BRITISH AND SUBSIDIES

Dominion, Volume 32, Issue 93, 13 January 1939, Page 8

BRITISH AND SUBSIDIES

There appears to be no escape from the subsidy system in some form or other if British shipping is to. be rescued from the plight into which it is drifting. State assistance for private, industry is seldom desirable from either a national or an economic viewpoint, but there are circumstances and occasions when it is justified. Industries which are vital to the nation’s welfare and security must be protected and maintained; moreover, they must be in a position to keep abreast of national progress. If they cannot advance unaided because of lack of efficiency, the support of the public purse merely perpetuates weakness and tends to build an unstable industrial structure. In such cases reorganization rather than coddling is required. But.if, on the other hand, it can be demonstrated that industry is helpless in the face of foreign, State-backed competition—that independent headway is no longer possible—the provision of assistance becomes an unavoidable expedient.

British shipping today is hampered on all sides by the efforts of foreign nations who have adopted subsidy systems as part of their national trading policies. Foreign companies are able to cut freights and fares, to run more frequent services and to offer a variety of minor but attractive inducements to their customers. Against such tactics as these, plodding methods are of little avail. British ships and shipping facilities are no longer so superior to others that rivalry can be ignored, and the days of a virtual Red Ensign monopoly of the principal trade routes are gone, probably never to return. It would seem to be necessary, as Mr. R. S. Hudson, Parliamentary Secretary to the Board of Trade, said recently, to’“get down into the arena” of State-subsidized shipping—to see to it that British interests have the same ’armour and the same weapons as those of their opponents. The proposals of the United Kingdom Chamber of Shipping which, it is announced, are being put before the Board of Trade, provide for a wide range of subsidies covering almost every class of shipping that is threatened by foreign competition. It is urged in the first place that the subsidy for tramp steamers should be renewed, this time to the tune of £2,500,0CX) for five years. Secondly, it is proposed that £5,000,000 a year for five years should be spent on the services maintained by liners on regular trade routes, including £500,000 a year for Continental and Mediterranean services. The remaining suggestions are for:

Insistence on the greater use of British ships in the timber and coal trades.

An annual subsidy of £500,000 for five years' for tramps in the nearer Continental trade. V A similar subsidy for British coasters, and also an assurance of fair competition from railways.

It is not unlikely that assistance on the scale set out by the Chamber of Shipping would bring about a temporary trial of strength in subsidies, but Britain would have nothing to fear on this score. Her resources are substantial, and once having taken the course of State assistance in maritime trading she would be in a position to pursue it further and more effectively than the majority of her ambitious competitors. Up to the present the rehabilitation of British shipping has been postponed because those who refuse to accept the inevitability of subsidies are either unwilling or unable to offer an effective alternative. “Shipowners,” wrote an English commentator last month, “cannot agree among themselves as to any particular plan, or to decide between compulsion and a voluntary system, a national or an international scheme, of shipping control. And the Government for its part is reluctant to take action without a unanimous request from the interests concerned.” That request has now been made. Notwithstanding the obligations that may be involved —the fear of political interference and State dictation —shipping interests seem agreed that in a system of straight-out subsidies lies the best hope for a sorely-tried industry.