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Orders Of The Day

Volume 524: debated on Tuesday 9 March 1954

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Supply

[8TH ALLOTTED DAY]

Navy Estimates, 1954–55

Order for Committee read.

Mr J P L Thomas's Statement

3.56 p.m.

I beg to move, "That Mr. Speaker do now leave the Chair."

As I have said in my Explanatory Statement, where I have given all the details, I am asking the House this year for £353 million. This is the net figure at which we arrive, taking into account appropriations in aid, including the naval share of mutual defence assistance so generously granted to us by the United States of America in the year 1954–55.

The Navy has had a difficult period in the last few years. In the first place, after the war we had to reduce and then, as the need for increased preparedness arose, we had to build up once more. Distribution of manpower became extremely difficult; men could not serve long in a particular ship, and ships had many movements as we played our part in carrying out our world wide tasks. We should not have been able to fulfil our various obligations, particularly in Korea, if we had not recalled hundreds of reservists and retained in service many men whose engagements had already expired.

I am glad to be able to tell the House that by the end of this month all of the recalled and retained men will be back in civilian life and I am sure that it is the wish of the House that we should let them know how grateful we are to them for their invaluable services.

This means that we can now look at certain problems afresh. I am also sure that the House will appreciate that so long as we had men in the Royal Navy who had been retained beyond their engagements, or who had been recalled from the reserves, it would not have been fair for men on normal engagements to be able to buy themselves out of the Navy. From time to time I have been asked in the House, and in many letters from all sides, to reintroduce discharge by purchase. I have been only too well aware that the sailor does not, at the moment, enjoy a privilege which is available in some measure to the soldier and to the airman.

I am glad to say that, following the release of the last of these retained men and recalled reservists, I shall be able to reopen discharge by purchase. The scheme will necessarily be on a limited basis as it is in the other two Services and full details will announced to the Fleet this week. With the reintroduction of discharge by purchase we are also able to approve that officers who have not reached the age for compulsory retirement may, at Admiralty discretion, be allowed to retire voluntarily or to resign. That puts us on a similar basis to the other two Services. We have long wished to achieve it, but have been prevented for the reasons I have given.

A sailor's life has always been a hard one. The nature of the Service and the element in which he serves makes that inevitable. But the changing and unpredictable demands upon the Navy since the end of the war, aggravated as they have been by serious shortages in certain branches, have made orderly drafting impossible and have bedevilled all attempts to introduce a reasonable measure of stability into the sailor's life.

This is unsettling obviously both for officers and for men. They have not time to get to know each other; they have not had time to develop a real pride in their ship or in themselves, and their plans for joining their families during spells at home between foreign commissions are far too frequently upset. Briefly, they get heartily sick of being pushed around— although they themselves would perhaps put it more crudely than that.

For 50 years or more ships on overseas stations have served on the basis of a two-and-a-half year commission. Nowadays the call for foreign service is high, and I am only too well aware, as my predecessors have been, that two-and-a-half years' continuous absence abroad, usually involving separation from families for this period, causes hardship to the officers, to the men and, of course, to the families. Successive Governments, as I have said, have all felt that this period is too long, but the strain on naval resources since the war has made a change difficult.

Now that the war in Korea is over, I can tell the House—with considerable relief, I may add—that we are introducing two measures to improve the situation. The first is a scheme of general service commissions for those afloat. The main feature of the scheme is that the maximum period of continued absence from the United Kingdom will not be more than one year. It will also mean that captains, officers and men will remain together as far as possible for 18 months in most ships and for two years in aircraft carriers, because of the special training arrangements in the latter.

Part of the commission will be in the Home Fleet and part on foreign stations, but I repeat that the period away from the United Kingdom will not normally exceed 12 months. The scheme will apply initially to aircraft carriers, cruisers, "Daring" class ships, destroyers and frigates of the Home fleet, the Mediterranean Fleet, the South Atlantic station, the America and West Indies station and the East Indies station, except for the Persian Gulf. For the Persian Gulf there are specialised ships and, alas, they are too few in number for constant changes.

The second measure is to reduce practically all other forms of foreign service not covered by the general service commission scheme. Here officers and men who are either unmarried or who, being married, cannot be accompanied by their families, will have their foreign service reduced to 18 months. Married officers and men who are able to take their families abroad with them will be entitled to family passages and other family benefits, and will serve overseas for up to 30 months if they are needed.

As the House probably knows, ships on the Far East station and in the Persian Gulf, and surveying ships too, move so frequently that there are very few chances of family life, and for that reason, even today, their officers and men do not qualify for family passages. The new scheme does not in any way alter that position, but, as I have said, their time away from the United Kingdom will be reduced from two-and-a-half years to 18 months.

Officers and men on general service commission, whose period of service abroad is not expected to exceed 12 months, will not qualify for family passages or other family benefits abroad. This may sound like a snag in the scheme, but the officers and men in the ships now changing over to general service commissions who have their families abroad with them today represent only 2 per cent, of the officers and 1 per cent, of the men out of the total numbers in the Navy. Therefore, if we weigh those small figures against the improvement for the vast numbers of officers and men which the new scheme will bring, the House will realise why I commend it with confidence to them and to the Royal Navy.

I must warn the House, and, through it, the Navy, that some inconvenience is obviously inevitable during the period of one-and-a-half years or so while the new arrangements are coming into force. We shall begin the plan this June by reducing progressively the period of foreign service and by gradually adjusting the ship commissioning programme to the new form. Many officers and men will be moved from their present billets at home and abroad sooner than they are now expecting to move, but the important point is that once an officer or a man joins a ship newly commissioning under the general service scheme or on the revised foreign service basis, he will be assured of the shorter period of separation from home or family and of the longer periods of living in the same ship and with the same messmates which is a feature of the fixed commission system.

The Admiralty, under successive Governments, as I know well—-the previous Administration did their best, and we have continued to do our best, too—has tried to improve the living conditions on board ship. After all, the fighting efficiency of a warship, as the House knows, depends upon the efficiency of her crew, and that, in turn, depends largely upon the conditions under which they have to live. Living conditions rank equally in importance with armaments, speed, endurance, protection and other fighting characteristics of the warship.

The aim is, and always has been, certainly in later times, to get the best balance between these various and, I am sorry to say, generally conflicting calls upon weight and space. In other words, even in a new design there is a limit to the extent to which living conditions can be improved without deterioration of the fighting efficiency of the ship.

The principal difficulty facing us today is that, since the majority of our bigger ships were designed, they have had up-to-date armaments and equipments fitted into them, and in all too many cases this has taken up the space available for accommodation, and in practically all cases they have required an increase in complement.

In spite of those difficulties—anyone connected with the Navy will know that they are very great—a good deal has been done both by the last Administration and by the present one to improve those conditions. In the case of ships which have been fully modernised, living standards have in general been maintained in spite of the additional equipment which has been put into the ships. In the case of the conversions of the anti-submarine frigates "Rocket" and "Relentless" and their successors, it has, I am glad to say, actually been possible to improve the previous standards.

I should not, however, like to convey to the House that the future ships of Her Majesty's Fleet will have luxury accommodation. Sailors do not expect it; but, at the same time, they do expect us to do all that is possible in every way to minimise their discomforts.

If the right hon. Gentleman is finishing with that point, I should like to ask him a question. We realise that there is a limit to the amount of living accommodation which there can be in any ship, but within that amount of living accommodation there is a certain proportion allocated to officers and a certain proportion allocated to ratings. During the time that the Labour Government were in power the percentage allocated to ratings was increased. Does that percentage now remain the same?

Perhaps the right hon. Gentleman will allow that question to be answered at the end of the debate. I think that the percentage has increased. At all events, I am sure that it has not grown less. A more detailed reply will be given to the right hon. Gentleman at the end of the debate.

As well as the measures for the welfare of officers and men afloat, we are, of course, continuing the essential work of providing and modernising barracks for accommodation of the Navy ashore. We have extended our plans for married quarters so as to include the building of married quarters at the three manning ports—Portsmouth, Devonport, and Chatham.

I must now say something about general manpower problems. I want to be frank with the House about the particularly difficult situation that we are facing at the moment. I do not suppose that the House or the country realise that nearly one-third of our Regular ratings, excluding National Service men, are under 21 and that another one-third are under 25. So the House will see that we have a great shortage of men with eight years' service and upwards and that their places have to be filled today by abnormally large numbers with below seven years' service.

That situation is obviously extremely serious. The seven-year men are now beginning to come to the end of their engagements in large numbers. We want them to stay in the Navy for at least another five years. If sufficient numbers of the seven-year men stay, we shall then be confident of building up an efficient manpower force and of keeping our recruiting requirements within reasonable limits. I cannot pretend that present indications are encouraging, and unless there is an improvement we shall be faced with a serious loss of experienced men and with a recruiting requirement which we shall find hard to meet.

I very much hope that the recent pay improvements will result in many more men deciding to make the Navy their permanent career and giving to the Service their experience and usefulness. The new pay arrangements are, of course, specially designed to reward those who want and accept the responsibility of a higher rating or rank. The new length of service pay is designed among other things to provide special encouragement to the seven-year men to extend their engagements for another five years and later to re-engage for pension.

We are doing all we can to encourage men now completing 12 years service to re-engage and have extended the re-engagement bounty of £100 until further notice. A number of branches are still short of petty officers and leading ratings. How soon the shortages can be overcome will depend very much on the numbers of seven-year men who decide to stay in the Navy.

Regular recruiting is on the decline and in 1953 we were 15 per cent, short of our target. When we consider the counter attractions of civil life today, with full employment and the opportunity of getting home every night, the House will understand how much we depend on young men who are prepared to take the rough with the smooth and come into the Service. Unless we can arrest and reverse this trend we may find ourselves short of juniors in the short-term, and our bearing of senior ratings in the more distant future will once again be unsatisfactory.

I can, however, give the House a more cheerful picture of the naval reserves. They are in a healthy state and recruiting is satisfactory. The R.N.V.R. reached its golden jubilee last year—and so did I— but, unlike me, they had to postpone it a year owing to the Coronation festivities, and they will celebrate it belatedly on 12th June this year with a review by Her Majesty the Queen on the Horse Guards Parade.

If the hon. and gallant Gentleman wants to bring his own horse to the parade, I will certainly make arrangements for him.

Recruitment to the W.R.N.S. is satisfactory and their efficiency remains exceptionally high.

I need hardly tell the House that the Royal Marines have played their full part in the activities of the Fleet all over the world. We have an honourable and gallant addition to the Royal Marines in this House with the entry of my hon. and gallant Friend the Member for Haltemprice (Major Wall), and I am sure that the hon. and gallant Member is as pleased as anyone at this fact.

As regards officers, hon. Members will be aware that cadet entry is now in a transitional stage. The last competition for the entry of cadets at the age of 16 will be held in June of this year. We shall then set about increasing the 18-year-old entry to about double its present number. The preparations of regulations governing this new "all-18" entry is well in hand and they will be made widely known in plenty of time for the first competition to be held in October this year.

These regulations will include provision for candidates to be exempted from the written examination conducted by the Civil Service Commission if they have obtained certain passes at ordinary and advanced level in the examinations for the General Certificate of Education and equivalent certificates in Scotland and Northern Ireland.

I said last November that I would consider the possibility of introducing a scheme like that of the Royal Air Force to enable boys who show promise to stay on at school after 16 and prepare themselves for entry into the Royal Navy at 18. The House will be glad to learn that I have now decided to introduce a Royal Navy scholarship scheme to take effect next year after the entry at 16 into Dartmouth has come to an end. The details of this scheme will be announced in plenty of time.

Those of us who are concerned with Dartmouth College, and its running down, would like to know whether the right hon. Gentleman can say by what date he will have received the report of the Committee which is considering this matter.

I cannot give my hon. and gallant Friend a date. It is a very complicated matter, but I do realise the interest of those in Dartmouth and in the neighbourhood. If I can get that part of the report at an earlier stage than the rest I will do so because I appreciate the feeling about Dartmouth.

We are carrying out in the Admiralty a full review of the early training of officers. As a result, we hope to reach a decision about the way in which cadets of the new entry should be made ready for service in the Fleet as junior officers. This review is part of a wider examination of the whole officer structure of the Navy. The rapid development in the weapons at our disposal now and in the future, involving important changes in the shape of the Royal Navy, makes it very necessary that we should consider entirely afresh the principles on which the present careers and training of naval officers are based.

As far as the lower deck is concerned, it continues to be a most important source of officer recruitment. There have been more promotions to the general list through the upper yardmen scheme in the last 12 months than in any year since 1945. Promotion at a rather later age to branch officer, which carriers with it a subsequent opportunity for promotion to the general list, has also continued in a very satisfactory manner.

So much for manpower, but I would remind the House that in paragraph 9 of the White Paper on Defence the Government have summarised their policy—to be seen about the world as a strong and well equipped people in a cold war; to deter the aggressor by various means; and to foe ready if hot war should come. Obviously, it is my duty to try and tell the House how this policy affects the Royal Navy.

First of all, there is the Navy's part in providing a deterrent against major aggression and preparations to meet such a contingency, should it unhappily arise. I hope that the House will not accuse me of living in the past when I say that any potential enemy of this country must read the lesson of history as weapon has succeeded weapon down the ages. It is our weakness as well as our strength that this country is an island. Our greatest and most powerful ally is separated from us by the waters of the Atlantic, and whatever the shape of a future war, control of the seas, from America to this country, and to the continent of Europe, must be a basic aim in our strategy.

Safety for our supplies, safety for Europe's supplies, is the task of the Navy. That safety begins with a denial of the sea to the enemy and only if there is evidence that the Navy can and will perform this task can we be satisfied that we have made our contribution to the deterrent. What, then, are we doing? First, we are ensuring that the active Fleet contains the most modern ships and that the reserve Fleet is in good shape. In the open oceans only carrier-borne aircraft can destroy reconnaissance aircraft, provide fighter protection, and in distant waters they alone can hunt out and kill the enemy surface raider and submarine.

I have set out in the Explanatory Statement the new carriers coming into service. All those completing or being modernised after 1953 are expected to have the full angled deck, which will improve their fighting efficiency and enable them to accommodate more aircraft, and the steam catapult and the latest arrester gear, which is necessary for the operation of the modern aircraft then due to come into service.

Despite certain labour shortages, late delivery of equipment and difficulties over design problems, good progress is being made on the construction of frigates and several of them will be undergoing trial before the end of this year. There are now two squadrons of fast anti-submarine frigates converted from destroyers already in the Active Fleet, and some of them are with the training squadrons.

New submarines are to be laid down, and the process of modernising and improving existing submarines is continuing. Our submarine construction is based on the experience of the last war, and all the research and development that has been going on since then. In addition to what I might call the orthodox submarines, two experimental craft using high test peroxide propulsion to provide high underwater speed are nearing completion and are expected to undergo sea trials this year.

Can the right hon. Gentleman tell us what is high test peroxide?

As far as I, a layman, can tell, it is nothing more than a concentrated form of hydrogen peroxide, which is what ladies use to turn themselves from brunettes into blondes. What it does to ladies is not for me to say, but I am delighted to be able to tell the House that it does at least make our submarines faster.

The first submarine of this kind, H.M. Submarine "Explorer," as the House knows, has been launched within the last few days, and I will not repeat what has been said about her in the Press. New and improved midget submarines will complete this year. We have also made progress in another field of submarine development, and that is the continued study of nuclear propulsion.

During 1954–55 a large number of the small craft laid down under the 1952 and earlier programmes will become available. These consist of new coastal minesweepers, inshore minesweepers, fast patrol boats, and seaward defence boats. In spite of delays, 11 of the coastal minesweepers and 22 of the smaller inshore minesweepers will complete during the current year, and many others are approaching completion. At the present rate of progress, the numbers to complete during 1954–55 will approach one ship of each type every week.

The broad picture that I want to give the House and the country today is of the relegation to reserve of the older carriers, frigates, and minesweepers and their replacement by more efficient new construction. Although financial and manpower considerations impose limitations on the size of the Active Fleet, it is true to say that a steady improvement in the material quality of the Fleet is taking place as the post-war building and modernisation programmes progress.

Now I should like to deal with the question of our aircraft. The rearming of the Fleet Air Arm with jet and turboprop aircraft is well under way, and will be nearly complete by the end of this coming financial year. We have already rearmed several of our day fighter squadrons with Sea Hawks, and a strike squadron with Wyvern aircraft. In the coming year we expect the delivery of further large numbers of Sea Hawks, Sea Venoms, and Gannets. The result will be that by this time next year the Sea Fury and the Firefly, which have both served their generation well, will have been virtually eliminated from the front line. The Gannet, which will be the first specialised naval anti-submarine aircraft, will come into squadron service this year.

We will also start on the production of a lighter anti-submarine aircraft, the Sea Mew, the prototype of which hon. Members may have seen at Farnborough last year. In this aircraft a resolute attempt is being made to halt the trend towards large and complicated aircraft. It has been specifically designed for rapid production and ease of operation from the trade protection carriers.

Progress is also being made in the production of the swept-back wing jet fighter to which I referred last year, but it is too early yet for me to say by what date it is likely to be in service. It will be an aircraft of exceptional performance. It will be equipped with an air-to-air guided missile for air combat, and it can carry an atom-bomb if required.

I think that a special word this year is certainly deserved by helicopters, in which the Navy has taken such intense interest from the first. A squadron of naval helicopters which has been operating in Malaya has earned generous praise from no less a person than my right hon. Friend the Secretary of State for War in his Explanatory Memorandum on the Army Estimates.

All I can say, in belated return—as my Explanatory Statement had gone to the printers before his—is that it has been a great honour for the crews of these helicopters to have lifted, since January of last year, no fewer than 10,000 of our fine fighting troops and 300 casualties in these most difficult operations. Helicopters, as I think will be agreed by my right hon. Friend the Secretary of State for War, are now regarded as quite indispensable in Malaya.

Very considerable advances have been made since the end of the war in new weapons and equipment for all forms of naval warfare, and the next few years will show the fruits of an intensive programme of research and development coming into operational service. Our main efforts have, of course, been directed to attack on enemy U-boats, surface warships, and shipping wherever they may be found, and to the protection of our own shipping from aircraft and mine attack as well as from U-boats and surface raiders.

The latest anti-submarine vessels will be equipped with greatly improved Asdic equipment which controls automatically the new anti-submarine mortar logically developed from the successful Squid, and will very much increase the killing power of the anti-submarine escorts. I mentioned last year that the prototypes of these equipments were fitted in "Rocket" and "Relentless." I am delighted to say that these ships, and their successors, have come fully up to the expectations of the Admiralty.

Our anti-submarine aircraft will be fitted with improved radar for Snort detection and will carry buoys which can be dropped for detecting submerged U-boats. Greatly improved homing weapons for destroying these U-boats when located will shortly be coming into service. Here I come back to the question of helicopters, because there are great possibilities in the use of helicopters in anti-submarine warfare. Their ability to hover with a locating device suspended in the sea promises us a great improvement in the accuracy with which a submerged submarine can be fixed.

An order has been placed for a twinengined helicopter—the Bristol 173— for use as an anti-submarine helicopter for the Navy. Until this is available, we are using American helicopters and equipments and have already formed our first anti-subarine helicopter squadron to evolve and develop the necessary tactics.

Our submarines are also being provided with much improved Asdics. Also of great importance is defence against the mine menace. That continues to occupy a very prominent place in our research and development programme. Last year I may have sounded despondent on this subject, but we are now going thoroughly into novel and promising new devices for the clearance of all types of mines. I am sorry that I cannot tell the House more today, but I can at least say that though we have a long way to go I believe that we are tackling the problem on wise and very promising lines.

A special effort is being made to improve the defence of the Fleet and merchant shipping against air attack. Steady progress is being made by the Ministry of Supply, for which I am grateful, in the development of a large guided missile for fleet and convoy protection, and the first guided weapon trials ship will be fitted out shortly. It would, however, be a mistake to imagine that guided weapons will be in general service at sea or will supersede the gun as a means of medium and close range defence of the Fleet and convoys against air attack for some years yet. Air defence by carrier-borne fighters and by guns still remains essential for some years ahead.

The Parliamentary Secretary to the Ministry of Defence, referred to our world-wide tasks in the defence debate, and, however far we look ahead, the Navy's task will continue to be to use the sea to impose our will upon the enemy in time of war, to deny him the use of the sea, and to safeguard our own sea communications.

Hon. Members who went to the last and previous Naval Reviews will have seen how the shape of the Fleet has gradually changed in this century, and I have described some of the things we are doing to bring ourselves completely up-to-date, such as developing improved submarines, whose rôle will be to attack, before they can threaten our shipping, the enemy forces including U-boats which put to sea despite our other offensive measures.

I wonder, when the new cadets, in the new Dartmouth entry which I mentioned, become admirals, what kind of a Navy they will see. Weapons may well have changed out of all present knowledge; but, from what I read of the prophecies of scientists today, not only will there be a Navy but it will be a Service of supreme importance. But before those cadets get even their first seagoing command many Changes will have already taken place. We shall have to augment, and, later, to replace, our cruisers and anti-aircraft escorts by ships armed with guided weapons. It will be some time, however, before the modern cruiser will become outmoded.

Changes in naval strategy and naval weapons take a long time to implement, and we must be quite sure, if I may reverse the words of the song, that we are on with the new love before we are off with the old. The Navy must be prepared for war whenever it comes and able to perform its peace and cold war tasks, and there must be no doubt in the mind of any potential enemy that we are on top of the job now and that we are alive in the Royal Navy to the changing needs of this changing age. That potential enemy must also realise that, if the need should, alas, arise, the Navy will fight the next war with the next war's weapons.

4.33 p.m.

I should like to congratulate the First Lord on the third occasion on which he has had the honour of introducing the Navy Estimates. It is a privilege for anyone to introduce them, and he has done so, as he always does, agreeably and courteously. We have no complaint to make of him on that score, nor, indeed, on the score of our dealings with him throughout the year. Indeed, not only from him but from the Parliamen tary and Financial Secretary and from the Civil Lord we have always had the attention that we like to receive and we know that when we submit cases to them they axe dealt with in the manner we like, even though we do not always get the replies we would like.

I was interested in the First Lord's review especially in the light of the Statement on Defence. The Statement on Defence tried, for the first time, to lift at least a corner of the curtain over the new developments taking place in the world and their consequential effects on tactics and strategy. I know only too well that I am no authority to discuss these matters, but I shall submit certain observations to the House in the hope that if they are inaccurate they will be corrected by those better informed than I, and that if they should have a substratum of truth in them, that may illuminate some corners which the First Lord has not.

Although the First Lord said he was giving us a broad picture I could not think that it was a broad picture of the Navy's rôle. The Statement on Defence says that the Navy has world-wide tasks. Indeed, the First Lord had not spoken more than a moment or so before he, too, was referring to the Navy's worldwide tasks. However, I have a feeling that this phrase is stuck in when nothing else can be thought of to be said I wonder whether as much thought is being given to the role of the Navy in these world-wide tasks as ought to be.

If thought is being given to it, as I am quite prepared to believe it is, then I should like to see more evidence of it, and of the changes that are likely to come in the Navy, and I should be glad if the First Lord or another Minister would try, later, to draw together all these unconnected hints that the right hon. Gentleman has thrown out about hydrogen tests in submarines, air-to-air guided missiles, and all the other things he talked about to make our flesh creep. I should like him to do so in order that we may see what effect all these will have on the Navy's role, because he has not publicly faced the fact that the Navy's role is being increasingly challenged by the other Services.

There are hon. Members associated with the other Services who are ready to challenge the Navy's role. I have some hon. Friends sitting behind me who are ready to stab me in the back at any moment, and the First Lord had better keep a close watch to his rear, too, because there are plenty of hon. Gentlemen sitting on the benches behind him who simply do not accept the phrase that he used, late in his speech, about the safety of these islands' supplies and those of Europe resting on the Royal Navy. [HON. MEMBERS: "Hear, hear."] Yes, the right hon. Gentleman is challenged, judging by the cheers. I think this argument should be thrashed out. It is just not sufficient for us to say that the safety of these islands depends upon the Royal Navy. That is approved by some who believe in the Royal Navy, but heard in rather glum silence by those who say that it is outdated.

I should like the First Lord or the Parliamentary Secretary to give us a genuine picture of how he sees affairs at the present time, how he sees the role of the Royal Navy in preserving the safety of these islands and the safe passage of the 80 million tons of supplies that come here every year. We have not had that picture painted for us yet today. I am going to try to fill in some of the gaps in the sketch. I may do so in an inadequate way, and I apologise in advance. Let us consider the position at the present time so far as the Navy is concerned.

We have one battleship, the "Vanguard," in the Active Fleet, and four in reserve. I suppose that there is fairly general agreement that the battleship was dethroned from its former status in the last war. Yet we have one in the Active Fleet today. What is its role? Why is the "Vanguard" in commission now? What purpose does she serve? What role is she intended to fill later on? She was commissioned about two years ago. I do not know what her company is. I suppose it is about 1,500 men. Her peace-time complement is, I think, 1,600. Perhaps she has not that number. However, I suppose that her company numbers about 1,500.

If the battleship is no longer the core of the fleet, what role is she intended to fulfil? Surely she is not being used merely as an office for the Commander-in-Chief of the Home Fleet? It would be a rather expensive way of providing an office afloat. I have heard it said that we cannot put the office of the Commander-in-Chief in an aircraft carrier because aircraft carriers are not designed for that purpose.

It may be that that is true, but there must surely be better ways of providing an office than commissioning a battleship which, as far as I can see from the unrelated statements that the First Lord has made today, has no r61e to play. If it has a rôle to play, I shall withdraw what I have said and be very happy to hear what it is. In that case the First Lord can rely upon me for all the defence he needs. But he has the responsibility for making out a case for commissioning this ship and keeping her in commission.

I know that a great many young men are trained aboard her, and I am sure that they receive good training; but they would get equally good seamanship training if the First Lord commissioned another five, six or seven frigates to do the job. The men would then get in some small ship time, and they might see more seamanship than they will in the "Vanguard."

If it is agreed that the battleship has a very small role to play in a future war, in our balanced and limited Fleet, with the limited amount of money which we can put into it, we need to be satisfied about what the Admiralty is doing with the battleship. The other four battleships are in a very low state of reserve and I warrant that it would take hundreds of thousands of pounds, if not millions, to put them into a seagoing state.

I turn to the cruisers. Apart from the "Superb" and "Swiftsure," we have about 24 middle-aged or rather elderly cruisers. I believe that the two I have mentioned are the only ones which have been completed since the end of the war. I exclude the "Darings" from this category. Although they have been written up as light cruisers and are called "Daring Class" ships in the Explanatory Statement, they are not cruisers in the sense in which the U.S.S.R. and the United States of America are using that term.

There is controversy about what role these cruisers are to fulfil. Are they designed or able to face the cruisers of the U.S.S.R.? At Spithead, last summer, we saw the magnificent "Sverdlov." She is rated at 13,000 tons, but those who can judge these matters much better than I tell me that that is an underestimate and that she is nearer 17,000 tons, which is the equivalent of some of the large United States cruisers. They look much of a muchness.

We have about 24 cruisers of between 5,000 and 10,000 tons displacement, armed with 5.25-inch and 6-inch guns. I believe that some of their fire control has been modernised. Is it the view of the Board of Admiralty—and the Minister takes the final responsibility— that these cruisers are to face those of the U.S.S.R. in the event of war? Frankly, I doubt it, but I go no further at the moment.

Now I come to the aircraft carrier. It may be suggested that it is taking the place of the cruiser. That is true, within limits. The aircraft carrier is able to search a much wider area much more rapidly than any one cruiser can do, but I ask the First Lord to note that, at the moment, the aircraft carrier itself is under challenge and under very heavy fire from a great many senior officers in the Royal Air Force—mostly retired, but nevertheless officers of very great weight and experience. [Interruption.]If we have some criticisms to make of them later on, there is no reason why we should not pay them a compliment at the beginning.

If it is the view of the Admiralty that the aircraft carrier, flying off aircraft, can take the place of the cruiser, can the First Lord assure us that the weapons carried by those aircraft are capable of sinking ships of the "Sverdlov" class? Eight cruisers of that class are now being built, with a displacement of between 15,000 and 18,000 tons. If we are to rely on the aircraft carrier, the First Lord should tell us whether it is his view that the weapons provided are capable of sinking that class of ship. Doubts are expressed about this. Many people take the view that the weapon which can be carried in an aircraft is not capable of sinking a cruiser. Can the First Lord give us an assurance about that?

I would also ask him to note that every one of the major units of the Fleet today—the battleship, the cruiser and the aircraft carrier—is either regarded as obsolescent or is challenged. I do not mean in terms of numbers or class, but in terms of its rôle. The argument against the aircraft carrier is that anything that an aircraft can do when operat- ing from a carrier can be done very much better by a land-based aircraft. That sums up the arguments of the "air boys" fairly well, and their case grows stronger every year. With the development of very long-range aircraft, able to operate from shore bases, the case for the aircraft carrier must be argued very fully if we are to know where we stand in this matter.

This reduces us to a rather critical situation. If the rôle of every one of our major units is under challenge, does the House think that the Navy can exist in a purely defensive rôle, such as is envisaged by units of the anti-submarine and anti-aircraft frigate and minesweeper type? In his war memoirs the Prime Minister wrote at some length about what he regarded as the excessive defensive mentality which he found at the Admiralty from time to time, and which he thought he ought to counteract, and some pretty sharp notes were passed—not wholly one way, because Admirals have a very good flow of language if they are provoked, and some answered back very sharply.

But how much more would a defensive attitude be encouraged if the rôle of the Navy were reduced to that of convoy protection and minesweeping? That is a very real issue, which the House and the country should face and upon which we ought to have guidance from the First Lord, instead of him just telling us that the Navy's rôle is world-wide, that it will carry out its world-wide tasks and the rest. That is not sufficient today.

In the present atmosphere, so far as I can judge—and I hope that I am being fair to everybody—the Navy feels that there is a great deal in the case made out for shore-based, very long-range aircraft. What has the Navy got against this argument? First, it does not trust the Royal Air Force. The Navy does not believe that any Service which is not under its control, and upon which it has to call for aircraft, will be there when it is wanted. It draws upon its past experience and upon its views of the relative importance attached by the Royal Air Force to its various rôles

The pride of the Royal Air Force is now the strategic bomber. Then comes Fighter Command and, a long way down the list, we have Transport Command and Coastal Command. This is often denied, and it is said that Coastal Command has parity of treatment and is as well regarded in the Royal Air Force as the strategic bomber force, but we cannot get it out of the mind of the Navy that the two Commands are not regarded in the same way by the Royal Air Force. We must face the fact that the suspicion is there and is felt very strongly.

If we couple that feeling of the Admiralty with the fact that if the Navy were deprived of its only offensive weapon it would become a purely defensive Service, we can all see how the Admiralty naturally digs itself in on this question of the right rôle and the right weapon to be employed. I very much doubt whether, in the present atmosphere, we are going to get to the bottom of this controversy about the aircraft carrier and its rightful place. I do not blame the Admiralty, because anybody who has served on the Board of Admiralty always falls over backwards to see its point of view, but I do not think it is any use our hiding our heads in the sand any longer. The attack will go on increasing, and we ought to face it.

I do not forget that there has been a lot of co-operation. When I was at the Admiralty I had the good fortune to go to Londonderry to see the anti-submarine school there, which I thought was very good indeed. But we have two forms of training, two sorts of living accommodation, two forms of recruitment, and all the rest of it, and I do not think that the Fleet Air Arm, as the very junior partner, can ever expect to get the same treatment as the Royal Air Force in the demands which it makes in any direction.

Therefore, I come to the following conclusions. The Royal Air Force and the Navy have a great deal in common. Their rôle is the same. The Navy has no right to exist purely because there has always been a Navy and because it is the Navy. Its right to exist depends upon the fact that it is controlling the sea routes to which the First Lord made reference. That is also true of the Royal Air Force. Both Services are sharing today the rôle of keeping open our communications and of protecting our commerce

Both Services have a great deal in common, and yet at the present time there is more inter-Service argument going on about this subject—though it is kept down at the top, and is quietened and hushed— than I can remember ever since I have been studying—in a rather faint way— these problems. It may be that in a couple of decades the Royal Air Force itself will be obsolescent. The strategic bomber may well have been displaced within 20 years.

I defer to my hon. Friend on that matter. It may well be true. It may be that the development of the guided air-to-air, sea-to-air or ground-to-air missile will make piloted aircraft obsolescent. Both these Services have great problems to face during the next 20 years if the resources which they are now being given on an unprecedented scale are not to be misused.

I put it to the First Lord—I see that representatives of the other Services are present—that the time has come when a fresh review should be made of the methods used for protecting our commerce and of keeping our sea lanes open, and that such a review should be raised above the level of an inter-Service wrangle. It should cover the consequences of the development of very long-range shore-based aircraft, and the rôle of the carrier and the cruiser. In the light of the development of that aircraft, such a review would clearly have to take into account the extent to which the North Atlantic Treaty forces modify our needs in any direction.

It should try to visualise just how far the development of guided weapons a decade ahead should influence the direction and pace of our efforts today, because, at the rate at which we build ships, a ship laid down next year will not see service in much less than six or seven years. That is a fact which must be taken into account if the First Lord wants to modernise his cruiser fleet. A committee making such a review should be looking a decade ahead and examining what will take place. It should be a committee at the highest level and should be free to examine the most radical and profound modifications of rôles between the Services. The most radical question it could examine would be whether there is the need for a separate Royal Air Force and a separate Royal Navy. I merely pose the question because I should not be presumptuous enough to begin to answer it. Neither do I think that any of us in a debate of this sort should.

If, after careful consideration, the committee reached such a conclusion in the light of the development of guided missiles, and, perhaps, the obsolescence of the Royal Air Force, then we should not shrink from making the change, whatever the consequence. I think there is a very strong case for the Government putting in hand such a review and communicating its results to the House and to the country. Who knows, it may even result in some economies which would please my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes), as well as some other of my hon. Friends.

I do not want to be too sweeping this afternoon, and, therefore, we will save the Army for next year. I am only putting forward some tentative thoughts which we ought to be considering at the present time and which we ought to discuss in the interests of the nation as a whole.

On the question of manpower, I very much welcome the decision of the Board of Admiralty to restore the right to men in the Service to buy themselves out. The hon. and gallant Member for Portsmouth, West (Brigadier Clarke) wrote to "The Times" recently on this subject, and I agree with everything that he said in his letter. I believe that the inability of men to buy themselves out accounts for much of the underlying cause of the trouble on the mess decks recently, because one man unable to buy himself out and with a long period of service in front of him can upset a whole mess deck.

I asked the First Lord a Question the other day about the ages of those who had committed these offences, and also about their average length of service. I received the answer which I expected. Ten out of 12 of them were under 21 years of age, and of those who had signed on for 12 years all but one had more than half their service to do. The discontent of such men is due, perhaps, to the fact that they have joined the wrong Service or are unable to face the undoubted hardships of life in the Royal Navy. Life in the Royal Navy will never be easy. Therefore, to get out of it these men may commit these acts.

By his decision this afternoon the First Lord has done quite a lot to lessen the discontent and to get rid of the handful of people who are quite unable to settle down to life in the Service. I also congratulate the right hon. Gentleman on his decision to reduce the length of the foreign service commission to 12 months. I know that the Parliamentary Secretary brought that idea back with him when he went to the Far East last summer, and I am very glad that it is now proposed to put it into force over a period of time.

I should like to hear some further details as to how the system is going to work, because, so far as I can see, it is going to mean a drastic overhaul of our methods of providing for the Fleets. Are the rôles of the Home Fleet and of the Mediterranean Fleet to be changed, the Home Fleet being regarded as the training Fleet and the Mediterranean Fleet as the one to go into action? How will it affect their rôles? We should certainly like an explanation of that. I have here in my notes, as two of the things to which I wanted to call the First Lord's attention, the inability of men to buy themselves out and the length of the foreign commission. Now I can wipe both of them out.

However, I want to mention two other things in connection with the length of engagements. I know that the Navy wanted to build up a long-term service, and I think that is a very good idea if it can be achieved. If the policy of allowing men to buy themselves out is applied fairly liberally, it can perhaps still be achieved, but I warn the First Lord that he will create a discontented Service if he gets men to sign on for 12 years under some form of sharp practice. I will tell him what I mean.

Among the Questions which I put down in preparation for the debate, I asked what proportion of Regulars signed on for seven years and for 12 years respectively in 1950, 1951, 1952 and 1953. I know that in 1950 and 1951 no particular pressure was put upon men as to whether they signed for seven years or for 12 years. But I have my doubts about 1952 and 1953. Indeed, I go further; I think pressure has been brought to bear on men, perhaps on men who have no strong views one way or the other, to sign for 12 years, because of the desire for a long-service Navy.

Further, I believe that pressure has been applied in this way: a young man goes to the recruiting office and the man in charge of recruitment says, "You want to sign for seven years? I am sorry. I have no vacancies for seven years but I have one for 12 years, if you care to sign for that period." If my suspicions are regarded as unworthy, I ask the First Lord how he accounts for the figures which he gave me, which show that whereas in 1950 and 1951 38 per cent, and 39 per cent, of the men signed on for seven years, in 1952 and 1953 the total had dropped to 13 per cent, and 12 per cent.—only one-third. There is some reason for that, and I believe I am pretty near the mark. I tell the First Lord that in the long run it will not do much good if he gets people on this basis, because generally they will be disgruntled after a fairly short time.

I now turn to a subject which a number of my hon. Friends will raise. I apologise for the length of my speech. As the First Lord knows and the House no doubt recollects, a committee reviewed the operation of the Naval Discipline Act and decided that a great many reforms should be made. I do not think I am breaking any confidence when I say that in my last eight or nine months at the Admiralty —I was there for only 18 months—I was very busily engaged in reaching decisions on some of the new features which will appear in the legislation. That is about three years ago, and we still have no signs of legislation on that Act which, as the First Lord told me in a reply he gave recently, requires modernising.

The First Lord told me that when a place can be found in the legislative programme he will bring his proposal forward, but I do not think that is good enough. By now he should have reached his conclusions and be fighting for a place in the legislative programme to enable him to undertake the reform of this Act. If I were in a contentious mood this afternoon, I should tell him some of the things which he could well leave out of the programme in order to bring that reform forward, but I will leave that to the imagination of hon. Members opposite whose consciences are as guilty as, from the looks on their faces, they themselves feel.

I hope the House will forgive me for making a quotation, but I wonder whether at the back of the Admiralty's mind there is not an underlying reluctance to bring forward a review of the Naval Discipline Act. I ask this because of a minute which I once saw in the Admiralty's files. I hope that the First Lord will not challenge me on this. Perhaps I may read the minute and then he will see. It reads:
"Should our code of laws become a matter of discussion before the House, the Members of which understand little or nothing of sea life in the Navy, I fear it would suffer considerably as the standard of duty and discipline in civil and home life is much relaxed in these days."
What a commentary on the post-war Labour Government. But then I discovered that this minute was written in 1905.
"The standard of duty and discipline in civil and home life "
seems to have been relaxing continually. I wonder whether there is not something like this in the back of people's minds today—some thought that the House cannot be expected to understand how the Naval Discipline Act should operate, so let the House not be worried with it.

May I next offer a word of congratulation to the First Lord? If he had to alter the Dartmouth plan, I think he has done it in the right way.

My hon. and gallant Friend should not try to detract from the one compliment which I am paying the First Lord.

I think he took exactly the right decision, and 1 want to say to any ostriches there may be around the Service that if they believe this decision will be altered again, they should take their heads out of the sand. We on this side of the House will stand by it and carry it out, and I believe it will be in the best interests of the Navy.

I will conclude by some questions about the programme of new construction. In March, 1951, it was announced that we proposed to convert 45 destroyers to frigates. Only 10 have so far been completed. What is the programme for the remainder? Thirty-five remain to be completed. The results so far are not much for a substantial three-year rearmament programme. Will the Parliamentary Secretary tell us what the Government have in mind for the conversion of the remaining 35 vessels?

In March, 1951, it was announced that 25 frigates would be built. As far as I can make out—I may be wrong—only one has been completed; that is, one out of 25 at the end of a three-year rearmament period. What is the programme for the remainder of these frigates? It should have been hurried on, and I am disappointed to learn that only one has so far been completed. I am glad that the minesweepers seem to be doing rather better, and I agree as to the concentration of effort which has been put into them.

The House will be delighted to hear that I leave a lot unsaid. We have a long debate before us. Criticisms which are made of the Navy from any quarter of the House are made with a desire to improve it. A lot of money is going into the Royal Navy and, indeed, into the other Services—more money than ever before in peace-time. There is a great responsibility upon the administration of the Admiralty to see that the use of that money is wisely directed, especially when the Admiralty is calling upon the nation's resources more widely than ever they have been called on before—a great responsibility to see that the pace and direction of effort are right. I hope that when the results are known we shall find that the resources which the Admiralty has had at its disposal have been wisely used for the future as well as for the needs of the present.

5.8 p.m.

With very great sincerity I crave the indulgence which the House is renownedly so generous in granting to those who try for the first time to contribute to its deliberations.

When I sought to speak in this debate I had it in mind to try to make two points. The first is perhaps a very modest one, but it is one which I believe affects the strength and health of the naval service at its very roots. I want to make a plea for more instruction in seamanship—and, with great respect to the hon. and gallant Member for Hull, East (Commander Pursey), who has just left his place, I do not include horsemanship. I mean more instruction in seamanship for ratings who are recruited into the seaman branch of the Service. That instruction should be given by junior officers who have responsibility as divisional officers for the welfare of the men whom it is their duty to train.

How should this be achieved? In the first place, it is fairly obvious in the case of training establishments. But in the case of ships of the Fleet at sea I suggest that is should be given as an instruction to commanding officers in Admiralty Fleet Orders that, more often than they do, and more often than they like to do or than their first lieutenants like them to do, they should send boats away under oars and under sail, with junior officers and with newly-entered ratings, for training and instruction.

May I explain briefly why I feel that this is of such importance and value? I believe there is a danger that we are developing a Navy without sailors. I am afraid that too many young ratings go to their ships and become immured as little more than street cleaners in a vast iron slum, and that they are divorced from the realities of the sea. In such a Navy, I think that the spirit which keeps it alive must perish.

May I put it in this way? I think that, in the short time I have been a Member of this House and during the time I have been sitting on a Committee upstairs, I have been most impressed by one thing. Many hon. Members who sit on the opposite side of that Committee to me have spent many years in mining. We are considering a mining Bill, and I am sure that they will feel with me the great affinity which exists between, curiously enough, the calling of the miner and the calling of the sailor. They will appreciate that it is not possible in the seafaring profession, any more than in the mining profession, for experience to be gained at second-hand. It is absolutely vital that those who go to sea in ships should really know the fundamentals of their craft at first-hand and become versed in the skill of their calling. For many of them it is a new and temporary calling, but it is a calling in which the people of our land have for generations taken pride and delight.

I also believe that training in seamanship is of incalculable value in the establishment of morale in the Service. I know that I have, and other hon. Members, too, must have seen with the very greatest misgivings reports of malicious damage in Her Majesty's ships, but I think that anyone who knows the Navy recognises instantly that this is damage which must be laid at the door of faulty morale, and that no question of treason enters into it at all. I believe that the maintaining of naval discipline and good morale, in conjunction, is a most difficult and delicate business.

If I may draw on my own experience for a few moments, it was my lot during the Second World War to spend some considerable time at sea in a small ship on a particularly arduous and unrewarding type of patrol, and it so happened that my commanding officer allowed me to take the ship's boats away under sail in conditions in which normally it would not have been possible for me to do. I learnt from that, and from the experience that I had with those whom it was my responsibility to lead, that in the satisfying exertions of handling small boats on the sea one found, among those who shared in them, that confidence and mutual respect which is the basis of discipline.

I should like to make this third point in support of my plea for training in seamanship. It is an insurance policy against unnecessary loss of life in times of disaster and crisis at sea. We used to say, with sadness, that it was indisputable that when there was loss of life at sea in the Royal Navy and in the Royal Norwegian Navy during he last war, that when a ship of His Majesty's Navy, as it was then, was sunk, the loss of life was always much greater than when a ship of the Royal Norwegian Navy was sunk.

The reason was no fault of ours. Our men were comparative novices in the ways of the sea, but the men of the Norwegian ships were trained men and seamen from birth, and when it comes to it in the last resort in a fight for survival between men and the sea, it is fundamentally discipline and training in the actual handling of ships on the sea, and small boats above all, that will cause a man to survive or go under.

I believe that we owe it to the young men who volunteer, as they do, to join the naval service to see that they are given that skill and that at homeness in their surroundings which may save their lives.

I feel that in making this point I am not doing so at an inappropriate time because, in the Explanatory State- ment which my right hon. Friend has published, it is pointed out that owing to the deterioration in regular recruiting in the seaman branch exceptionally large numbers of National Service men are joining the Navy this year, and I feel that, as things are going, that will be the case in the years that lie ahead.

I see that the Leader of the Opposition is not in his place, but I know that hon. Friends of his on both sides of the House will believe me when I say that he will have some sympathy in this matter, because I noticed with great interest that his own son was a valued member of the staff of one of the most helpful organisations which seek to promote exactly the kind of standard I advocate—the Outward Bound Trust.

The second point which I want to make—and I shall not detain the House much longer—is a rather less narrow one and concerns more the broader principles of naval strategy. I hope that the hon. Member for Cardiff, South-East (Mr. Callaghan), who spoke from the Dispatch Box opposite, will believe me when I say that I have no intention of being controversial, because I did not know what he was going to say. But I am not inclined to alter what I am about to say, and I hope that he will believe me when I say that I am not making debating points on this matter at all.

My right hon. Friend the First Lord is criticised—and I am not speaking of criticism from the other side of the House but of criticism such as that made in a leading article in "The Times" this morning. The gist of the criticism which is laid at his door is, I think, this: that on the offensive side not enough progress is being made. That the Admiralty is content to concentrate upon defensive policy and to develop the strength of minesweepers and frigates and similar vessels at the expense of striking power in the Navy, which has its part to play in the offensive and strategic policy of the Western world as a whole.

I believe that this criticism is ill-conceived and unjustified. In the first place I think that no one, without second sight, could possibly concentrate upon constructing offensive major war vessels and armaments at this time without the risk of finding that vast expenditure was committed to ships and weapons that research was likely quickly to render obsolete. In the second place, no one, I think, will deny that there are certain enduring realities in regard to the rôle of the Royal Navy in the past and the present, and in the future, so far as one can tell. There can be absolutely no question as to the need in any future war, if such a thing should happen, for huge fleets of minesweepers and anti-submarine vessels, because, whatever the strategy of any future war, this country will still depend on the safe arrival in its ports of millions of tons of shipping on which our lives depend.

For that reason, an enemy is bound to try to prevent the ships reaching our ports, and the best methods—and I do not see these methods being fundamentally altered in the future—of preventing these ships arriving are, first, mines and, secondly, the submarine, or U-boat. Therefore, if there is to be any choice in the emphasis between offensive and defensive strength in the Royal Navy as to which should be perfected and developed first, I am sure that we are right to concentrate now on bringing our minesweepers and frigates to the maximum strength and the maximum perfection.

At the same time, I think that we should have our minds open to other things in the future. I listened to the debate on the Air Estimates in this House and it was a chastening experience. I do not mean in the physical sense, although we sat up all night, indeed I must say—I hope without being misunderstood by hon. Gentlemen who sit on the Front Bench below the Gangway opposite—that, although it was a chastening experience, it was rendered not altogether unenjoyable by the virtuosity and skill with which they kept us up and detained us for so long.

As one who has been afloat at sea, I suggest that it would have been very much less chastening if hon. Members had had the good sense to provide themselves with hammocks, as they would have done in the Royal Navy, because the Palace of Westminster is so constructed that it is admirably suitable for the slinging of hammocks across the corridors and lobbies. That is a reform which the House might consider in the future.

In saying that the debate on the Air Estimates was a chastening experience, I mean that to one who, by habit, regards the Royal Navy as a bulwark which is not to be challenged in the defence of this country, it was chastening to find it brushed aside by hon. Members, on both sides of the House, who spoke as though it was only in the air that we had to consider the strategy with which to conduct any future war. This is not so. I believe that the ultimate striking power that is to be developed in the West or in any nation that brings its military potential to the greatest height is bound to be achieved in a combination between the sea and the air arms.

While, therefore, for the time being the Admiralty is right to concentrate upon what it knows to be vital—the development of the defensive role of the Navy, which cannot toe denied and will always be required—we should at the same time feel that future developments will depend upon the researches of which there are only dark hints in the Explanatory Statement, and, also, that they will depend very largely upon the searching and radical thought which, if I may say so, right hon. and hon. Members, on both sides, have to give to the role which the Navy should play.

5.22 p.m.

It affords me particular pleasure to follow the hon. Member for Ilford, North (Mr. Iremonger) and to congratulate him upon his maiden speech. He represents a constituency in my native county of Essex and I am sure that all of us in the House will agree that he spoke with a fluency, knowledge and humour which will encourage us all to listen to him again.

The First Lord and my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) devoted a good deal of their speeches to the men and ships of the Royal Navy. I join with them in their tributes to the Royal Navy, but the House will expect me to turn my attention to the Royal naval dockyards. These dockyards in their condition today would not command pride from any of us. The First Lord himself said last year that they were congested and old-fashioned and had an undue proportion of old plant. If the Chancellor of the Exchequer is right when he says that we have an improved economic situation, the First Lord should have been sufficiently strong in his demands for a higher proportion of the capital investment that was available.

My hon. Friend said that a lot of money had been set aside for the Admiralty and that it is how this money is spent that matters. I do not think it is being spent in the best possible way. Much more could be done in the dockyards if there were greater efficiency and if there were a tendency to look at things which cost more money than they ought to do. I speak only from experience and I do not say that these are substantial matters, but they are indications of the unnecessary waste that takes place.

As the First Lord knows, the Royal Marine Barracks, Chatham, are unoccupied for the first time in 200 years. Had these buildings been used, there would have been no waste, but they have been neglected and are rapidly deteriorating. That famous parade ground has weeds on it for the first time. I know that it has now been given to the Army, but surely the First Lord should have considered more fully the proposition that I made to him earlier, when the Chamber of Trade wanted to inspect the site in order that it could be considered for industrial purposes. We did not have a very good reply from the First Lord, who was not at all sympathetic. All I can say is that the ratepayers of the town are losing about £3,000 a year. I should like to know what will now be the cost of putting these barracks into a reasonable condition. I imagine that it would be very high. Not only are the citizens of the borough suffering locally, therefore, through higher rates, but they have to pay more taxes nationally because of this kind of neglect.

I hope that the First Lord is not so doctrinaire that he believes that private enterprise must come into the dockyards also. More private enterprise work appears to be being done in the dockyards today than hitherto. This would not be a bad thing if it was being done cheaper, but I have some illustrations which show that the cost is heavier, and not less, as a result of private enterprise doing some of the work in the dockyards.

There is the "Ausonia" depot ship and there is the gunnery shop in Chatham Dockyard, both of which are being painted by outside contractors. Their workmen get higher pay than those in the dockyard, and they have to come down from the north of England and are given a subsistence allowance. Not only does this cost the Admiralty more money, but the permanent men in the dockyards are becoming discontented, which is not a good thing.

I am told, furthermore, that at the Royal Naval Armaments Depot, at Lodge Hill, tugs are being repaired by private enterprise. I am trying to ascertain the cost, and if it proves to be higher it will fortify the instance I have already given. The First Lord is really not giving his whole attention to the dockyards, but is concerned rather with what appear to be petty party doctrinaire views.

I should like to make an appeal about a local matter which could be a cause of extreme danger. The House will recall the tragic accident in Dock Road, Chatham, when many young Royal Marine cadets lost their lives. At the Pembroke Gate the conditions really are bad, and time and time again the trade union representatives have asked that they should be put right. I ask the First Lord to give his attention to this matter before we have another disaster in the area.

The right hon. Member will know that the lighting in Dock Road, which is in my constituency, in Gillingham, is now thoroughly satisfactory. I am sure he would not want to imply that nothing has been done there.

The hon. Member must be aware that I am informed about local government matters. A local government responsibility is not a matter that I should today raise in the House. What I am discussing is the responsibilty of the Admiralty and has nothing to do with the lighting in Dock Road.

To turn to construction work in the dockyard, I was very pleased to hear this afternoon, and to read earlier in the Papers, about the launching of the "Explorer." It was done by private enterprise and I am sure that the standard of workmanship is of the highest. There is, however, a term that is always used in the Admiralty, with which we are all familiar and which I strongly support: that we must always preserve the war essential. This means that more building has to be done in the Royal dockyards if they are to retain the skill of the craftsmen, technicians and others.

There is a tendency for those people to drift away from the dockyards. I do not have the figures for the apprentices, but it would be most revealing to know the number of young men who have been trained by the Admiralty and who, two years after serving their apprenticeships, leave the dockyards and go elsewhere. This is a very bad thing from the viewpoint of the preservation of the war essential.

Prior to the new submarine, the "Explorer," the last submarine that was launched was the "Acheron "—built at Chatham Dockyard. It was a magnificent ship and is the only one to have dived with a Prime Minister aboard. The First Lord may recall that my right hon. Friend the Leader of the Opposition went down in the submarine on one of its exercises, which in itself is an example of the confidence in this well-manned and well-built ship from Chatham Dockyard. We would like more work to go there so that this kind of workmanship can be maintained.

I should like to refer to one other matter, the question of staggered holidays. I am told that if the holiday period is now to be closed instead of staggered as before, it will mean, in the case of Chatham, that for two weeks ships which would otherwise have gone there would be diverted—

Royal Assent

5.30 p.m.

Message to attend the Lords Commissioners.

The House went; and, having returned

Mr. SPEAKER reported the Royal Assent to:

  • 1. Cinematograph Film Production (Special Loans) Act, 1954.
  • 2. Industrial Diseases (Benefit) Act, 1954.
  • 3. Royal Irish Constabulary (Widows' Pensions) Act, 1954.
  • 4. Merchant Shipping Act, 1954.
  • 5. Civil Defence (Electricity Undertakings) Act, 1954.
  • Supply

    Navy Estimates, 1954–55

    Question again proposed, "That Mr. Speaker do now leave the Chair."

    5.43 p.m.

    Before we were called to another place, Sir, I was talking about the holiday situation in the dockyards. The trade unions have had imposed upon them what is known as a closed holiday period. I was about to make a point in the interests of economy. The overheads go on all the time, and if we are not keeping the yards fully employed during the entire year and closing down for those two weeks, it means additional expenditure.

    I want also to stress that both the Labour Governments and the Conservative Government have been trying to get public opinion to agree to staggered holidays as being desirable in the interests of the country, and it seems to be a bad thing that the Admiralty should depart from that standard if we are to meet the wishes of those who have given this matter careful consideration.

    I now want to refer to the details given in the last Estimates by the First Lord about the strength of the Soviet fleet. What the right hon. Gentleman failed to give us last time was enough information about mine-laying potentialities which he said he could not give for security reasons. This afternoon we have heard that mine-laying and submarines are really the menace, so he ought to be able to tell us more about it. What is the security involved? The Russians know what they have got. The First Lord certainly gave us more information about our defence, but last year he said that what was disturbing him was that he had not been able to organise all the antisubmarine and counter-mine work which was necessary. Can he assure us that the words he uttered last year no longer apply and that we can look forward with more hope to safety in the future?

    I dislike saying this, but I believe that the Royal Navy is becoming the Cinderella of tine Services. We have a Minister of Defence who is a great soldier. I have no doubt that he tries to be fair, but he is obviously biased and cannot help being so because of his training and upbringing. As far as the Secretary of State for War is concerned, we all know him to be a gallant, bold adventurous man who won the Victoria Cross. But when we come to the Royal Navy we find that we have a Minister who is not forceful enough, who is not doing all that is necessary for the Royal Navy, which will always be needed.

    There are powerful reasons why the Air Force and the Navy should be brought closer together with one end in view, to serve the country best. At the Spithead Review I was distressed at being told constantly that the Royal Navy is now part of the Royal Air Force. It is true that we could see nothing but aircraft carriers but, in the interests of strategy, to protect our trade routes, and for many other reasons, the Royal Navy has a formidable part to play. I therefore want to see the First Lord pressing more energetically the claims of the Service which he represents in this House, which is still the senior Service.

    5.46 p.m.

    As I rise to address this House for the first time, Mr. Speaker, I take refuge in a time-honoured tradition and crave the indulgence of the House as I set sail for the first time on what are, to me, uncharted waters. I am particularly pleased that I have managed to catch your eye, Sir, on these Navy Estimates for not only have I served 16 years in the Royal Marines but I now have the honour to represent a part of the City of Kingston-upon-Hull, the third port of this country. Many of my constituents axe fishermen and they know from hard experience the true worth of the work of the Royal Navy in peace and in war. Two weeks ago we had the privilege of welcoming H.M.S. "Truelove," a vessel of the Fishery Protection Squadron, whose task it is to see that our fishermen proceed on their lawful occasions unmolested.

    I shall not start by saying that I will take up the time of the House for only a few moments. If you will forgive me, Sir, for interjecting a note of levity, in the short time I have been in this House I have already learned to what lengths such a statement may lead. I want to deal with three main points: first, the men who man our ships; secondly, the problem of what is now called amphibious warfare; and. thirdly, a word about the problems of the Corps in which I had the honour to serve, the Royal Marines.

    On the question of the men who man our ships, the hon. Gentleman the Member for Cardiff, South-East (Mr. Callaghan) has already referred to the sabotage, or alleged sabotage in Her Majesty's ships, which we all deplore so much. I entirely agree that this is caused by young men who, for reasons best known to themselves, join the Service but, once in it, find that it is a disciplined Service, that it requires team work, and that team work inevitably means self-sacrifice. These young men have found that they were not able or capable of making one of the team, so they have had recourse to these violent methods of obtaining their discharge. If the House will permit me, I will quote a paragraph from a letter received recently from a friend of mine on board one of Her Majesty's ships, as follows:
    "The hopeless misfits, the anti-social, the homesick child, make these pathetic efforts, misnamed sabotage, to draw attention to themselves and endeavour to obtain release. They are not representative of the whole."
    Indeed they are not representative of the whole, and I am certain that their problem can be solved along the lines mentioned by the First Lord this afternoon, namely, by the reintroduction of the privilege of discharge by purchase. I think I am speaking for all hon. Members of the House in welcoming this decision. These misfits are not representative of the Service as a whole, but, nevertheless, I believe that there is a certain unsettled feeling in the Royal Navy today. This is due to many things —the aftermath of war, full employment and high wages ashore, increased mechanisation and specialisation and, possibly above all, the extreme youth of the members of the lower deck in the post-war Navy.

    I should like to make certain suggestions as to possible means of overcoming this feeling of frustration. The first and most important step has been taken in this House this afternoon in the statement by the First Lord that the general service commission of one and a half or two years is to be reintroduced. A ship's company is a team, and no team can play well or work well when its members are being continually changed. Once this continual turnover is stopped a team spirit will grow and a man will become identified with his ship, and no sailor will willingly let down "his" ship.

    The second step involves the question of manpower. At the moment there is a shortage of manpower and most of our ships, certainly the larger ones, are manned with reduced complements, yet they are still expected to operate at or near peak efficiency. This involves great strain not only on officers but on petty officers and men. No one likes more than I to see a large number of ships in commission, but I suggest to my right hon. Friend that a policy of manning fewer ships with larger complements might produce dividends by creating happier ships' companies and improving the well-being and efficiency of the Fleet.

    I should like to deal briefly with certain individual problems of the men who man our ships. First, there are the problems of the senior officers. Here the main problem is the lack of sea time. There were 645 commanders on the Navy List in September last year and only 90 were serving in command or in executive appointments at sea. This meant a ration of sea time of something like one and a quarter years in five. The position of the captains' list is even worse. The ration of sea time in their case was 22 months in nine years.

    I appreciate that this is an almost insoluble problem in the days of a small-ship Navy and a large Fleet Air Arm, but I should like to contribute one suggestion with all humility in the hope that it may be of assistance. It is that attention might be given to the manning of some of our larger fleet auxiliaries by Royal Navy personnel on the lines that are followed by the United States Navy. It would not be as pleasant to command an oiler as a destroyer, but at least it would give our officers a greater amount of time at sea.

    As to the younger officers, there has been a certain amount of criticism in the Press, which may or may not be well founded, that they are tending in these post-war years to get some distance away from their men. If there is any truth in that allegation, I suggest that it is because they are marrying at a younger age than was customary pre-war and that it is very difficult for them to keep their homes going and to fulfil their Service commitments. I believe that the announcement made last week of increased pay will help very much to prevent this conflict of loyalty.

    The chief petty officers and petty officers are, as always, the backbone of the Service, but since the war they have left in large numbers. I hope sincerely that the pay increases announced last week will serve to check this trend. If it does not, I suggest to my right hon. Friend that he turns his attention towards the question of petty officers' pensions. These are long service men and they realise that their commercial value in civil life is not very high at the end of their second period of engagement. Therefore, they go out after 12 years to earn sufficient money on which to live in their old age. If the Service gave them adequate pensions they would probably sign on for their second period of engagement.

    The last men with whom I should like to deal are the seamen. There has been a great deal of correspondence and talk about the relative merits of accommodation in the ships of the British Navy and in the ships of the American Navy. In the British Navy we have a mess deck which the seaman can call his own home and that of his mates. The American Navy goes in for rather more grandiose ideas and its men lose the homely touch of the mess deck. I know that our constructors are facing a very difficult problem in trying to put a vast amount of new equipment in a restricted space. I ask the First Lord, however, to try to give accommodation on the mess deck a higher priority than it receives at present.

    My right hon. Friend has spoken already on the subject this afternoon and I think it was my hon. Friend the Member for Ilford, North (Mr. Iremonger) who spoke of slinging hammocks in the Palace of Westminster. Hammocks are slung on the mess decks of H.M. ships in every conceivable place and I have heard men complain very rightly that they were unable to obtain an adequate amount of sleep because a hammock was slung, for instance, near a hangar or the aircraft lift or adjacent to the flight deck of a carrier. There is also the complaint that fresh water has to be rationed at sea. These things are very important, and I ask my right hon. Friend to consider whether the degree of priority given to accommodation on mess decks cannot be raised. It has been truly said that the Service man is our country's best ambassador. It is equally true that a contented man is the Service's best recruiter.

    I turn now to the question of amphibious warfare, which was known as combined operations. I believe that a study of our history shows that at the start of a war we never have a force available and capable of putting into effect a maritime strategy. I wonder whether history is repeating itself again. Though, very probably, we shall see nothing on the scale of the Normandy invasion in the future, I believe that in the early stages of a war the use of atomic weapons may enable us to break through on the enemy coastline and, provided the Army is carried in mobile covered carriers, it might be possible to land and achieve considerable penetration. Added to that, the knowledge that we could land a force anywhere on the vast coastline controlled by a possible enemy would cause that enemy to tie down great numbers of men for defence purposes.

    If we ever reach the stage of "broken-backed" warfare which we discussed in the House last week, these special ships and landing craft would be invaluable for landing stores and food on the beaches of this country once our ports had been put out of action. This subject is possibly not appropriate for a debate on the Navy Estimates, it is more a question for a defence debate, but I submit that, though the First Lord is not responsible for amphibious warfare, he is responsible for the provision of amphibious ships and craft.

    I have looked through the Navy Estimates very carefully to discover what is being spent on new amphibious craft and I have found very little. Can my right hon. Friend assure me that we are not entirely living on our fat and that new LST and LCT are being produced, that the existing LCT can carry the new heavy Army tank, and that the new DD tanks and other "funnies" will fit into craft now in use? At present, we have no modern raiding craft. Are steps being taken to build some?

    The LCA with which we are still operating are falling to bits. I speak from personal experience. Are the replacement craft being designed and— more important—being built? The operation of these minor landing craft is the task of the Royal Marines. The amphibious school at present situated in Langstone Harbour is rapidly silting up. Can my right hon. Friend assure us that the long-awaited move to Poole is at last to take place?

    That brings me to my final point, the Royal Marines. Their main problem is one of recruiting. This has become a vicious circle which works as follows. The teeth to tail figures of the Royal Marines are better than those of the Royal Navy as a whole. This means that a greater proportion of the men are employed on operational tasks such as the manning of Her Majesty's ships, Commando Brigade, Rhine Flotilla, and so on, and fewer employed at home in barracks, training establishments and other administrative tasks.

    This is largely due to the fact that the Royal Marines have adopted the functional system as opposed to the old home ports system of the Royal Navy. It is very satisfactory to have more men in the operational teeth than in the administrative tail, but that leads to increased disturbance and no assurance that, when a man has finished his foreign service and comes home, he may be stationed near his home port, where, probably, his wife has established a home.

    The whole position is aggravated by the reduced Vote A strength shown in the Estimates we are debating today. I am told that this is not caused by financial stringency but by lack of manpower, So we have the vicious circle, more on operational tasks, more disturbance, less home service and inevitably fewer recruits. I believe there are some ways of overcoming, or at least of reducing, these problems. The Marines are the Navy's handy men who, at short notice, can be turned to soldiers, sailors or parachute troops. Inevitably, when any new naval task arises, from the Rhine to the Falkland Islands, the Navy has not only to "tell it to the marines" but to give it to the Marines. But it must be borne in mind that if so small a Corps accepts too many commitments it means more foreign service, more disturbance and strain all round which, in turn, must reflect on recruiting figures.

    If it is true that Marines suffer a greater disturbance than their opposite numbers in the Royal Navy, is it right that the allowance of married quarters should be tied down to a small and fixed percentage of the Navy's allocation? More married quarters in Royal Marines establishments would help in this problem of recruiting. Cannot something be done to improve the recruiting propaganda for the Royal Marines? For the moment they tend to be mentioned as an afterthought after the Royal Navy. This is particularly true, as I know from experience, when we are concerned with liaison, with schools, sea cadet units and other organisations.

    Uniform is of great recruiting value. Could not full dress be brought back on the same lines as in the Brigade of Guards? I believe that, initially, it costs the same to kit-up a marine as to kit-up a seaman, but, after the initial issue, more money is spent on the seaman than on the marine. Could not the money saved be devoted to improving the quality of the uniform, or possibly in introducing an open-necked blue tunic?

    The Volunteer Reserve of the Marines can be of great recruiting value. These men are civilians and they go for two weeks training a year. If this training is made interesting and not cramped by financial considerations these men will go back and shoot a terrific line about what they had been doing. That would be extremely good value in encouraging youngsters to join the Service. I repeat that the contented man is his Service's best recruiter.

    I conclude by saying that in these days of supersonic warfare and the atom bomb the Royal Navy is apt to be forgotten. We should, however, not forget the submarine which, twice in our lifetime, has very nearly brought this country to her knees. The safeguarding of sea communications is now the joint task of all three Services and I submit that the Navy still plays the major part. Without the Royal Navy the aircraft of the R.A.F. could not fly and the Army could not move, except on its feet. There i* nothing wrong with the senior Service which cannot easily be put right. I believe that the statement of the First Lord today will prove of great encouragement to all ranks of the Royal Navy.

    6.6 p.m.

    I do not know whether, in his 16 years' service with the Royal Marines, the hon. and gallant Member for Haltemprice (Major Wall) faced any ordeals comparable with the one through which he has just come so successfully. If he did, and got through those ordeals as successfully as he did through this one, he must have been a very fine officer indeed. The hon. and gallant Member spoke factually about something which he knows. He has not so much made a maiden speech as a serious contribution to this debate. I welcome him as a representative of the very great corps with whom he served for so long, and I believe we all agree that he will be a very effective Member of Parliament.

    I agreed with a very great deal of what the hon. and gallant Member said. Like him, I have been interested and disturbed by the reports which we have been reading in the Press during the last 12 months about dissatisfaction in the Navy—instrument smashing and all that. When I read those reports I usually tended to think of them as exaggerated newspaper stunts because, in my short experience of the Navy, I came to the conclusion, for what it is worth, that the Navy handles men better than either of the other two services. Despite the fact that conditions in war-time were foul and the pay disgracefully low, we all managed to have developed in us the feeling that we were all in the same boat, or the same ship—as literally we were.

    After thinking over these recent disturbances, I realised that people like myself and other hon. Members who have not had Service experience in the Navy since the war have to realise that there are tremendous differences between service in the Navy at present and in wartime. In war-time we were often in danger, and that had a wonderful effect in the way of providing a sense of unity. As ratings, we knew perfectly well that the officers had several privileges, such as the privilege of gin. The skipper had living space about equal to half the space allotted to 60 ratings but we knew that he had responsibilities and that if the ship were torpedoed he would be no better off than we would be. There was the unifying feeling of danger.

    At least equally important was the release that came with safety and the obliviousness that came on arrival in safety. Once safe after a period of danger, we did not really notice that conditions were so bad. I remember our washroom in a destroyer where the area for 150 men was about the size of the Table of this House, but we did not bother about that very much because, the moment we got into port and were safe, it was so nice to get any sort of a wash. Therefore, the conditions did not worry us very much.

    Thirdly, in war-time every member of a ship's company had a feeling of immediate purpose, that he had a real job to do. We used to be given some pretty peculiar jobs on occasions during war-time. I remember once having to wash the oil off the side of the ship and watch a choppy sea put it back again. I remember, on another occasion, when we knew that a bombing attack was coming which would make an absolute shambles of the ship, even if we were not actually hit, being set the task of polishing the brass on the quarter deck. But we felt that action was coming and that it was far better to brood over the "Bluebell" than over the bombs.

    There was a sense of immediate purpose, but there was something even more important than that. It was that when we were serving in war-time we had also a sense of over-all purpose. We really did feel that the Navy had an important and a major job to do in the scheme of that war, and that in a real sense the safety and the welfare of the Realm depended upon us.

    Today none of those things exist. There is none of the community spirit that comes from danger. There is none of the relief that comes from safety, and, partly because these things do not exist, the conditions under which men serve become especially important. The contrast between the conditions for the ratings and the conditions for the officers glares at the ratings in a way which does not obtain in war-time.

    From direct experience I know that a great deal has been done to improve the conditions of the Service. Fairly recently I was aboard what I must still call a "Daring Class" destroyer—I do not know its official name now. As usual, we went to inspect the lavatory and washroom, which always seemed to me to be a most important section of the ship. I found them an absolute paradise compared with what I had seen on "I" and "V" and "W" class destroyers. But in my opinion some of these alleged improvements are not good things at all. Bunks are being put in. One of the great virtues of the hammock—one of many— is that it takes up air space which would not otherwise be used, whereas a bunk takes up deck space and tends still further to cramp the quarters of the crew.

    Furthermore, as I think the First Lord himself mentioned, though the designers start off with the best will in the world, remembering that men have to man these ships, before the vessel is actually in commission so many new gadgets have been invented that all the extra space given to the crew is taken over by radar equipment and the like. I know of one destroyer where at the last minute—I do not know why—they decided to put in a refrigerator, and the only space which could be found to accommodate it was in the boiler room. That is the kind of thing which is making it difficult to obtain good conditions for men at sea.

    Then there is the question of pay. I know that pay is a lot better than it was when—I was about to say in my young days, because all this seems so long ago—

    Well, it is not so long ago as all that. There is still a certain amount of mean-mindedness in some respects regarding pay in the Service. Only this morning I received a letter from the mother of a petty officer. I have not been able to check the facts in this letter, but she states that her son went into the Navy as a stoker to do his National Service. He liked the life and decided to reengage, I imagine for a short-service period of five years. At the end of it he was to get £100. At the end of that time he was a stoker petty officer with first-class papers and he took his £100. He used that money as part of a deposit for a bungalow for his mother, who was a cripple.

    Then he said, "I still like this life and I would like to go on with it." No one asked him to re-engage, but he volunteered for a further term. He was told by the authorities that he could carry on if he liked, with his qualifications and all the rest of it, but that he would have to pay back the £100. He had not £100 but he was still keen to go back, and so the Navy is taking 10s. a week from his pay until that £100 is paid. If that story is true—and as I say, I have not yet been able to check it—it is an example of mean-mindedness which will make it less likely that other people will sign on for a further term of service.

    Apart from pay and conditions, there is a much bigger problem which my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) faced up to bravely. It is that at the present time, unlike wartime, there is no sense of purpose in the Navy. Battleships have gone—quite rightly I think. Carriers are likely to be obsolete also. It is only escort ships and other small ships that have, or are likely to have in the foreseeable future, any real job to do. In fact the Navy is the Senior Service only in the sense that old grandpapa, sitting in the chimney corner and nodding his head, is the titular head of the family.

    That sort of feeling is doing immense harm, and it is absolutely essential that the First Lord should say something much more clear and distinct about what the Admiralty foresees as the future rôle of the Navy than the kind of bromides which he dished out this afternoon. This uncertainty is having a serious effect upon discipline. I am no martinet. I dislike the discipline of my party Whips on many occasions. I never believed in the Captain Bligh sort of discipline in the Navy or anywhere else—

    I believed in orders being obeyed, as I once told my hon. Friend the Member for Cardiff, South-East.

    But generally speaking, Admiralty discipline, even as measured out by me to my hon. Friend, if firm, was tolerant. But there was one thing which in the Navy was an absolute rule. If you were given a direct order by an officer, a petty officer or a leading hand, you did it first and argued about it afterwards. That seemed to me to be absolutely essential, however silly the order happened to appear.

    I am told that now that is not being carried out. In recent weeks I have taken the trouble to talk to a number of petty officers and leading hands. Time after time a petty officer has told me that he has given a man a direct order and has been told by the man what to do with his order, in front of a large section of the ship's company. The man has then been taken aft, only to receive a caution, while the petty officer got the "bottle." If that is the general practice it will have a bad effect upon the Service.

    These men told me that they feel that today officers are trying lead a quiet life. One or two have even hinted that instructions have been sent from the Admiralty to the effect that an appearance of a happy ship should be given by keeping the crime sheets clean. If that be so it is absolutely fatal to the maintenance of efficiency in ships. But I think it more likely that the explanation is this feeling of uncertainty from which everyone in the Navy is suffering. The officers feel that there is less incentive to maintain the traditional, tolerant, but firm discipline which I admired when I experienced it myself.

    The Admiralty must make up its mind about what purpose the Navy is to fulfil in the foreseeable future and, having done so, must let that knowledge go to all ranks so that they may see what job the Navy will have. Furthermore, the Admiralty must make up its mind to adjust the Navy, both in its size and in its activities, to the new rôle.

    I was glad to hear the First Lord's comments on the constant changes which have taken place in personnel. I know a man who in the past year has had no fewer than nine drafts. That kind of turnover makes it impossible for ratings to settle down and form roots and for officers to display any qualities of leadership. How the First Lord intends to do what he says about this I do not know, but I was delighted to hear him say that he is setting about stopping this procedure.

    We must do everything we possibly can to improve the conditions of men serving at sea. As I have so often said in the House, we must make human beings a first charge upon the Admiralty Vote. We must do what we can to be more generous-minded about pay, but above all we must decide what use, if any, the Navy will be in future years and make that use fully known so that everybody may understand what their job will be. If we do not do that, there will be no possibility whatever of reviving what used to be a most excellent thing about the Navy and one of the greatest experiences in my life—the sense of being part of a ship's company.

    6.22 p.m.

    I hope that the hon. Member for Hudders-field, East (Mr. J. P. W. Mallalieu) will forgive me if I do not follow him in his remarks. I will confine my remarks to Her Majesty's dockyards in general and the Devonport Dockyard in particular.

    I congratulate the First Lord on having been able to start a long-term plan for the modernisation of dockyards, something which has been requested by hon. Members on both sides in debates for many years. I am sure all those connected with the dockyards will be grateful to the Government and will congratulate them on having gone so far to meet the demands to modernise the dockyards.

    I want the First Lord to consider two points of detail. The first concerns the apparent misuses of some ex-naval chief electricians in the dockyards. To understand this problem hon. Members must bear in mind that it is the electrical departments in the dockyards which are expanding more than any other. There is therefore considerable concern among ex-naval chief electricians and T.G. Ms. who find that they can get employment in the dockyards only as labourers. This point has been put to me on several occasions by men who have had up to 25 years' service in the Navy, some with 10 or 12 years' service as chief electricians and, who, because of the existing regulations about apprenticeships, are now working as labourers.

    Of course, I should be the last person to try to start an argument of Naval loyalty versus union loyalty. It is pointed out that if the existing regulations are to be changed, many people in the yards who are electricians' mates ought to be upgraded first. I only ask my hon. Friend to consider the situation because I have put it to him several times and have not had a very satisfactory answer. There is genuine concern in the yards about this matter.

    The next point I wish to make concerns the system of closed holiday periods. I recognise that the Admiralty has forceful arguments on its side to show that much money will be saved by this system. I understand that it will be saved because the maintenance of the dockyards will then be done on 14 consecutive days and not at week-ends. Overtime and double overtime has to be paid on Saturdays and Sundays. There will also, I understand, be a saving in the continual drain of manpower from the various departments over a long holiday period.

    That may be true, but there is great feeling among the dockyard cities and the men that it will not be as satisfactory for them, and I ask the First Lord whether he will call for a comprehensive report at the end of the year to find out the feelings not only of the Admiralty but of the unions and the local authorities as to the success or failure of this system. I do not know what arguments can be advanced to show that it will benefit the men. The only argument in this connection which I have heard is that they experienced it in 1939 and earlier, but I do not think that is a very good argument.

    I wonder whether those who have taken the decision have considered what it is like when 20,000 people—as will be the case in Devonport Dockyard, many of them my constituents—are using the same clubs, cinemas, public houses, buses and utility services at the same time. They all do approximately the same things and very few leave Plymouth for their holidays. It may not be a very satisfactory way of spending a holiday. That is a point which must be considered.

    We should also consider the view of the dockyard cities. It is easy, in Whitehall, to forget how interdependent are the lives of dockyards and dockyard cities. I will quote no lesser authority Chan the present Admiral Superintendent at Devonport, a distinguished sailor. Sir Philip Enright, who stressed this point publicly the other day when he said in that dockyard that there were no fewer than four lord mayors, six aldermen, 13 councillors and two magistrates for the City of Plymouth. I make that point to show how interdependent these two organisations are.

    I am not convinced that the dockyard cities will benefit by this system, because the closed period will fall in July, August and September at a time of tourist traffic. Will the First Lord give an assurance that he will call for a comprehensive report? If possible, he could show it to hon. Members on both sides of the House, but if not he could study it and tell us his reaction before deciding to go on with this system. In the interests of the Admiralty it is essential that the dockyards and the dockyard cities should keep the closest and best possible liaison.

    6.30 p.m.

    I propose to deal with a subject which has not yet been touched on by hon. Gentlemen on either side of the House, and that is the shortage of officers and, of course, the methods of entry and selection which follow from that. Recent debates in this House, particularly the debate last summer on the report on cadet entry, led many people to assume that this question of the shortage of entries into the officers ranks of the Navy was a new one. In fact, it has always been with the Navy, and the main reason for that is that the Navy has always been interested in narrowing too closely the field of selection.

    All inquiries during the last century, from the Crimean and Baltic wars of 1854—and those were only a day or two ago, or a matter of a century—after which continuous service was introduced for ratings, have shown that the field was too narrow, and there were always recommendations for improvements. At one time there was a bright idea that the Navy was not getting enough entries from the sons of parsons, and special bursaries were introduced to increase such entries. It is not on record what the results were, and I would not like to lower this debate by telling the House what it was; but it was not a good idea.

    Fifty years ago Admiral Sir John Fisher, later Lord Fisher, put on record in his book "Records," at great length, quite firmly and factually, why the Navy never could get sufficient officers. The main point is that the Navy never went the right way about getting them. Admiral Fisher stated:
    "Officers will be drawn exclusively from well-to-do classes. Democratic sentiment will wreck the present system in the long run, if it is not given an outlet. But let us take the far higher ground of efficiency: is it wise or expedient to take our Nelsons from so narrow a class? "
    He went on to say:
    "The present system admits the Duke's son if he is fit, but excludes the cook's son whether he is fit or not."

    Will the hon. and gallant Gentleman permit me to intervene?

    Certainly, let us have a free field with no favours. I am ready to take on all comers.

    Will the hon. and gallant Gentleman admit that Lord Nelson was a parson's son?

    I left that point long ago. I would seriously recommend to the hon. Gentleman that he should pay attention to the time factor, and press button B at the right moment and get his penny back. I have no intention of going back five minutes at a time, and having my theme upset by irrelevant nonsense. Lord Nelson is not the only admiral in the British Navy.

    I was saying, when I was interrupted, that Lord Fisher wrote:
    "The present system admits the Duke's son if he is fit, but excludes the cook's son whether he is fit or not."
    He went on to say:
    "It ought to admit both, but only if both are fit."
    and added later:
    "Brains, character and manners are not the exclusive endowment of those whose parents can afford to spend £1,000 on their son's education."
    Reverting to the hon. Gentleman's point about Lord Nelson, if he went before a selection committee today for entry as a cadet he would not stand an earthly chance of succeeding. It has been claimed in debates in this House that the early entry scheme and special entry scheme have produced a good type of officer. The question I want to pose is: a good type for what? [Laughter.] Hon. Gentlemen need not laugh; they should wait until they get the answer. It is not as funny as all that; it is very serious. Is it a good type of officer for an admiral? Ninety-five per cent, of them fail, and only 5 per cent, become admirals.

    What is the test? The greater majority of naval officers are only required to reach the rank of lieut.-commander in their 30s, and to retire at the age of 45. Why, then, all this "hooey" and nonsense about cadet entry? There is no question, and it is well for the controversy, which has been going on in "The Times" and in this House that this point was not developed because I could have sunk that as well, that there is a high standard and has never been any complaint.

    Every published report of investigations into the cadet entry has always criticised the lower standard of the lower half of the entries, in particular, the "tail" that the system was carrying— too heavy a tail of indifferent officers which it ought not to have carried. The only real investigation carried out was by representatives of the United States Navy before 1914, when the common entry system had been going on for 10 years. They reported that the British Navy was getting good officers in spite of the entry scheme, and not because of it. That has continued until the present day. So there is no question at all, as my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) said, of going back to the early entry.

    We have now got the late entry, once and for all. There is no question that the Admiralty has to extend its field of selection and the range of schools. If there is to be a weak tail from the "posh" schools, why not a weak tail from all the schools? The Navy is a national service and every boy in the country has a right to an equal chance to serve in any of the national services as an officer, more particularly indeed, when the system is entirely free. Let us finish with this nonsense about restricted entry and selection because of people being "posh," and having an Oxford accent or a B.B.C. accent, which is worse still.

    I will now pass to lower deck promotion. Whenever the Navy is short of officers it has gone everywhere else except to its own sources to get the increased number it requires. That has occurred right throughout the years. In the major expansions of 1895 and 1898 where did the Admiralty go? It went to the Merchant Navy and the Royal Naval Reserve; at that time the Royal Naval Volunteer Reserve did not count as it does now.

    Commissions were denied to warrant officers. A rating who joined the Royal Navy as such, and who had gone through various grades as an able-seaman, leading-seaman, petty officer and warrant officer, had to find some way of getting out if he wanted a commission, joining the Merchant Navy, getting a commission there and returning to the Navy with that commission because there was no other way for him to do it. Of two contemporaries at school; one of whom joined the Merchant Navy and the other the Navy, the one who joined the Merchant Navy would get a commission in the Navy before his contemporary who had joined the Navy as a career. Just over 40 years ago the present Prime Minister, in introducing the Navy Estimates, in 1912, said:
    "These are the days when the Navy … should be opened more broadly to the nation as a whole. The question … is fraught with difficulties. We have thought them well over, and we are agreed … that there are no difficulties which … cannot be and ought not to be overcome."—[OFFICIAL REPORT, 18th March, 1912; Vol. 35, c. 1570.]
    The following year, in introducing the Navy Estimates, the right hon. Gentleman said:
    "I have noticed the tendency in some foreign newspapers to speak slightingly of this development "—
    of lower-deck promotion—
    "as if it were a desperate expedient to which our shortage of officers compels us. I therefore wish to make it clear that we regard promotion from the lower deck, with possibilities of advancement"—
    and this is the important point—
    "for merit to the highest ranks, as a permanent and essential feature in our naval system."— [OFFICIAL REPORT, 26th March, 1913: Vol. 50, c. 1781.]
    In other words, 40 years ago it was intended to be a permanent and essential system.

    What has been the position? I was pleased to hear from the First Lord this afternoon that the numbers given commissions from the lower deck have been better than since 1945. But they should be even better still. The way to improve recruiting propaganda is to give the numbers who have entered and have got commissions, and the numbers of those who have attained the ranks of commander, captain and admiral. Then we shall attract people into the Navy as a career. If people get the idea that they are limited to the rank of chief petty officer or warrant officer, with limited resources, obviously they will not jump at it.

    Then comes this question of selection committees and interviews. What are the stumbling blocks? The questions asked relate to one's parents, school, games and the newspapers one reads, and they also like to know what sort of accent an applicant has, but they do not ask questions about it; they hear that. Some of our greatest leaders in the various industries in this country in every walk of life would never have scored any points at all under those heads, and yet they have attained the highest ranks in their professions, in the academic, mechanical, engineering and other fields. Yet this is the "ruddy hooey" that they concentrate on.

    I speak from knowledge on this subject, from my own experience as a candidate and as a training officer for commissioned officer candidates in H.M.S. "Hood," then the largest warship in the world. What happened when I went before my own selection board? [Laughter.]
    I knew that would draw laughter, but hon. Members should wait for the finale. They asked about my parents. Well, I could not bluff that one, even though I had not got my birth certificate with me. I could not say my father was the First Lord of the Admiralty if something else was on my parchment. Then comes the question of the schools. If the candidate was in the Navy's orphanage, that is also written down on his parchment, so he cannot do much bluffing there, except to say that perhaps he was at the top of the form instead of at the bottom.

    When the candidate was asked what papers he read, if he said the "Daily Herald" he would be out. In my time the thing to avoid was to say that one read "The Times" in case someone said, "What did you think of the second leading article yesterday?" The answer— and there is no free advertisement here today—was to say the defunct "Morning Post."

    If one was asked "Why the ' Morning Post'?" one said that it had a very good naval correspondent who gave a fair and objective point of view and stated the Admiralty point of view, so that one was on the right side of the fence. As for the accent—well, hell; if the candidate came from Yorkshire or Lancashire and said "Ee, bah gum, an' all, what did I say when I come'd in?" he did not stand much chance.

    When it comes to games, let me tell the House what "hooey" it was. The night before I went before my selection committee I sat down and wrote out all the possible questions and then faked all the possible answers. I was careful not to play my trump card in games too quickly. The candidate could say, "I have a go at football," but he should not lead with that one in case he does not play football. I used to have a go at cricket, but usually in the long field, catching the boundaries. I led to my trump card without getting stymied somewhere else, and I said that I played golf. It was unusual for a sailor to play golf. The chairman said "Golf? That's fine. Have you got your sticks with you?" I said "No, I left them at home." At any rate, that was a good subject, and both sides of the table could talk about golf.

    They asked, "What courses do you play on?" I said that I played on the course where I lived and on another course five miles down the coast. Then they asked "How many clubs have you?" I told them a driver, a brassie, a niblick, a mashie and a putter. That was all right. I thought I was going to be asked what balls I used, to which I should have to reply "The three outside the pawnbroker's shop." We went on debating golf, and a fine time was had by all. I was totting up the points and thinking that I was getting well over this fence.

    Then the President said "What was your handicap?" I thought to myself "My golly, that is the one question I did not work out last night." I remembered how old retired colonels would argue with one another whether they would give each other a stroke a hole or half a stroke a hole, and then I thought I had better say nine. They said, "That is not bad." But if that had been the wrong answer, I should have been out. The point, however, is that I have never played golf in my life. I have been a caddy. So I discussed golf as a caddy, and it was a caddy's golf that got me my commission. That shows the "hooey" of this "ruddy" games nonsense.

    I am sure the hon. and gallant Gentleman would not wish to mislead the House about interviews. I should be grateful if he would give the other side of the picture. He will remember that the recent committee on naval entry reported that they thought that the interviews were very fair, and when the Press, including his hon. Friend the Member for Huddersfield, East (Mr. J. P. W. Mallalieu), attended these interviews recently, that was also their opinion.

    Yes, but the hon and gallant Gentleman must not expect me to do his propaganda. He has got more time than I have. I am not the Parliamentary Secretary on the defence; I am on the attack. I am giving my own experiences as a training officer on the "Hood." I got as many candidates in three years as any other training officer because I made a special study of the subject.

    Before a candidate went before the selection committee I would get hold of him and find out what this background was. I would also find out—because it would be common knowledge to the Navy—who was on the board, where the admiral served last, what were his peculiarities and the peculiarities of the members of the board, because it is more important to study those than the peculiarities of the candidates. Then 1 tried to marry the two together.

    I got one very good candidate and 1 asked, "What was your last ship?" He said, "I was on the East Indies station." I said, "You are in clover. The president was chief of staff on the East Indies station. But watch your step. You will be asked what you think of the East Indies station. Don't say it is the worst in the world. Don't say it's fine. You can say you can get unusual experience seeing new things there, and that you can go up the mountains, and so on."

    Another "guy" came from Ireland. He was the son of a schoolmaster. At that time the Sinn Fein troubles were on. "You will be asked about Sinn Fein," I said. There was an officer on the board who asked about that. So I briefed those "guys" and exercised them, and off they went, and in next to no time I was told they were back. I went to see them and I asked what had happened. They said, "Exactly what you said would happen. We were asked the questions you said we would be, and we were all prepared, and the whole thing was ' Bob's your uncle.'"

    That is the difference between candidates going before a board for lower deck commissions who have been briefed by an officer who knows the ropes, and others who do not know the ropes and get into traps. A "guy" from the next ship was asked, "What do you do in your spare time?" He said, "In my spare time I do gardening." All old sailors garden if they do not keep "pubs." One member of the board asked him, "Can you describe to us the development of the chrysalis to the caterpillar?" Which just shows that there are things to avoid. However, I do not want there to be any question of the Admiralty's offering me a job as adviser either to selection boards or to candidates going before selection boards. All this just shows how people can get over the hurdles if they know the ropes, while others who do not take a fall.

    When I started to talk about my selection board there was laughter, but I did so to show how one could get through. However, it was not a question of the Navy getting a "King's Hard Bargain," because three of my contemporaries from the same orphanage became admirals. The point now is that if any of us went before a selection board for lower deck commissions today we should not stand an earthly, because the Navy has got too "posh" and will take no risks. It took a risk with me, and it was not a bad one.

    I come now to warrant rank. During the period of the Labour Government the idea was to give them some improved conditions and prospects, but the conditions have not worked out as was thought, and they are worse off than before. In the old days warrant ranks had selected cabins individually, as storekeeping officers. Now they are sharing cabins. They used to have their own mess; now they are in a general mess with other officers, although I do not criticise that. However, instead of being independent, on their own, with good prospects of promotion, they find that their conditions have deteriorated, and I suggest that the Admiralty must go into the question of the employment and the chances of promotion of the warrant ranks so that their Lordships can use these for their official propaganda.

    My last point is that which the Navy Estimates gives me a chance once a year to raise, and that is the constituency interest of East Hull, and an interest of all Hull. Hull is the third port in the country, and I ask that it should be allocated more ship repair work. I have done this in previous years, so far with no result. After the First World War the only building yard in Hull was closed, so the port is largely, if not entirely, dependent in the big yards for ship repairs.

    The Admiralty is doing certain things for commercial ports. Reserve Fleet ships are being berthed in commercial docks on the north-east coast and in South Wales. In Hull, admittedly, there is no place for berthing them. However, one hears of the First Lord's visiting other ports and other localities. Why not Hull, the third port of the country? The Home Secretary was supposed to come up to my constituency recently and open a factory. For reasons I need not discuss here, he did not come. [Laughter.] There was no dirty work about it. Instead, his Parliamentary Secretary, the hon. Gentleman the Member for Gosport and Fareham (Dr. Bennett) came in his place. I hoped that he would have been here to enjoy this.

    Admittedly he provided some weight and bonhomie and a good speech, after a good lunch, and, as an ex-naval officer, he was able to make a valuable contribution, but he was representing the Home Secretary, and the main interest of the Home Office in East Hull is the Borstal Institution, which it cannot control. That is what we want the Home Office to deal with.

    Hull demands that the First Lord, or at least the Civil Lord, should visit the port to see the conditions and possibilities of ship repairing, and to consider the question of the unemployment there, and map out a programme of work for Hull for a year ahead. At present, all we are getting is a motor minesweeper for which we are grateful, but that is only chicken feed, only a pinch of salt in the ocean.

    There is a considerable amount of other Admiralty work going to other private yards. What is wanted is a visit by one of their Lordships to conduct an investigation on the spot, and then, having conducted an investigation on the spot, to ask me what the trouble is, because he will not get the story otherwise. I am the "guy" that has got the story. There is no question that in the next 12 months the Government must do something about unemployment in Hull, otherwise, I can promise them, the "balloon will go up."

    It is not only of importance from the naval point of view, but also from the point of view of the Merchant Navy. Here is the country's third port. There are London, Liverpool, Hull; no other fancy towns with their ports. It is essential that the talent, the skill and the workmanship of the yards in Hull should be fully employed for naval work and for mercantile marine work to cure the canker of unemployment there. Hull is an industrial island in an agricultural area, and the workers there cannot be used anywhere else near at hand. Their talents should be fully developed and employed in that town and port, instead of their having to draw unemployment benefit.

    I warn the First Lord that there will be trouble in Hull unless we get more Admiralty ship repair orders, a visit from one of their Lordships and more consideration for Hull, the third port of the country.

    Shipbuilding Industry

    6.58 p.m.

    I beg to move, to leave out from "That," to the end of the Question, and to add instead thereof:

    "this House, convinced of the unquestioned importance of the shipbuilding industry in peace and of its vital role in war, urges Her Majesty's Government to promote the greatest measure of stability in all matters affecting the industry, and recognises that its well-being depends upon a flourishing Merchant Navy enjoying the freest possible conditions of international trade."
    I am afraid I shall not be able to make half such an amusing speech as has the hon. and gallant Member for Hull, East (Commander Pursey). Indeed, I am going to make a rather serious speech about a serious subject.

    I ask the House to turn from the affairs of the Royal Navy itself to those of the fourth line of defence, by which I mean the shipbuilding and shipping industries. Each is a great subject. Mr. Gladstone used to say, "A great subject should be treated copiously." I am not Mr. Gladstone, and I can assure the House that I shall speak as briefly as the subject permits. The pictures which I shall paint will be done with broad strokes, and much that is essential will have to be left out, but in advance I ask the forgiveness of the House if I speak at greater length than I usually do. Nobody detests long speeches more than I do. I shall begin by talking of shipbuilding and go on to some of the problems affecting the industry's customer, namely, the shipping industry.

    Before I do so I want to say, more or less in parenthesis, that I shall not deal with the wage structure or with alleged restrictive practices. A court of inquiry has just been considering those questions so that they are, as it were, still sub judice. I recommend hon. Members to read the Report of that court, which is contained in Cmd. 9085. I am glad that I am not dealing with those subjects because I do not want this debate to be contentious or partisan. I shall not weary the House by discussing at any length the great importance of merchant shipbuilding in its relation to our economic structure or its vital role in time of war. The Amendment calls it "unquestioned," and that needs very little substantiation.

    But I must say that its economic significance is immense. At the end of 1953, the estimated value of orders on hand and of vessels under construction was £580 million, of which £170 million was for export to foreign countries. So far as employment is concerned, on shipbuilding and repair work, more than 125,000 men are employed, of whom 106,000 are engaged on Merchant Navy work and 19,000 on naval work. And, of course, a very large number of men which it is impossible to determine are engaged on the manufacture of components, because it must be remembered that shipbuilding is an assembly industry. To say anything about its r61e in war is to indulge in platitudes, but I must say one thing.

    During the war, 6.6 million tons of dry cargo ships were sunk and four million tons were replaced. Half our tankers were sunk and all but 300,000 tons were replaced. British yards were responsible for nearly all these replacements, and that on top of an immense volume of new construction for the Navy which, of course, was given first priority during the war.

    This Amendment, however, was not put down for the purpose of stressing the obvious. It was put down because during the past six or eight months the industry has undergone a complete change of climate. A year ago the barometer was set fair. Today the future is full of doubts and uncertainties. This sudden change of climate has given rise both to exaggerated pessimism and to complacent optimism. Both inside and outside this House alarmist speeches have been made. So far as complacency is concerned, I am afraid that I cannot acquit Government speakers of it; I need only refer to the speech made by the Paymaster-General in the other place on 9th December.

    I do not think that either method of approach is very helpful. What we need is a calm, untendentious, factual assessment of the situation. This debate will have justified itself if it helps the House and the country to take a balanced view. The more critical the situation, the more need there is for a right perspective. I must inflict a few figures on the House in order to try to attain this perspective.

    Our share of the world output total is falling. In 1948 it was 48 per cent., while in 1953 it was 25 per cent. Over the last few years output has, on the average, remained pretty steady at about 1¼ million tons a year. Since the war, immense sums have been spent on modernisation and on the re-equipment of yards and today, if all shortages were overcome—and, of course, in talking of shortages in the shipbuilding industry one primarily means steel—an output of 1½ million to l¾ million tons a year could be achieved. Berths, labour, skill and equipment are all available.

    I now turn to the order book. At the end of 1953 the merchant order book stood at 5½ million tons. I have already said that output is 1¼ million tons a year at the present time. On the face of it, therefore, it looks as if the industry is on a pretty good wicket for the next four years, but I ask the House to beware of generalisations. The outlook is not nearly so bright as it appears.

    Eighty per cent, of the total output is due to 22 firms, about one-third of the principal shipyards of the country. These firms may expect to maintain their present level of activity up to the end of 1956 or well into 1957. But the smaller firms are far less heavily booked. Some of them have sufficient work to carry them to the end of 1955, but, in some cases, not beyond the end of this year.

    Secondly, 57 per cent, of the output is represented by tankers, and tankers are not wholly reliable as an early source of further orders. The important thing for us in this country is to maintain our dry cargo fleet. Thirdly—and this is most grave—the order book, far from expanding, is contracting. In 1953—and I ask hon. Members to bear the annual figure of 1¼ million tons in mind—only 520,000 tons were ordered and 250,000 were cancelled. Twenty-eight firms booked no orders at all. We are well into the third month of this year, and, so far, there have been virtually no new orders. There have been some cancellations, and a good many more are believed to be pending. Those are the plain facts about the output and the prospects.

    Does the hon. Gentleman include fishing vessels in his figures?

    Is the hon. Gentleman aware that a contract to the value of £6 million for trawlers—some of considerable size—was negotiated with the Russians?

    It is not yet a firm order. I should be obliged if hon. Members would not interrupt me because I do not wish to detain the House longer than necessary. I have a herculean task in trying to paint a picture of these tremendous industries in half an hour.

    I was about to ask what comments could fairly be made. The first is that the industry has always suffered from fluctuations. It suffers from such unpredictable fluctuating factors as the late war and the Korean crisis. The industry depends in the main on building for the British Merchant Navy, and if—and it is a big "if "—shipowners can afford to pay for new ship orders must sooner or later be coming in again.

    We must remember, however, that the yards cannot be idle for a long period and then suddenly burst into full activity. It is important that both the industry and the Government should read the signs of the times and should realise that 14 years of a sellers' market is a thing of the past. We must resolve that the industry shall be fit and able to take full advantage of any upward trend in orders when it comes, in a highly competitive world.

    I must say a word about foreign competition. There has always been foreign competition and there always will be. The cessation of orders is not peculiar to this country alone. Foreign order books are shrinking too. It is easy to exaggerate the menace of foreign competition, particularly when foreign Governments grant subsidies and other forms of artificial assistance. A considerable number of countries today are granting subsidies and other forms of artificial assistance. I need only cite France, Germany and Italy as the chief offenders, more or less in that order.

    There is no question that, provided our shipbuilding industry is healthy and our national economy is sound, foreign competition can be met successfully. None the less, it would be folly to deny that at the moment foreign competition is greatly intensified. The picture which I am trying to draw is one of a great industry in a state of doubt and uncertainty. There is no need for panic, but neither is there room for complacency. I hope there will be none of either tonight.

    As to what the industry asks of the Government, the Amendment
    "… urges Her Majesty's Government to promote the greatest measure of stability in all matters affecting the industry …"
    The key word is "stability." How is it to be achieved? The industry does not ask for special treatment, such as subsidies or artificial aid. Of course, it welcomes Admiralty orders, and hopes that they will be spread wisely, but it does not come to the Admiralty cap in hand. It not only seeks no help from subsidies and artificial aids but believes that they would be disastrous in the long run.

    What it wants is some certainty that delivery dates will not be held up for lack of supplies, especially steel. The steel position has vastly improved over the last year or two, but shortage is still a restricting factor. I hope that the Civil Lord will not tell us that all is well with steel supplies, for he will not be justified in saying that. The industry asks for a reasonable stability in all factors affecting costs and, consequently, prices. In other words, the greatest service which the Government can render the industry is to govern wisely and well.

    Unless the £ retains its purchasing power, rises both in wages and cost of materials will price the industry out of existence, and unless there is peace in industry as a whole this industry will come to a stop. Those are statements which affect all industry and are not peculiar to shipbuilding. The moral I wish to draw is that the red light which is now shown by shipbuilding will be shown by every other industry if the Government fail in their duty. All that is peculiar to shipbuilding is that it will be one of the earliest casualties, and one of the most damaged.

    Does the hon. Member not agree that the Government's recent decision to increase the profit on steel by selling it back to private enterprise and giving a guarantee of 7½ per cent, will increase rather than decrease the problems of the shipbuilding industry?

    In the long run increased production will bring the industry easier and better supplies of steel. This debate will range widely enough, but a discussion of the nationalisation or denationalisation of steel would be ruled out of order. The industry believes that it will be helped by the action of the Government. I do not speak for the industry, but I have asked its views on this question, and it is in favour of the action which the Government have taken. That is all I can say in answer to the hon. Member for Rotherham (Mr. Jack Jones).

    The second part of the Amendment asks the House to recognise that the well-being of the shipbuilding industry
    "… depends upon a flourishing Merchant Navy …"
    I make no apology for those words. We cannot discuss the future of a factory without discussing the purchasing power of its customers, and it is impossible to consider the future of this industry without considering the position of shipping, in its turn. I want to give the House a broad and, I hope, sound, but to some extent superficial picture of the prospect facing British shipping in respect of its ability to order and pay for new ships and so keep our shipyards busy and prosperous.

    The picture which I shall paint is extremely sombre. The plain truth is that British shipping is suffering from a wasting disease which, unless checked, as bound to prove fatal. The name of that disease is "the incidence of taxation." Unless radical changes are quickly made, within 15 or 20 years the British Merchant Navy, as a source of wealth in peace and our most vital lifeline in time of war, will virtually have passed out of existence. One incidental consequence will be that there will be no shipbuilding, and another will be a serious gap in our balance of payments.

    It is not a pretty picture or prospect, but if it contains any substantial element of truth it is high time that the facts were displayed brutally and baldly to the public gaze. I hope that this debate will be the beginning of such a display of the plain, unpalatable facts, and I should like to think that by what I have said I have given the House a shock, for I certainly intended to do so.

    I must now justify what I have said. Our sea-going merchant fleet, which includes only those ships which are seagoing and of over 500 tons, totals nearly 17 million gross tons. That is roughly the same figure as in 1939. It is one-fifth of the world's total. Fifty years ago the British Mercantile Marine comprised one half of the world's total. But it is no use bewailing the passing of a golden age that will never return.

    Merchant fleets today are partly dry cargo and partly tanker. Their problems are rather different, and to be comprehensive I should deal with both, but for the sake of brevity I shall deal only with the dry cargo problems. The House must not forget, however, that the story of tankers is analogous. We have a dry cargo fleet of 10.9 million tons. The average useful life of a dry cargo ship is between 20 and 25 years. I should say that it was nearer 20 than 25. It is accepted that 20 years is the maximum useful economic life of war-built ships. I ask the House to cast its mind forward to the year 1965, which will be the critical time for our Mercantile Marine. By then, only 3¾ million tons of our present dry cargo fleet will still be in service, and even that figure is dependent on no ships under 20 years' old being sold abroad.

    If we take a more optimistic view— which is thought to be an unrealistic one —and assume that half the war-built ships will still be in service then, the figure in 1965 will be 5½ million tons. But if we make the reasonable and generally accepted assumptions as to the life of our present fleet, the increase of world trade and the demand for carrying power —and it is generally held that material increases and various other factors will cause a considerable increase in the demand for world carrying power in the next 15 years—it is clear that our dry cargo fleet must be replaced at the rate of at least 900,000 tons a year.

    I do not ask the House to accept these figures as being cast-iron accurate, but I ask it to accept that over the next decade or so we must build dry cargo ships to the extent of one million tons a year if we are to retain our present share of the world's carrying trade. If this were a purely shipping debate I should go on talking about tankers, freight rates, the transfer of tonnage to foreign flags—such as Liberia and Panama—flag discrimination, and so on. But I am primarily concerned with shipbuilding, and I hope I have made the point that the present rate of building, on the average over the years, must be at least maintained if our Merchant Navy is to continue to play its proper part in our economy in peace, let alone its vital rôle in war, and if its present valuable contribution to our present balance of payments is to continue.

    It all hangs on the question whether the shipbuilders can afford the money, or have the money, to replace their fleets to the extent required. I state categorically that there is not the remotest hope that they will be able to do so unless the present incidence of taxation is changed. I ask the House to look at the facts. Obviously, we can assume that the shipowners can pay for the ships already ordered, or they would not have ordered them. It is reasonable to suppose that collectively they have considerable reserves—how big is known only to themselves and to the Chancellor of the Exchequer. But unless these reserves can in their turn be replaced when they are exhausted, their existence amounts only to a postponement of the day of reckoning. I do not think that they can be so replaced.

    The problem has two aspects. The first springs from the fall in the value of money and the second is inherent in the present system of taxation. As to the first, I think hon. Members know how ships are depreciated for Income Tax purposes. They are depreciated at the original cost price. In other words, after an initial allowance of 20 per cent, has been written off, over every year 5 per cent, of the original cost price is written off and at the end of 16 years the shipowner should have enough in reserve to build a new ship to replace the old ship, provided that he can buy a replacement at the same price. But today it costs three times as much, and in many cases four times as much, to build a ship as it cost before the war.

    The difference has to be made up out of profits of which over 50 per cent, is paid in taxation. Even if costs do not rise any higher, the replacement of our present merchant fleet is bound to throw a titanic burden upon the industry. For, however large the reserves are, I find it difficult, indeed impossible, to believe that they amount to three times the cost price of our present Mercantile Marine—-and that is the minimum figure which will be needed merely to replace, without any question of expansion. It is not unreasonable to suppose that the present accumulated reserves cannot shoulder that gigantic burden.

    The second, and in the long run more serious, aspect is that present taxation makes it practically impossible for the industry to keep its capital equipment— namely, its ships—up to what is demanded in the way of numbers and quality in a highly competitive world. I will give the House an example of a typical shipping company owning tramps. These figures have been published.

    In 1913 it operated 14 ships. The gross profit was £166,000. Taxation took £8,000–5 per cent.—and enough was left to build three new ships, which were in fact built. This gives some indication of the extraordinary way in which the value of money has changed. In 1952, which was the best shipping year which has ever been known, the company operated 19 ships. The gross profit was no less than £l¾ million, of which taxation took £900,000–51 per cent. Anybody would think that the balance was enough to keep the fleet going very satisfactorily. As a matter of fact, enough was left only to build 1½ new ships.

    The truth is that the life blood of the industry—and by "life blood" I mean hard, unromantic cash—is being drained away to such an extent that unless the Chancellor changes his tune—

    I have allowed the hon. Member to make a reference to taxation but what he is now asking would involve legislation, and that is out of order on Supply. We cannot discuss taxation and legislation on Supply.

    I was relying on the words of the Amendment, which asks the House to recognise that the well-being of the shipbuilding industry "depends upon a flourishing Merchant Navy." It is common sense to say that there cannot be a shipbuilding industry unless the Mercantile Marine and shipowners can pay for new ships, and I am, first, pointing out the difficulties facing the shipping industry and, second, asking the Civil Lord, who has responsibility for the shipbuilding industry, to place certain crude economic facts before the Chancellor of the Exchequer. I have almost arrived at the end, and if I may be allowed two or three minutes' grace to complete my argument I should be most grateful. Unless there are changes in certain directions, then in a comparatively few years the Merchant Navy will dwindle away.

    The next words on my notes are, "It would be out of place in this debate to say more than a few words on possible remedies."

    I think that the hon. Member ought to stick to his notes in that connection.

    I shall.

    I have three sentences to say in dealing with this subject. The first is that concessions relating to initial allowances and percentages of depreciation are not to be despised, but they do not touch the root of the problem. [HON. MEMBERS: "Order."] There seem to be many Speakers in the House. My second sentence is that the only possible solution lies in the direction of the relief of taxation—

    I did not know that was in the hon. Member's notes. What he read out was that it would be out of order to pursue this subject, and I think it is out of order. I must ask the House to remember that on Supply we cannot discuss taxation or legislation, and that is what the hon. Member is doing. He was allowed to make his point and he has made it, but he must now conform to the rules of order.

    I will, indeed. I quite see the difficulty with which the House is faced in these matters.

    I want to try and help the hon. Gentleman to be relevant, if I can. The last words of his Amendment deal with the Merchant Navy

    "enjoying the freest possible conditions of international trade."
    He has not said one word about that or about East-West trade, and I offer that to him as a suggestion. Would he end his speech with it?

    I am grateful to the hon. and learned Gentleman for offering that suggestion. I intended to say nothing about that because I feared that Mr. Speaker's gaze would fall upon me before I reached that point. Indeed, it seems to have fallen upon me. I will complete my sentence by saying that there are certain matters affecting the economic strength of the shipping industry which, unless attended to, will be fatal to the shipbuilding industry. I believe that it is essential that reserves set on one side for shipbuilding should receive special treatment, whether by legislation or otherwise, by relief from taxation, either in whole or in part. I will leave it there.

    The shipping industry is in a very precarious position. Neither the Government nor the public seem to realise it or to face the facts. I have given figures to show that unless the shipping industry can afford to order new tonnage on a very considerable scale over the next 10 or 11 years, then by 1965 our dry cargo fleet will almost have vanished. My task tonight is to hoist a gale warning to the shipping industry. It is such a gale as has never blown before.

    The hon. and gallant Member has had his gale, and we can leave the matter there. I am here to hoist a gale warning to the shipping industry, and I hope the House will insist that the captain of the ship, the Chancellor of the Exchequer, will act wisely and rightly and, above all, that he will act in time

    7.30 p.m.

    I beg to second the Amendment.

    This is a subject of vital importance for all of us who are the slightest bit concerned about the survival of British merchant shipping. I agree with my hon. Friend the Member for Farnham (Mr. Nicholson) in much that he has said, and I hope to be able to tread delicately on the path on which he trod rather heavily towards the end of his speech.

    I think that everyone will agree that over the last 12 months one of the major difficulties on the shipbuilding side has been the question of steel supplies and steel plates. There is no reason at all for any one to be complacent on this issue. I have no doubt that there has been a considerable improvement in the position in the last six to eight months, largely as a result of the setting up of an inter-Departmental committee on this matter, but, in spite of the improvement, there are still shortages and there still exists a wrong sequence of delivery and of sizes of plate.

    It is this question of sequence of deliveries which has led to less efficient production in the yards than might otherwise be the case. I do not want to overstate this point by suggesting that there is inefficiency, but there is less efficiency than might otherwise be the case, and so long as such a position obtains the British shipbuilding industry is under a disadvantage which should not be placed upon its back.

    I understand quite well that the call for plates has increased enormously of late, but it is not sufficient merely to say that this position does exist, and do nothing about it. There is still the need for some attention by the steel mills themselves to the demands of the shipbuilding yards and repairing yards. [An HON. MEMBER: "And the Government."]

    It is not only a question for the Government. It is a question of companies meeting the demands of the shipbuilders themselves. It is up to the two sides— the shipbuilders on the one hand, and the steel producing industry, on the other— to try to work out a method of making greater progress on this issue.

    The question of the delivery dates being offered by the shipbuilders is one which, to a certain extent, has frightened away further orders. We know a great deal of the history of this issue. The length of delivery dates is largely because of the size of the orders and not because of inefficient production in the yards themselves. I am not trying to belittle our shipbuilding industry, or to say that we are losing orders to foreign countries because of internal inefficiency. That is just not the case.

    The truth is that the order books have built up to such an extent since the outbreak of the Korean war that long delivery dates are inevitable. We are now going through a period of readjustment, and the length of delivery dates will be declining.

    We can easily compare the position with Germany. Germany has had special advantages as a result of the war and the developments arising out of post-war planning. The destruction of her yards and their complete rebuilding with new machinery, new equipment and new layout altogether has resulted in increased efficiency coming to the German yards as a by-product of the war. If we had been able to effect large-scale replanning and rebuilding of our yards in this country we would have been considerably more efficient and more competitive than the Germans ever could be.

    For the simple reason that we defended ourselves adequately during the war and did not have our naval yards razed to the ground. It is purely the fact that the German yards were razed to the ground, and as the result of their re-equipment after the war, their yards have a more efficient layout and a more efficient supply system from behind. It is as simple as that. There is undoubtedly a need for shorter dates for delivery coming out of our yards, but this is a question to be remedied in the coming months as the present order books can be fulfilled.

    When we turn to the question of prices, there, again, it is alleged that other foreign countries can compete and can quote prices considerably lower than can the British market. I would say that our shipbuilders in this country can quote competitively where the conditions are fair and equal as between different yards and different countries.

    Where, however there is subsidy and special assistance and tax concessions—I hope that I am not out of order in mentioning that—by foreign Governments, the foreign builders inevitably have heavy advantages. I think it is right that we should investigate the advantages given to foreign shipbuilders in an attempt to have these differences ironed out, so that we can compete on fair and level ground. We feel that when level ground does exist, British shipbuilding will take the orders every time because of quality, efficiency and speed of production when conditions are equal, and because of its high standard of technique and ability.

    In relation to future prices, we are going through and perhaps we are coming towards the end of the difficulty which arises through wage increases. I do not intend to trespass on the highly dangerous ground of discussing wages, because I do not think it will add one useful word to this debate, especially when this question is due to be settled, as we all hope, by the two parties most actively concerned in it. I ask hon. Members to try to steer the debate through finance, because it is an issue which cannot do much to add to the debate.

    Again, when we talk about our ability to compete in prices, we can compete against foreign builders provided that the conditions are equal and provided that there are not hidden subsidies, hidden assistance and hidden help given to builders in foreign countries. On the shipbuilding side, although there has been a decline of orders and although there has been difficulty over supplies and cancellations, we are still in a position to compete and to get orders when conditions are equal.

    When we turn to the question of the order book, we remember quite well the sort of position the order book had got into just before the outbreak of the Korean war. It may be that we shall return to the same sort of position now that obtained in those months immediately before that outbreak. Since the Korean war, and the position which obtained immediately after, there has been a simmering down and certain readjustments and a certain fear in the minds of people working in the industry that there is danger ahead. Now, I believe, is not the time for undue optimism or undue pessimism. I would quote a few words which the Paymaster General spoke in another place on 9th December when he referred to the re-equipment of our merchant fleet.

    He said that the question of replacement was not immediate and that we must accept that replacement would not in any case fall due for the next five years, so that it was not an absolutely immediate problem. He was referring to the technical problem of older vessels. In the shipbuilding sense, I would submit to the House that something that affects the next five years is an immediate problem. It is not something that can be resolved in five years' time. This question of the replacement of our older vessels is an immediate problem, in spite of what has been said by the Paymaster-General. I myself feel that there is a complacency on the part of the Government on this issue of the replacement of the merchant fleet. I certainly hope that a greater sense of urgency will be shown by the Government in their reply to this debate. Unless this problem is faced, it will be too late to face it in five years' time.

    Again, talking about the order book, we are worried about German competition. Let us look at the launchings from British yards in recent years. As my hon. Friend has said, in 1948 our percentage of the world output was 50 per cent.; in 1949, 40 per cent.; in 1950. 37 per cent.; 1951, 36 per cent.; 1952, 29 per cent., and in 1953, 25 per cent.— a progressively diminishing total through the years. Admittedly, part of this can be accounted for by increased German production, but it is an unfortunate trend over these immediate post-war years that, from the position of supplying 50 per cent, of the world's output, we are now supplying only 25 per cent. In spite of the increase of German production, these figures show quite clearly that our position relative to the world in general has declined. The conclusion to which I am drawn is that there is need for a greater sense of urgency in applying solutions to this problem.

    When we refer to the percentage of the world's fleet that is registered under the British flag, we come down from a figure of something like 50 per cent, early in the century to a post-war 21 per cent., declining in 1953 to 19 per cent.—again, a decline in the influence and numbers of the British merchant fleet. Although the position is by no means good, it is not beyond rescue. I suggest trying to bring a sense of urgency to this issue in that a solution is needed quickly; and if we are to apply a solution quickly, it must be at the ship operating end of the line. That is why it is worth placing on record a few of the figures of the earning capacity of the shipping industry.

    From 1948, our foreign earnings have gone up from £255 million to £436 million in 1952. Our dollar earnings from shipping have risen from £46 million in 1948 to £77 million in 1952. Shipping is an industry which employs 210,000 people. Although this may not be a particularly large figure when compared with certain other industries, the industry has a vital significance, and if allowed to run down it cannot be gathered together again in the twinkling of an eye. It is an industry which, while employing 210,000 people, was estimated in 1951 to have a gross output of £234 million. These figures demonstrate to a certain extent the importance in the economy of the nation, and in that much hackneyed part of our economy the dollar trade, the vital significance of the industry as a dollar earner.

    But it is not with the shipbuilding industry alone that we are concerned; it is with the ancillary trades—the supplying industries, the catering and furniture industries, the manufacture of heating coils and similar things for tankers, and so on. All these industries behind shipbuilding should gather our attention on a day like this. If there is to be a decline still further in British shipping, we must admit, at the same time, that there is to be a further decline in our position as a world power and as a world trading power. We can have our position as a first-class nation only if we are a first-class trading nation, also. Therefore, we come to consider what remedies we must have.

    I do not want to trespass too far on to the subject of taxation, and I do not wish to be out of order, although that is the one subject which is at the root of this issue. It is all right posing the problem, but there can be no conclusion to this debate unless—

    The hon. Member says that he does not want to trespass. I hope he will observe his own ruling.

    All I would say then, Mr. Deputy-Speaker, is that there is a case for financial aid being given to this industry. There is no question of any preferential treatment, but there is a case for a new approach to the whole level of assessment for taxation throughout British industry.

    If one cannot pursue that issue, which is of the most important aspects affecting the Amendment, I merely conclude this part of my speech by referring to the burden which the industry is bearing in helping other forms of expenditure in the nation. It is too high and too heavy a burden.

    There is reference in the Amendment to
    "a flourishing Merchant Navy enjoying the freest possible conditions of international trade."
    I do not want to go too much into detail in what, I know, is a contentious subject. I should merely like to quote from the Annual Report of the Chamber of Shipping for 1953–54. In a reference to the Suez Canal, the report says:
    "From the course of their daily business they "—
    that is, the British shipping interests—
    "can see, more clearly than most perhaps, how much world trade will lose in freedom unless agreement with Egypt provides not only paper safeguards but real ones for the effective continuance of the Canal as an international waterway at the service of international trade."

    I was merely trying to follow the wording at the end of the Amendment, which refers to:

    "enjoying the freest possible conditions of international trade."
    One of the greatest waterways used by British shipping is the Suez Canal. If it were to be closed, or if facilities in the area were withdrawn it would be a tragedy for British shipping.

    Yes, indeed, but more particularly for the British, because we are particularly concerned with trade with the Far East and with the Persian Gulf. Those words which I have quoted are sage and sensible words on this issue. They are a request for real safeguards for British shipping in order that it may have not merely a paper agreement, but real safeguards, which will look after the best interests of British shipping in this vital waterway in the Middle East.

    In view of your Ruling, Mr. Deputy-Speaker, I do not intend to elaborate on that subject. I merely repeat that unless British shipping can have some definite guarantee about the freedom of the Canal, I should be very doubtful about the worth of any other agreements relating to that area. One of the first needs in the area is that the Canal should remain open for international shipping.

    I conclude by urging the House, and, more particularly, the Admiralty, to consider this matter of the British shipbuilding and shipowning industry as a matter which needs urgent attention. There can be no delay. If there is delay, there may well be trouble ahead. If the Government are willing to take action on the sort of lines that my hon. Friend and I have tried to argue, there is a chance that we will prevent a further decline in British shipping. Unless action is taken quickly and unless the mood of complacency is thrown off, there is danger ahead. I hope and pray that the Government will take action while the time is ripe.

    7.50 p.m.

    If I intervene briefly in this debate—and I apologise to my hon. Friends and to hon. Members in other parts of the House— it is because I have been a long time here and have always been attracted by debates which refer to shipping and its kindred industry, shipbuilding. I congratulate the hon. Member for Farnham (Mr. Nicholson) on having brought this important subject forward. He was somewhat embarrassed because he transgressed the rules of the House, but that is not unusual, not for the hon. Gentleman but for many other colleagues of ours in this assembly.

    Nobody will deny the importance in the national economy of shipbuilding and shipping. But let us not indulge in too much pessimism about the position of those industries and services or, indeed, their future. I agree that a distress signal has been hoisted by shipowners in particular, and also by many shipbuilders, because of the difficulty of obtaining adequate and speedy supplies of raw materials. But ever since I can remember, in the debates we have had on shipping and shipbuilding in this House, now a matter of 30 years or so, hon. Members who have spoken from the other side of the House have always complained about the difficulties and dangers that beset those industries.

    I remember that away back in 1910 the cost of a dry cargo ship—we did not build so many tankers in those days— or even the cost of a passenger liner, was infinitesimal compared with the enormous cost of those vessels nowadays. I can also recall the rates of pay for the men who sailed in those vessels. When I first came into contact with the seafarers of this country, on the Clyde in particular, the able seaman going to the River Plate received the enormous monthly wage of £3 15s. and the man in the stokehold was paid £4 a month. Nowadays, of course, wages are very much higher. They are four or five times as much, but even in those days shipowners complained how difficult it was to carry on.

    The same applied to the inter-war years. I remember the debates we had in those years, and hon. Members are saying the same things now. The position is not disastrous. It is not fatal, but, nevertheless, there is the danger that our shipping and shipbuilding industry may suffer a decline unless we are extremely careful. The thing we have to do is to consider how best we can promote our shipping services and, of course, render services to the shipbuilding industry in turn.

    It is not to be done by means of taxation or, for that matter, by ensuring that the Suez Canal will be left open, but it can be done by promoting international trade. In the absence—surely this is obvious to everybody—of international trade, the shipping services of this country and, indeed, of the whole world are doomed. It is only by promoting international trade, by one country trading with another and by the removal of quotas and restrictions—in other words, condemning the policy frequently advocated by hon. Members opposite—that we can hope to render a service to our own shipping and shipbuilding industry.

    It is true, as the hon. Member for Sunderland, South (Mr. P. Williams) said, that the German shipbuilding and shipping industry has revived in the last few years. It is also true that the reason for it reviving is that the industry in Germany has been completely exempt from taxation. What has been the effect of it? A recent announcement appeared in the newspapers which, no doubt, hon. Members have seen, indicating that as a result of the almost complete exemption from taxation of shipping in Germany the shipowners had built up no reserves. Now the German Federal Government have decided that they must abandon exemption from taxation for the shipping industry in that country, and shipowners really do not know what to do.

    In contrast, in this country the shipowners have built up very large reserves. Very few shipping companies have not got reserves which would enable them to replace a part of their fleets. Moreover, let it be freely admitted, whether hon. Members like it or not and whether the shipowners or even the ship builders like it or not, that in the last few years both the shipowners and the shipbuilders, taking them by and large, if I can use a nautical expression, have been doing exceedingly well and making large profits.

    It is true that if one or two shipping or shipbuilding companies are selected, we could point to difficulties that they have encountered. No doubt they are apprehensive about the future, but, generally speaking, they have not done badly at all, and it may be that if they had put more to reserves instead of liberating profits for dividend holders their position would be less precarious than it is today.

    I bow to Mr. Deputy-Speaker's Ruling, of course, and I will not discuss taxation, but I should like to make this observation. When hon. Members suggest that shipbuilding should be exempt, or partially exempt, from taxation, we must recognise that as soon as this is done and there is any kind of taxation relief, then every industry in the country will make the same claim. It is quite impossible to single out the shipping and shipbuilding industry for that purpose. We must look elsewhere for a remedy.

    One of the main reasons, if not the main, why I have intervened in this debate is that during the past week I have had conversations with people associated with the shipping officers' organisations, and I can tell hon. Members what they think about the position. They are alarmed, but they are less alarmed about foreign competition, strangely enough, than they are apprehensive about the effect on the shipping industry, and, through it, on the shipbuilding industry, of competition from air transport. Indeed, some shipowners have now embarked on air transport organisation because they realise that this air transport has come to stay not only for passenger traffic, but, in the long run, it may well be for certain kinds of freight traffic, although at no time would it be able to carry the heavy freight carried by the shipping industry.

    What the Government ought to do is to examine the difficulties very closely. Apart altogether from the questions of taxation, financial relief, anything in the nature of subsidies or questions concerning foreign policy, such as the freeing of the Suez Canal from intervention by the Egyptians or any other Government, what they have to do is to see whether the shipowners and shipbuilders are devoting sufficient of their profits to reserves so that ships can be rebuilt.

    I know I am on firm ground in saying to hon. Members that shipowners with initiative—and there are many enlightened shipowners, men of imagination and enterprise—are capable of building up out of the reserves which they have carefully safeguarded in recent years, when the going was good, an adequate modern fleet providing the best conditions, apart from pay, for those who sail in their vessels. And what can be done by some shipowners can be done by all if they adopt the same methods.

    I do not want to proceed farther along those lines, because many of these facts are well known to those who have examined the position. At present, the care of the shipping industry is in the hands of the Admiralty, but I say quite frankly that when it was first decided to transfer shipbuilding from the old Ministry of Shipping and, subsequently, from the Ministry of War Transport to the Admiralty, I was opposed to it. I recognise that there is a close connection between merchant shipbuilding and naval shipbuilding, particularly in relation to the supply of raw materials and that this must be properly co-ordinated, but I have not been happy about the change.

    What is the history of all this? Before the last war we had in this country the Mercantile Marine Department of the Board of Trade. It was not altogether successful, at any rate in giving an impetus to our shipping industry, and it was decided by the Government of the day to create a Ministry of Shipping. That was supported by the Labour Party. During the war the Ministry of Shipping was amalgamated with the Ministry of War Transport.

    That Ministry has gone and shipping is now the responsibility of the Minister of Transport, but I sometimes feel that, so far as the Ministry of Transport is concerned, shipping is the Cinderella of that Department which pays less attention to shipping than to road or rail transport or to the reconstruction or reorganisation of our road system. While I make no complaint about what the Admiralty have done for shipbuilding, particularly during the war and in the post-war years, I believe that the time has come when the matter might be reconsidered.

    If it has, I want to make a suggestion which has nothing to do with legislation, Mr. Deputy-Speaker, because it can be done by administrative action. I suggest that if we do not revert to the Ministry of Shipping—and there may be strong arguments against appointing another Minister; because we may have too many already, though I do not single out anybody in particular—at any rate the Ministry of Transport should have a Parliamentary Secretary who devotes all his time to the care of our shipping industry.

    While we ought not to be unduly apprehensive about shipping and shipbuilding, the position should be as carefully watched by the Government as are the industrial interests of the country. There must be no question of neglect, because we cannot afford that. On the other hand, let us not be too much alarmed by foreign competition. For many reasons I doubt whether the Germans will ever be able to compete with this country in shipping and shipbuilding services because of the high quality of our shipbuilding and the excellent condition of a great deal of our Mercantile Marine.

    Let me give an example. Hon. Members will recall that there was a time before the war when we were alarmed at the competition coming from the United States, which had built a vast number of ships. But the United States was never a successful mercantile marine country, despite its large number of vessels. We overcame that difficulty and, later, we overcame competition from Japan to a large extent.

    I agree that competition is emerging again, that it may become a menace and that it must be watched, but I do not believe that we should be unduly alarmed about the position, though we have to watch it and see that there is no further neglect or deterioration. If we do that, and, at the same time, appoint somebody whose sole responsibility will be that of the care of our shipping and shipbuilding interests, we shall have done a very good job.

    8.6 p.m.

    I find myself in complete agreement with right hon Member for Easing-ton (Mr. Shinwell) in at least one thing he said, which was to the effect that the House should be grateful to my hon. Friend the Member for Farnham (Mr. Nicholson) in introducing this important subject into our discussion. Although I represent part of a Navy seaport, I make no excuse for intervening into a Merchant Navy discussion because it is obviously true that in war-time the Royal Navy derives a large part of its strength from the peace-time Merchant Navy.

    My hon. Friend referred to the fact that 50 years ago this country owned about half the total world shipping. He went on to say that we could not expect to return to that position because those times are gone for good. That is true, but we have to ask ourselves two questions. I am not sure that the right hon. Gentleman has asked himself the first one, which is the simple and fundamental question: Are we slipping any lower down that scale? If the answer to the first question is "Yes," the second question is: Is there anything we can do about it? So far as the first question is concerned, my hon. Friend the Member for Sunderland, South (Mr. P. Williams) quoted some figures which I should have thought had a definite and clear meaning. They referred to the tonnage of merchant vessels built in recent years in the various countries. My hon. Friend did not go far with those figures, and I shall quote a few more.

    First it is important to realise that for the world as a whole the tonnage of merchant vessels built has increased by nearly 40 per cent, in the last three years, from 3,557,000 tons in 1951 to 4,938,000 tons in 1953. So far as this country is concerned, the tonnage completed year by year has fallen every year since 1949, and in the last three years that fall has amounted to 6½ per cent, which compares with a world increase of 39 per cent.

    When we look at the countries in which that increase has taken place, we find food for serious thought. In the last three years the German figures were 265,000 tons, 498,000 tons and 712,000 tons.

    That point was dealt with earlier.

    I admit that Germany had her yards razed. But let us look at a few more countries where that did not happen. Japan, which did not start from zero, has the following figures: 431,000, 513,000, 732,000 tons. The right hon. Gentleman had a little tilt against the United States of America so far as its Merchant Navy is concerned, but the figures there for the last three years were 153,000, 397,000 and 600,000 tons. The same trend is true of Holland.

    In all these countries there has been an upward trend in recent years. The percentage of our share of world tonnage, on the contrary, has shown a steady decline and now stands at 20 per cent. There is no doubt whatever that we are slipping away and that a distress signal is flying, visible for all of us to see. That being the case, can we do anything about it? As some hon. Members have learned today, this is not the appropriate occasion to suggest that more generous taxation terms for shipbuilding companies might be of considerable assistance.

    I make a suggestion which I think will be within the rules of order. I think that there should be a good deal more cooperation between masters and men, there should be a good deal less talk in the shipbuilding industry, as in other industries, of the two sides of industry. There should be greater realisation that there is only one side in industry and that is the side that brings the bread and butter to every man whose livelihood depends on industry.

    There should be more consultation and mutually agreeable solutions. I was very pleased to notice that spirit in the wind and to see the result of the Court of Inquiry into the engineering industry, which recommended some such body as I have in mind, a body which would have constantly under review not only wages and matters of that kind but other related matters, including questions of dividends and their relationship to profits and wages.

    It is obviously true that most Royal Navy ships are built in private yards. That gives us in the Royal dockyard towns some cause for anxiety about the continuity of employment in future. I wonder whether it would not be possible to build a larger proportion of Royal Navy tonnage in the Royal yards, not only from the point of view of continuity of employment but also because apprentices and other young workers, when occupied solely on repair and conversion, miss the vital experience that can only be obtained in new construction. If more new constructions could be allocated to the Royal yards that would be of enormous importance and advantage as a contribution to the experience of these young people. If that cannot be done I wonder whether it would be possible to arrange some kind of scheme whereby these young men could spend periods of training of three months or so in a private yard in the Clyde, or wherever it might be. I think that my hon. Friend the Member for Farnham has done a good service to the House by putting his Amendment on the Order Paper, and I look forward with the greatest interest to the Minister's reply.

    8.14 p.m.

    We have listened with tremendous interest to the speeches of the hon. Member for Farnham (Mr. Nicholson), the hon. Member for Sunderland, South (Mr. P. Williams) and the hon. Member for Langstone (Mr. Stevens). They should be congratulated on bringing to the notice of the House the condition of the shipbuilding industry. But I cannot understand their line of reasoning. They argue, and rightly, that this country requires a flourishing shipping industry and high quality ships at the lowest possible cost so that freightages can be obtained at the lowest price and trade obtained to bring about the salvation of the country's economy.

    The price of steel enters into shipbuilding. Not long ago the Government did certain things. I know companies in this country that are primarily ship's plate producers. For two and a half years the price of ships' plates have carried a profit in interest of £3 10s. for every £100 worth sold. Ship's plates cost approximately £20 per ton, but the hon. Members who have been speaking tonight not long ago went into the Lobby to make certain that a further 4 per cent, interest at least should be put on the price of steel. They argued then that it would be a good thing if the production plant to which I have referred—and others like it—was returned to private enterprise so that remote investors could make more money. I do not know how they can argue as they do today, for a subsidy by means of a special form of taxation when one remembers the tricks that they were up to when they deliberately went into the Lobby to increase the profits on steel.

    We on this side of the House argue that shipping, engineering and all things ancillary to our world-wide trade are a matter of national importance and should be looked at within the framework of the national economy. We argue that shipbuilding should be a national responsibility—not that it should be nationalised but that there should be priorities and a sufficient amount of plant and material earmarked to safeguard that industry. History proves that the present Government have done exactly the opposite. I do not blame the hon. Member for Sunderland, South so much because he was not in the House at the time, though I know what Lobby he would have entered if he had been here. But the hon. Member for Farnham cannot deny the fact that hon. Members opposite walked deliberately into the Lobby to improve the position of their friends in the steel industry. The hon. Member for Farnham said at that time that I forgot that immediately on denationalisation there would be an upsurge of efficiency and the price of steel could come down. If that could be done overnight then hon. Members opposite are guilty of not having done what should have been done.

    I never said that it would be done overnight. It is a question whether the shipbuilding industry thinks that it will do better under the present arrangements than under nationalisation. I am sure that the hon. Member will agree that the question is whether the consumer is satisfied or not, and the categorical answer is that the shipbuilding industry welcomes the Government's measures.

    Of course it does. It is behind the Government politically but not economically.

    Surely that is a crazy argument. It is sheer nonsense to say that the shipbuilding industry, because it is allegedly behind the Government—whatever that may mean—for political reasons, is glad when steel is sold to it at less favourable terms. The industry wants the best steel at the lowest prices.

    May I remind both sides of the House that an argument on nationalisation is not in order?

    I agree, but one cannot get away from the fact that the hon. Member for Farnham and the hon. Member for Sunderland, South adduced to the House arguments on the cost of producing ships, and ships are not made from egg shells. They are made from steel and the cost of producing the steel is of vital importance. And that brings into the argument the question of the amount of profit made per ton produced.

    I have only brought that point into the discussion to show the hypocrisy on the part of some hon. Members opposite when they have gone into the Lobby to add another £4 10s. profit per £100 worth to the price of steel. Ship's plates were being sold at approximately £20 per ton and the amount of interest was £3 10s. per five tons, that is per £100. Hon. Members opposite went to the Lobby to increase that by £4 10s. That means that on five tons of ship's plates costing £100 there is an increase of £4 10s. in interest, which is 18s. per ton.

    I take it that the hon. Member is saying that there is a 4½ per cent, dividend, but does he think that the whole of a dividend comes off every transaction in business? His arithmetic is quite right and if it is £4 10s. on 100 tons one gets £108, but the dividend is not paid by increasing pro rata the selling price of every article.

    The hon. Member should get the simple arithmetic firmly fixed in his mind. Ship's plates are sold at the approximate price of £20 a ton—

    Wait a moment. One dog, one bone. The amount of State interest is £3 10s. per £100 worth, and the hon. Member went into the Lobby to increase that to an amount of not less than £7 10s. per £100 worth sold. That means an increase of 90s. per £100 worth sold, and that is 18s. per ton. It is no use going into the Lobby to vote that and then to come here moaning about the effect on the shipbuilding industry.

    No, indeed. I have given way three times in succession to hon. Members who do not have the habit of giving way. I want to put the point that people who make difficulties for themselves should not come back to the House and moan about those difficulties.

    8.22 p.m.

    I am glad to follow the hon. Member for Rotherham (Mr. Jack Jones), not because I agree with his mathematics, but because he was perfectly correct in devoting his remarks to steel in a discussion on shipbuilding. The whole root of the production in shipbuilding is the speed at which one can get the steel plates through the production sheds. That does not necessarily depend only on the delivery of steel but, as I understand the position, the shipbuilding industry is at present well satisfied with what is happening about deliveries of steel and preparations for the future.

    Before I go further perhaps I ought to declare an indirect interest in the matter as advising certain shipbuilding firms on legal matters.

    In the course of the debate the word "complacency" has been mentioned on several occasions, and it has been thrown in the face of the Government. We know that the shipbuilding and shipowning interests are facing difficulties at present. Even though they have 5¼ million tons on their order books, which is something like four years' production, they point to the competition of German and Japanese trade and to the subsidising of those foreign industries. They point to the wages and restrictive practices related to labour, and so on.

    When these two industries say that the Government are complacent it is perhaps a case of the pot calling the kettle black. There has been so much work for the shipbuilding industry since 1940 that there has been little need for them to think ahead. Perhaps one cannot blame the industry for not thinking ahead when hon. Members opposite held the sword of Damocles over the head of the industry, threatening to nationalise it at any moment if they had the opportunity.

    Would my hon. Friend agree that the argument of the hon. Member for Rotherham (Mr. Jack Jones) was not true, because the price of steel has not increased one penny since denationalisation?

    That is true, but I did not want to rouse the hon. Member for Rotherham into mathematics again and I wanted to proceed with my own argument. I think it is a little unjustified to call the Government complacent when the shipbuilding industry over the past years, when orders have been good, has perhaps been a little complacent itself. Now, since the peak of September, 1952, it has been caught napping in two respects—

    I am speaking of the industry.

    I think the owners were fairly prepared for competition from air transport immediately after the war and were prepared to join in developing air transport. That was prevented by the wholesale nationalisation of air transport by the Socialist Government and it seems that the shipowners lost interest in that aspect of the matter. The Act of 1953 has given an opportunity to progress along those lines, but I do not know whether they are ready or have any plans ready.

    I think that perhaps they should look to that question and not be frightened that air transport will take away their sea passenger transport. There should be some possibility of working the two systems in harmony. Personally, I do not know the answer, but I am sure the answer can be found by good will between the two concerns, air transport and sea transport, and, no doubt, by the assistance of the Government.

    I believe that the shipbuilders have been caught napping over the sudden popularity of the very large tankers. Only recently has it been realised that the future lies with the 40,000-ton and 45,000-ton tanker. We have not the docks in this country in which to build tankers of this size and until recently no effort has been made to produce them.

    Is the hon. Gentleman aware that an effort is being made to provide dock accommodation for just the type of vessel about which he is speaking?

    I am aware of it, and I am obliged to the hon. Member; that is just my point.

    It was not until the peak in shipbuilding production had been reached in September, 1952, and a decline had started that the shipbuilders seemed to realise that they were, if I may say so, in the wrong boat, and that they should be concentrating on the much larger tankers of 40,000 and 45,000 tons. It was only then that they thought about building large docks.

    If I may be permitted another pun, they certainly missed the boat, because this was already being done in the German yard of Howaldt's Werke, at Hamburg, where they produced the "Tina Onassis" the largest tanker in the world. It was launched last July and took only three-and-a-half months for fitting out. So far as I am aware there are only three shipbuilding firms in this country concentrating on the construction of large docks capable of accommodating that type of vessel.

    Mention has been made in the debate of the modernisation of yards and the explanation was given that Germany had progressed with her yards because they had been bombed during the war and so it was possible to have a new layout. Hon. Gentlemen opposite murmured something about the nationalisation of our yards, but that would not help because the old yards have not the space for modern development. They have not the space in which to construct yards for 40,000 and 45.000 ton vessels. There is not the space to put up the production sheds in which to carry out the modern method of prefabricated shipbuilding. We have to find new land in this country on which to construct these docks.

    That may well be a very good reason why they have been able to make such progress in shipbuilding. I think there may be some way in which the Government can assist in the building of docks large enough for these vessels, but I must not develop that argument or I shall be ruled out of order.

    I wish to make one or two suggestions about ways in which the Government might help both the shipbuilding industry and shipowners. There is the rather wide aspect of trade with China, and its development would be of great assistance to shipowning interests in this country. The question of the Suez. Canal has already been ventilated and there are some minor points which might be dealt with by the Government and afford assistance to the industry, such as relief from the restrictions on the transfer of ships on sale.

    There is the Ship and Aircraft (Transfer Restriction) Act, 1939, which may be ended not by legislation but by Order in Council. I suggest that it is time that came to an end, because it is restricting the sale of ships from this country abroad. The proceeds of a sale have to be placed in a blocked sterling account in this country, which prevents the use of that money for development. It can also have the effect of forcing the shipowners to sell to the British Iron and Steel Corporation at controlled prices. I consider these controls are now unnecessary, as is the control which still exists on the voyage licensing of tankers carrying cargoes outside the Government programme. There are other minor considerations of that kind which might be dealt with by the Government and which would be of assistance to the industry.

    From the point of view of the shipowning interests, the Government can best give assistance by ensuring that State air transport does not carry uneconomic loads which can more economically be carried by sea; from the point of view of the shipbuilding interests. I hope that some assistance can be given towards the construction of adequate docks.

    8.35 p.m.

    I join my hon. Friends in expressing our deep sense of gratitude to the hon. Member for Farnham (Mr. Nicholson) for introducing a subject of vital importance to the House and the country. It is certainly one of the most vital features in our internal economy today.

    I would, however, point out that many of our problems result from Governmental policy. There has been a policy of procrastination about future orders for British shipyards. I believe that the orders for 1954 will be considerably less than those for 1953, and they will certainly not bear favourable comparison with foreign shipyard construction. As many hon. Members have reminded the House, we are faced with keen competition from Germany and Japan. I had occasion last week to speak to a number of prominent businessmen associated with the shipbuilding industry, and they emphasised the tremendous pace at which work is now going on in German shipyards. There is no relaxation of effort in Germany to capture the market either by price or, indeed, by delivery. That is an important feature.

    I noted that the hon. Member for Crosby (Mr. Page) suggested that Germany was in the strong position she occupies because she has no rearmament programme. That demonstrates convincingly that a country which can spend more on productive and social services and less on non-productive and destructive services is likely to have an improved economic position. There can be no doubt that the shipping authorities in this country are complaining vigorously about the dearth of orders and are expressing the fear that there may be great unemployment in our shipyards. If I now refer to my constituency, I do so because a measure of redundancy exists in the finishing trade there. I can only express the hope that what is happening at the finishing trade end will not ultimately affect the craftsmen who build the ships in our yards.

    Many of our economists are talking about the possibility of an American recession. This has undoubtedly caused a worried flutter in the rest of the world. Just what will be the future for the economies of the world no one can accurately foretell. The fear of a slump is real in shipbuilding and engineering and other basic industries, but we ought not to be weeping Jeremiahs and adopt too pessimistic an outlook. I believe that it is possible, with strong Governmental action, to improve the situation and thus give a measure of stability and security to those who are engaged in the great shipbuilding and engineering projects of our time.

    I charge the Government with being responsible to some degree for what has happened. Let us examine in particular what has happened in the last year. There has been the problem of granting licences for the building and export of dredgers to countries in the Soviet bloc. The Civil Lord cannot help but be aware that three dredgers are now being built in Dutch shipyards for the Soviet Union and Poland.

    I hesitate to interrupt, but I am not quite clear how the hon. Gentleman holds the Government responsible. The fact is that the Government received no application for licences, and if the order was not given to British yards and no application for a licence was received by the Admiralty I am not quite clear how he thinks the Government is responsible.

    I want to return to what I said earlier, that when application was made by the firms building dredgers in this country to the Board of Trade for licences they were distinctly informed that it was no use making such applications.

    I welcome the Prime Minister's statement last week that we should endeavour to open out East-West trade, and that a greater volume of trade would certainly ease the present international tension. It would be well if the Prime Minister were to direct his energies and those great characteristics of drive and courage of his into some of his own Government Departments.

    Is it not a fact that, because the international situation has cooled down, hon. Gentlemen opposite— who when they were in Government had to impose the most stringent restrictions on exports' to Russia—-because under this Government there has been an easing of tension, are now asking the Government to increase sales to Russia? The Prime Minister himself has shown the way in his recent speech.

    I would remind the hon. Gentleman that the Korean war has finished, and I take the view that we should expand our trade with the East, even to the extent of exporting capital goods. I think the Prime Minister in his fine declaration had a greater sense of balance and a better understanding of what is needed in the present hour of trial than have some hon. Gentlemen opposite.

    8.42 p.m.

    I at once will disclose a personal interest in shipbuilding. The whole future and prosperity of the town whose representation I share with the hon. Member for Sunderland, South (Mr. P. Williams) depends on k. It is for that reason that I must continue to be disturbed at the complacency of the Admiralty. I am now really in very distinguished company. The Chamber of Shipping in their annual review, complained of the "smoke screen" put up by the Admiralty. Sir Donald Anderson in his last speech as President of the Chamber of Shipping, complained of the "dangerous complacency" at the Admiralty. Mr. Denholm in his presidential speech broad-coast "a gale warning," and I should like to quote one passage of that speech, because it very fairly puts the case. He said:

    "In the last few years we have tried to drive home to the public at large, and the Government in particular, our fears for the future, but it seems to me that we have not succeeded and that there is still a large measure of complacency, engendered, perhaps, by the balance sheets we have produced in the last few years, showing, we must admit, large gross profits."
    That fairly puts the case, because both these industries have been profitable for the past decade or so, and for that reason are not in a strong position to call attention to what is a real problem facing the industry.

    Yes; the point is that both industries have been very profitable and not in a position to exercise a powerful lobby on the Government. Again, "The Times" recently said:

    "Yards not equipped to build tankers or liners will feel the pinch soon."
    and, indeed, a few weeks ago the Civil Lord himself changed his mind a good deal. Only last summer he was talking about four years on the order books, but when we last debated this subject a few weeks ago he said that the larger yards ' alone had booked work well into 1956. No longer did he talk about four years and his reference was only to the larger yards.

    But the fact is that two-thirds of the yards of Britain are classified as small yards, so that the situation is one that demands serious attention. The output figures by themselves would be quite misleading. As several hon. Members have conceded, what happened was that the Korean war gave an artificial stimulus, and I would concede with the hon. Member for Sunderland, South that this is a situation corresponding to that obtaining in 1949 and 1950. In other words, we are now examining what are the long-term prospects of the shipbuilding industry.

    There is a significant point to which I would call the attention of the House. In the Report of the British Iron and Steel Federation, reference is made to plate production, and it talks about the "temporary demand" and of how we shall soon be over the hump. This is the steel industry making an estimate of the future position of shipbuilding, which is disturbing in the sense that it demands analysis, examination and realistic appreciation.

    The essential figures have already been given. In 1951 the new orders put on the books were over 4 million tons, whereas, last year, they were just over half a million tons, and against that we have to offset a quarter of a million tons by way of cancellations. We must realise that this year there has been very litle put on the order book and further cancellations. I am disturbed by the references made to foreign competition. This is not the result of foreign competition. It may be aggravated by foreign competition, but it does not result from that competition.

    I welcome the Amendment because we cannot divorce the future of shipbuilding from shipping. The fundamental difficulty lies in the prospect for shipping. After all, the foreign yards are suffering the same difficulties as our own yards. We only have to look at the Japanese figures to realise their difficulties, and now the German yards are facing similar difficulties. The short explanation is that shipping is no longer sufficiently profitable to induce the placing of orders on the scale that they have been placed in the past few years.

    We only have to appreciate that the freight rates, taking 1952 as 100, dropped on an average last year to 77, and in December they were as low as 71.5. In fact, since May they have fluctuated around the 74 mark. This is a very appreciable fall in the freight rates and it is bound to affect the shipbuilding position.

    Another index is the number of British vessels tied up other than for repair. We have about a quarter of a million tons of idle shipping tied up. This figure is fluctuating, but it has tended to fluctuate round about the 200,000 ton mark. If shipping is tied up in this way, it is not likely that we will have orders placed in the yards. This is a reflection of world trade, and we have to safeguard our own essential industries against that background. We cannot complacently accept it as inevitable.

    I have stressed that foreign competition is not the cause. The fall in the profitability of shipping is the cause, but we have got to realise that this has been aggravated by what has been happening in world shipbuilding as a whole. It is significant, as previous speakers have said, that our percentage of the world output has fallen at this time when the profitability of shipping has slumped. Last year we produced 26 per cent, of the world's shipbuilding, compared with 30 per cent, the year before and compared with from 34 per cent, to about 50 per cent, in the immediate pre-war years.

    Let us look for a moment at the output of the main competing countries. Sweden, last year, turned out 485,000 tons. That is a third more than Sweden produced the previous year. It is the largest output in the history of shipbuilding in Sweden. In 1938, the output of the Swedish yards was 166,000 tons. Japan, last year, turned out 557,000 tons. That was less than the previous year's output, but the previous year's output was the highest in the history of Japanese shipbuilding and has to be compared with a tonnage in 1938 of 442,000 tons.

    Somebody referred to Germany as not ever being in a position to compete with this country. The output of German yards last year was 818,000 tons. That is certainly comparable with our present output, and was 300,000 tons more than in the previous year. It was an all time record in the history of German shipbuilding. We have to compare it with the pre-war output of the German yards, whose output in 1938, when they were at maximum production, was 481,000 tons.

    Yes.

    The United States last year produced rather more than 500,000 tons of shipping, which was a larger output than in the previous year and, of course, was larger than prewar. We have also to recognise the whole time the tremendous potential of the United States. In five years, between 1938 and 1943, the United States increased their output from 200,000 tons to the tremendous figure of 11½ million tons.

    The point is that at the time when the profitability of shipping has slumped and drastically affected shipbuilding, there is a larger shipbuilding capacity available in the world.

    The hon. Gentleman has quoted Sweden, Germany and the United States. Would he agree that in all these cases there is a far more modern method of shipbuilding adopted than in this country? Are those figures due to that more modern method?

    I would say that these figures demonstrate the point made by the hon. Gentleman. I was going on to say that there is not only an enlarged capacity but also new capacity. I concede at once the point made by the hon. Gentleman. New capacity has great advantages in production over old capacity.

    I am afraid that a lot of nonsense is talked about foreign competition. Too many people are trying to seek that as an avenue of escape.

    There has been a lot of talk about the Hamburg yards working round the clock. If we worked round the clock it would add to the costs, and with our present steel supplies it would mean that men would work round the clock for four months in the year and be unemployed for the other eight months. I do not know why this comparison with Hamburg is made. We have to remember that Hamburg has 80,000 unemployed. If one has a background of unemployed then it is possible to work with an occasional third or second shift.

    Our yards are in a competitive position largely because they have cheaper supplies compared with foreign yards, and the main difference between ourselves and the West German yards is that our yards get their steel at £10 a ton cheaper than do the German yards, thanks to nationalisation. The reason why our yards are being prejudiced at present is because this differential is being narrowed the whole time for two reasons. The first is that denationalisation adds to the cost of steel in this country, and the second that the Schuman Plan is operating to reduce steel costs to our main competitors.

    The fundamental problems of the shipbuilding industry are, as I have said, the fall in the profitability of shipping and the increase in the world capacity of the shipbuilding industry. This is aggravated by the fact that the increase of shipbuilding capacity today is governed by strategic and national considerations. That is why I mentioned the United States. We do not know what the United States may feel driven to do regarding its own shipbuilding capacity. It means as a consequence— and this has been touched upon by other hon. Members—that there is a large measure of Governmental aid and interference in the shipbuilding industry in most other countries.

    The hon. Gentleman is making a very important point, but surely the one important factor is that the German yards are working round the clock and we are not. One appreciates the difficulties, but that means that people going to the German yards are getting quicker delivery. That is a vital factor.

    The difficulty about that is that one cannot have long order books with immediate delivery. The yards without order books can, of course, give a better delivery date than can the yards with full order books. I do not agree with the hon. Baronet the Member for Farnham (Mr. Nicholson) that shipbuilding should not have preferential treatment.

    I was merely anticipating developments.

    In Italy, Japan, West Germany and in almost every other shipbuilding country the State has accepted a responsibility in one form or another for the industry. We have to recognise that we have without question a claim to some preferential treatment for British shipbuilding, and, if necessary, for British shipping. The first thing is that the country must accept its responsibility.

    To go back to Mr. Denholm's presidential address, he went on to say:
    "our defence expenditure is running at the rate of £4½ million a day. What is the use of this if we do not have the tonnage with which to maintain our vital communications."

    I am very glad that the hon. Member accepts that point of view. It logically follows that shipbuilding, and, if necessary, shipping demands preferential treatment from the Government.

    This matter must be urgently considered. I have pleaded previously for a working party; the Trades Union Congress wants a development council, and the "Newcastle Journal," which devoted much of its energies to this problem, has-said that we should have a fact-finding inquiry. Such a body should include shipping interests, and should deal with, technical questions, such as the 45,000-tonner which can be loaded and unloaded in nine hours, and which is beyond the capacity of most British yards.

    I am not satisfied that sufficient attention is being paid to research in shipbuilding. I remember raising the question of the experimental tank when we were considerably behind competing countries. There is also the question of replacement finance especially in relation to dry cargo tonnage. There is the anomaly of the excavation of a dry dock not having certain advantages which it ought to have. I shall not mention the advantages because I might transgress the rules of order.

    There is the vital factor of space, which is emphasised by the comparison between ourselves and other countries. We have to have more space for the yards, and this is a very difficult problem, as we can see if we consider the Wear or the Clyde. The problem cannot be tackled by single yards. We have to look at the Wear as a whole to see how we can make the most of it and provide the proper space for straight run prefabrication.

    We have also to promote co-operation and efficiency throughout the industry, I regret that this industry has been disturbed by the recent wage dispute, which is a reflection upon the shipbuilders. It is difficult to call for the utmost cooperation in the face of these very long and protracted negotiations. The sooner the matter is dealt with and out of the way the better it will be. If it were out of the way there should then be discussions about the demarcation question and the problem of the structure of this industry. But, first, we have to resolve the wage claims.

    We must examine two essential problems. First, there is the determination of the need and extent of Government aid and, as a consequence, Government interference. Secondly, there is the unavoidable problem of the redundant capacity which has to be maintained in the national interest and the interests of the men who are to be used in those yards when the emergency arises. In other words, we have to examine and re-examine the question of redundant capacity being maintained and alternative work being provided for highly-skilled workmen.

    We talk about American efficiency, but our shipyard workers on the Wear out-competed the men in the Kaiser yards. Although they overtook us during the war, we regained the lead before the war was ended. These are men of great skill, and they are hard-working. This is true both of management and men. We have a resourceful management. It must be remembered that the Liberty ship was designed on the Wear. We have initiative both in management and men which cannot be allowed to go to waste again. This problem must be considered by the industry, by the shipping interests, and by the Government.

    I want to conclude by making a plea for something further. It is time for international action. For example, I was very disturbed to learn that American naval officers are in Western Germany discussing with the Germans the placing of tanker contracts. I should like to know what discussions the Americans had with us about the placing of those contracts. It is a matter of Western defence. The problem of shipbuilding has to be tackled not only nationally, but internationally.

    Against the background which 1 sketched tonight, I hope that there will be mot only national, constructive discussions by all sides of the industry but that the Government will also endeavour to give a lead in promoting international discussion.

    9.6 p.m.

    Like my hon. Friend the Member for Sunderland, North (Mr. Willey), I have a substantial constituency interest in this subject. I, too, should like to thank the hon. Member for Farnham (Mr. Nicholson) for giving us the opportunity of discussing this subject tonight.

    It is true that shipbuilding does not today play quite the same part in my constituency as that which it played before the war. Then, due to the deliberate concentration and decline of the shipbuilding industry, Jarrow became known as the town which was murdered. That can hardly happen again, because the shipbuilding industry today represents only between 20 per cent, and 25 per cent, of the total employment in the area. Nevertheless, that is a substantial percentage, and because it is substantial and because of the fear which the people of Jarrow have at present—the outcome of past bitter memories—I hope that the Government will do all they can to see that the highest level of employment is maintained in this industry.

    I want to correct the Parliamentary history of one or two hon. Members opposite, including the hon. Member for Sunderland, South (Mr. P. Williams). This Government have made it more difficult for the British shipbuilding industry to compete in international markets, because one of their first actions on coming into power was to compel the Steel Board to increase the price of steel. The board said that this was not necessary and that it was making enough profit to pay its way and to provide capital investment. Indeed, the Government compelled the Chairman to resign because he said he did not believe it was necessary to increase the price of steel. The subsequent balance sheet of the nationalised industry showed a £60 million to £70 million profit as a result of all this.

    How much better it would have been if the Government had allowed the price of steel to remain unchanged, thus enabling British ships to be delivered at a much cheaper price. It was the policy of the Government which had a direct effect in undermining our ability to compete, and it ill becomes the Government or any hon. Members opposite to talk about the dangers which the wage claims of the workers may have upon employment when they themselves, by actions of the kind which I have described, deliberately undermine our ability to compete. Obviously, one reason why the price of steel was increased, making it more costly to build ships, was to make the steel industry more profitable when it was handed back to private enterprise.

    While I want everything possible to be done for the shipbuilding industry, I am always alarmed when any special privileges or preferences are given to an industry. I come from a mining locality, and I remember in the early twenties when the mining industry was given the special privilege of a subsidy. I know what happened to the subsidy—how it was frittered away and how, ultimately, the industry which was supposed to be saved by it was left in a condition worse than its condition before it received the subsidy.

    When hon. Members talk about the high level of taxation today as being one of the deterrent factors and one of the problems which make it most difficult for this industry to compete, and as one which makes it more difficult for the shipowners to replace their fleets, never let them forget that the biggest contribution towards that high level of taxation which the people of this country today are bearing is of course, the arms burden. The very Estimates which we are considering now total £353 million, and I cannot think that anyone would believe that it would be right and proper that any section of industry should not, from its profits, make its contribution to that sacrifice and the amount that is required.

    I should like to get from the Civil Lord tonight some decision with regard to our attitude to building ships for the eastern European countries and the Soviet Union. It may be true, of course, that no orders have ever been submitted and, therefore, no question of a decision by the Admiralty or the Government arises, but what is true, and what all those Governments know, is that there were two tankers built in this country which were paid for before they were delivered and which, when the time for delivery came, were not delivered.

    I am not blaming the present Government for that because that happened under our Government, and I protested as strongly against that when our Government was in power as I want to protest against the attitude which, I think, the present Government may probably take if any further orders come along. While it is true that we are not supposed to deliver strategic materials because the terms of the Battle Act prohibit it and we shall not get American aid if we do, it is also true that every other country which is affected by the Battle Act has just disregarded it.

    Sweden built the two tankers that we failed to deliver. The French, last July, made a trade agreement with Russia under which they would build and deliver certain ships. The Danes likewise have continued, despite the Battle Act, to build and deliver shipping to the Soviet Union. I want to know if the businessmen who have been to Moscow recently have been able to obtain any orders, and whether those orders are to be permitted by the Government. I want to know whether the Government are going to be like Denmark who, when the Americans challenged their right to deliver, just turned round to the Americans and said, "This is our business and we can look: after it very effectively without any outside interference."

    I am quite sure that substantial orders in that direction could be obtained. When British businessmen had been given the right to accept orders there has been no question of foreign competition being able to beat us. The Germans were competing for the contract for the 20 trawlers that are to be built at Lowestoft, and Britain was able to submit much the lowest tender and got: the contract. I think that in view of the reduced international tension and the need to maintain, so far as possible, full employment in the shipbuilding industry, the time has come when we should review the list of proscribed exports to the various countries.

    No matter whether it be the shipbuilding, the metal, or any other industry we are considering, the only hope of any Government being able to provide the people with full employment is upon the basis of an expanding world trade. The possibilities of that substantial expansion in world trade now exists. It is for us to take this chance, and it is for the Government, who have the opportunity, to grasp it with both hands and thus make certain that the days of depression, of which there are so many bitter memories in so many parts of the country, are never allowed to return.

    9.16 p.m.

    I, too, thank the hon. Members for Farnham (Mr. Nicholson) and Sunderland, South (Mr. P. Williams) for raising this subject tonight, although I entirely disagree with the proposals of the hon. Member for Farnham as being suitable to save the shipbuilding industry, A good deal of propaganda is carried out by the Shipbuilding Conference to stimulate the idea that taxation relief is necessary to save the industry, but I do not believe that this is the remedy. Obviously, this sort of thing could be done over a wide field; every industry could demand the same kind of thing, but in the result the position would be the same as that from which we started.

    I was surprised that the hon. Member for Sunderland, South did not raise the question of prefabrication. The Liberty ship, as was rightly said by my hon. Friend the Member for Sunderland, North (Mr. Willey), was designed on the Wear. The contract was given to Kaiser to produce the Liberty ship on the west coast of America, and it was produced with British and British-designed equipment.

    The Liberty ship could not be produced in this country. If John Brown's, of Clydebank, had the area in which to work and could get at a reasonable price the land on which to build big covered shops for prefabrication, they could stand up to any competition in the world in quality and price. One of the greatest handicaps of British shipbuilding, as we see it on the Clyde, is the lack of space for the development of intensive prefabrication.

    I am aware that these processes are being carried out in Hamburg and in the United States. Although they were British designed, they cannot be carried out here because our shipyards are closed in on the riverside, with expensive land and big buildings all around them. The capital cost is too great for our companies to move out to get the space for prefabrication.

    Of course, work can be carried on for 24 hours of the day if there are great covered sheds where prefabrication can be done by men employed on three eight-hour shifts. I doubt very much, however, whether at Greenock or Clydebank one could get three shifts to work out on the stocks on the slipway in winter. In any case, John Brown's would not get me doing it on the night shift.

    If we are to compete with the processes now being operated on the west coast of the United States and at Hamburg, where the surrounding built-up area was smashed and the resulting vacant land was put at the disposal of the shipbuilders, obviously something has to be done to help the British shipbuilding industry to extend its area of land for prefabrication, which it certainly cannot do with all the expensive land surrounding it, from its existing resources.

    I consider that the Admiralty has wasted an awful lot of money in building hulls that are outmoded. I should have thought it would have been much better if the Admiralty, in the interests of shipbuilding in this country, had enabled the shipbuilders to get land such as I have mentioned. For instance, Messrs. John Brown and Co. Ltd. have established in Clydebank away from the river, the building of land boilers. If John Brown's could establish a new industry and get the land for it, why cannot the Admiralty assist these companies to get land alongside their yards for prefabrication?

    There is another development of which we have to take cognisance, and that is the process going on in St. Nazaire and in Newport, where they are converting docks into dry docks and building prefabricated ships. I think there is only one such dock in Newport, but they have three in St. Nazaire.

    They have built a shallow dry dock for the express purpose of undertaking construction by that method. There was no dock there, so far as I could see.

    That was in St. Nazaire, and they have a dry dock for building ships and then floating them out. They have big fabricating areas as well, thus ensuring continuous use of capital equipment. This sort of thing would be difficult on the Clyde, because the river is so shallow, and it would be very expensive to cut deep into the land because the river silts up quickly.

    One other point with which I want to deal is the question of world trade. Obviously, unless world trade is worked up to its maximum the shipbuilding industry, not only in this country but in every country in the world, must fall considerably. I think it is dishonest to keep quoting this percentage figure of British shipbuilding and. the British Merchant Navy and comparing it with the overall figure for the world. What we should consider is, are we achieving a reasonable production from our potential, our raw materials and our labour? What percentage it is of the world figure does not very much matter as long as all our resources are being used. If this Government and other Governments pursue a policy which will reduce trade then trade will fall all round. I do not see why we should worry if Germany and the United States are producing more, provided that our full capacity for production is used and our potential employed.

    With other countries, with larger areas and greater sea coasts, becoming increasingly industrialised, they will produce more, so we have to see that world trade is kept moving at the same tempo. If this potential keeps going up, I do not see that there is any reason for us to be despondent. As soon as the present Government got into power business began to tighten up. There was a slackening off, for it was recalled that a prominent member of the Government when in opposition said that what we wanted in this country were more and bigger bankruptcies. When businessmen found this Government in power they began to be careful. One of the first things that the Government did was to put up the Bank rate. On a ship costing a couple of million pounds it meant that the cost increased tremendously.

    The hon. Gentleman is talking about bankruptcy, but he must realise that one of the greatest bankruptcies that was avoided was national bankruptcy.

    No, a nation does not go bankrupt.

    I have heard some extraordinary statements tonight. For instance there was the statement from the hon. Member for Farnham that the reason why Germany was in such an advantageous position was that she was defeated in the war and could start afresh. Perhaps it would be excellent if Britain went bankrupt and paid Is. in the £, because she could start all over again with no National Debt. That would be very useful indeed. If the British Government went bankrupt and put in an official receiver and decided to pay 1s. in the £, the National Debt would be wiped out and we could start afresh.

    It is only a couple of hundred years ago that the National Debt was a few million pounds, but my grandchildren will probably see it in figures as long as the space between my two hands. But nations do not go bankrupt. That is not a term which can be applied to a nation. A nation always gets out of it in some way or another, because the wealth of a nation is its human beings and their capacity to produce.

    When I heard the hon. Member for Farnham talking about the golden age of half a century ago, I asked myslf, a golden age for whom? The shipbuilders? I ask the hon. Gentleman to go with me to Clydebank and ask the retired shipyard workers of 60 or 70 years ago if 50 years ago was a golden age for them.

    Of course I was not meaning that. I was merely saying that if we could go back to the time when we owned half the world's shipping, it would be a repetition of the golden age.

    Surely no one would suggest that Britain has an inherent and natural right to retain that percentage of world production, either in shipbuilding or motor cars or sewing machines. The rest of the world will go on producing, and it is better that all the world should produce as much as possible. Surely the more the world produces the richer humanity will become? Why should we be despondent because the world is producing more? It is only because hon. Gentlemen opposite measure the output of human labour by the profit it brings to those who control that labour that they are despondent.

    I remember the rationalisation schemes of the late Stanley Baldwin before the war. His argument was that we were poor because we were producing too much. He said that if we rationalised industry and cut down production we should all get richer. I stood up at the public meeting he was addressing and asked, "Then if we all produce nothing at all, we shall all be millionaires?" That was the logic of it, and I was nearly blue in the face about that argument.

    I believe in the maximum production of all resources, but the trouble is that then profit cannot be made. Even today there is too much. I have been connected with an industry which has not produced to the maximum capacity because its output was at a figure which gave the maximum price for its product and the maximum profit was obtained at that figure of output. I do not say that is the case in the shipbuilding industry, because I have never worked in it, but in the industry which I have mentioned that was so. Our market research saw to that. That is the major difficulty in this country, and it is the difficulty of the right hon. Gentleman and his hon. Friends.

    I say that the shipbuilding industry of this country will only be saved if there is a world planned economy based on agreement between the nations to use the resources of every country to build up the trade of the world. We shall not do it by fostering the idea in Germany that we are working more cheaply or longer hours or by building up the idea here that they are doing the same because, by doing that, every industry in this country will be crippled, the trade of the world will be crippled and the lives of millions of men and women and their families will be crippled.

    9.30 p.m.

    It should not go out from this House that none of our British yards is making a proper effort to modernise and meet the challenge of the present time. When, very rightly, we have had this very valuable examination of this important problem it is only fair that we should know, also, that in some areas at least we have been able to make very real advances in shipbuilding modernisation. As I represent an area where many of these most outstanding changes have taken place, it is only right that I should say something about them.

    On the Tyne it has been possible over these last years for two major shipbuilding firms to make considerable changes by way of modernisation. One of them has already carried out a vast reorganisation, including the prefabrication to which reference has been made several times in this debate. It is acknowledged that we have there a modern yard fully capable of meeting modern competition. In a neighbouring yard, probably one of the largest in the country, there is now being carried through an expensive modernisation scheme which the Minister examined when he was in Tyneside a short time ago. This scheme will enable the Swan Hunter yard to deal with the largest size of tankers that can be built and will enable the Tyne to compete in world markets.

    All this raises the problem of space which several of my hon Friends have mentioned. In many cases there is not the space to carry out this work. One must not only have the largest slips, but one must also have the prefabrication shops so sited as to give easy access to those slips. In many cases that is not possible without almost the replanning of some towns. In one Navy yard it has been possible to carry out reorganisation and in another yard schemes are now well advanced which I am sure will succeed before long in producing the size of slipway and the prefabrication shops that we want.

    But reorganisation of this kind is much more difficult to carry out when the slips are still working, as compared with the problem of our foreign competitors who are building from scratch. One must pay tribute to the firms that are involved in these very big reorganisation schemes and in the planning that is involved to ensure continuity of work in existing slips while the reorganisation of the rest of the yards is going on.

    I quite appreciate the impossibility of carrying out schemes of this sort in many parts of the country without great changes in the planning and layout of streets. It is a problem which requires the active cooperation and help of the Government. I suggest that there is a very strong feeling that with regard to these life and death problems the Admiralty has not shown the drive and keenness that many parts of the country would have liked to have seen.

    I do think it is pertinent at this point to refer to proposals put forward on many occasions in the House and in the Press by my hon. Friend the Member for Sunderland, North (Mr. Willey) and his suggestion that there should be a working party set up between the two sides of the industry, with the assistance of the Admiralty, to tackle some of the problems of organisation both of labour and capital in the yards so as to face the problems which undoubtedly will be coming upon us before long.

    It is important that we should get the wage claim out of the way first but, once it is out of the way, it is highly important that the two sides of the industry should discuss these long-term problems. Unless they do so, I am afraid that we shall be in very real difficulty.

    A further point which I have raised at Question time on several occasions is that, although it is true that steel plate is now much easier to obtain in the yards, there are certain types of plate which are still very difficult to obtain, in particular boiler-plate. The more I try to find out why boiler-plate delivery should be two and even three years from our own manufacturers the more difficult it seems to get an effective answer. So far as I understand, some of the larger types of boilerplate are only manufactured by one firm, that of Colville's.

    For reasons which 1 do not pretend to understand they have not been willing to expand their production to meet the undoubted need for a greater quantity of boiler-plate, with the result that very large orders from the Tyne and elsewhere are having to be placed abroad and we are obviously coming at the end of the queue as against our competitors. That is putting our firms in a disadvantageous position.

    It is the responsibility of the Admiralty to look into the matter to see whether it is possible to secure an extension of the production of this very heavy plate. I fully recognise the problems and difficulties and the reorganisation of plant which would be needed to expand production in this field, but here is a matter of great public importance and one in which I should have thought the Admiralty should attempt to take action. I think it would be a pity if there went out from this House any report of general gloom about our prospects, because I do not think that that would be wholly justified.

    Neither do I think that the Admiralty ought to feel it can sit back comfortably and do nothing about it. Many firms are showing great vigour and activity in dealing with problems and their lead ought to be acknowledged and encouraged. It is the responsibility of the Admiralty to attempt to get the two sides of industry together to work out more effective measures for the future of the industry.

    9.38 p.m.

    The Amendment rightly draws attention to the question of the importance of the shipbuilding industry and its vital role in war. It also draws attention to the need for promoting the greatest measure of stability in all matters affecting the industry. For these reasons I hope that we shall never see a repetition of an incident, fully reported the other day, in which a trawler returned to the sea the body of an airman, apparently one of the casualties from the loss of the Washington bomber over the Irish Sea on 26th January last.

    It is true that the Admiralty or the Service Departments and the Merchant Navy must have the closest degree of co operation in time of war, but that co operation ought to exist without exception in time of peace. It can happen that in time of peace an unfortunate incident takes place and it is only right that the Admiralty and the Service Departments should be able to rely to the utmost possible extent on the co-operation of the Merchant Navy if and when such circum stances arise. As a result of this incident, so far from improving the stability in all matters affecting the industry to which the Amendment refers—

    I do not know how the hon. and gallant Gentleman relates what he is saying to the problems of shipbuilding.

    It was pointing out that the Amendment refers to the need for promoting the greatest measure of stability in all matters affecting the industry. In my submission, it does not tend to promote stability in the industry when, as a result of the incident to which I have referred, four deck hands have refused to sail in the trawler to which—

    Do I under stand, Mr. Speaker, that any further reference to the need for stability in the Merchant Navy is out of order, because—

    What the hon. and gallant Gentleman is referring to is far too remote from the Amendment to be relevant.

    I was trying to argue—[HON. MEMBERS: "Oh."] If hon. Members opposite are not concerned about the deplorable episode to which I have referred, that is their business.

    I was trying to indicate, Sir, that the Merchant Navy, as is pointed out in this Amendment, has a vital role in war and that we must have—

    On a point of order, Mr. Speaker. Would you consider the advisability of pointing out to the hon. and gallant Gentleman that we are talking about the shipbuilding industry and not the shipowning industry?

    I thought I had already done so and I hope that the hon. and gallant Member will now accept my Ruling.

    Of course I accept your Ruling, Mr. Speaker, although hon. Members opposite seem to think I am departing from it. I am trying to suggest that it is not sufficient merely to talk about building ships if we do not also consider the use to which they are put and the competence of the people in charge of them. I am asking the Admiralty—

    No, I will not give way any further.

    I am asking the Admiralty to ensure that there is a close degree of co-operation between the Admiralty, as the Service Department concerned, and the Merchant Navy, so that investigations may be carried out into circumstances which lead to incidents of the kind I have mentioned, involving Service personnel. The Merchant Navy can be of the greatest value to the Admiralty. If, in peace-time, the crew of a merchant ship see a mine floating in the sea, it is their duty to notify the Admiralty so as to keep the sea passages safe and prevent the destruction of the shipping of which hon. Gentlemen opposite are saying we should have more.

    I hope that the Admiralty and the other Service Departments will make it their business to see that such deplorable incidents as the one to which I have referred do not occur in the future.

    9.44 p.m.

    I wish, first, to congratulate my hon. Friend the Member for Farnham (Mr. Nicholson) on the able way in which he introduced the Amendment. He mustered a remarkable number of facts about this industry which revealed that he had given careful study to the problem. I would also congratulate my hon. Friend the Member for Sunderland, South (Mr. P. Williams) for the way in which he seconded the Amendment in what I thought was a very interesting speech.

    It may seem strange to hon. Members that in a debate on Service Estimates we should be discussing shipbuilding, but I think that, on reflection, they will see the very close connection which exists between defence and the shipbuilding and shipping industries. Indeed, anyone who reflected on the part which those two industries played in the two recent wars would certainly be convinced of their relevance on a day like today.

    The Admiralty is concerned in a dual capacity with the shipbuilding industry. First, it is the sponsor of the industry; second, it is its best customer. As sponsor of the industry, it is the Admiralty's duty to watch events in the world which affect the industry, and that we endeavour to do to our best advantage. The First Lord and I have frequently visited shipyards throughout the country, and there we have had a chance of learning about the problems of the industry at first hand, and have been able to talk to the management side and the trade union side alike about those problems.

    The hon. Member for Sunderland, North (Mr. Willey), and another hon. Member, asked whether it might not be necessary for the Admiralty, as sponsor of the industry, to have the advice of a working party. The Admiralty has considered that and has come to the conclusion that it is not really necessary. There is already the Shipbuilding Advisory Committee which was set up in 1947 specially to advise the Admiralty on the problems of the industry. The committee's terms of reference are extremely wide, and the committee includes representatives of both sides of the shipbuilding industry and both sides of the shipowning industry. I feel that the Shipbuilding Advisory Committee, which has been doing very valuable work, is fully qualified to do the same kind of work as would be done by a working party.

    The second way in which the Admiralty is connected with the industry is as a customer. Defence orders at present with the industry amount to £120 million. It is perhaps not generally realised how close and technical a link there is between the Admiralty and the shipbuilding and repairing industries. The results of much of the technical research carried out in Admiralty establishments such as Haslar are made available, and are, I believe, of use, to the merchant shipbuilding industry. The Admiralty has a very close link with the industry there.

    At the present time 20 per cent, of the men in the industry employed on new construction work are engaged on Admiralty work. Many Admiralty orders, especially for minesweepers, go to the smaller yards, which, as a number of hon. Members have shown they realise, are those which are at present most in need of help. The work of the smaller yards is running out very much faster than that of the larger yards which build the bigger ships.

    The Amendment speaks of the importance of the shipbuilding industry. The Admiralty needs no convincing about that. If it were technically possible, we should have been willing to accept the terms of the Amendment, but that is not possible owing to the rules of order. Not only is the industry important to a number of towns and cities represented by hon. Members who have spoken in the debate and, therefore, important for the employment of a very large number of people; it is also important to the economy of the country as well.

    I do not want to bore the House with too many figures, but there are one or two that I should like to give. The earnings of shipbuilding from United Kingdom owners last year amounted to £90 million and from foreign owners £35 million, a total for the year of £125 million. Turning to the shipping industry, we find that the indirect earnings of foreign currency are about £135 million, excluding oil.

    I now turn to another aspect of the importance of the industry to the country. There is the question of war potential. It is most important for us in time of war to have available yards where we could build the necessary ships, both warships and merchant ships. As several hon. Gentlemen have clearly recognised, the history of this industry has tended to be one of booms and slumps, and I suppose it would be true to say that there is no industry in the country more sensitive to world trade than the shipbuilding industry.

    Since 1939 the industry has enjoyed a long period of unbroken prosperity, and in 1952 a record was reached, when more than seven million tons were on the order books. At the present moment the position is not quite so satisfactory. There were 5,500,000 tons on the order book at the end of last year, two million tons of which are under construction. Last year employment in the industry rose by 7,200, although some of those men have come from the ship repairing industry, where the work is not so heavy as it was, largely because of the volume of new construction which there has been since the war—

    Would the hon. Gentleman say what is the total increase or decrease, including shipbuilding and ship repairing workers, because he cannot change from one to the other?

    They are two separate industries, but the total would be about the same and the 7,000 increase in the shipbuilding industry would about cancel out the decrease in ship repairing, but I am speaking without the relevant figures being before me.

    As to the future of the industry, there is. of course, the question of steel. Undoubtedly, with a greater flow of steel, output during the coming year could be increased. A number of hon. Gentlemen have spoken about steel plate, particularly the hon. Members for Rotherham (Mr, Jack Jones) and Sunderland, South There is no doubt that the action of the Government, and of the Ministry of Supply in particular, has eased the steel position considerably. Nevertheless, more steel would be useful to cancel out difficulties because of bad sequence deliveries. I do not suppose that enough steel is likely to be available to the industry until new plate capacity is available, because of the great increase in the proportion of plate which is used today.

    Undoubtedly, the main problem of the industry is no longer so much that of steel as of future orders. I think that this has been generally reflected during the debate which we have had this evening, and it has been the central problem which the Admiralty has been watching for the last six months or more. Until early 1956, work is there, and the position is satisfactory for the larger yards, although smaller yards will need orders before that. We have naturally to ask ourselves [whether orders will come along after that to make good the deficiency.

    Some hon. Gentlemen seem to have assumed that the Government are able to obtain new orders in some easy fashion. But this is essentially an industry which depends upon world trade, and the help which the Government can give is very limited. I think the right hon. Member for Easington (Mr. Shinwell) put for ward that point of view—

    May I ask one question? There is one form of help which the Government can either give or withhold. Certain firms would like to trade with countries behind the Iron Curtain. They would like to sell ships to them. What encouragement or discouragement do they get from the Admiralty when they wish to do so? It is not just a question of refusing permits. Are they discouraged even from asking for permits? From the knowledge which I have, that would appear to be the case.

    I was coming to that point a little later in my speech. I think that the right hon. Gentleman is misinformed on his last point, but I will deal with that later.

    As to the kind of help which the Government can give, they are obviously able to give naval orders, and I have already given figures indicating the kind and degree of help which that will be to the industry. But these naval orders are not likely to increase, and in any case they are relatively small compared to the capacity of the industry. Secondly, the Government can help with regard to steel supplies; they have already done so, and further efforts are being made to increase the flow of steel plate to shipyards.

    Would the hon. Gentleman say whether he has any information on the problem that I raised several times about boiler plate and the problem of the single firm that is producing it?

    Boiler plate has been one of the most difficult aspects of the steel problem, but it has received attention by my right hon. Friend the Minister of Supply. Then again, the Government are able, by their general economic policy, to be of help to the shipbuilding industry, and I believe that in that way the present Government have achieved a lot.

    One or two hon. Members have gone on to speak about the possibility of fiscal measures or subsidies being used for the shipbuilding industry in this country. That is something for the Chancellor of the Exchequer to consider, and it is rather outside anything that I can deal with. In any case, I have to be careful what I say, Mr. Speaker, or you will call me to order. I am, however, authorised to say that a few days ago the Chancellor received a deputation from the General Council of British Shipping and he is now giving the most careful consideration to what was said. For these reasons, and because the Budget is so near, it would be inappropriate for me to say anything more on this subject at present.

    As I have said before, the central factor in obtaining orders for the shipbuilding industry is the state of world trade in general, and freight rates in particular, and I was very glad that the hon. Member for Sunderland, North emphasised these points. With regard to world trade, it is interesting to note that world tonnage of merchant shipping rose in the last year for which figures are available by no less than three million tons, or 3·5 per cent. As to freight rates, the position is not quite so encouraging, the latest index figure being 72 on a base year of 1952. There we see one of the reasons why inevitably the flow of orders must tend to be damped down. Nevertheless, when we come to consider—

    The key and base year? The hon. Gentleman does not seem to appreciate the significance of this. He said that was the base year. It is not of any particular good to know that, or to tell us that the index is now 72. Will he tell us what the freight rates are by comparison with, for instance, 1947 or 1949 as the base year?

    I do not think I could do that offhand. It would fall in the province of the Minister of Transport rather than in that of the Admiralty. When we consider the movement of oil in ships I think the outlook is a little more encouraging because in recent years the movement of oil has been increasing by about 5 per cent., although that is only a very rough figure. The world fleet of tankers has been going up considerably more rapidly than that of dry cargo ships.

    In addition to these general considerations, in buying ships there are certain other considerations that are bound to be in the mind of every shipowner, in particular early delivery, because very often ships are ordered for a known demand. There is always a heavy financial commitment involved which a shipowner is unwilling to undertake unless he has a fairly clear idea when the ship is likely to be delivered. As has been pointed out in this debate, the mere fact that the order book is getting shorter will of itself help delivery by making delivery dates very much shorter than they have been for some time. Plentiful steel will cut down the length of time it takes to build a ship.

    Above all, modern methods, which have been described tonight, for instance, by the hon. Gentleman the Member for Dunbartonshire, East (Mr. Bence) will help to reduce the building time of ships and increase the efficiency of the yards. During the last five years no less than £20 million have been spent on modernisation of one kind and another, and owing to the relaxation of licensing it is now very much easier for shipbuilders to spend money in this very important way.

    Then we come to the question of cost. Many of the factors in cost are the same as those which affect delivery dates. Cost has gone up three to four times what it was pre-war. This is an assembling industry, depending largely on components. I think all this adds up to the need in this industry for increasing certainty both as to delivery dates and as to price; and, therefore, the return of the fixed price contract is highly desirable whenever that can be achieved. Some of our competitors overseas are already able to offer a fixed price contract, so that the shipowner knows what the ship is going to cost him when delivered, and it is not very difficult to see that that is an advantage.

    In obtaining foreign orders, which have represented in the last few years about a third of the ships produced, there are many factors to be taken into consideration. One is the traditional links which happily exist between shipbuilders in this country and shipowners in countries overseas. In most other respects the kind of considerations that will persuade foreign owners to place orders for ships here are largely the same as the considerations I have been describing. Only last December the Chancellor of the Exchequer altered the credit restrictions with regard to foreign owners placing orders for ships here. Up to that time they were pledged to. repay loans six months after delivery of the ships. That rule has now been relaxed, and I very much hope that as a result further orders will be attracted to this country.

    Several hon. Members, and in particular the right hon. Gentleman opposite, have referred to the question of orders from Russia and from countries behind the Iron Curtain. Only the other day we issued licences to a Lowestoft firm for an order for trawlers to a value of nearly £6 million. I should say that we are willing to take orders not only for trawlers, dredgers and tugs, but also for ordinary merchant ships subject to security and quantity controls. The industry have full details of these, and some firms are at the moment in contact with the trade delegation of the Soviet Government.

    Does the hon. Gentleman know that there are cases where firms could have accepted orders which, in fact, have gone to the Continent?

    A number of firms have been in negotiation for orders, but have failed to secure firm contracts. Therefore, they have not been in a position to come to us for licences. We cannot negotiate the contracts for them. They must do that themselves, and if they fail there is, of course, no firm order to licence at all.

    Can the hon. Gentleman give an undertaking that if an order for tankers was obtained their delivery would be allowed? If he cannot, will he say why other N.A.T.O. Powers are allowed to construct and deliver tankers?

    It is quite true that there are certain types of vessels which for strategic reasons we should not be willing to licence. But, in that case, we are in the same position as the other N.A.T.O. Powers.

    Yes.

    I must say a word about the question of foreign competition. It has been quite rightly pointed out by one hon. Member that this is not the chief reason for the present decline in orders. Nevertheless, it is something which has come to stay. Our chief competitors— Germany, the Netherlands and Japan— have received great advantages from the reconstruction of their yards owing to the war. Last year Germany increased her output of ships by no less than 57 per cent.

    Many of our foreign competitors enjoy State subsidies. They have an adequate supply of steel, and almost without exception they can offer earlier deliveries than we can. In addition, they have an adequate labour force. However, I still believe that on balance we have the advantage with regard to price, and, of course, we have a splendid tradition and a reputation second to none.

    The hon. Member for Farnham dealt at some length with the question of the Merchant Navy. That matter is really outside the province of the Admiralty. It is a Ministry of Transport responsibility, though, of course, the Naval Staff is most anxious that there should be a large and healthy merchant fleet. The figure 18 million tons has again been reached after the depredations of the war. The standards of the merchant ships which are being built and are going into that fleet are going up, both with regard to speed and to the accommodation of the crews. The latter has improved very much indeed.

    The prosperity of this very important shipbuilding industry depends essentially on world trade, and on many factors of world trade which are outside the control of any Government. Nevertheless, the Government are watching the industry and, in particular, developments with regard to orders which we shall need after 1956, and which we should like to see placed as soon as possible.

    I believe that this industry, with its traditional skill both of management and workers, will be able to respond to the undoubted challenge which now exists because of the difficulty of getting orders in the face of strong competition from overseas. It is an industry in which we have a great deal of experience upon which to draw, and in which we are still the undisputed leaders of the world. We should take a balanced view of the industry's future and be neither too pessimistic nor too optimistic.

    I hope that this has been a useful debate. I beg to ask leave to withdraw the Amendment.

    Amendment, by leave, withdrawn.

    Main Question again proposed.

    10.11 p.m.

    I wish to return to some of the general themes which we were discussing before the hon. Member for Farnham (Mr. Nicholson) moved his Amendment. I am sure that all Members welcomed at any rate one part of the statement made by the First Lord. In all our debates on the Navy Estimates since the end of the war, hon. Members from one side of the House or the other—and usually from both sides—have raised the question of the period of foreign service. Most people agree—certainly those who come from naval ports—that the greatest deter- rent to recruitment in the Navy, and the sorest grievance of the men, has been the lengthy period of foreign service.

    Many proposals have been made for dealing with this problem. I believe that when my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) was at the Admiralty he gave instructions for a full inquiry into this matter, to see if something could be done to alleviate the position. I realise that great difficulties are involved in carrying out such a proposal, but from what was said by the First Lord it seems that the Board of Admiralty has now made definite decisions in the matter. We shall all watch with great interest to see how these are carried into effect. We are nil very pleased at the announcement made by the First Lord, and we congratulate him on having made it.

    On the more general issues of strategy which were discussed at the beginning of the debate it is not possible to pay quite the same compliment to him, because he did not deal in a very detailed or graphic way with the real problems which were posed in the remarkable speech made by my hon. Friend the Member for Cardiff, South-East. That was an extremely interesting speech, and it seemed to me that my hon. Friend had been successful in carrying out a feat in which such notable persons as Philip of Spain, Admiral Van Tromp and Admiral Villeneuve had all failed, namely, to destroy the main Fleet of the Royal Navy in a single engagement. That appeared to be the total effect of his speech.

    I am not saying he is wrong on strategic grounds, but whether or not he is it is necessary that we should be told how the Government regard these main problems. It is quite impossible that we should have debates of this nature in which the fundamental strategy on which the Navy is to be based is not discussed by the Government spokesmen. In the recent debate on the Air Estimates there was considerable discussion about the strategy which should underly the policy of the Air Ministry.

    Although there were strong differences of opinion in different parts of the House as to what the strategy should be, nevertheless we discussed the general defence strategy of this country, whereas in this debate the discussion on the main issue of strategy has been very one-sided. I hope that the Government will make a statement on the subject or try to give a clear indication of how the rôle of the Navy fits in with the general defence policy of the country.

    Some speakers have referred to an issue which has arisen in all the dockyard towns in the last few months because of the Admiralty's decision to revert to the system of having the holiday periods all at the same time, thus abolishing the system of staggered holidays. Protest has been made from both sides of the House, but it is necessary, on this subject, too, that the Admiralty should state its position much more clearly. What it has done in abolishing staggered holidays, which have existed since the war, is to defy the clear statement of Government policy made by all the other Ministers.

    It has been the policy of successive Governments to encourage staggered holidays. During the war the Catering Wages Commission and its two standing committees, each appointed by the Ministry of Labour to encourage the idea of spreading holidays and seeing that they were not all cramped into the same period, inquired into the matter. After the war considerable efforts were made, through Government encouragement, to get individual firms to take such action and to ensure that the holiday period all over the country extended over the longest possible time.

    A national publicity campaign was organised, through the Press and the B.B.C. and backed by the Government, in order to stagger holidays. That was continued until 1950, when the campaign was take over by the British Travel and Holidays Association, in consultation with the Board of Trade. As recently as last January, the President of the Board of Trade announced that it was the Government's policy to encourage individual firms and others to stagger their holidays instead of having them all in the same period.

    But the Admiralty has flouted the whole of this policy of other Government Departments, and we have the right to ask whether it consulted the Board of Trade before it reached the decision. Did the Admiralty consult any of the holiday associations? We know that the trade unions were consulted, because they gave an emphatic "No" to the proposal. Were the corporations and city councils consulted? Had they been consulted it would have been discovered that in all the dockyard towns there was a unanimous opinion against the Admiralty's decision.

    We have all the hotel associations, all the city corporations, all the trade unions, all the Government Departments concerned—except the Admiralty—opposed to this decision. I can discover no one except the Board of the Admiralty who approves of the decision. A much clearer explanation should, therefore, have been given of the detailed grounds on which the Admiralty reached the decision, because obviously it involves enormous inconvenience for all those employed by the Admiralty.

    For the people in the Devonport or Portsmouth dockyards, and all other dockyards, to be told to have their holidays during the same fortnight is a gross inconvenience to them. Surely the Admiralty should have a strict regard for the interests of those who work for it. The Admiralty must have known this subject would be raised on all sides, and I hope that we shall have a clear statement of how much money is involved and how much the Admiralty thinks it will save by this process of planning the holidays over the same period.

    When we are told how much will be saved we may be able to judge whether it is worth while involving so many thousand people in so much inconvenience as will be the result of the Admiralty's decision. In any case, I hope that the Admiralty is going to give much closer consideration to this matter before next year and make sure that it consults in very good time the trade unions concerned to see if we cannot get a better arrangement and one which really looks after the interests of the workers in the dockyards better than the Admiralty has done this year.

    Now I wish to turn to some other matters connected with the Royal dockyards. When I mention that, I see some of my hon. Friends wincing, but I will put them out of their misery at once. I do not propose to make the same speech as I have made on seven successive occasions on the Navy Estimates. Needless to say, it is not the case that the Admiralty has adopted any of the recommendations that I have made on previous occasions. It has not adopted any of them properly, and the reason I am proposing to take a fresh course this year is that I am adopting a different strategy.

    Instead of attacking on a broad front, I hope to be more effective on one point at least. I do so because it has been suggested, and indeed the Admiralty makes a great song and dance about it in the White Paper which it has issued with the Estimates, that the Admiralty has in fact made a concession to one of the appeals which some of us have been making for the last seven years. If we read the White Paper, it says that the Estimates provide additional resources in the next few years towards modernising dockyard plant and equipment. That has been published as a great new plan and ambitious programme to be embarked upon by the Admiralty.

    I want to examine this programme to see whether it is really so big, and in order to discover whether it is real we have to examine carefully what is said in Vote 10 of the Estimates. On the whole of Vote 10, covering works, building and repairs at home and abroad, there is a net decrease for this year of £1,203,000. Vote 10, so far as I know, is the main Vote governing the provision of works and buildings in dockyards and elsewhere, but in this main Vote there is a decrease to start with, and so it does not sound like a great modernisation programme. If we look more particularly at Vote 10. under the special item dealing with new works and additions, there is also a reduction of £1,574,000, so we have to inquire into that a little more closely to see where in fact this great modernisation programme is to be undertaken.

    When we look at the detailed amounts to be spent on Vote 10, and the amount to be spent on dockyards and factories, as shown on page 140 of the Estimates, we see that there is an increase of the amount to be voted in 1954–55 on new works of £39,000 over last year. It is quite true that the total amount that will be spent eventually on some of these new works amounts to £1,500,000, but the actual increased amount, according to the statement made in the Estimates, to be spent on new work to be started in 1954 and 1955 in the dockyards and factories is no more than £39,000.

    That is £39,000 between all the dockyards. It is not exactly a tremendous indication of great enthusiasm for the modernisation programme when the amount to be spent on new works in the dockyards at home amounts to £39,000 increase out of a total Admiralty budget of £400 million, and out of a total increase this year of £23 million. So all that the dockyards are going to get out of this huge increase is this very small amount of £39,000 on new works this year. If I am wrong about these figures, I should be glad to be corrected.

    Anyone who examines the figures will see that there is not only a general decrease under Vote 10, but there is in particular a general decrease on the amount for new works and buildings. It is only when one comes down to the particular item on the dockyards that there is a slight increase; and, as I have pointed out, it is very small indeed. It is certainly quite insufficient to deal with the real problems of the dockyards, which we have been describing for the past six or seven years and which the Admiralty has never fully comprehended.

    I should also like to know whether, even in this small amount which the Admiralty proposes to devote to the new programme, the individual admiral superintendents are to have any greater powers over how the money is spent compared with what they have had in the past. One of the main recommendations of the Select Committee on Estimates, which went into the problem of the dockyards, was that each admiral superintendent in each dockyard should have a bigger sum of money voted to him and much greater discretion as to how to spend it.

    The ridiculous fact came out in the cross-examination by the Select Committee that each admiral superintendent had discretion over only £1,000 during the whole of the year, which is fantastic. It was the evidence of all the employees in the Admiralty—all the heads of departments—who came forward and gave evidence at the time of the Select Committee investigation that this was not the real way to do the job. On page 284 of the minutes of evidence taken before the Select Committee on Estimates, Session 1950–51, will be seen the evidence given by the heads of the engineering department in Devonport Dockyard.

    This was the answer given by one of them:
    "I think we ought to replace all our obsolete plant in five years and get new plant, plant not now in design, faster tool cutting plant and everything else. If we could get a sum of money to replace that obsolete plant in five years we should increase production probably by 50 per cent."
    Does the Admiralty want to increase production in the dockyards by 50 per cent.? This is the way it could be done. If the Admiralty took more money off some of the other Votes and put it on to Vote 10, it would make a real economy and in a few years would be producing much more. The Admiralty need not take my word for it but can take the words of the heads of the engineering departments at Devonport Dockyard, who gave this evidence to the Admiralty: but, of course, all the recommendations of the Select Committee were turned down flat.

    The heads of the engineering departments were asked whether it would be an advantage to have greater discretion over the money that was allocated and to decide how best it should be spent, and the answer was "Yes" from everyone. But still the Admiralty thinks that it knows better than the people on the spot who are doing the job. We have given many examples before, but we must go on giving them until the Admiralty realises what this problem is.

    A statement was made in Devonport the other day by the superintendent naval store officer, who said:
    "The rectification of the conditions for road and rail traffic in the yards is long overdue. The North Yard, in particular, is appalling, but I am afraid it will probably be a long time before anything can be done about it."
    I have quoted before statements that were made to the Select Committee by several other employees of the Admiralty. The Admiral Superintendent in Devonport Dockyard, for instance, said:
    "Give us the money to build some decent shops for the men to work in … The position is frightful. It is amazing how the people turn out the work they do … The dockyard is in a very bad state."
    All the evidence is in the Select Committee Report of how the whole of the plant and equipment in these dockyards is appallingly antiquated. The surest economy that the Admiralty could make would be to spend much more money on Vote 10 instead of thinking that it can carry on with the same old equipment and in the same old way in which it has been run for generations past.

    If the hon. Gentleman is right in his interpretation of the figures, would he not agree that, according to these Estimates, in the last year this Administration has done more for the dockyards than any other Administration since the war has done in one year? Or is it a decrease?

    Taking the whole question of works and buildings, I say that on Vote 10 it is a decrease this year, but taking the individual amount on the dockyards it is, as I have said, an increase of £39,000 this year. I am afraid the hon. Gentleman must have misunderstood what I have been saying about the dockyards for the last seven years if he thinks I was satisfied with what was done before.

    It may even be possible that what we have said before has penetrated, that the Admiralty has begun to understand the importance of Vote 10, because we have been shouting about it for seven years. But the Admiralty has not learned sufficiently.

    Is my hon. Friend not aware that the main portion of the money spent in the dockyards in the last two years has been spent because the Labour Government had a planned programme, as a result of which this money had to be spent?

    Some of the money has come forward because it was allocated before, but as I said to my hon. Friend when he was in office, and as I say to him again, it is nothing like enough. He need not take it from me. He can take it from the Admiralty Superintendent of Devonport Dockyard or all the trade union leaders in the Admiralty dockyards, whichever one he likes.

    My hon. Friend may say he did it, but the work is not done. Take the way they run the lorry system, with lorries parked all over the place in Devonport Dockyard, blocking the shops and ships. It is a hopelessly chaotic system. The lorries have to go some distance away to fill up. Streams of lorries can be seen going off half empty or completely empty, and the taxpayer can look on and see how a great part of his money is being wasted.

    As I said to my hon. Friend when he was in office, this is the opinion of everyone who inquires into it on the spot. The dockyards are hopelessly antiquated and inefficient. People have to work in workshops that are a disgrace. Therefore, even though some extra money was voted under the Labour Government, and even though a little extra is perhaps to be voted this year, it is nothing like enough to do the main job which has to be carried out. I say the Admiralty has got its priorities wrong in this, just as I believe it has got its main strategy wrong. If the Admiralty decided what money to spend in improving the equipment of the dockyards and to step up the amount in terms of millions instead of a few thousands it would be the very best economy that it could make.

    Whilst the Admiralty is puzzling its head so much in discovering what ships to build, and whilst it is very uncertain about what kinds of ship it ought to be building, it might at any rate take some money from those Votes and use it to put in proper order the machinery which it will require for building the equipment that it will need in future, which would be a much wiser course than the one which the Admiralty has followed in the past.

    I know that many hon. Members who do not come from dockyard towns may think this is a small matter, but if they take the trouble to read through the Report of the Select Committee on Estimates which went into this matter they will see that all those working in the dockyards say exactly what I have been saying. Much more should be spent under Vote 10. I have quoted one eminent authority in Devonport Dockyard who has said that doing that could very quickly increase production in the dockyard by 50 per cent. This is what I am asking for in the interests of the nation as a whole, because it is wrong that these vast industrial organisations, which is what the dockyards are, should be left in an antiquated state.

    The Admiralty must embark upon a capital investment programme in the dockyards. The case has been proved by the quotations I have already given, but which I propose to go on giving until the Admiralty decide to take some action. I have got to be grateful for the fact that out of the £400 million we have now got a few thousand pounds extra. Some hon. Members opposite are easily satisfied, but if they want anything out of the Admiralty they should not need to go about in in that way.

    I do not want to end on a note that is not cheerful. Last year we got one small concession from the Admiralty, the appointment of a deputy manager for a limited period in one of the dockyards. That was a great, daring experiment in the civilianisation of the dockyards. Are we to have some report of what has happened? Has catastrophe followed? Have there been all the appalling consequences which some people foresaw? The Admiralty embarked on the terrible programme of interfering with the naval officers in the dockyards, but we know that it was a sop thrown to the Select Committee—one small, timid, miserable experiment in the face of the massive proposals put forward by the Committee.

    Now we have got another, a few thousand pounds extra, a pious hope in the White Paper. We have had two concessions from the Admiralty in two years, which shows what daredevils we have got at the Admiralty now. I hope the Admiralty will be encouraged to go on, but, as I have said before, it must be very careful. It can be dangerous to grant only a few concessions now and then, as dangerous as the obstinacy of Louis XVI and Marie Antoinette, who gave a few concessions but not the main ones needed. I warn the Admiralty that if it continues this policy there is going to be a revolution, a revolution which is going to carry into effect all the recommendations not only of the Select Committee two years ago, but those of the Committee which made the same recommendations way back in the year 1927.

    Before the hon. Member sits down, I should like to correct a point on which he has been harping for some time. He seems to have forgotten that the new equipment and machinery for the dockyard does not come under Vote 10 but Vote 8, and in Vote 8 we have a £7 million programme for a period of four years, and this year we are going to spend £1 million on it.

    The hon. and gallant Gentleman interrupted me before I sat down. I am afraid that his main argument only confirms what I have said, because under Vote 10 comes the money required for the overhaul of roads, railways and other things in the dockyards, and it is there that the hon. and gallant Gentleman's interruption is most misleading. However, no doubt we shall have an opportunity to examine these individual Votes. If the Government do not attempt to report Progress, enforce the closure or anything of that sort, I can assure the hon. and gallant Gentleman that I shall be most happy to examine the Votes in great detail.

    10.38 p.m.

    It has been my lot to follow the hon. Member for Devonport (Mr. Foot) on several occasions when he has been making one of his famous seven speeches, but I have never heard him in such optimistic voice as he is this evening. It is a great achievement for the Government, because they seem to have put him in such good humour.

    The main theme of this debate has been, as I always thought it would be, first, the question of the strategic future of the Navy and, following from that, the difficulty of recruiting. I agree with the hon. Member for Huddersfield, East (Mr. J. P. W. Mallalieu) that until the long-term future of the Navy is settled and the shape of things to come is more clearly seen, it is very difficult to expect young men to devote their whole lives to the naval service.

    I was much impressed by the speech of the hon. Member for Cardiff, South-East (Mr. Callaghan). I thought that it sized up the whole matter clearly and fairly. I do think that it is vital that we should face these rather difficult problems and not be frightened of them merely because they are controversial and difficult. We must settle them, for to settle them is to the great interest of the country.

    These problems obviously devolve on who is to control what kind of weapons in the future, and here, without doubt, the question of aircraft comes in. For example, are they to be shore-based or sea-based; who is to control them? These, I suggest, are problems for the real experts to settle. We in this House who have a great love for and faith in the Service in which we have served, often feel that any criticism or doubt which may be cast on the importance of our particular Service is quite wrong. Our anxiety complexes are apt to throb, and we are apt to say things which are by no means for the good of co-operation between the Services.

    Before the war, I remember the controversy which raged over the Fleet Air Arm, and I do beg some of the retired senior officers—and this applies equally to each of the three Services—not to give tongue on matters which, sometimes, do not help the proper solution of these great problems. Particularly, I suggest, that should be remembered in another place. I do believe that these problems would be easier to face if we politicians left them to the expert and only expressed our determination that they should be faced and solved.

    The solution of these problems does not only affect this country. The Royal Navy today is part of the N.A.T.O. setup, and all these problems have to be solved together; we have to co-operate very carefully with other countries. In that connection, I was very interested, when looking at the United States estimates devoted to their Army, Navy, and Air Force respectively to see that the proportion of money which they devote to each Service respectively is quite different from our allocations here.

    We have to decide on a general strategy and, when that is approved and agreed, I think a great many of the difficulties of recruitment will end. It would be lamentable if the great traditions of the Royal Navy were lost to the service of our country. We have some of the finest of our young men in the Royal Navy, and it is only right and just that their future should be made secure and that they should be able to serve their country with that knowledge.

    I should like to turn for a moment to one aspect of the problem of recruitment. I do not think it could be denied that one of the anxieties which prevent men from signing on for a given number of years is their doubt of what they will do when they come out of the Service. All of us who have served have probably had that anxiety ourselves, and it means a great deal to feel that there is security about the future. I know that in the depots people are advised about getting jobs when they leave the Service, but we ought to go much further than that for these men who have come forward to serve in an arduous and difficult life.

    Let us remember that whatever we do cannot make it much less arduous because, among other things, there will always be foreign service. There will always be separation for wives. Life on the mess deck will never be like living in a comfortable house. We owe a debt of gratitude to the men who devote their lives to serve the country in the Royal Navy, and there is a strong case—perhaps this is the moment to deal with it, now that we are short of recruits—for the Ministry of Labour, the Admiralty and the trade unions to get together to see what can be done to help men who are leaving the Navy.

    I have discussed with people in the Ministry of Labour a suggestion which I believe to be practicable. I suggest that it is possible to take retired members of the Services, both officers and men from the lower deck, into the service of the Ministry of Labour to help the Navy to get these men into jobs. It is true that some such organisation exists in the Appointments Bureau. We should extend it so that every sailor may feel that his country is doing its utmost to see that he gets a good job when he leaves the Service. If we are to do that, we must have people available who can look at a man's history sheet and say, "Here is an able seaman with two good conduct badges and a first-class record, and he should be capable of holding down such and such a job." Such people would know what sort of job the sailor could do. This work could be done by recruiting to the Ministry of Labour men who have special knowledge of the capabilities of sailors and of the way in which the Navy conducts its affairs.

    Another matter which has always worried me is the way in which the Navy deals with promotion. It promotes by merit, and its promotion is perhaps the most highly competitive form of promotion anywhere. That is right, for we must make great efforts to get the best men into the right places. On the efficiency of the senior officers depends the happiness and safety of all the men under their command. It is essential that we should choose the best.

    Our mistake is that we divide our promotion periods into zones, and once men get to the top of their zone they have no more hope. I have seen that happen so often. I have seen lieutenant-commanders pass out of the zone, and for a few more years they are pushed about from one job to another. They know that they cannot be promoted. It happens, too, on the lower deck. I have seen so many chief petty officers who can get no further.

    Yet remember how efficient were some of the officers and men we promoted to acting rank in the war. Who could say that the acting warrant officers we made straight from chief petty officers did not earn their keep? A chief petty officer because of educational reasons, has failed to become a branch officer. Why should he feel that he can go no further? The man who has just failed to attain commissioned rank and has become a chief petty officer at an early age, has no future. Is it not natural that he should leave the Service? How can we expect him to sign on for a long period?

    I have always felt, both with officers and men, that the door should always be open. Everybody knows that when a man has passed a certain age he is not likely to be promoted, but it should not be impossible. There should always be a chance so that by some brilliant action, possibly the wiping out of a black mark which he has been given in the past, he can get a little further in the Navy. I would ask the Admiralty seriously to consider this point. It means a big change in things that have gone on for many years, but it would be a great advantage in getting people to sign on for longer periods, as they should.

    Finally, I should like to say that the Navy today is going through a period of change. Things may be very different soon. There was a peculiar expression which emerged in the defence debate— "a middle-piece" officer: I have never heard it before. It is a shocking expression. But there is a great need for the Admiralty to use the ideas of lieutenant-commanders and commanders, whom I suppose to be middle-piece officers, more than it has done in the past. I think it interests ships' companies to be set problems. I remember one admiral under whom I served did do that, and it went extraordinarily well. One can get a lot of ideas from men aged 35 years who have given much thought and study to their profession. I should like to see more of that sort of thing done.

    In one ship I was in we were told we would have to have a big refit to produce a new form of ammunition supply. We did not want the ship cut to pieces. We did not think it would be efficient if it was. So we all set to, from the captain down to the gunner's party, to think out a different way of doing it. The chief ordnance artificer produced the best scheme, and it was accepted and the country was saved many thousands of pounds. He won a prize of £5. Much can be done by the use of prizes to assist in studying ship's problems and asking men what their views are on a particular subject. That might help to solve the grave problems which lay before us. I commend these ideas, for what they are worth, to the Admiralty.

    10.54 p.m.

    The hon. and gallant Member for Horncastle (Commander Maitland) will pardon me, I hope, if I do not follow him, because it is 40 years since I left the Navy, and I have not had an opportunity of keeping in touch with my branch of the Admiralty service to the extent that would justify my following the line which he has taken in this debate.

    I was rather surprised when I listened to the speech of the First Lord to find that he almost completely ignored what was happening in the Royal Dockyards. We have had some discussion about this by Members on both sides of the House today, and I want to reinforce one point which was made by all of them. My right hon. Friend the Member for Rochester and Chatham (Mr. Bottomley), the hon. Member for Plymouth, Sutton (Mr. J. J. Astor) and my hon. Friend the Member for Devonport (Mr. Foot) have all referred to the closed period which the Admiralty has enforced on workers in the various dockyards. I do not want to elaborate that matter, although it is a very serious one. All I would say is that I hope that the First Lord has noted that from all parts of the House that he has been asked to give some further consideration to it.

    There is only one point that has not yet been made that may usefully be made now, and that is about the effect on education of the Admiralty decision. I understand that there is some difficulty at Chatham Dockyard. The hon. Member for Gillingham (Mr. Burden) will, I hope, excuse my mentioning this, but I also have constituents employed there. The education officer is desirous of avoiding a clash between the dockyard closed period and the school holidays. In my constituency there is a very large firm, Bowater Lloyd Ltd., which also has a closed period that does not coincide with the dockyard closed period, and that makes it doubly difficult to arrange matters satisfactorily from the point of view of education. I hope that the appeals made from both sides of the House for reconsideration of this matter will not be lost sight of.

    I want to turn to a constituency matter about Sheerness Dockyard. Many years before the war I was concerned in a difficulty that arose there over C109 coaling hulk. It was hoped to start a payment-by-results scheme, which was resisted by the members of my trade union at that time because of the then considerable amount of unemployment. They were under the impression that if they entered a scheme of payment by results it would mean that eventually some of their comrades would be put out, as they said, "on the stones." After some difficulty we got such a scheme accepted. My information is that after the first teething troubles had been overcome the scheme worked excellently, and that it is working so to this day. I understand that there have been no complaints from the Admiralty to the employees' side of the shop committee about this coaling operation as performed in Sheerness Dockyard.

    Recently, so I am informed, a proposal has been made to let this work out to a private contractor. I understand that representations have been made through the usual channels at Departmental level, but that no satisfactory answer has been obtained so far. It may be that it is only a rumour, but if that be so it is difficult to understand why satisfaction could not have been given to the trade union representatives at Departmental level. In any case, the rumour exists; there is a feeling of uncertainty; and 1 appeal to the Parliamentary and Financial Secretary to do all he can to assure the employees on that job that there is no substance in the rumour.

    Another matter I wish to mention is the allocation of tugs. I understand that this has also been dealt with at Departmental level. The question arises as a result of a memo, exhibited on the notice board at Chatham Dockyard. As a result, it is thought by many employees at Sheerness Dockyard that an attempt is to be made to reduce the number of duty tugs. At present there are two. There have been two ever since I was first connected with the dockyard over 40 years ago. I understand that the proposal is that one duty tug should be stationed at Chatham: in other words, Sheerness is to lose its duty tug.

    The question has been taken up at Departmental level. Employees' representatives have been told that the matter cannot be discussed because it is top secret and the memo, to which I referred was put on the notice board in error. I hope that I can be given an assurance on this point. It is the opinion of skilled craftsmen that if we are to have only one tug, though it is to be hoped that the Admiralty will not run the risk of having only one, the most sensible place at which to station it is Sheerness rather than Chatham.

    I do not want to place myself in competition with Chatham, for I am advised by those who have been operating the tugs for many years that two tugs are essential. I hope that note will be taken of my comments. If I can be assured that there is nothing in the matter, I shall be as happy as the men for whom I speak.

    I will certainly look into the two points about Sheerness Dockyard, and let the hon. Gentleman know my view as soon as possible.

    I am pleased to hear that.

    There is a feeling in Sheerness that work is gradually being taken away from the dockyard. About three years ago the naval stores department was taken to Chatham. The Fleet Reserve has recently been taken away. Now we have these rumours about the removal of other work. When one remembers that employment in the dockyard is almost the only work open to men on the Isle of Sheppey, one realises that this is a serious matter. I am informed that the removal of the naval stores department, taking into consideration the transport and the waiting for materials and components, hardly achieves the saving which was anticipated when the change was made.

    Finally, I wish to refer to what was happening at Sheerness just over a year ago when the dockyard suffered considerable damage in the floods. A frigate and a submarine were submerged, and it was thought for a time that they would be total losses; but because of the skill and loyalty of the men concerned they were saved. I understand that they are either in service or are about to come into service soon. Not only was the dockyard staff able to give service in the dockyard but it was able to perform wonderful work for the civilians in the nearby area. I hope, therefore, that we shall not be faced with the position of this continual whittling away of work from a yard on which such a large number of my constituents depend for their livelihood.

    11.5 p.m.

    I am sure that the hon. Member for Faversham (Mr. P. Wells) will forgive me if I do not deal with the topics which he has raised, as my only experience of that part of the world was confined to my R.N.V.S.R. training days before the war. I should like for a few minutes to mention a few points that have been exercising some of us recently, and this seems to be the opportunity to raise them.

    First, I think that some of us were alarmed to see an article in a national newspaper regarding disaffection in the Navy. I feel quite sure that there were no grounds for this concern and that when the Parliamentary and Financial Secretary comes to reply he will reassure us on that aspect. But it seems to me that the trouble here is one which was touched on in the opening of the debate, that of man versus machines. Those of us who have come up against this problem in the war will know the constant struggle and battle it was to reconcile old ships which were constantly having new equipment put in them, especially on the mess decks, where the equipment had to be under cover, thereby taking space from the men.

    It is a problem which will always be with the Navy, and, as has been said several times today, life in the Navy can never be easy. But one must be assured that everything is being done— and I am sure it is—to study that problem and to see that as far as possible these articles of equipment are not put into ships as an afterthought if it can be avoided; and I think there must be, and probably is, in future planning new thinking regarding the accommodation of ships' companies from smaller warships and auxiliary ships, ashore as much as possible. What the hon. Member for Huddersfield, East (Mr. J. P. W. Mallalieu) said about conditions of the heads and bathrooms in his ships reminded me of what happened in one of my own ships during the war, where we had no bathrooms at all. So hurriedly, before coming home across the Atlantic, we slopped down some cement on the iron deck, and put up some iron stanchions, and when we got back to the dockyard said that our bathrooms had been washed away, and we got new ones built.

    Regarding recruiting, I should like to make a suggestion concerning the Sea Scouts and Sea Cadet movements. I understand that Sea Scouts are not granted entry into the Navy unless they are Queen's Scouts, and that Sea Cadets cannot be granted entry into the Navy unless they are Cadet petty officers. Of course, they can go in through the R.N.V.R., but in distant counties like Cornwall it is often very difficult for them to serve in the R.N.V.R. because of the distances they have to travel for their training.

    I wonder if recruiting could be helped by improving our propaganda. After all, although all the means of entry into the Service are made known to the various units, some units are better than others. I suggest that perhaps the Service could be helped by the inclusion of more highly qualified officers, who could inspire enthusiasm by going round lecturing to these units and telling them more about the Service and how they can get into it, and what they can do when they get there.

    I think there is something in what my hon. and gallant Friend the Member for Horncastle (Commander Maitland) said about asking for advice. I remember on one occasion during the war when we had a piece of equipment put into the ship which every single officer and all the gunnery ratings said was useless. We simply steamed from one port to another, where it was ripped out and thrown away.

    I wish to ask about minesweeping training, especially as it concerns R.N.V.R. personnel. Have they got modern ships and enough of them in which to train, because, as my hon. Friend the Member for Ilford, North (Mr. Iremonger) said in a most excellent maiden speech, there is no substitute for sea training, especially in the complicated procedure of minesweeping? We know that problem is going to be one of the most appalling which any country will face at the beginning of a war, with ports being sealed up, and so on. I hope that I detected a more hopeful note in the First Lord's speech this afternoon as regards dealing with that menace. I also hope that their Lordships are satisfied that there are enough R.N.V.R. officers and ratings successfully carrying out this training.

    In this connection, I want to raise once more the question of the travelling allowances of R.N.V.S.R. officers. Many of these officers had six years' continuous sea experience during the war. They are young enough to be very valuable still today. They do not mind about the pay, but it would help if their travelling expenses could be made up to them.

    Regarding fishermen's training, I understand that adequate numbers are coming through under the List B scheme whereby they do four periods every five years. It is hoped that many of them will join the Patrol Service at the end of the five years. The Outward Bound