MERSEY DOCKS AND HARBOUR BOARD (Hansard, 30 November 1970)

§ The Minister for Transport Industries (Mr. John Peyton)
May I begin by offering the right hon. Gentleman the Member for Sheffield, Park (Mr. Mulley) my profound apologies for the fact that arrangements which were carefully made for the transmission of copies of this statement to him and his colleagues miscarried slightly. If they were late I am sorry.
With permission, Mr. Speaker, I should now like to make a statement about the Mersey Docks and Harbour Board.
As the House is aware, the Mersey Docks and Harbour Board is in serious financial difficulties. The Board first came to see me at the end of July and, at my suggestion, appointed consultants to examine its financial position.
The Board informed me earlier this month that it had decided on far-reaching steps to restore its revenue position, but was faced with cash deficiencies totalling some £20 million over the next three years mainly to meet bond redemptions falling due in that period. It envisaged two alternative ways of dealing with this. First, Government bridging loans or 904 guarantees to cover the expected deficiencies. Failing these it recognised that some form of moratorium on the repayment of bonds and interest would be necessary, together with a revision of its capital structure. It later became clear that, even if this was done, it would still require some means of dealing with smaller but still substantial cash deficiencies over the months until a Bill promoted by it could become law.
Some of the major users of the port, with whom I have held discussions confirmed at a meeting this morning that they could not help with bridging finance.
The Board announced on Friday that it was, as a preliminary measure, depositing a Bill to provide for the reconstruction of the Board's capital debt and interim changes in the composition of the Board. It added that ways were being explored of obtaining sufficient finance to meet the Board's commitments, including maturing bonds, until the time that the Bill could be passed into law. On the same day I communicated to the Board the Government's decision that it would be inappropriate and contrary to their general policy to make any contribution towards the bridging finance.
The Board has agreed to co-opt immediately Mr. John Cuckney and Sir Matthew Stevenson and to elect them as Chairman and Deputy Chairman respectively. They replace Mr. Joseph Taylor, who has had to retire on health grounds, and Sir Joseph Cleary, who told me that he was ready to take any step, including giving up the post of Deputy Chairman, to help the recovery of the port to which he has given such devoted service. I would like to offer my sympathy to Mr. Taylor and to thank him and Sir Joseph Cleary for the part they have played during what has been for them a very painful period.
The Board has agreed to delegate its main functions to a small Executive Committee led by Mr. Cuckney and Sir Matthew Stevenson. The Committee will also include Mr. Emerson of I.C.I. and Mr. Wall of the Transport and General Workers' Union, both of whom are at present members of the Board; they will be joined by Mr. R. L. E. Lawrence (General Manager of the London Midland Region of British Railways) and perhaps one or two others.
905 The Government have already agreed that their loans made before the deposit of the Bill shall be written down in the same way as the private capital. We are also prepared to enter into new commitments to provide loans for the completion of the Seaforth scheme as at present planned and for other approved capital works.
This still leaves the problem of dealing with the cash deficiencies which the Board foresees in the first half of 1971. The Government have decided to apply for the appointment of a receiver of the rates. This is intended to protect the financial interests of the Government and the other secured creditors. It is important to understand that such an appointment would not and could not be for the purpose of winding-up the undertaking; on the contrary, the object would be to secure the payment, out of the rates, of the expenses necessary for the continued operation of the Port.

§ Mr. Mulley
I am grateful to the right hon. Gentleman for his explanation for the delay in our receiving a copy of the statement. I accept his apology.
The right hon. Gentleman will be aware that this is a very serious statement which we shall need to consider very carefully. May I ask him even at this last moment to reconsider his decision not to make some bridging finance available so that our major port shall not have the indignity of being run by a receiver?
What is the right hon. Gentleman's assessment of the impact of this matter on the future income of the employees of the Board? What does it import for the future of the Board's pensioners? In view of this serious development on Merseyside and the right hon. Gentleman's recent remarks to the Institute of Transport, is it not urgent that we should have the Government's promised statement on their future policy for the ports so that we can debate what they intend?

§ Mr. Peyton
To answer the last question first, I have recently had some recommendations from the National Ports Council on ports policy generally, and I am considering these as a matter of urgency. I do not regard, and never will regard, nationalisation of the ports as being anything approaching a helpful solution.
906 The right hon. Gentleman suggested that the port of Liverpool would now experience the indignity of being run by a receiver. That is wrong; it is a misconception of what has happened. A receiver in the case of a statutory trust port, as is Liverpool, will be a receiver of the rates only. He will not be responsible for the management of the port, nor will he be able to have recourse to the assets of the port. He will simply receive the rates.
I acknowledge the importance of the points raised by the right hon. Gentleman about workers and pensioners. The Government believe that the arrangements I have outlined offer the best prospect for the port, but this is a time for realism all round. Perhaps we could all learn some rather bitter lessons from the past.
I am sure that the right hon. Gentleman will join me in expressing the hope that everyone concerned with the port will now do their best to ensure that it has a future.
The point raised by the right hon. Gentleman about the pensioners is one with which I am particularly concerned. I expect, and I am advised, that the receiver will have power to pay these. Should matters turn out otherwise, I should need to reconsider the position.

§ Mr. Selwyn Lloyd
I warmly welcome the Government's support for the Seaforth scheme, but will my right hon. Friend bear in mind these considerations? First, the port of Liverpool must continue. It is physically possible for only a very small proportion of the cargoes that go in and out of the port to be handled at other ports. Second, it is absolutely necessary that the position of the pensioners should be safeguarded. Third, in handling the question of the bonds, I hope that my right hon. Friend will have regard to the credit-worthiness of this sort of public utility. Finally, far-reaching plans have been made to change this very large deficit into a surplus, plans which will need, as my right hon. Friend said, realism on the part of all concerned. Does not my right hon. Friend think that there will have to be some sort of bridging arrangement until those plans can be put into effect?

§ Mr. Peyton
On the question of Seaforth, the Government are committed to a total expenditure of nearly £40 907 million, of which about £16 million has already been spent. This leaves the Government still with the prospect of finding another £24 million for the Seaforth dock.
I accept what my right hon. and learned Friend says about the importance of the port of Liverpool. Indeed, 24 per cent. of our general cargo exports go out through the port and a very substantial share of our crude oil imports comes in through the Mersey.
I have already commented on the position of the pensioners, and I note what my right hon. and learned Friend has said. I note also what he has said about the bonds and I recognise the importance of the issue of credit-worthiness.
On the question of converting the deficit into a surplus, since the Board received the report of the consultants there has been an increase in charges of 25 per cent. and a further increase is in contemplation, and the Board is making arrangements to dispose of surplus land and assets. I believe that the Board has made in the past few weeks a very realistic attempt to grapple with its problems and I hope that the Committee to which I have referred in my statement will be able to take those efforts a good deal further.

§ Mr. Heffer
Will the right hon. Gentleman explain to the House how the proposals he has put before the House will help forward the development and expansion of the port of Liverpool? Is he not starting this the wrong way round? Will he look at the Touche Ross report issued in January to the National Ports Council, which concludes that the four continental ports which were studied had a massive advantage over the ports of London, Liverpool and Southampton because of the immense financial assistance granted to those four continental ports by the continental governments concerned? Is not the right hon. Gentleman's decision to put the port of Liverpool into the hands of the Official Receiver—even though perhaps a bridging operation—a scandalous one and an abdication of responsibility by the Government?

§ Mr. Peyton
I am conscious of the fact that the hon. Gentleman can play a very important part in the future of the port of Liverpool, but I hope that he will try to pursue some slightly different course 908 from that he has embarked upon in his supplementary question.
There is no question of the Official Receiver being involved in this. The Official Receiver is concerned with the winding-up of companies. I have tried to make it clear to the House that with a statutory trust company no ordinary wind-up procedure is even possible and that the receiver the appointment of whom the Government now seek is appointed to receive the rates only and is not concerned with the management of the port, has no powers to wind it up, nor can he have recourse to the assets.
The hon. Gentleman asked what there was in my announcement that offered a prospect for the development and expansion of the port of Liverpool. I must tell the hon. Gentleman that in my view the prospects for the expansion and development of the port of Liverpool reside in Merseyside and not in Ministers.
The hon. Gentleman mentioned the question of subsidies. I do not expect the hon. Gentleman to agree with me, but I believe that the country has become sick of subsidies, and it is time we got away from them.

§ Mr. Tilney
As Merseyside, where tens of thousands are affected directly or indirectly by the Dock Board's difficulties, must apparently now find its own solution to a problem which, even through only a partial default by the Board, threatens, in the view of some investors here and overseas, the credit of all Merseyside local authorities, will my right hon. Friend consult his Ministerial colleagues as to the quickest means of giving the eight authorities with which the Board deals the powers to guarantee, if they so wish, in appropriate fractions the capital and the interest of any new borrowings by the Board, in the same way as some European bonds were guaranteed by countries, including Britain, before the war?

§ Mr. Peyton
I am grateful to my hon. Friend for his suggestion. I have been in touch with the local authorities. Indeed, I saw them when I was in Liverpool on a recent visit. I will certainly take account of what my hon. Friend has said. If the local authorities concerned should wish to see either my right hon. Friend or myself, we would be delighted to see them.

§ Mr. Dell
Can the right hon. Gentleman make a categorical statement on the subject of pensions? Is he not aware that statements were made to pensioners about the future of their pensions and it is time the Government made a statement to give pensioners security in what they have earned? Regarding the future of the port, is it not the practical situation that the Government have taken over the running of the port without being willing to provide the finance necessary to sustain a proper level of activity and, in a sense, have tried to force private institutions and individuals to produce the money which the Government refuse to produce and which they should produce?

§ Mr. Peyton
The steps that I have announced today are steps which I have taken with great reluctance but which I believe to be for the benefit of the port. I assure the right hon. Gentleman that there is no intention on my part or on the part of the Government generally to become immersed in the minutiae of running the port. That is why I sought as early as possible to obtain an executive committee which will take the full responsibility upon its shoulders.
As for the right hon. Gentleman's point about pensions, I understand his concern about this, of course. But I think that I should not go beyond what I have said already, namely, that I am advised that there is no reason why the receiver should not pay out these pensions. If matters should turn out otherwise, I will of course urgently look at the position again.

§ Mr. Marples
Will my right hon. Friend agree to call a meeting of all those interested on Merseyside, including the business community, the Chamber of Commerce, all local authorities and workers in the docks, to see whether all interested would make a contribution to the finances, and then reconsider his decision about the finances?

§ Mr. Peyton
I understand my right hon. Friend's concern about the situation. He has been in touch with me a number of times during the past few weeks. I could not undertake to reconsider my decision, though I would be willing always to meet my right hon. Friend or any representatives of Merseyside to examine any suggestions that they may make or look at their anxieties.

§ Mr. Dunn
Is the right hon. Gentleman aware that there is considerable doubt and anxiety about whether, in the case of a statutory port trust, the appointment of a receiver is legal, and that that doubt is based upon the 1858 Act and on the revision of the Mersey Docks and Harbour Board provisions in 1965? Will the right hon. Gentleman look further at the financial problems, bearing in mind that the Mersey Docks and Harbour Board has no way of raising money in the interim pending the introduction of its new Bill and its acceptance by this House? Is he aware that his announcement creates great problems, and will he look again at the possibility of making available bridging finance?

§ Mr. Peyton
The hon. Gentleman properly raises a point about the uncertainty of the law. I cannot go further today than say that I am advised that the procedures now undertaken are perfectly proper and likely to be successful. The hon. Gentleman's other point is the same as that raised by hon. Members on both sides, asking me to reconsider the Government's decision not to provide bridging finance. I am afraid that I cannot do that.

§ Sir G. Nabarro
While congratulating my right hon. Friend on the financial propriety of all that he has said today, which is exactly in consonance with the new direction of this Government's policy, having regard to the fact that no finance will be available from the central Government, can my right hon. Friend say what steps he is prepared to take to collaborate with the Mersey Docks and Harbour Board and other interested authorities, including local authorities, to raise the necessary finance on the open money market and pay the appropriate rate for it?

§ Mr. Peyton
All that I can say in answer to my hon. Friend is that the port of Liverpool will need a better financial position before it can go to the money market. As for the point about safeguarding the cash flow and raising money for the Board's current requirements, I ought to make it clear that if a receiver is in post he will receive the charges of the port, and having paid the outgoings, will make available to its secured creditors, including the Government, such balance as may be available. Thus, the 911 cash requirements of the port will be looked after from current earnings.

§ Mr. Ogden
Will the right hon. Gentlemen compare the strident demands made by Conservative hon. Members representing Merseyside constituencies that the Labour Government should help Cammell Laird with their abject acceptance of his statement today? Is it correct that the proposals which the right hon. Gentleman made to his right hon. Friend and overlord and the Cabinet were a good deal more favourable and helpful than the decision that he has had to announce today? Can he deny that there is no significance in the fact that this new example of Conservative economic policy for development areas is not being used to benefit an area which contains some of the strongest and most loyal supporters of the Labour Party?

§ Mr. Peyton
I dismiss that last remark of the hon. Gentleman as being rather unworthy of him. On the general point, I can only say that what I have announced I believe to be for the benefit of the port of Liverpool—[Interruption.] I am sorry that the hon. Gentleman persists in ignoring what seems to be an important point of substance, namely, that the Government are in process of investing £40 million in the creation of Seaforth. The hon. Gentleman chooses to put that on one side as being of little importance—

§ Mr. Ogden
With respect, it is a first-class development. Some of us went to see it a little while ago. It is fine. We have to ensure that those dock gates are kept open.

§ Mr. Peyton
The Government are providing a £40 million key.

§ Mr. Pardoe
Will the right hon. Gentleman go a little further on his consultations with local authorities? Has lie been made aware by local authorities in the area that, with his help, they would be prepared to provide bridging finance? What discussions has the right hon. Gentleman had with the North-West Economic Planning Council about the effect of his decision on the economy of the North-West in general and the development area in particular?

§ Mr. Peyton
I hope that the Chairman of the Council, whom I saw not long 912 ago, will not hesitate to let me know his views now that I have made this announcement. I am sure that he will not. I do not think that I can usefully add to what I have said.

Several Hon. Members
rose—

§ Mr. Speaker
Order. We must move on.

§ Mr. Heffer
On a point of order. I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely, the refusal of the Government to give financial aid to the Mersey Docks and Harbour Board to enable it to continue its day-to-day operations without a receiver, thereby placing the future of the Port of Liverpool and of the whole of Merseyside in grave jeopardy. This is a specific matter because we are here dealing with the second largest port in Britain and the port which handles the biggest volume of exports. It is a matter of the most vital importance, not only to the future of Merseyside but to the economy of the whole country.
The point made by the Minister for Transport Industries that the Government are continuing their financial support for the Seaforth project is merely the continuation of the policy of the previous Government and has nothing to do with the day-to-day work of the port of Liverpool.
The second point that I would make is that it is important because, if immediate financial assistance is not forthcoming, the port can and I think will find itself in grave difficulties; because many of the workpeople could be thrown out of work in an area which has already high levels of unemployment; and because the Government have given a very narrow interpretation of Section 11 of the Harbours Act, 1964.
For those reasons, I urge that the House should be allowed to debate this matter at the earliest opportunity.

§ Mr. Speaker
The hon. Member for Liverpool, Walton (Mr. Heffer) asks leave to move, under Standing Order No. 9, the Adjournment of the House for the purpose of discussing a specific and important 913 matter that he thinks should have urgent consideration, namely. the refusal of the Government to give financial aid to the Mersey Docks and Harbour Board to enable it to continue its day-to-day operations without a receiver, thereby placing the future of the Port of Liverpool and of the whole of Merseyside in grave jeopardy. I am satisfied that the matter raised by the hon. Member is proper to be discussed under Standing Order No. 9. Does the hon. Gentleman have the leave of the House?
The leave of the House having been given—

§ Mr. Speaker
Leave having been given, the Motion for the Adjournment will now stand over until the commencement of public business tomorrow, when a debate on the matter will take place for three hours under Standing Order No. 9(2).