for Wallsend (Mr. Garrett) said in the previous debate, my constituency is a town which lost more merchant seamen in the past two wars than any other. My constituency contains the largest branch of the National Union of Seamen in the north of England and the general secretary of the NUS comes from my constituency. My constituency is based on Tyne Dock. As I have said, I have no financial interest but I have a great interest in the maritime industry.

It is with great sadness that I take part in this debate, especially in view of the earlier speech on the motion and the introduction to these regulations by the Under-Secretary of State. There is great resentment in my constituency about the way in which the Government have let down the Merchant Navy. These regulations are not a step forward. The Under-Secretary of State took 35 minutes to wind up in a three-hour debate, thereby preventing me from making a speech, and that can only add to the resentment.

Photo of Dr David Clark Dr David Clark Shadow Minister (Business, Innovation and Skills), Shadow Spokesperson (Education)

I shall not give way. The hon. Gentleman spoke for 35 minutes in the previous debate and gave a long introduction to this debate. He will have a chance to make his point when winding up.

The Under-Secretary of State talked about the Brussels package. I hope that all hon. Members wish the new commissioner in charge of transport, Stanley Clinton Davis, well in his task. I deplore the scurrilous attacks made on him and his colleague, Lord Cockfield, by the leader of the Liberal party when in Brussels. It was disgraceful to make such attacks on two first-class men. We wish Stanley Clinton Davis well in his efforts to grapple with the problem connected with the Brussels package.

The Under-Secretary of State said that our maritime ability will depend upon our industry's ability. As we argued for three hours in the previous debate, this has nothing to do with the industry's ability—it has to do with the fiscal measures that the Government are prepared to take to help the maritime industry to survive. I am sad that the Under-Secretary of State was not able to pick up that point, which was made ferociously by both sides of the House. I hope that the hon. Gentleman will take that message back to the Chancellor of the Exchequer and say how unfair the Government's decisions in the last Budget were in reducing the overseas earnings allowance of seamen. That measure will increase the cost of the wages of the British shipping industry. It will give the lie to the point made by the Under-Secretary of State that our maritime ability depends upon the industry's ability. The Government have shown no incentive in trying to help the merchant shipping industry.

About 22 minutes ago, the Under-Secretary of State assured us that the purpose of the regulations and his policy was to protect British shipping. That is not how the shipping industry sees it. The hon. Gentleman responded by referring to the supply ships in the Norwegian section of the North sea. Some months ago, the hon. Gentleman met the responsible Minister, but we are still awaiting developments. The Norwegians operate a bureaucratic system that makes it virtually impossible for British offshore and supply vessels to become involved. It is as simple as that. The Norwegians know that, and they are pulling the wool over the Minister's eyes.

In introducing the regulations, the Under-Secretary of State rightly mentioned many other OECD countries, specifically Norway, Sweden and Denmark. I understand that the British Government are conducting negotiations with the Soviet Government. The British Government propose to preclude any Russian vessels from entering the port of Tyne and the river Tyne. I urge the Under-Secretary of State — he probably does not have the necessary information with him — to look into this matter. We can understand why the Government do not want to let the Russians into Barrow-in-Furness and Rosyth. I seriously warn the Government that, if they prevent Russian vessels from entering the river Tyne, they will add to unemployment. As a representative of the travel-to-work area with the highest unemployment rate in England — more than 30 per cent. of the men in the travel-to-work area of my constituency and that of my hon. Friend the Member for Jarrow (Mr. Dixon) are out of work —I know that already this year we have had more than £1 million worth of work from the Russians. I have heard much criticism of the Russians in this debate, but at least they pay their bill and are good customers. We want Russian vessels on the river Tyne. I hope that, if the Under-Secretary of State cannot give an answer today, he will write to me.

Photo of Mr David Mitchell Mr David Mitchell , North West Hampshire 7:45 pm, 17th December 1984

I do not want to detain the House for any longer than need be. I apologise to the hon. Member for South Shields (Dr. Clark) if my summing up in the earlier debate deprived him of the opportunity to participate. That was unintentional. We did not have sufficient time to discuss such an important subject. I wanted to put several points on the record, because hon. Members on both sides of the House raised a large number of issues. I shall ensure that the points made by the hon. Member for South Shields about fiscal matters are conveyed to my right hon. Friend the Chancellor of the Exchequer, and I shall write to him about the entry into the Tyne of Russian vessels.

My hon. Friend the Member for Uxbridge (Mr. Shersby) raised a number of points and expressed his continuing anxieties. I well know the points that he made at the earlier stage of the legislation. I shall write to my hon. Friend about the legislation in other countries. The Government's objective in the definition of a shipper's organisation has been to ensure that those organisations able to play a worthwhile role in consulting conferences will be recognised, but to avoid setting conditions requiring conferences to consult so many organisations that the process becomes unmanageable.

My hon. Friend the Member for Uxbridge asked about a national line and about how the Government will monitor conditions set out in regulations 2(4) and 2(5). The Government will not intervene. These are matters for the liner conference and disputes will be referred to the civil courts. It will be in the interests of other lines to monitor progress.

The hon. Member for Wigan (Mr. Stott) and other hon. Members questioned the wisdom of our being involved. They suggested that extrapolating the historic trend of protectionism raised the question whether we would be better to join those countries which voted in favour of the code and get our 40 per cent. out of our trade. That assumes that no further effective steps are taken to resist protectionism. I hope that I managed to convey to the House our clear intention to be active on that front, especially in co-ordinating resistance protectionism within Europe and through the United States — Consultative Shipping Group talks, with the expectation that there will be progress in January or February.

Hon. Members referred to charges imposed on our exporters if they lose the freedom to choose which they now enjoy. Some goods for Brazil from the east coast of the United States travel via western Europe because that is cheaper than using the carved up trade between the other two countries. That shows the damaging effect on a country's exports when there is a stranglehold on the shipment of goods.

The industry's calculations show, and the General Council of British Shipping has made this point also, that it would be better for our ship operators if we joined the liner code on the terms now proposed. Although I understand the misgivings that have been expressed, I believe that there must be a coincidence of interest between the ship owners and the unions. There is room for the unions to talk more closely and to understand each other's thinking. That would be a helpful step forward. I hope that hon. Members will join me in saying that that should be commended to the parties. I hope, too, that the House will feel it right to approve these regulations.

Question put and agreed to.

Resolved,That the draft Merchant Shipping (Liner Conferences) (Mandatory Provisions) Regulations 1984, which were laid before this House on 13th November, be approved.