Amendment of the Law

Part of Budget Resolutions and Economic Situation – in the House of Commons at 9:07 pm on 10th March 1992.

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Photo of Mr Mark Wolfson Mr Mark Wolfson , Sevenoaks 9:07 pm, 10th March 1992

I understand the hon. Gentleman's point, but I shall continue with my speech. My hon. Friend the Minister or her colleagues will have opportunities to speak.

As I said, the economy is clearly set for recovery. Inflation and interest rates are down. Companies and individuals have reduced their debt burden, and productivity and competitiveness have increased. There can be no argument on those matters. Our unit wage costs, which are the key to the future and to our competitiveness, are rising more slowly than those of our competitors. That means that real earnings are able to rise, and are doing so on a firm base. It would be the height of irresponsibility for a Labour Government to pursue policies that would lead to further inflation and result in a loss of competitiveness in British industry. That route would lead to the loss of many more jobs, because other countries would produce the goods and services that are bought by us and the rest of the world, resulting in a loss of jobs in Britain. That is the key reason for keeping inflation down. Without low inflation, we cannot look forward to success.

The House should consider an issue that was not dealt with in the Budget, and I put up a marker to my right hon. Friend the Chancellor and his Conservative successors—we shall return to the issue of British shipping and the difficulties that our merchant fleet has faced over the past 10 years. It is the Government's policy to avoid special subsidies to parts of British industry. One request by the General Council of British Shipping is that it should be allowed capital allowances. I appreciate the Government's concern that if they were to make an exception of one industry and allowed capital allowances, that would open the floodgates to similar requests from many other industries that are in difficulty. I argue, however, that our shipping industry is a special case and different from other industries, and I believe that there is concern about it in all parties.

The industry has a defence requirement that we cannot lightly set aside, and the need for action is critical. A merchant fleet that is strong and active in both ships and crew is essential for the economic and defence policies of the United Kingdom, and since last year the need for action to secure that has become more critical than ever. More well-known British companies are moving their ships or crewing arrangements offshore or they have gone out of shipping altogether. The United Kingdom-owned and registered fleet continues to contract and to age dramatically.

The capacity of our ships has decreased by a further 7·5 per cent. and on average they are over 15 years old. The average age of our seafarers is also increasing alarmingly. The average age of officers is now more than 40. For a seafaring nation such as Britain, that is unacceptable.

The Government are active in trying to solve the problem. Their strategy is to bring other countries, especially in the EEC, into line with us in not giving subsidies to shipping. I would argue that that is an unrealistic move because other countries tend to provide additional assistance to their shipping industries. I hope that my right hon. Friend the Chancellor will refer to the matter in a future Budget and give it more favourable consideration than it has been given in the past.