§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Rossi.]
§ 12.27 p.m.
§ Mr. Nicholas Edwards (Pembroke)I welcome this opportunity of drawing to the attention of the House a matter of great importance for the future of my constituency. I am particularly glad that my hon. Friend is to reply, because his Ministry may not have shown sufficient account up to now of the serious situation that we face. I am glad to say that it has been readily recognised in the Welsh Office, and when I approached the Secretary of State soon after the general election, he was quick to appreciate the seriousness of the matter and he immediately arranged for his officials to discuss the whole situation with British Rail.
I understand that a meeting in fact took place between those officials on 7th October and that British Rail has undertaken to keep in touch with the Welsh Office during all their discussions about the future of Fishguard Harbour and before any decisions are announced.
1453 I should like to explain why I believe that Government involvement at this time is vital. The passenger and freight services at Fishguard now provide employment for about 400 people and create the nucleus around which the economy of not just the town, but the whole of North Pembrokeshire depends. It provides, too, the one focal point around which in the future it may be possible to create some light industrial development in an area which is otherwise largely agricultural.
The future of the passenger services and the car ferry to Waterford seems reasonably safe. In due course the present vessel will be replaced by an end-loader. British Rail expects that by 1985 the volume of car traffic to Ireland will treble. Unfortunately, this traffic is purely seasonal, and it does not, therefore, provide all the year round employment.
The vital issue is the future of the freight service. The main Irish freight traffic is now directed, or would be but for the damage to the Menai Bridge, through what British Rail describes as the central corridor and Holyhead, which links the main centres of population on either side of the Irish Sea. This route is fully mechanised and in normal circumstances handles about 100,000 containers a year. In addition—and, it must be said, against the advice of their consultants, although, I believe, rightly—British Rail has decided that it should also maintain a southern corridor through South Wales, but the potential of this route in the foreseeable future is thought to be only about 20,000 containers a year, and at present this is shared between four different concerns and four different routes, British Rail through Fishguard to Waterford, Bell through Newport to Waterford, Irish Ferryings through Newport to New Ross, and B. and I. through Swansea to Cork.
Bell are operating modern vessels and their long-haul ships can compete effectively against the short-haul Fishguard transit with the totally inadequate equipment at present in use. At Fishguard containers are handled but with a crane which can lift only 15 tons and without adequate track or storage space. A bigger crane provides no solution, and if Fishguard is to have a future the port 1454 must be completely modernised so that it can handle large numbers of fully loaded containers.
The situation is complicated and the prospects are clouded by the fact that difficult commercial negotiations must take place to bring about some rationalisation of services in the southern corridor. I do not think that it would be right for me to go into any detail about the nature of those negotiations, except to say that the Irish Government is closely involved, and there is a very real danger of Fish-guard being squeezed out, whatever practical and economic advantages it may possess. This is made the more likely because as a result of the extraordinary structure created by the previous Government. British Rail has no commercial or marketing responsibility for the freight liner service in which it has only a 49 per cent. interest. This responsibility, for the freight liner service, lies with the National Freight Corporation which has no direct interest in the future of the port and no interest either in any savings in real operating costs which arise because both freight and passenger services are operating over the same line.
It seems clear that without Government intervention the fate of Fishguard Harbour may well be decided by a variety of bodies with no direct interest in it, and with powerful motives for backing a different horse. The truth is that the employment prospects for Fishguard and, with them, of a large part of north Pembrokeshire rest very largely with the Irish Government and with the other interests involved, the National Freight Corporation and so on, to whom Fish-guard is no more than a far away country about which they know little. But make no mistake, the birds will come home to roost. If the harbour closes for freight handling it is the people of Fishguard, the people of Pembrokeshire, who will suffer, and it is the Government who will face the almost impossible, and certainly very costly, task of repairing the damage, and, incidentally, of maintaining what will be an increasingly unprofitable, but, none the less, essential, railway system west of Swansea.
That is why I believe that the Government cannot just stand on one side but must actively involve themselves in the negotiations and make certain that the 1455 economic, social and political considerations are taken into account before it is too late.
This brings me to a more general issue, important over a wider area. Modernisation of the ports will cost money, a substantial capital sum. If it were available it might tip the commercial balance in Fishguard's favour, and I hope the Minister will tell me and the House whether under existing legislation this must come from British Rail or whether there is any other way in which it can be made available.
I would suggest that we have in general a more flexible approach to the problem of uneconomic or temporarily uneconomic railway lines such as this. At the present time grant aid is given, quite rightly, to unprofitable passenger services for social reasons—but not to freight services, even when they are essential for economic development. I am not suggesting that uneconomic freight services should be subsidised indefinitely, but I do suggest that it is folly to discontinue them in those areas where enormous efforts are being made to attract new industrial investment. In such areas the maintenance of the railway service can be a crucial factor, and can be more valuable than half a dozen advance factories.
It is so in Fishguard, it is so in south Pembrokeshire, where the railway is threatened with closure just at the moment when it is hoped to attract light industrial infilling around the refineries at Milford Haven. Vast quantities of Government money have been poured into the international oil companies to help them build in Pembrokeshire the refineries they would have built there in any case. The Government are now rightly seeking, above all through the Local Employment Acts, to concentrate help where it is most needed, and for improving the infrastructure. In areas like West Wales the one essential requirement is good transport facilties, and I would surrender almost all the other aids in exchange for those. Road and rail communications represent the arteries which carry the life blood of the community. Cut those arteries and the community dies. Free them from obstruction and West Wales can look forward to new life and energy.
1456 I am not asking the Government to prop up something without a future. I am asking them to show in their policies for, and in their attitude towards, railways and transport and the development areas, a new flexibility and a new realism. It is an extraordinary concept to regard freight and passenger services as entirely different—the belief that it is right to subsidise a train carrying people and not a train carrying goods made by those people. Of course, there may be—there are—areas where there cannot be and could never be the volume of goods by rail to justify its continuation, but where there is a possibility of growth we should seek to develop, and we should seek to stimulate trade, opening the prospect of new employment, a new prosperity, and also, for the future, a substantial saving of Government funds.
The railway west of Swansea is costing in grant aid at present £276,000 a year to maintain. If the freight service can be stimulated and developed to Milford and Fishguard, the whole line being treated as a whole, it could become self-supporting. In 1969, 113,000 tons of goods were shipped; this year it will be 150,000 tons, partly as a result of the Menai fire. With a modern container port that amount would at least double.
I ask the Government to do two things. First, to recognise the need for these railway services and to approach the whole problem with more flexibility and more determination to overcome it. Second, to recognise that the future of Fishguard harbour, and therefore the prosperity of a large part of my constituency, depends on their active intervention at this critical point in the port's history.
§ 12.40 p.m.
§ The Under-Secretary of State for the Environment (Mr. Paul Channon)I am sure we all agree that my hon. Friend the Member for Pembroke (Mr. Nicholas Edwards) has done a service to his constituency by raising this extremely important question. I think that he has also done a service to Wales generally by taking this opportunity to raise in the House the problems and uncertainties which face the port of Fishguard. I think that the electors of Pembroke will feel that my hon. Friend will certainly be a sturdy champion of their intersts in the future.
1457 Unfortunately, the sort of situation which my hon. Friend has described this morning is by no means peculiar to Fishguard. He mentioned the problem of attracting new industries to more remote parts of the country. This problem is a continuing one, and it is a problem to which the Government will be giving increasing attention. I think it is fair to says that evidence of the Government's awareness of the problem is provided by the fact that responsibility for transport planning and regional policy is now vested in the same Department, and I hope that this will be a considerable improvement on the practice that has existed in the past.
In our regional planning my right hon. Friend will, of course, keep in close touch with the Secretaries of State for Scotland and Wales. I know that my right hon. Friend the Secretary of State for Wales is well aware of the problems of Fishguard. Indeed, before this debate I had the opportunity of discussing them with him. He and his Department have recently been engaged in discussions with my hon. Friend, with the Fishguard and Goodwick Urban District Council, and also with the British Railways Board about the whole question of the so-called "Southern Corridor" Irish shipping services.
I think that it might help if I give a little background information about Fishguard and the services that operate from it. Fishguard is a railway port, and the board's shipping division has two vessels which run daily services between there and Rosslare carrying passengers and accompanied cars. During the summer a daily boat train runs from Paddington to connect with the sailings, enabling passengers to travel through from London to Cork or Dublin in a day. I have on several occasions had the chance of travelling to Dublin and to Cork from Fishguard, and I know that this is indeed a most enjoyable service. There is also a motorrail service which runs daily from London in the summer. A third vessel operates a freight service throughout the year from Fishguard to Waterford. Besides general cargo, this vessel carries containers for the freightliner service from Swansea.
My hon. Friend concentrated mainly on the freight problem, and I shall come to that in a moment. I should like to deal first with the passenger services. I 1458 have been told by the Railways Board that the prospects of these passenger services appear to be good. Over the last 10 years the number of rail passengers carried has remained roughly constant at about 160,000 a year. The number of car passengers has risen from 24,000 in 1960 to 177,000 last year, a really enormous increase. The board forecasts that this rise in car traffic will be maintained. I am told that it foresees the need for a replacement vessel with a larger capacity in the not-too-distant future. This would be a multipurpose ship with end loading roll-on roll-off facilities, enabling commercial vehicles to be carried as well as cars.
Those ideas are still at a preliminary stage and the approval of my right hon. Friend would be required before the board could undertake the necessary investment, but I think the fact that the board is giving serious thought to this possibility is sufficient evidence of its confidence in the long-term future of the passenger and vehicle service.
The rail service to Fishguard is not grant-aided. The number of passengers using the boat trains is steady, and the rail link appears to have a future. I think that it is also relevant that there is heavy petroleum traffic from Milford Haven to South Wales which uses much of the same route. Thus any suggestion that Pembrokeshire will soon be denuded of its rail services would, I think, be unjustified.
As my hon. Friend rightly said, it is the future of the freight services which is much more uncertain. The problem stems essentially from the fact that there are four competing freight services operating across the Southern Irish Sea. In addition to the British Railways service from Fishguard to Waterford, their competitors run services between Newport and Waterford, Newport and New Ross, and Swansea and Cork. At present, the freight traffic on the Fishguard route is not heavy. Total freight handled by the port last year was about 36,000 tons, which by present-day standards is not large.
I think that one reason for the low volume of freight traffic is undoubtedly the fact that the handling facilities on land are outdated. For example, the crane at Fishguard has a capacity of only 1459 15 tons. It is clear that heavy new investment would be needed if the railways were to develop the service in the way that my hon. Friend would like to see. I think he would accept that in planning any new investment the board is bound to operate like any other commercial organisation. It must forecast the likely business which the new facilities would bring. It must take account of the services offered by its competitors. It must ensure that there will be a satisfactory pay-off from the investment.
I am told by the board that it has concluded that the answer to the problem of the over-capacity on this southern corridor is rationalisation of the services, and the board is at present discussing with one of the other operators ways in which the freight services can be integrated. I must stress that it by no means follows that rationalisation means the withdrawal of freight from Fishguard. The board recognises that Fishguard has considerable advantages as a port. It is well served by rail, and the sea crossing to Ireland is shorter than from any other South Wales port. Rationalisation seems the only commercially sensible course, but it is too soon to say what form this rationalisation would take.
I know that there are fears that were the railways to withdraw the freight services to Ireland from Fishguard the rail freight service to Fishguard would also be withdrawn. I know that my hon. Friend feels that if that were to happen there would be very serious consequences for the economic prosperity of the town. It is, of course, for the board to decide whether to continue its rail freight services in those circumstances, and it is not in a position to answer what is at the moment such a hypothetical question, I shall, however, write to the Chairman of British Railways to draw his attention to my hon. Friend's comments this morning.
My hon. Friend has rightly drawn attention to the social problems which would arise were any decision taken in the future to stop the rail freight services. I assure my hon. Friend that my right hon. Friend the Secretary of State for Wales has this very much in mind, as I know from my discussions with him, but I shall draw his attention to what my hon. Friend has said today.
1460 My hon. Friend knows that the container service through Fishguard is operated by Freightliners Ltd., with the railways providing the shipping facilities. There are fears that this might preclude the proper development of the services. I do not think that those fears are justified. Freightliners Limited is a jointly-owned subsidiary of the British Railways Board and the National Freight Corporation. The railways are represented on its board and participate in the future planning of the business. There is no reason why these arrangements should militate against the freightliner service through Fishguard so long as it is profitable.
I now come to the second subject in my hon. Friend's Adjournment debate—the specific suggestion that the Government should have power to pay grants towards the cost of operating unprofitable railway services in development areas. As he knows, we are not insensitive to the problems of the development areas. I shall say something later about the positive steps that are in hand to aid their prosperity. But in terms of freight transport the Government's policy is that freight should move by the means to which it is economically most suited, as endorsed by the free choice of the consignors. The Government are not attracted to the policy of using artificial restraints and inducements in an attempt to force a transfer from one mode to another, provided that proper account is taken of safety and similar considerations.
A subsidy to rail freight would distort the natural operation of the market and could be justified only if its benefits outweighed the economic cost of so doing. If I understand my hon. Friend aright, he is arguing that the economic benefits from such a scheme would outweigh the disadvantages that I have outlined.
§ Mr. Nicholas EdwardsDoes not my hon. Friend agree that the reverse of what he has just said is true, and that if people see the freight service apparently being deliberately run down by British Rail, and the prospect that it will be discontinued, it will affect their economic judgment in deciding whether they should use that rail service in the future?
§ Mr. ChannonWhat I hope to do is to talk a little about rail freight services in general. My hon. Friend this morning 1461 has made a case on cost-benefit terms. He argues that it would be the most efficient use of Government money to operate a service of this kind. I am pointing out that there are considerable disadvantages to what he suggests. Nevertheless, he is making out a case that the practical and economic advantages to the Government outweigh those disadvantages, and I shall hope to tell him shortly that in these economic terms the Government will naturally consider his suggestion.
I am a little worried that on the benefit side my hon. Friend may have exaggerated the importance of rail freight services on the prosperity of an area. The House may be interested to know that of the internal freight transport in this country only 11 per cent. moves by rail—and that includes bulk traffics such as coal and iron ore. If those traffics are excluded, the total tonnage moved by rail is approximately 3 per cent. of that which moves by road. That being so, I should take some convincing that the withdrawal of rail freight services—if that were proposed—would necessarily be so damaging to the prosperity of a town like Fish-guard as my hon. Friend suggests.
But although my initial reaction to this suggestion is that the cost of subsidising rail freight services, even in a development area, outweighs the benefits, I must point out that we accept that the more remote and less prosperous parts of the country should be given economic assistance and incentives to encourage new businesses to establish themselves there. In his statement last week my right hon. Friend the Chancellor of the Exchequer announced that a review of regional policy is already in progress. It has already been decided that additional public expenditure, building up to £25 million a year, will be devoted to the improvement of the infrastructure and to building grants in the development areas.
Other measures announced recently by the Chancellor include, for example, free depreciation on capital expenditure on new machinery and plant. My hon. Friend takes the view that a subsidy for rail freight would provide a more effective incentive than most of these other plans. I shall draw my hon. Friend's remarks to my right hon. Friends who are principally responsible for the review 1462 of regional development policy and ask them to consider his points in respect of a rail freight subsidy—although I must say that at first sight I should not wish to raise my hon. Friend's hopes, because it seems to me that the measures already announced by my right hon. Friend are likely to provide a more effective incentive to industry in development areas than a subsidy on rail freight. Nevertheless, any idea that my hon. Friend wishes to put forward will receive the most careful consideration. I can assure him that what he has said today will be carefully studied.
What my hon. Friend has told us this morning is a graphic description of the sort of problem that faces many remoter areas. The Government are keenly aware of the sort of problems that can arise when rail services—either passenger or freight—are withdrawn. The main interest in today's debate has centred on freight services, which fall within the Railway Board's management responsibilities. I have already promised my hon. Friend that I shall write to the Chairman of British Rail drawing attention to what he has said. My hon. Friend knows that the railways have a statutory obligation to pay their way, and are obliged to take decisions in accordance with normal commercial principles. It would be wrong for the Government to seek to influence their commercial judgment. We support the principle that economic assistance should be provided to the development areas, but such assistance must be carefully scrutinised to ensure that it represents real value for money. That is the criterion that my hon. Friend is suggesting this morning, and in that light I shall scrutinise what he has said.
If there are any other points that I have not been able to answer fully this morning, I shall write to him about them in the future, but I can assure him that after the extremely energetic action that he has taken in the past few months in pressing the problems of Fishguard upon my right hon. Friend the Secretary of State for Wales and other Departments concerned, we are well aware of his point of view, and of the importance of this problem. He has certainly done his constituents a very good turn by the energetic action that he has taken and is continuing to take on their behalf.