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Royal Navy: Support Vessels

2.57 p.m.

Viscount Caldecote asked Her Majesty's Government:

The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, the Government believe that there are sufficient British-registered and owned merchant ships and British crews to support the Royal Navy in overseas operations, if required. However, it is the Government's policy to charter on the international market. This approach ensures the greatest choice of ships and the best value for money for the taxpayer.

Viscount Caldecote: My Lords, is my noble friend aware that at the time of the Falklands War in 1982 there were about 2,800 ships on the British register and that there are now about 400? Is he further aware that for ships of over 500 tonnes gross registered tonnage the comparable figures are 1,200 in 1982 and 259 now? Does he agree that the chartering of foreign ships is not always satisfactory because the crews are often reluctant, and may even be forbidden, to enter a war

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zone? Does my noble friend further agree that these are matters of grave concern which warrant the setting up of an inquiry?

Viscount Goschen: My Lords, we do not believe that that is the case. I agree with my noble friend that there has been a considerable reduction in the size of the British-registered fleet in the timescale that he described. However, the Government's policy of chartering has shown itself to be a flexible and workable approach, as demonstrated by our operations during the Gulf War.

Lord Mayhew: My Lords, is the noble Viscount telling the House that at present the Government are capable of mobilising sufficient tonnage, whether British or otherwise, to fulfil our commitments in the Falklands?

Viscount Goschen: My Lords, our commitments to the Falklands and our way of going about things have now changed. In the intervening period since the Falklands War there has been a considerable change in the terms of maintaining a base there, including the arrangements for the runway and so forth. The fact is that we run exercises between the Ministry of Defence, the Department of Transport, the Baltic Exchange and the Chamber of Shipping and other interested parties to make sure that we can mobilise shipping, be it British registered or chartered on the international market.

Lord Kennet: My Lords, does the Minister remember a recent exercise in which a large part of the British Navy crossed the Atlantic to the United States, for which it was necessary to charter some merchantmen in support? Can the noble Viscount tell the House how many British-flagged ships were able to be chartered and the nationalities of the others?

Viscount Goschen: My Lords, subject to correction I understand that no British ships were chartered on that exercise and that although one was put up for charter it was not of the correct type. We must choose vessels that are of the right type, that are available and that meet our specifications. The British merchant fleet is efficient. Its vessels are largely fully dedicated. In such an exercise we cannot expect to see too much slack. The fact that the chartering arrangements worked bears testimony to our policy.

Lord Peyton of Yeovil: My Lords, does my noble friend really believe that the shipping resources available to this country at the moment are even remotely adequate, or does he think that that is stretching credulity a great deal too far?

Viscount Goschen: No, my Lords. I have described our policy of chartering on the international market and of using the core British fleet where appropriate. The successful combination of those two sources of merchant shipping (which have shown themselves to be

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available and able to be used) was demonstrated by the substantial operation in which we engaged for the Gulf conflict.

Lord Callaghan of Cardiff: My Lords, does the Minister recognise that there has probably never been a period when the Royal Navy has been more hard pressed and more hard worked than it is now when it has inadequate resources? Is he aware that those of us who follow these matters are much more inclined to agree with the Question from the noble Viscount, Lord Caldecote, than with the Minister's rather complacent answers?

Viscount Goschen: My Lords, I hope that my answers have not shown complacency. We follow these issues closely and study the situation with our partners at the Chamber of Shipping, also using organisations such as the Baltic Exchange. The Question revolved around the assets available to the Royal Navy, presumably in terms of fighting vessels. However, we are now more concerned with the ability of the merchant fleet to provide back-up. We are satisfied that that can be done. It will involve chartering on the open market.

Lord Greenway: My Lords, does not the Minister agree that the problem outlined by the noble Viscount, Lord Caldecote, is to a certain extent exacerbated by the changes in modern shipping? Many new ships are cellular container ships which need sophisticated off-loading cranes in ports and are therefore not really suitable for battlefield purposes. Does the Minister agree that manning is very much part of the problem? Is he aware that, although many young people in this country want to pursue careers at sea, because of the reduced size of our merchant fleet there are simply not enough places available to enable them to do that and we are therefore losing a body of talent which would be of use not only in any potential conflict, but also for all our seagoing purposes and in all our marine-related industries ashore?

Viscount Goschen: My Lords, the noble Lord is right to draw attention to the issue of the type and specification of such vessels. It is misleading to quote outright numbers or dead-weight tonnage. We need suitable vessels, such as heavily reinforced ro-ro ferries which can take armaments on board.

In terms of the number of British officers available, I can advise the noble Lord that we have been working with the industry to produce carefully targeted measures, such as the Government's assistance with the training and development of the certificated seafarers' scheme of which the noble Lord is well aware. Such schemes have been successful and we shall be pursuing them further.

Lord Clinton-Davis: My Lords, does the Minister recall that on 12th June he referred to the state of British merchant shipping as "lean and efficient"? Would it not be more correct to regard it as anorexic rather than lean? Is the Minister aware that, contrary to what he said on that occasion and to what he has implied today, the

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Chamber of Shipping is deeply concerned about the continuing loss of British shipping and about the failure to attract a sufficient intake of seafarers? According to the Chamber of Shipping, that will leave us ill-equipped to participate in the future potential for international shipping. At present we are 800 new entrants short of what is required. To echo the phrase used by my noble friend Lord Callaghan of Cardiff, is the Minister prepared to be much less "complacent" on this occasion and in future about the Government's actions to resuscitate the British merchant fleet?

Viscount Goschen: No, my Lords. I stand by what I said. I believe that the British merchant shipping industry is lean and efficient. To suggest otherwise, as did the noble Lord, is grossly to insult an industry which has shown itself to be highly competitive in competing with highly subsidised, inefficient overseas shipping companies. We have an industry which is a world leader in terms of cruising, the ro-ro industry and the high-tech and container industries. We have also seen considerable developments in our ports. We cannot turn back the clock. The world shipping industry has changed. It is up to our industry in the United Kingdom to become as efficient as possible and to compete on those terms. We have some carefully targeted measures which we believe are appropriate.

Treasury Outlook: Leaked Document

3.6 p.m.

Lord Ezra asked Her Majesty's Government:

    Whether in the light of the recommendations of the internal report referred to in the Financial Times on 5th June they will take steps to change the outlook of the Treasury.

The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, the Financial Times article was based on selective quotations from a leaked draft document by a junior official. The Treasury is right to assess its outlook. It is an essential part of the change management programme which it is undertaking.

Lord Ezra: My Lords, is the Minister aware that over the years many have thought the Treasury to be unduly arbitrary and secretive and not particularly good at figures? Is it not of some interest that the leaked document, whatever its source, seems to admit those shortcomings? Is the Minister further aware that this is not a new problem? With his considerable erudition, does he recall that in 1692 Samuel Pepys, who was not only a remarkable diarist but also a good administrator, complained as follows:

    "the life of a virtuous administrator is a continual defensive war against Ministers of State and in particular against the Lords Treasurers and all other prejudiced inquisitors and malcontents"?
After 300 years is it not about time that the inquisitors and malcontents changed their spots?

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