I agree with the hon. Gentleman. It is a vital industry for the nation and for his Constituency as well. The industry needs to recruit a considerable number of young people to make sure that we have sufficient officers and ratings in future. It is through large numbers of young people joining the industry that we will make sure that Britain is again a leading seafaring nation, with modern ships and well-trained young people crewing them. The hon. Gentleman shares my concern about the decline in the number of ships and tonnage. We should consider the reasons for that decline.

It is certainly wrong for some hon. Members to say that the Government are responsible for the decline in the British merchant marine. The decline started well before the Government came to office. The start of the 1970s saw the beginning of the decline in the British merchant marine. The reasons for that are not only that Britain's share of world trade was declining but factors beyond our control, such as decisions made in the United Nations, supported by British Governments and by many other Governments.

Those decisions affected the extent of cross-trading. In consequence, developing countries ensured that their own shipping fleets had an increased share of world trade and trade from their shores. The United Nations Conference on Trade and Development code on shipping brought into being a group which resulted in many developing countries trying to obtain 40:40:20 ratios for trade, whereby 40 per cent. was reserved for the developing countries and only 20 per cent. was to be allocated to cross-traders. Of course, Britain has expanded its merchant marine over many centuries, based on cross-trading.

Also, during the 1970s the Soviet and communist nations expanded their merchant marines with considerable subsidies, and built unprofitable ships which would not succeed in any market-oriented economy. In consequence, our shipping fleet faced considerable competition.

The British merchant marine was also not helped by the United Kingdom economy in the 1970s. The economy did not go through a very good phase. There was a lack of economic growth and, therefore, a lack of growth in trade, which did not help our merchant marine.

The then Labour Government took desperate measures to build subsidised ships. We had the curious situation that several ships were built in British shipyards only to be sold under subsidy to Poland and used by the communist regime in Poland to undercut British ships in the markets in which our ships operated. All that, combined with convenience flagging and some ships built under subsidised tax regimes in overseas countries, meant that our merchant marine had a difficult 1970s. It is no wonder that the decline has continued.

It is also worth noting that the 1970s was a bad decade not only because there was a significant decline in the merchant marine but because, in the 1970s, British Governments did not address safety problems as they should have been addressed. Therefore, it is particularly pleasing that, in their Merchant Shipping Act 1988, the present Government introduced safety measures which have pleased all my constituents who work on our ferries in Dover. Indeed, in Britain our ships are now much safer than many foreign ships which call at our ports. I hope that my hon. Friend the Minister will address that issue in his reply.

The decline in our ships in Great Britain has also led to the problem referrred to by the hon. Member for Antrim, East (Mr. Beggs). There is a reduced number of ratings and the number of people entering the industry in recent years has not been at a level that will sustain a satisfactory number of officers and ratings for the decade to come. I am pleased that the recruitment of officers has recently stabilised, but I urge the Government carefully to consider employment in our shipping industry and to come up with policies that facilitate training and improve the numbers of people who enter our industry in the years ahead.

One should also draw attention to the many measures taken by the Government which have been helpful to the shipping industry. The economic growth that we have seen in the 1980s has resulted in considerably improved standards of living in Britain. In consequence, our industry has expanded in terms not only of exports but of imports. To the shipping industry, both exports and imports are of particular importance.

Economic growth has brought more trade which at least has meant that the decline in our shipping industry has been less sharp than it might have been. Of particular interest to Dover has been the shift in the Government's policies from direct to indirect taxation and lower rates of income tax. Lower rates of income tax have led to increased use of Dover ferries. After every reduction in income tax, there has been a considerable expansion in the number of passengers travelling on Dover ferries.

I am also pleased to draw attention to the fact that the present Government have helped seafarers in the taxation of their overseas earnings. Section 45 of the Finance Act 1991 is particularly welcome to seafarers because it gives them better relief in certain circumstances against taxation of their overseas earnings. The new safety measures to which I referred earlier have increased the public's confidence in our ferries and our shipping industry. By increasing public confidence, we ensure that more use is made of the ferries between Dover and the continent.

However, I should also mention one measure that has not been helpful. It is the Treasury's idea of fiscal neutrality. The Treasury has been too theoretical in its approach to capital allowances. Perhaps the computer model that it uses does not sufficiently consider the risk factors involved in investing in British industry, especially the shipping industry. If risk factors were taken into account in the Treasury model, the cash flow cost of a ship would be considered more carefully in relation to the risk that the shipowner had to bear. The cash flow cost of a ship is borne up front, yet the tax relief is spread over many years—far too many. The tax relief needs to be reconciled more closely with the cash flow cost on day one.

Our shipping industry is even facing problems from our European Community partners. Evidence is emerging that some EC countries are abusing the principle of a level playing field and giving considerable benefits to their shipowners and seafarers. Those countries are encouraging their shipping industries unfairly when compared with the British shipping industry. Some EC countries, and some European countries outside the EC, have been giving some form of subsidy, through reliefs on payroll taxes and on the equivalent of our national insurance.

The Department of Transport should carefully monitor what those countries are doing and should set up a monitoring system in close co-operation with the General Council of British Shipping and employees' representatives so that we can ensure that British shipping is not unfairly prejudiced by the actions of other EC member states.

The Government should also consider other measures to support our shipping industry. We must have more investment in the industry, and we must remember that investment is determined by profitability and cash flow. A careful examination must take place to ensure that the industry is profitable and has a positive cash flow. That is how we can ensure that more jobs are created in the industry. A return to economic growth in this country is clearly crucial. We must ensure that that growth results in considerable investment in shipping.

We must take firm action against convenience flagging. We should not allow ships to be flagged under foreign registers, and we should try to bring many ships back on to the United Kingdom register. We should also prevent ships from being flagged coley for tax reasons in overseas registers. We should not hesitate to use safety regulations to prevent subsidised and unsafe foreign-flag ships from using our ports.

Also, we should encourage the Treasury to adopt the tax measures that I mentioned earlier, and to introduce a more favourable capital allowance regime. I strongly support a 25 per cent. straight line write-off, which would ensure that British ships had a tax write-off over four years. That would reconcile the need for cash flow and tax allowances to be more closely aligned.

I would also support an examination of the question whether it would be appropriate for the employer's national insurance contribution to be restricted in the same way as the employee's contribution. The employer's rate of national insurance should not continue at the same rate after the employee's contribution levels off.

Those measures are small in total cost, but they are important and should be considered. If they cannot be considered in time for the Budget next Tuesday, they should remain on the agenda for early action if the Treasury finds that the economy and Exchequer finances allow early action to be taken.