which imposes tax on their operations. We have agreed to participate in these enquiries and went on record at the Ministerial Conference in Tokyo last year of the Consultative Shipping Group which noted the concern expressed that the registration of ships under flags of convenience 'encouraged in general a lowering of standards of safety and of social benefits to seafarers and was affecting the competitive position of their merchant shipping and could lead to a loss of capital, of employment and of taxable capacity', and asked officials to review the position. There have already been some moves in the EEC towards a common system of registry in the enlarged Community. This is a desirable objective and we should do nothing to prejudice it. If we have already opened our register to all and sundry and other member countries have not this would be likely to impede progress.
12. Fourth, the Merchant Shipping Acts are built round the concept that British registry is confined to British and Commonwealth ships. Legislation would be needed to alter this, probably of an extensive character.
13. Finally, the unions are opposed to flags of convenience and a move of this kind would meet strong union resistance.
CONCLUSION
: 14. The arguments cited above against opening the
register are not overwhelming but they are strong and in the absence of any compensating benefit to the United Kingdom economy or that of Hong Kong Mr Pao's proposal is quite unjustified. I would suggest that you might ask Mr Pao what particular benefit he thinks would accrue to the economy of Hong Kong if foreign shipowners with no residential or other connection with Hong Kong were allowed to put their ships on the Hong Kong register.
Is it simply the benefit of the income from the registration fees?
5.