Cross-Channel Shipping Freight Rates—Motion for Tribunal.

Minister for Industry and Commerce (Mr. S. Lemass)

I move:—

That it is expedient that a tribunal be established for inquiring into the following matters of urgent public importance, that is to say:—

The level and structure of cross-Channel shipping freight rates, including through rates; the extent, if any, to which collective arrangements or other restrictive practices obtain in the fixing and application of freight rates; and, if such arrangements or practices obtain, whether their maintenance is contrary to the public interest.

Deputies will have noted Press reports to the effect that, on 7th September last, the Irish and British Traffic Conference and the individual shipping companies engaged in the cross-Channel trade, which, together with railway companies, comprise the membership of the conference, announced an increase in cross-Channel freight rates to take effect from 1st October, 1957. The increase announced was a flat percentage increase at the rate of 7½ per cent., but, after allowing for certain reductions in sea charges, the net increase, I understand, is about 5 per cent.

That announcement caused grave concern not merely to the Government but to everybody whose business requires the utilisation of cross-Channel shipping services. This was the seventh increase in cross-Channel shipping freights made by the Irish and British Traffic Conference and its constituent shipping companies since 1950. All these increases have followed the same pattern of applying a uniform percentage increase to existing freights and there is no indication that regard was had to the financial position of individual companies or to the economics of carrying different kinds of traffic. Moreover, the tendency in these cross-Channel rates has been consistently upward over the period although, during that time, the ocean freight rates, as is well known, have fluctuated very considerably. Deputies will, I feel sure, be aware also that, even before this latest increase was announced, there was a growing volume of criticism in this country of the high level of cross-Channel shipping rates.

Although I say that, I do not wish to prejudge in any way the outcome of the inquiry which I propose should be held. Indeed I would urge on Deputies who may wish to speak on the motion the desirability of not prejudging the outcome of the inquiry. I must say quite frankly that I have no information upon which to base an opinion as to whether these rates are justified, the reasons why increases were considered to be necessary, or on the procedure for settling the rates.

I will assume that most members of the House are in exactly the same position. We have, of course, seen the recently published report of an economic survey in the Six-County area, carried out by Professors Isles and Cuthbert of Queen's University, in which it was stated that there was reason to believe that the rates for certain classes of cross-Channel traffic, particularly coal, are rendered needlessly high, both because full use is not made of the most economic methods of shipping and of handling the traffic, and because of what is described as "monopoly pricing."

That report went on to point out that as far as shipping to foreign ports is concerned, the competition of the tramp and of foreign shipping generally keeps rates fairly keen. They say that cross-Channel shipping is virtually immune from competition and that they are free of all restraint except that imposed by the trade itself. I do not know what basis or justification there was for these comments in that report, but it is not an unreasonable assumption that the Irish and British Traffic Conference follow a uniform practice in regard to both parts into which this country is divided.

The importance of shipping charges on the competitive position of Irish exports is obvious. During recent months there have been discussions in my Department with a representative cross section of firms engaged in the export trade. These discussions were directed towards ascertaining and remedying the difficulties which impede further development of our exports. With a remarkable degree of unanimity, these firms have referred to cross-Channel shipping arrangements and freights as being one of the greatest deterrents to the full development of their export trades.

The information which I gained from these discussions might, I think, have led me to propose such an investigation as is contemplated in this motion, even if nothing else had happened to arouse public interest in the position. Immediately following the publication of the notice about these increased charges, on September 10th last, I informed the Irish and British Traffic Conference and the shipping companies concerned that I was perturbed to notice the proposed increases, particularly as they happened to be of uniform order, and that, having regard to the impact of cross-Channel shipping charges on the national economy, I was considering the desirability of establishing a tribunal to make a public inquiry into these charges and into the arrangements under which they were fixed.

I suggested to them that the operation of the proposed increased charges might be deferred in the meantime. The conference informed me, however, on September 24th, that they found it impossible to defer the introduction of the increases which had been announced, and they claimed that these increases were the minimum additions considered necessary to enable the undertakings to maintain their present standard of shipping facilities.

There is no statutory authority vested in me, as Minister for Industry and Commerce, or in the Government, by virtue of which direct control can be exercised over the level of cross-Channel or any other shipping rates. Indeed it is in the nature of the trade that effective control of freight rates cannot be unilaterally exercised by the Government here. In the shipping industry generally, very keen international competition controls freight-rate levels. I think it is urgently necessary to find out why collective arrangements for the fixing of freight rates have brought about a position in which freight rates in this trade have risen consistently and uniformly over a long period when shipping rates generally were fluctuating.

The most suitable body to undertake such an examination as is proposed would be the Fair Trade Commission which was set up by the 1953 Restrictive Trade Practices Act. However, that Act does not apply to services other than those which are ancillary to the supply and distribution of goods which are the subject of inquiry by the commission, and for that reason an investigation into shipping freight rates may not be carried out under that Act as it stands. The Government has decided, therefore, to set up an inquiry under the Tribunals of Inquiry (Evidence) Act of 1921, but we propose to ask the individual members of the Fair Trade Commission to undertake the inquiry. While the inquiry will be concerned principally with the level and structure of the freight rates of the Irish and British Traffic Conference and of the associated companies operating cross-Channel services, the freights charged for such cargoes as coal and cement carried by tramp shipping between here and Britain will also come within its scope.

The rates for bulk cargoes are fixed by the British Chamber of Shipping, which is an organisation representative of British shipowners and there have been increases in their rates also, the most recent being in June last. The object of this inquiry which I am proposing is primarily to establish the facts, and, until the tribunal has reported, I cannot usefully forecast what steps can or should be taken by the Government in relation to cross-Channel shipping rates.

Before leaving that point, however, I would request Deputies not to confuse the issue raised in the motion with the question of the possible extension of Irish control in cross-Channel shipping operations. The two issues are quite distinct and separate. The problem of high freight charges and of concerted action to arrange the charges could conceivably arise, even if only Irish controlled companies were engaged in the trade, and indeed a number of the companies which are involved in the arrangement to be investigated are Irish-registered companies.

It may be, of course, that the inquiry may reveal information which will have a bearing on the other issue, but that is another day's work. I may say also that there are some discussions taking place regarding the possibility of an extension of Irish control in cross-Channel shipping. Apart, however, from indicating that the matter is having active attention, I am satisfied that it would not be helpful if I were to say more at this stage. I am sure the House will agree that the carrying out of this investigation is a matter of urgent public importance and will, therefore, have no hesitation in assenting to the motion.

Mr. Cosgrave

I think the House will be surprised that the Minister had not some more information to give in moving this motion. While Deputies have not available to them some of the information which is normally available in a Government Department, this is a matter that has, over a long period, attracted public attention and notice and the fact that the Minister has so little information on which to base the proposal before the House is somewhat disturbing. Not only the Department of Industry and Commerce but the Department of Agriculture is vitally concerned in shipping arrangements. I believe that it will come as a surprise to a number of people that these various increases, amounting to seven in all since 1950, can have taken place without greater detail being supplied to the Minister's Department and to the Department of Agriculture.

This increase has certainly focussed attention on the importance to the country's economy of the cross-Channel shipping interests. While it affects a variety of goods, the live-stock trade is the one which is the most serious from the national point of view. It is true to say that the sheet-anchor of the national economy is live stock and the protests which were made by the live-stock traders, and other interested parties affected by this increase, not alone reflected their own interests but reflected the effects this increase would have on the economy as a whole. We have no objection to the inquiry which the Minister proposes, but it does seem that the terms of references are somewhat restricted.

I can understand the Minister's desire not to widen the discussion or consideration of this matter. Quite an amount of comment has been made in the newspapers since this took place. Articles have appeared as well as letters from correspondents and comments from trade bodies and so forth, all indicating a natural objection to it and a great many expressing the view that either Irish Shipping or some Irish controlled and operated company should enter this cross-Channel service. As the Minister remarked, it is not as simple as that and not as easy, but undoubtedly there is a volume of opinion that the present arrangements are unsatisfactory and there are good grounds for supporting that contention. I believe that if public confidence is to be secured through an inquiry of this sort, the inquiry should have power to consider other aspects of the question. If not, it is to be hoped that this inquiry will report quickly and that the other matters will then receive attention.

The bulk of the traffic, certainly so far as boats carrying live stock are concerned, is one way and that is one of the problems—that ships travel light. Obviously, if this matter were as simple as some correspondents and commentators appear to think, people would have entered the business long ago. On the other hand, the fact that traditionally over a number of years certain firms have had a virtual monopoly in this matter is no reason why, if it is decided in the national interest that that situation should not continue, it should not be ended as speedily as possible.

This increase has followed rapidly on the earlier increases and it is worthy of note that this is the only method whereby inquiry into freight rates is possible. When the Fair Trade Commission legislation was going through this House, I moved an amendment, which was rejected, that services might be included. This procedure under the Tribunals of Inquiry (Evidence) Act has been used before. I agree that, in the circumstances, it may be the only satisfactory way of dealing with it, except that it does appear that the terms of reference are limited to the actual increase or the reasons for the increase in freight rates. It is not certain whether the tribunal to be set up will be able to elicit the facts on which to make a decision; it is not certain that it will be possible for them to secure the evidence necessary, or to compel the attendance of witnesses in a position to supply it. I hope it will be possible to get the full co-operation of all those concerned.

There is no doubt that the easiest way of dealing with this matter is to establish a tribunal of this sort. I remember that, when similar bodies were established by the previous Government, we were always taunted that we had set up another commission or another committee to inquire into something or other. I think the Minister himself was one of those who said that when the Government had a problem, they set up a commission to inquire into it. Some people might even say it is a form of "passing the buck". Nevertheless, the Minister brings it forward here as the only method by which he can discover the facts, and, as such, we are prepared to assent to it.

I think serious consideration should be given, even while this committee is sitting, to the other aspects of the question which have been uppermost in people's minds since this increase was announced. If this committee can discover the facts and reasons for these increases, then people will naturally ask: "What next?" or "What will the Minister do?" or "What will the Government do to deal with the situation?"

The Minister adverted to the fact that he had no statutory powers by virtue of which he could direct the companies concerned to take any action. It has been suggested to me that, in view of the importance of this inquiry and the matters which will fall to be considered, the chairman of the commission should be a High Court judge. I have no predilection one way or another. I think the members of the Fair Trade Commission who are named here are quite competent to conduct an inquiry, but some criticism has been voiced from time to time about the manner in which evidence has been taken at the Fair Trade Commission. It may secure greater confidence if, in a case of this sort, a judge acts as chairman. Certainly, anything that will enable the commission to secure the maximum respect and to gather the necessary information rapidly and fully is essential in the public interest.

I agree with the Minister's view that it is hardly desirable at this stage to consider the other aspects of the question. I have no doubt, however, that those who are anxious to see the answers to the inquiry which this commission will undertake are not alone interested in the facts which it is hoped to elicit but particularly interested in knowing what steps the Government propose to take to deal with the situation, if the replies are as it is generally expected they will be.

This recent increase has focussed public attention on the importance of the cross-Channel shipping business and, in particular, on the importance to the economy here of having shipping freights at the lowest level at which it is possible to keep them. We do not oppose the Minister's proposal. We should be glad to hear from him, when he is replying, if it is expected that a report will be furnished quickly by the tribunal.

Mr. Russell

I agree with the Minister that one should not confuse the issue. There are not two confusing issues but rather they are all part of the one issue.

I suggest that the Minister is putting the cart before the horse. This is the seventh or eighth increase in cross-Channel shipping charges over the past few years. I feel that, if the recent 7½ per cent. increase had not taken place, the Minister would not now be setting up a tribunal to inquire into the level of freights, and other matters.

The tribunal is starting off at a disadvantage in that it is to inquire into a business which to a large extent, certainly over 90 per cent., is owned by somebody else. I do not want to prejudge the issue, but I foresee certain difficulties when the tribunal endeavours to secure information from the two main participants in the cross-Channel trade, namely, British Railways and the British and Irish Steam Packet Company. Two small Irish companies are also engaged in the cross-Channel trade but their participation is very small indeed. I think that, in all, six cross-Channel companies are members of the British and Irish Conference. Strangely enough, there is at least one other English shipping line that is not a member of the British and Irish Conference.

One of the reasons why I put down the motion which appears on the Order Paper was, to use the Minister's own words, to avoid any confusing of the issue. There is only one issue and the first point to tackle is the present position which is directly responsible for the fact that these increases in shipping charges can go on year after year with impunity. As long as we suffer the position whereby we have no say whatever in the fixing of the rates, so long will the people who own the shipping interests continue to apply whatever rates they desire.

I was glad to hear the Minister say that consideration is being given to the question of some participation by this country in the cross-Channel trade. My only regret is that the question of this participation was not considered and something done about it over the past 30 odd years. Previous Governments must share responsibility for the fact that nothing was done in that regard.

Everybody must agree that shipping is one of our most essential links with the outside world. We are an island and claim to be an independent nation. If we cannot control or at least substantially influence shipping to and from this country——

An Leas-Cheann Comhairle

The Deputy is now arguing the establishment of an Irish company. That is a separate matter which may not be discussed on the present motion.

Mr. Russell

At the moment, we pay out an estimated £15,000,000 to £20,000,000 a year to cross-Channel carriers who, in the main, are foreigners. The first step—which is now apparently under consideration— should be the bringing of a share of the cross-Channel trade under Irish control. Once that is achieved, the question of rates would be one over which this country would have some say. Until that is done and until we can control the cross-Channel trade to some extent at least, we cannot hope to utilise some of that £15,000,000 to £20,000,000 a year or ensure that a share of it is expended in this country. I may say this quite honestly: I hope the tribunal will fulfil a useful purpose and secure a lot of useful information, but I do not think it will ultimately achieve any purpose, until the Government tackles the question of the control of Irish shipping. If I am in order in saying so I should like to see this question considered not only on a purely Twenty-Six County basis. As the Minister quite rightly said severe strictures have been passed by people who inquired into shipping conditions in the Six Counties and I think it would serve a very useful national purpose if some joint or co-ordinated action could be taken by the authorities in both the Twenty-Six and the Six Counties on the whole question of shipping which affects both North and South.

I think I am correct in saying that some years ago Irish Shipping Limited had two cargo vessels engaged in the carrying of coal between England and this country. I understand the Irish Shipping Company had to take off those vessels because of lack of support from the Irish importers. It seems to me there is not much use in talking about participation until importers and exporters make up their minds that they are going to use shipping owned wholly or partly by an Irish company. In that regard, there is a tremendous lot to be done in changing trade policy on the part of importers and exporters first of all in utilising the shipping that exists and then on the question of participation in support of an Anglo-Irish venture.

I wish this tribunal every success, and I hope it will achieve a useful purpose, but I am more encouraged by the Minister's hint that the major question is at issue than I am by the hope that this tribunal will achieve the desired objective.

Mr. Dillon

I have no objection to setting up a tribunal but I think the Minister ought to tell us now what he proposes to do when he has the report of the tribunal. Has he in mind any steps which he would take in the event of the tribunal apprising him that the existing arrangements or practices are contrary to the public interest? There is not much good in setting up a tribunal and discovering that the existing practices are contrary to the public interest unless you have some plan in mind to deal with that situation if it is found to exist.

I remember about 18 months ago, or perhaps less, some problem of this character arose with special reference to through rates for live stock and at that time I asked members of the British Federation of Carriers, representatives of the British Railways and shipping interests, and representatives of the Livestock Exporters' Association to come to meet me in the Department of Agriculture. I think after some discussion we were able to resolve the difficulties and get the proposed increases postponed. I do not believe there has ever been any proposal to revive the question of their imposition and the difficulties that then obtained were overcome. Mark you, there is a good deal to be said for that procedure because very often, if you get men round a table, you find, if everybody tries to be reasonable, a way can be found to avoid some change which it appears will be to the detriment of all concerned.

I am rather surprised that the Minister for Industry and Commerce and the Minister for Agriculture in consultation did not send for the shipping companies and the live-stock interests and discuss this proposal with them and see if they could not, by the exercise of argument and persuasion, get both parties to agree to what would be equitable and fair and possibly to point out to the carrying companies that the effect of the increase might very well be to reduce the total volume of traffic that they could reasonably anticipate they could get.

I think the Minister is wrong in coming to the House and saying that he views with grave concern this increase in freight rates and that the only proposal he has to remedy it is to set up a commission to inquire into the facts. I think he ought to be able to say to us—and I do not despair of his resolving to do that now—that he is calling into consultation the parties concerned, with a view to seeing whether by discussion and argument they can be persuaded to abstain from this increase at least until a committee of this kind has reported.

I do not want to represent to the House that I was able to achieve anything miraculous by the procedure adopted by me but I think we did produce some results and they were of a character which preserved the status quo and prevented any worsening of the position, without setting up any commission at all. I would be grateful if the Minister could say when concluding what he proposes to do if this commission does report to him that this increase and that the existing practices are contrary to the public interest because I think Deputies ought to be in a position to appreciate what the problem is.

If Deputies will look at the terms of the motion the tribunal is to investigate among other things "the level and structure of cross-Channel shipping freight rates, including through rates". Many people, when they reflect on this whole problem, imagine it is a problem of getting cattle from the coast of Ireland to the coast of Great Britain. Of course it is nothing of the kind. It is true that we sell a good deal of cattle in Birkenhead and Glasgow but the vast bulk of the cattle is sold at the end of pretty long rail journeys in Great Britain and the bulk of this levy of 7½ per cent. will be levied on that part of the journey which is done by rail transport on the British transport system.

Does the Minister contemplate, if he finds the rail transport system in Great Britain intransigent, providing some alternative means of transport in Great Britain? I do not want the Minister to think I am just asking him trick questions because I know his difficulty—who should know it better than somebody who has been Minister for Agriculture?—that is, that he may not be able to exercise effective control over the bulk of the charge on which the 7½ per cent. levy is being made. When you are faced with this situation, you have to ask yourself what is the best way to deal with it and if you cannot control, you have got to ask yourself if you can persuade them. There is no use battering your head against a stone wall. That was the view I took 18 months ago.

It was for that reason I brought them all together round the table and succeeded in persuading the transport authorities in Great Britain to abandon the proposals they had announced they were going to put into operation. If I had directed them to abandon them, I think I would have got a very dusty answer. Therefore, I should be glad if the Minister would tell us what he has done with a view to effecting conciliation in this matter. I should be glad if the Minister would tell us how far the Minister for Agriculture has been consulted in this matter with a view to co-ordinating his exertions with those of the Minister for Agriculture. Has the record of our previous discussions with the British Transport Authority been reviewed in the light of this situation which I believe is material in the discussions between the Department of Agriculture and the British Transport Authority and which might be of value in arriving at an accommodation in regard to this problem?

There is another point—one which was mentioned by Deputy Cosgrave. As he said, it is not a point of principle; it is a matter of expediency. It is one on which I should like to invite the judgment of all Deputies. Doubtless, the personnel selected by the Minister will effectively discharge the job assigned them by this resolution, but we have got to bear in mind that the shipping companies are more or less in the dock in this inquiry. They feel that. We are not going to get very far if they are not prepared to come into the inquiry with a desire to give all the information they can.

Deputies will remember an analogous situation when there was difficulty about the rates being charged by British insurance companies in regard to motor car insurance. The British insurance companies simply came into the inquiry and said: "We will not tell you. We will not segregate our costs between our English and British business. We will give the global figure but that is as far as we are prepared to go." I think that probably arose from the fact that they felt they were in the dock. They were not going to help in giving substance to a decision which they felt was going to go against them in any case. If you put this inquiry under the chairmanship of a High Court judge, there might be an atmosphere in which we could get from all parties, transport companies included, a full disclosure of all the circumstances giving rise to this mooted increase, with the possibility of a better informed finding to guide our future course of action.

I want to sound this note of warning. The Minister's announcement of his intention to establish this commission naturally gives rise to high hopes in the minds of parties aggrieved by this increase in rates. It is not a good thing to persuade people who believe themselves to have a grievance that you are providing a remedy for them when they have made an enthusiastic contribution by way of preparing a case and bringing in facts before the commission and have got a favourable finding from the commission that the events of which they complain are, in the judgment of the commission, contrary to the public interest—it is not a good thing for the Government to say that may be the case but that there is nothing they can do about it. If that is the Minister's mind now, it is better to say so.

If, on the other hand, the Minister has in contemplation a direction to Irish Shipping to provide for an alternative service or the compulsory acquisition of one of the existing shipping companies, he ought to envisage those possibilities now and, when doing so, go on to say how he proposes to integrate the alternative service provided by Irish Shipping or the acquired shipping company with the transport service in Great Britain. Bear in mind that there is no use dumping cattle at a port of entry, if you have not got transport facilities to remove them to the place where you can sell them. Cattle cannot be left standing in the pen at a port in England because you have not got means expeditiously to transport them to the point of sale.

This is the time to state quite frankly what the limits are of the resources available to us. It is even possible to surmount that internal transport problem in Great Britain, if you want to go that far. Rail transport is a monopoly in Great Britain; road transport is not. If the Government were satisfied that the existing transport facilities were hopelessly detrimental to the life of industry in this country and were prepared not only to provide transhipment facilities but to organise road transport in Great Britain to service an Irish company that would be prepared to do that, that has to be envisaged. That possibility could be envisaged and examined on its merits.

If you are not going to face that, what will you tell people now—that the ultimate sanction of establishing a completely independent transport is not available to us? In that event our only rational line of procedure is a process of negotiation with the existing transport services to get the best deal we can. If you are not envisaging the ultimate sanction of providing a completely independent transport service over land as well as over sea from Dublin, Waterford or Cork to any place in Great Britain, are you sure you are going the right way about it by setting up a commission of this character? Might it not be much better to hold a round table conference with these people and see if you could get accommodation, holding over them the prospect that if you could not get a reasonable answer, you would certainly be forced by public opinion into this procedure?

If you got from a commission of this character a report that existing conditions were contrary to the public interest, the Government would be forced into an extreme course with which, perhaps, they would not desire to proceed. I do not mind telling the House, and I do not think it is any breach of confidence, that, when I was approaching the British transport authorities, I told them I was under heavy pressure at home to urge on my colleague, the Minister for Industry and Commerce, to press Irish Shipping to go into this trade, that if they were not prepared to take any cognisance of the difficulties of the Irish live-stock export trade pressure would be brought upon me with a degree of emphasis it would be impossible for me to overcome. I do not doubt that those representations had more effect in pressing the transport authorities in Britain to mend their hand a bit and it is vitally important that if you stop bluffing, you must hold the cards, referring to what is envisaged, to all the steps that may be involved, if you once embark on this course.

I think the Minister will agree with me that, once you have set up a commission of this kind, you cannot simply accept a report that these practices are contrary to public interest, and then say "So what?" You must do something at that stage. We ought to ask the Minister what are we going to do if we get a report of that character. If dialectic conclusions lead us upon a course far further than we should go, should we not stop now and hold preliminary discussions which would assist ourselves before establishing this tribunal which might lead to results none of us envisage? If the Minister feels this procedure is going to help him to remedy the present situation, we have no objection to it. Perhaps in his reply the Minister could tell us whether he intended to discuss this matter with the interested parties, even while this proposal was going forward, and I should be grateful if he would give us his opinion on the expediency of providing a High Court judge as a chairman of this tribunal.

Mr. T. Lynch

When I read that the Minister was about to set up a tribunal to inquire into the "ifs" and "ands" of cross-Channel shipping, I welcomed it. At the same time, I could be excused for asking what good will it do? I have a suspicion of tribunals and commissions. We have the experience of the Milk Costings Commission, but I am very glad the Minister has set himself to go into this because it is a step in the right direction.

In years gone by, people were chary about entering the cross-Channel carriage of live stock because there was terrific competition between the old London North-Western and Great Western Railways, and in carriage from Dublin, Waterford and Cork to the various ports where these two railways operated. They cut prices so low that no private individual had any chance with them. Now the whole position has changed. We have British Railways and they have the carrying in England of all the cattle from the ports of entry and are in a very strong position. It is obvious that, since 1950, freight charges have been going up at a rate of more than one increase a year. The Minister has no statutory powers to pull them up—British Railways hold the reins in their own hands.

All right; but in this matter of setting up a tribunal, if the tribunal finds that we are being overcharged, if it finds that restrictive practices are going on and if it recommends to the Minister that we should build ships, then we should build them. Even if the tribunal did not recommend that, we should go into the matter. We should build ships capable of carrying live stock, because, even if they are not used for that purpose of carrying cargoes to English ports, then they could be used for some other purposes.

I should like to point out that, in the years before the war, Irish people had ships trading and those ships were acquired after a suitable squeeze was put on by the English companies. I wish the Minister would look into this. I close by saying that whatever time this tribunal will spend in its sittings will be time wasted. The only way the English companies will take any notice of the Minister, and the only way the English companies will be made to reduce their charges is by Irish Shipping going into the business.

Mr. O.J. Flanagan

With very special reference to the observations of Deputy Lynch, who referred to the proposed tribunal recommending that Irish Shipping should enter into the live-stock export trade, I doubt that even if it did make that recommendation, and, assuming for a moment that the authorities decided to implement it, it would carry very much weight with the representatives of British Railways.

As has been pointed out here a few moments ago, even if we had numerous ships of our own engaged in this business and if we had not the co-operation of the railways on the far side, these ships would be of little use. With the present shipping arrangements there is one advantage, that shipments of cattle are guaranteed transport the moment they arrive at the ports and that arrangement is satisfactory. If the co-operation that prevails on the far side at the present time, whereby carriages are available to take the cattle from the ports to their destination in Britain, breaks down, then the cure will be much worse than the disease.

This is a motion which is welcomed by everyone in the cattle trade. It is a motion which, since it was given publicity in the papers as a result of the Minister's announcement that it would be placed on the Order Paper for discussion in the House, has aroused very high hopes in everyone in the trade. I venture to say that when it was announced that it was proposed to set up this tribunal, those engaged in the shipment of cattle felt that this was a step in the right direction. We all agree, but they go further than that. They hope that something good and something useful will come out of it as regards those increases. I hope they will not be disappointed but I fear they will.

An inquiry in relation to freight charges is long overdue. I feel that the real pity in this case is that the tribunal was not set up before the increased charges were effective. The increases are now in operation and when that is the case, what is there to inquire into? I do not know if the Minister has set out certain terms of reference for the tribunal. I am sure that in connection with the setting up of this tribunal terms of reference will be framed by his Department after consultation with the Minister for Agriculture so that that body will know what to investigate.

The most regrettable feature of commissions and tribunals such as the one suggested is that it takes not months but years before they submit a report. When a report is submitted there is the usual examination by the various Departments concerned and by the Civil Service authorities, and it takes many months before it is considered by the Government and before the observations of the Government are issued to the public.

I hope that this tribunal when it is set up will not disappoint those who are interested and who are expecting great things from it. If we are to compare it with other tribunals and commissions it will be five years from now before there are any results and we cannot expect a speedy or hasty report. However, in view of the urgency and importance of this matter to be inquired into, there should be a time limit fixed for the completion of these investigations. I do not know whether that is possible or not, but it is something that should be considered when setting out the terms of reference. The inquiry should not be allowed to drag on like the milk costings and other inquiries of which we have had experience. In view of its urgency and in view of the severity of the increased charges on the trade and in view of the expectations of those engaged in the trade as to the outcome, a time limit should be placed on the production of the report so that it will be available to all concerned with the least possible delay.

The Minister must realise that the authorities concerned with these freight charges will not be behind time in building up a strong case in justifying them. That will be their job. I venture to say that they will build up such a convincing case that it will be difficult for any tribunal investigating such charges to find that they are not justified. However, assuming that the tribunal recommend in their report that the increases are not justifiable, what steps will be taken in this regard? Will the Minister give us an indication for the information of those engaged in the trade as to whether there will be immediate reductions and whether the increased charges now being made will be refunded in the event of suitable records of the increased payments being kept, so that, if we do have a favourable report from the tribunal, all those at present engaged in the trade and who have experience of recent increases will have suitable refunds made?

I feel that only as a last resort and only in the event of all possible friendly negotiations breaking down with the British transport authorities and shipping interests should a tribunal such as this be suggested. I have heard in my own constituency, and indeed outside my constituency, the greatest possible admiration expressed for the able manner in which the former Minister for Agriculture, Deputy Dillon, met very difficult circumstances in regard to increased rates about 18 months ago. I wonder if the present Minister, since he has taken office, has arranged any such conferences as were arranged by the former Minister for Agriculture. It is my opinion that a round-table conference, friendly and reasoned discussion on both sides, would be a much better solution for the problem than to have a tribunal examining the situation and submitting long and detailed reports.

Even at this late stage, I would recommend to the Minister that if there have been no such conferences and if there are hopes of friendly negotiations on this matter, in view of the great importance of the matter to our main export industry, cattle, every effort should be made to have negotiations on a friendly basis between the Government here and the British Transport Authority.

In order that there might be confidence in the findings of the tribunal that may be set up, the Government would be well advised to appoint a High Court judge as chairman of that tribunal. That opinion has been expressed by Deputy Dillon and other speakers from this side of the House. My reason for making that suggestion is that it would reinforce the confidence of those engaged in the industry and would add to the dignity of the tribunal in the eyes of the authorities from outside this State who would be giving evidence and information to the tribunal. I highly recommend the appointment of a High Court judge as chairman and hope the Minister will see fit to recommend that course to the Government.

Finally, I would request that this tribunal should be different from other committees and tribunals inasmuch as that its report should be presented with speed and efficiency.

Mr. S. Lemass

I think it is necessary to emphasise that the inquiry which I am proposing shall take place will be into freight rates only, into the level of freight rates, the collective arrangements or restrictive practices that are operating in the determination of shipping freight rates and the extent to which these collective arrangements and practices can be regarded as detrimental to the public interest here. This is not a committee to determine policy. The purpose of this inquiry is to ascertain the facts and report on the facts. When the facts are known, in so far as it will be possible for the inquiry to produce the facts, then decisions on policy will be taken by the Government.

Deputy Cosgrave said it was rather surprising that we did not have more information concerning the composition and structure of shipping freight rates and the reasons for increases in these rates over recent years. We know, of course, that shipping freight rates have gone up. It was reasonable to have expected that they would have gone up. Other charges have risen during that period. Even this recent increase, in so far as it applies to through rates, presumably has some reference to the 10 per cent. increase in British railway charges announced some time ago.

The disturbing factor in relation to the shipping freight rates is the regularity of the increases. Notwithstanding the frequent fluctuations which have taken place in freight rates upon other shipping services, on this cross-Channel service they have gone up step by step almost, as Deputy Lynch said, year by year and they have gone up on the basis of a percentage increase applied to existing rates without any reference to the economics of any particular type of traffic or without reference apparently to the financial position of the individual companies applying these rates.

Deputy Dillon may not have been in the House when I mentioned that I asked the companies comprising this conference and the associated companies to postpone the application of the increase until after this inquiry. They declined to do so and said that the rates were in their view justified and that they proposed to apply them immediately. Indeed, I doubt from the record whether any such request would have been successful at any time. Deputy Dillon mentioned that he had some discussions with the shipping companies last year. These discussions, as far as I know, related to the provision of facilities for the transportation of frozen meats.

Mr. Dillon

Cattle.

Mr. S. Lemass

The Deputy, in that case, was not successful in preventing an increase in the freight rates last year or the previous year or the year before that. Freight rates were increased by 5 per cent. last year, by 7½ per cent. in 1955, by 10 per cent. in 1954 and, indeed, it is not so much the approximately 5 per cent. increase this year which is the justification for this inquiry but that regular pattern of increases over a considerable period, which must inevitably cause us concern.

While, as I said, we do not have ourselves the information which would enable us to decide whether these increases were justified or that the collective arrangements for determining the rates are or are not contrary to the public interest, it is not unreasonable for us to take note of the fact that the Isles Report relating to the Six Counties made reference to this precise situation and referred to the non-competitive rates applied on the cross-Channel service where, apparently, they said, the only limiting factor was the restraint the companies concerned chose to put upon themselves. I do not know upon what basis of information the comments in that report rested but that report was, as we know, published and it is a fair assumption that whatever conditions apply in regard to trade to Belfast from British ports apply equally to trade to ports in this part of the country.

I emphasised that this problem which the committee will be dealing with is distinct and separate from the problem of Irish participation in cross-Channel shipping services. There are some eight companies engaged in the service at the moment; some of them are Irish registered, two of them, at least, are Irish-owned. They are all in it together. They all work uniform rates and increase their freights by collective arrangement and this situation could quite well emerge even if they were all Irish companies.

We are dealing here with the question of charging for a service, not with the adequacy of the facilities or the desirability of Irish participation in that service which, though an important question, is a separate question, and I emphasised that these two questions were distinct and separate because, as I said, some action in regard to the extension of Irish control of the shipping services is proceeding and I do not intend that that action should be impeded in any way by the fact that this inquiry is taking place. There is no reason why it should be delayed on account of the passing of this motion by the Dáil.

Deputy Russell was not quite right in saying that this problem has existed for 30 years and was not considered before and nothing was done about it. It is true that nothing much was done but it certainly was considered on many occasions and the consideration that was given to it brought to light the many substantial practical difficulties which will attend any policy which may be decided upon.

Whether Irish Shipping, Ltd., should enter the cross-Channel trade is, of course, a major question of policy, and whether entering would have the effect of bringing down shipping freights is a question which has not been answered by anybody. Some years ago, I, as Minister for Industry and Commerce, authorised Irish Shipping, Ltd., to construct two boats suitable for the cross-Channel coal trade. They built those two boats. They were engaged in the cross-Channel coal trade under charter for some time, and when the charter expired they did their best to get someone else to take it over or utilise the boats on that service, but without success. Ultimately, the boats had to be adapted for foreign trade, on which they are engaged now.

The experience of that one effort of Irish Shipping, Ltd., to enter into the cross-Channel business indicated that the problems are considerable and that if it is to be done in the future perhaps some different approach may be required.

Again I emphasise, however, that that is not the problem we are investigating now. We are going to investigate the problem of prices charged for shipping services, just as we might in similar circumstances, where collective action or restrictive practices might seem to make it necessary, investigate the prices charged for any other class of goods or service.

Now the question arises as to how best this inquiry can be conducted. If the Restrictive Trade Practices Act of 1953 permitted it, I would have referred this question for investigation by the Fair Trade Commission without bothering the Dáil at all with a motion, but the fact is that the terms of that Act preclude the Fair Trade Commission from investigating charges for a service such as this or for any service, except where the need to investigate it arises in connection with an inquiry they are conducting at the time in relation to the sale of goods. Therefore, I could not get this inquiry under way through the Fair Trade Commission without proposing a motion of this kind in the Dáil.

It is intended, as I announced, that it is the Fair Trade Commission which will carry out the inquiry. I think they are eminently suitable for that purpose. They have the organisation which they use for their ordinary inquiries available to them and they have, of course, experience in the conducting of such inquiries and this will be very valuable to them. It is not proposed to select an ad hoc tribunal for this purpose. It is the members of the commission who will be asked to conduct the inquiry and that fact not merely guarantees that a thorough inquiry will be made but it is the arrangement which is most likely to give us an expeditious outcome of the investigations.

Deputy Cosgrave made some criticism of the terms of reference, but I think what he had in mind was that this tribunal should deal with a policy issue involving the extension of Irish control of shipping services. I do not intend, and it is not intended, that the issue of policy should arise. If that policy has to be settled—as it will at some stage—it will be settled by the Government in consultation with whatever expert advisers they can avail of. While the information gained by this tribunal may have an important bearing on the decision, this tribunal will not in fact be themselves concerned with that policy issue.

They have to investigate why these shipping freights on the cross-Channel shipping services have been going up so steeply and continuously in circumstances where freight charges on other services have been fluctuating, where it is obvious that the existence of competition has tended to keep the freights very keen. They will have to examine why it is that increases which might have been justified on grounds of costs were applied uniformly to all traffics without regard, as I said, to the economics of particular traffics or the effect of the increase upon particular traffics.

Deputy Dillon mentioned that the live-stock trade have a vital interest in this matter. They have a very vital interest because, of course, it is by far the biggest traffic offering to these services. It is reasonable to think that the live-stock traffic will go on, notwithstanding increases in particular charges, whereas other traffics may not be able to go on, if they have to bear an increased burden of shipping charges. Is this system of making increases which are themselves justified on a flat rate percentage basis also justifiable?

Then there is, of course, the very big question of the extent to which these companies engaged in this service compete with one another, why freight charges are fixed uniformly and without regard to the circumstances of individual companies. Is it the situation that the requirements of the least economic, least efficiently run, most costly company determine the charges for all?

As I said, I do not know the answers to these questions. I hope we will get the answers as a result of this inquiry and, when we have the answers, it is then we will consider what action we can wisely and usefully take to deal with the situation.

Deputy Dillon says we should have made up our mind now as to what we propose to do when the report of this inquiry reaches us. I think that would be the wrong procedure altogether. Surely the right time to decide what to do is when you know the facts, when all the investigations necessary to establish the facts have been completed. To attempt to decide now what should be done or what can be done would be a rather futile procedure, because the inquiry might show that some of the things we might think of now were unnecessary or, alternatively, might show them to be impracticable.

Mr. Dillon

I thought the Minister said the inquiry was not to inquire into the steps that might be taken.

Mr. S. Lemass

When the inquiry is over we will consider then the steps which can be taken to deal with this problem of high shipping rates on the cross-Channel services.

Deputy Russell said that this inquiry might not have taken place at all, if this latest increase had not occurred. Possibly that is true. I would not like to say that we would have initiated this inquiry now, if the matter had not come to a head with this further increase; but I did say that the examination which we have been making in the Department of the problems of individual manufacturing firms in expanding their export business brought to light the high shipping freights on the cross-Channel services as a major impediment. Because of those investigations, we might have thought it necessary to have conducted this inquiry, even if there had not been another percentage increase in the charges this year, as there was last year and the previous year and the year before that again. It is obvious that the possibility of this country expanding in its export trade in many classes of goods could be greatly enhanced if competitive shipping freights were available on those routes and that possibility, on the other hand, is reduced every time those shipping charges are increased.

The scope there is available in shipping on those routes for an extension of Irish export activity is, however, a very different question indeed. However, everybody is agreed there should be an inquiry. I think the arrangement proposed, to utilise the services of the Fair Trade Commission, will give us the best assurance we can have of an early and comprehensive report. I think it will be a very valuable document because it will throw light upon a matter which has never been fully examined and investigated.

Dáil Éireann debate -
Wednesday, 23 Oct 1957