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Inquiry Report

Volume 649: debated on Wednesday 22 November 1961

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asked the Minister of Transport what action he proposes to take to assist British shipbuilding and shipping, following the publication of the Peat, Marwick, Mitchell report.

This report confirmed that price has been a main factor in influencing British owners to place orders abroad. I think, however, that British yards are now quoting keener prices and there are signs of improvement in the competitive position of the industry.

My right hon. Friend and I are in close and regular touch with the senior representatives of the industry about its problems, but I am sure my hon. Friend will agree that on many of them it is only right that the initiative should come from the industry itself.

Is my hon. and gallant Friend aware that it was not necessary to have even such a distinguished firm as Peat, Marwick, Mitchell to tell us that it was price which made shipowners place their orders abroad? Is it not a fact that what we want to know is why shipbuilders abroad can quote a lower price than British shipbuilders? Further, may I ask my hon. and gallant Friend whether he can distinguish easily between bantam's eggs and hen's eggs?

I have no difficulty in making the latter distinction, but I cannot agree with my hon. Friend that this report and inquiry were unnecessary, because although we had reached a provisional opinion that price was the main factor, this had been based only upon a sample inquiry carried out by my right hon. Friend and myself. We thought it necessary to have a thorough, complete inquiry by an impartial body.

As for the greater competitiveness of foreign yards, I simply say that my right hon. Friend and I have formed a fairly clear opinion in our own minds as a result of our visits to foreign yards in September, but I would add that the factors which make a yard competitive are of an extremely complicated nature and I do not think that it is easy to generalise.

In view of the visit paid by the hon. and gallant Gentleman and his right hon. Friend to these foreign yards, will he consider issuing a White Paper or a similar document so that the House in general may have some indication of the type of information which they have? This is very important to shipbuilding, and I am sure that the nation would like as much information as possible in order to form a clear view.

I doubt whether a further White Paper is necessary at the moment. We have had an inquiry published last March—the Dunnett Report as it is known—and we have the Peat, Marwick, Mitchell report, and both my right hon. Friend and I have explained the conclusions which we have reached in a number of speeches and no doubt will continue to do so.

Is not the Minister aware that one reason why foreign shipbuilders can quote lower prices is the provision of extended credit facilities which do not operate to the same extent in this country? Is he also aware that some of the shipbuilding firms in this country have recently established the incontrovertible fact that on delivery they can compete on favourable terms with any foreign builders?

I entirely agree. The latter remark is certainly true of a number of British yards, although unfortunately not of all. We keep the question of extended credit under continuous review, but I must point out to the right hon. Gentleman that we can find no evidence of Government help over credits, anyhow in respect of the majority of our most formidable competitors.

In view of the contribution which British shipping and shipbuilding has made in the past to our visible and invisible exports, and in view of the contribution made not only during the war but since the war to the taxes of this country, will my hon. and gallant Friend ensure that at least the same credit terms and particularly interest rates and credit insurance rates are paid in this country as are paid in relation to shipbuilding contracts abroad?

That is another question. I am not in a position to give that assurance. I remind my hon. Friend that one cannot consider the question of shipbuilding credit in isolation. It is part of the general question of credit for exports on which my right hon. and learned Friend the Chancellor of the Exchequer answered Questions on 7th November.