Vol. 48 No. 9
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.
On the 7th September last the Irish and British Traffic Conference and the individual shipping companies engaged in the cross-Channel trade who, together with the railway companies, comprise the membership of that conference, announced an increase in cross-Channel freight rates to take effect from the 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 is, I understand, about 5 per cent. This is 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 have, apparently, been agreed between the companies without regard to the financial position of individual companies or the economics of carrying different kinds of traffic. Moreover the tendency has been consistently upward though over the same period ocean freights have fluctuated considerably.
Even before this latest increase was announced there had been a growing volume of criticism of cross-Channel freights. The recently published report of an economic survey of the Six Counties area carried out by Professors K.S. Isles and N. Cuthbert of Queen's University, Belfast, indicates that there is reason to believe that on certain classes of cross-Channel shipping traffics, particularly coal, freight rates are rendered needlessly high, both because full use is not made of the most economical methods of shipping and handling and also because of monopoly pricing. The report points out that so far as shipping to foreign ports is concerned the competition of tramp and foreign shipping generally keeps rates fairly keen, but cross-Channel shipping is virtually immune from such competition and free of all restraint except that imposed by the trade itself.
It is a reasonable assumption that these considerations apply equally to the cross-Channel shipping between here and Britain.
During recent months there have been discussions in the Department of Industry and Commerce with a representative cross-section of firms engaged in the export trade directed principally towards ascertaining and remedying the difficulties which impede further development of their 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.
On 10th September, the Minister for Industry and Commerce informed the Irish and British Traffic Conference and the shipping companies concerned that he was concerned to note the proposed increases, particularly as they appeared to be of a uniform order, and that, having regard to the impact of cross-Channel shipping charges on the national economy, he 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. It was suggested to them that the operation of the proposed increases might be deferred in the meantime. The conference replied on 24th September that they found it impossible to defer the introduction of the increases announced and claimed that these increases were the minimum additions considered necessary to enable the undertakings to maintain the present standard of shipping facilities.
There is no statutory authority by virtue of which direct control can be exercised over the level of cross-Channel or other shipping freights; and 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 keen international competition controls freight 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 the trade have risen uniformly over a long period when shipping rates generally were fluctuating.
The most suitable body to undertake such an examination would be the Fair Trade Commission, but as the Restrictive Trade Practices Act, 1953, does not apply to services other than those ancillary to the supply and distribution of goods, an inquiry under that Act could not be carried out by the Fair Trade Commission. The Government have decided instead, therefore, to set up an inquiry under the Tribunals of Inquiry (Evidence) Act, 1921, and to ask the individual members of the Fair Trade Commission to undertake the inquiry.
They will have available to them the organisation which they use for their ordinary inquiries and they have, of course, valuable experience in conducting similar inquiries in other fields.
While the inquiry will be concerned principally with the level and structure of the freight rates of the Irish and British Traffic Conference and the associated companies operating regular cross-Channel services, the freights charged for bulk cargoes, such 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, an organisation representative of British shipowners, and there were increases in these rates as recently as last June.
It is important to stress that the inquiry will be primarily a fact finding one. There is at present no information available to the Government on which any firm opinion could be based as to whether the present freight rates are justified. We should endeavour therefore not to pre-judge in any way the outcome of the inquiry.
There is a tendency in the public mind at present to link inextricably the question of cross-Channel freight rates with that of increased Irish participation in that trade. These are, of course, two entirely different matters. We are now dealing with a problem of freights and of concerted action to arrange the charges which might well exist in the same form even if there were substantial Irish participation in the cross-Channel trade. The desirability of Irish participation in that trade is another matter and one which is being kept in sight.
I am sure that the House will agree that the carrying out of this investigation is a matter of urgent public importance and will have no hesitation in assenting to the resolution.
At first sight, I think all of us would support this motion, but I prefer to look at it twice. In looking at it closely, it seems to me that it represents a waste of time. I would not go so far as to suggest that it is a deliberate waste of time, but the situation obtaining at present requires something more than a resolution from the Dáil and the Seanad asking the Government to set up an inquiry, an inquiry which will last how long?
I consider this motion as representing a great show of activity and concern on the part of the Government in relation to freight rates, and so on, without conferring the obligation on the Government of doing anything at all. They are going to set up an inquiry. They are going to ask the personnel of the Fair Trade Commission to go into the whole matter very deeply, and to discover what is happening exactly. In his speech in the Dáil, as reported in column 87, Volume 164, of the Official Debates of 23rd October, 1957, they will determine whether there are collective arrangements or restrictive practices operating in the determination of shipping freight rates. At column 67 of the same volume he said that "monopoly pricing exists" and that—I quote—"... cross-Channel shipping is virtually immune from competition and that they are free of all restraint except that imposed by the trade itself."
Instead of doing something, instead of tackling the problem immediately in the light of what we know, in the light of the circumstances, and in the light of our experience over the past 30 years, we decide to do what? To set up a commission. It is not a Royal Commission, admittedly, which is the stock method of the British House of Commons of avoiding taking any action for many years; it is a "commission of inquiry." What sort of confidence has this House got that the setting up of a commission of inquiry at this juncture is anything more than a smokescreen, a way of avoiding taking any useful action now, a "passing of the buck" to some tribunal in the knowledge that they will take a certain time to report back, and that by that time a number of conditions will have changed and the Government may perhaps have decided what they can do?
I do not know how long this commission will sit, but supposing it were to sit for three or six months, or three years as the same body did in fact sit in relation to baby foods and pharmaceutical products; supposing it discovers that there are restrictive practices in cross-Channel shipping which constitute an unreasonable restriction on the supply of those services; supposing they make a recommendation that action be taken; supposing that, say, there is found to be a collective arrangement or understanding between the companies relating to the prices to be charged, that that is "contrary to the public interest", in that it involves an unnecessary and unreasonable limitation on free and fair competition and accordingly should be prohibited; supposing that this ad hoc tribunal makes recommendations along those lines, what will the Minister do about it?
We know the answer to that already, because the same Fair Trade Commission from whose recent recommendations I have just been quoting made precisely those recommendations in those exact terms in relation to the supply of infant foods and pharmaceutical goods, and what did the Minister decide to do? He decided to do absolutely nothing, and would not even appear before the Seanad to explain his inactivity. Now we are asking these same people to take most complicated steps in order to tell him something, which in relation to a whole lot of other goods and services he regards as quite unimportant and unworthy of his attention or action as a Minister. Therefore, I think that this is just a waste of time, a way of stalling, a way of putting off decisions, and I do not think it should be entertained by this House.
I know that it went through the Dáil without even very much discussion, much less opposition; but there was one juncture at which the Minister said:—
"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."
Then Deputy Dillon intervened and said:—
"I thought the Minister said the inquiry was not to inquire into the steps that might be taken"—
which, in fact, he had stated. The Minister replied:—
"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."
So he intends to wait until he has had a long and cumbrous inquiry to tell him something he knows already, and when he finds out from that, officially, what he already knows, then he will "consider what steps can be taken" to deal with the situation. I do not regard this as a serious motion at all. I think it is a routine method of pretending to do something and, in fact, doing nothing.
I should like to consider the situation. British shipping companies are raising their rates by the equivalent of 5 per cent., although the rates on British Railways, I understand, have been raised by 10 per cent. Is it the suggestion that British Railways are coining money out of our trade? If so, what has so long prevented our enterprising "private enterprise" from going into this, and competing with them on level terms, or at least attempting it? They may say: "Ah, yes, but we would not be allowed to use British ports," and so on. Have they tried? If there is money to be picked up there, surely our go-getting business community would not have missed the chance? Is it that there is no money to be got there? Or that our private enterprise is not in fact so very enterprising at all? Why is it that this virtual monopoly exists? Has it not been apparent to us in this country for years—if it was not apparent from 1922 on, did it not become apparent in 1939—that we must not depend upon outside shipping?
I think it is fair to recognise that the Labour Party in this country for years before the war had been urging successive Governments to set up an Irish shipping company. It was only when the war broke out that, finally, the Government decided to do so. I think we can be proud of Irish Shipping Limited. The only thing we can regret is that its operations have not been more extensive. I believe the solution to this problem lies with Irish Shipping Limited. I believe they have the experience, and I believe that if they were given the encouragement and the authority it would be possible for Irish Shipping Limited to use its experience, its knowledge and its skill to negotiate a parallel competitive cross-Channel line, if necessary in much the same way as Aer Lingus has been able to negotiate and to get the use of British airports. I see no reason why Irish Shipping Limited should not go into it.
No one can say a State-sponsored company would be interfering with private enterprise. Private enterprise has had 30 years and has not found it possible to do anything in this field. Other people may say that if Irish Shipping goes into it, money will be lost. I believe that is quite possible, because I do not believe that this trade is such a gold mine for the British companies, as is sometimes suggested. But I believe that if money were to be lost it would be well lost, it would still be an excellent investment from the Irish point of view. The loss would be a balance sheet loss, but the gain to the country would be the sort of gain which is made by having, for instance, the condition of our roads and distribution services kept in perfect order. If the flow of goods and people into and out of this country is made as smooth as possible, the fact that there is a technical "loss" in one element in that process does not really matter— provided, of course, it is kept within reasonable proportions.
The point I am making is that a certain loss on a service of that kind, which makes for the smoother export and import of goods and people would be of immense benefit to the country as a whole, and would be the sort of thing which the community as a whole might regard as a profitable investment, a sinking of capital. For that reason, it seems to me we should long ago have set about some such negotiation in order that we should have an Irish shipping line sponsored by the State, in order to cover this pretty extensive field of the shipping of goods and people back and forth.
One could go into a lot of details about the kind of improvement one would expect to see, but I do no think this is the place for it. I believe that now is the time to start that negotiation, that now is the time to go into that field, that now is the time for the Government to ask Irish Shipping for their opinion and advice and to ask them to explore the possibilities of starting a branch of Irish Shipping for cross-Channel trade, even were a temporary balance-sheet loss to be incurred.
I believe that that is the realistic way of setting about it, and not by the setting up of an inquiry to report in six months' or three years' time, to tell us something we already know now. For that reason, I shall vote against this time-wasting motion today, which seems to me not to contribute usefully at all to the solution of our cross-Channel shipping problems.
Whilst agreeing with much of what Senator Sheehy Skeffington said, I am afraid I could not support him in voting against this motion. I think it is right that there should be this inquiry, because the situation has become thoroughly confused and the Minister or the Parliamentary Secretary have not helped in the least to dispel the confusion. Mention is made in the motion of through rates, but neither in the speech in the Dáil nor in the speech of the Parliamentary Secretary here this evening was there an indication that the whole problem is the through rates. Reference was made to the sea charges; comparison was made with the ocean rates and the way they have varied in the past few years; but the fact of the matter is, of course, that there is a collective arrangement between the transport organisations in Ireland and in Britain in regard to through traffic. I think the two public transport organisations in the Republic, under the control of the Minister—namely, C.I.E. and the G.N.R.—are parties to that arrangement. What has been increased is the through rates.
It means that in the case of consignments going from a point in Ireland—which could be inland, and most of it is inland—to another place inland in Britain, the rate for that traffic has been increased by 7½ per cent. The reason for the increase is very clear and I think the Minister might have been fair enough to say the reasons for it. Those rates were increased by 7½ per cent.—certain arrangements were made which brought it to an average of 5 per cent., as the Parliamentary Secretary said—and the increase applied from 1st October of this year. The reason for the increase was that the internal rates in Britain on British railways, the rates they charge to their own people, increased by 10 per cent. from 1st August, 1957. Apparently it was agreed between these organisations, including our own organisations, that the best way of averaging it out would be to apply this lower percentage increase to the through rates from the points in Ireland to the points in Britain.
There have been successive increases over recent years and those that I have knowledge of seem, like this increase, to be connected with an increase in the internal rates in Britain. The last increase in through rates was as from 1st June, 1956. That was an average increase of about 5 per cent. It coincided with an increase of 7½ per cent. in the internal rates in Britain as from 23rd May of that year. The previous increase was as from 1st July, 1955, which was an increase of 15 per cent. on consignments of less than one ton and 7½ per cent. on consignments of one ton and over, and that increase also coincided with an increase in the internal rates in Britain of 15 per cent. as from 5th June, 1955.
It is obvious, therefore, that all these increase are connected with increases in the rates charged by British Railways internally in Britain. We have not details as to the necessity for these increases in Britain, but we have sufficient information to know that British Railways are not making a great deal of money, any more than C.I.E. are out of these increased charges.
The difficulty is that these increases which I have mentioned are applied and are taken advantage of by the concerns which operate only the shipping part of the transport. I mean, the through rate may be increased by 7½ per cent. from an internal point in Ireland to an internal destination in Britain, but a great deal of the traffic, principally live stock, is booked from Dublin to Birkenhead or Holyhead and where the service is purely a shipping service, it does not seem to me that the increase can be justified on the basis that British Railways internal charges have been increased by a higher percentage. That is a difficulty which arises because of the collective arrangement. It seems to me to be a commercial problem rather than a question of British Railways or somebody else mulcting the Irish people in respect of transport.
I cannot envisage how that difficulty can be overcome. It seems impracticable, when an increase has to be applied internally in Britain, that the entire rate structure affecting traffic from every point in the Republic to every point in Britain should be swept aside and a new rate struck taking account only of the 15 per cent. increase, or whatever it may be, in Britain. That does not seem to be practicable, but, nevertheless, as I have pointed out, the concern which supplies the shipping service only is making a good thing out of it and I can assure Senator Sheehy Skeffington that it is a gold mine for the shipping companies only. That is the trouble and that is how it affects our exports, particularly live stock.
If the tribunal can find a solution to that problem and disperse the confusion which has arisen, it will do a good day's work and for that reason I welcome the motion and await the establishment of the tribunal.
I support the motion on behalf of the live-stock trade of this country. These increases will cost the live-stock trade and the carcase-meat trade something like £1,000,000 a year. On last year's shipments, 7½ per cent. will cost the live-stock trade alone a sum in the region of £750,000 and the carcase-meat trade a sum in the region of £100,000, which is a total of almost £1,000,000. It is the farmers who eventually will pay that. Throughout the world, shipping companies' freight rates are being reduced and obviously there is a ring amongst the companies operating in the Irish Sea.
Senator Sheehy Skeffington covered admirably much of the ground which I had intended to cover. He mentioned most of the points that I had in mind. There is no doubt in my mind and in the minds of the people in the cattle trade that there is a ring operating in cross-Channel shipping and the country suffers as a result of that position.
I am afraid that the tribunal which it is proposed to set up will be like many other tribunals and that we will get its findings in two years' time or 18 months' time. This matter is very important to the farming community generally, and I would urge the Parliamentary Secretary, in the interests of everybody concerned, to see that something is done about this matter. For the past four or five years, I have been advocating that Irish Shipping Limited should be introduced to the cross-Channel service. I have been a voice crying in the wilderness. I would urge the Parliamentary Secretary to endeavour to get Irish Shipping Limited to enter this service, and I assure him that the Irish live-stock trade will give him every support if he does so, if that should tend to reduce rates.
I shall give the House an instance of what the present monopoly is costing the country. To ship one ton of chilled meat from Dublin to London costs approximately £13 10s. To ship one ton of meat from Buenos Aires to London costs £14 15s. There is a case for inquiry there, having regard to the fact that whereas the distance from Buenos Aires to London is 6,000 to 7,000 miles, and the distance from Dublin to London only 300 miles the difference in the rate is only £1 5s. a ton. On that issue alone, I would ask the Parliamentary Secretary to do whatever he can to help the live-stock trade and the meat trade in this matter of transport.
I deprecate Senator Sheehy Skeffington's remarks during which he repeated the old cry to the effect that we set up a commission only to kill time. Personally, I would say that is not the history of the Department of Industry and Commerce or of the Minister. When he proposes any investigation, I think it can be said that he really intends to see it through.
What about the Fair Trade Commission?
He saw it through.
He did not implement——
Let us keep to the Order Paper and we will get through the business more quickly.
A point which puzzles me and which I wish to put to the Parliamentary Secretary is the scope of the inquiry. Will it be limited simply to cross-Channel traffic? This has been mentioned by other speakers and all I intend to mention is the fact that the cost of sending a carcase of beef from the abattoir in Dublin to London and from the Argentine to London is practically the same. That is fantastic although, of course, in the case of the Argentine, the meat is brought over in big ships in cold-storage. Nevertheless, the fact is extraordinary.
What I want to ask the Parliamentary Secretary is: May this inquiry deal with the overland aspect as well as the cross-Channel aspect, because the cross-Channel transport is not the whole question? Whatever about our costs in transporting the meat to the ports here, there is also the subsequent cost of transport from the port of landing in Britain—in the case of live stock, from Holyhead—to the various depots to which these cattle are distributed. It seems to me there is a bigger question involved than simply cross-Channel transport.
That suggests to me the question: What is the good of Irish Shipping Limited going into the cross-Channel trade when there will still be the subsequent distribution overland to be dealt with, this transport being in other hands? We could still be priced out of the market. I trust we shall be able to get sufficient evidence and information to cover the whole question and that, notwithstanding what Senator Sheehy Skeffington says, we shall be able to get it quickly, and have some results. Certainly, good results are very desirable.
I do not think there is anything I can say that will meet the point of view held by Senator Sheehy Skeffington. I think I made an appeal at the outset that we should not pre-judge the issue. The difference between the Senator and myself is that he seems to know all the facts and I do not presume to know any of them, and I am suggesting that we should go after them and discover them.
It may be that the Senator bases his attitude on what has happened in the North. I have referred to some extracts from the Isles and Cuthbert Report dealing with somewhat similar matters affecting the Six Counties, but one finds that the Six Counties are not doing anything and Senator Sheehy Skeffington therefore suggests we should follow their example. We do not propose to do that. We have a problem and we have the humility to say that we do not know the facts and we are taking what we think are the most effective steps to find them out.
I believe it is an absolute prerequisite that we should know exactly and precisely what the position is before we can even express an opinion on it. Having said that, I do not think I should deal with any points made by the Senator in the course of his further remarks which were based on the knowledge he professes to have and which I do not have.
The other Senators who have spoken —at least Senator Murphy has done so —expressed views which indicated that they had a good deal of knowledge which the Minister does not presume to have. It may be that the inquiry may establish the veracity of the statements of Senators in respect of these matters but we have no incontrovertible proof at this stage that these statements are true.
Take, for instance, the statement that shipping companies are coining— I think that was the word used by Senator Sheehy Skeffington — and Senator Murphy supported him in that but he confined his reference to the shipping companies. I do not know whether the shipping companies are coining, or whether only the shipping companies are coining, or if the coining is being done by anyone else.
Surely the Senator knows C.I.E. is not coining?
In any event, I can tell Senator O'Donovan that the overland rates are included in the reference to through rates. I think the motion itself explains exactly what the scope of the inquiry will be. It says:—
"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."
I think that is a complete answer to Senator O'Donovan's queries.
There is very little that can be said when one is starting off, as I must perforce do, from the starting point of lack of knowledge. I am not, therefore, able to cross swords with people who made categorical statements about what they want and on facts touching this cross-Channel transport service. The suggestion therefore that Irish Shipping should get into this business as a solution to the problem cannot be made with any degree of certainty here. I take it the question of utilising Irish Shipping is a matter that will be considered by the Government but it cannot possibly be considered until all the facts in relation to the matter have been ascertained.
It should have been considered years ago.
Irish Shipping, as the Senator knows, has done very well in the ocean tramp trade but one cannot inevitably deduce from that that they would have done equally well in the cross-Channel trade. It may be that the case made by these companies is fully justified and, if it is fully justified, I take it that in itself would indicate that Irish Shipping could not do anything better.
I can only repeat that we cannot assume, in the present state of our knowledge, that coining is in fact taking place at the expense of the Irish economy. When this tribunal has reported, and I feel certain it will not take two years to do so, as has been suggested by Senator Murphy, I am quite satisfied that whatever action is possible on the facts as then ascertained will be taken with full vigour and promptitude by the Minister for Industry and Commerce. Should there be any monopolistic conditions imposed by foreign shipping companies to the detriment of the Irish cattle trade, I believe that the Minister who established the Irish Shipping Company in circumstances of world emergency——
Far too late.
——can be relied upon to devote his energies and ingenuity to a solution of the problem. I do not think there is any point in my going into detail, seeing I am starting off from the point of lack of knowledge. We are asking the Seanad to set up a tribunal to inquire into this matter which is of vital importance to the national economy of the country generally, and particularly to the live-stock trade.
I wish to be recorded as dissenting.
