§ Mr. Prescott
I beg to move amendment No. 19, in page 11, line 25, leave out 'determine' and insert 222'alter in accordance with the provisions of this section.'
§ Mr. Deputy Speaker
With this it will be convenient to take the following amendments: No. 20, in page 11, line 30, leave out from 'person' to 'and' in line 31 and insert 'shall be altered accordingly'.
No. 21, in page 11, line 37, leave out subsection (2) and insert—'(2) The Order made by the Secretary of State under subsection 1 of this section shall require the National Ports Council to maintain such facilities as are required to provide him with an independent assessment of the financial, organisational and manpower problems facing the British Port' s Industry.'
§ Mr. Prescott
We have in these amendments the essential principle of difference between the Government and the Opposition about a centralised authority. The clear intention of the Bill itself is to abolish the National Ports Council, a central authority that was recommended by the Rochdale inquiry into the docks industry in 1962–64, and a central agency that was implemented by a previous Conservative Administration.
Our view—it is as well to make it clear, as it is relevant to the arguments that we are putting forward for a National Ports Council to be retained in some form—is that we have always believed that there should be a National Ports Authority—that is, a central agency with teeth and power to be able to implement the functions and roles that we would give to it and, indeed, as was envisaged in the Rochdale inquiry when it recommended a centralised authority.
We were defeated in Committee on that amendment. Whilst it was at the early stages of the guillotine procedure, I think that we did at least take sufficient time to indicate why, in those circumstances, we felt that a national ports authority was an essential part of the ports industry. Not only was it relevant to the period of the 1960s and, indeed, the 1970s; it is becoming increasingly evident that it is absolutely relevant to the 1980s, and possibly beyond that.
It is not necessary for me to put forward arguments about the National Ports Authority. It is simply for us to address ourselves to the amendments that are before the House this evening, the purpose of which is to retain in some form the National Ports Council. The clause to which we address our amendments deals with the apparent requirement of the Government that on the appointed day the National Ports Council shall cease its functions.
The rest of the clauses in this part of the Bill require cooperation from the people involved in achieving the rundown and the abolition of the National Ports Council and the transfer of some of its functions statutorily to the Government themselves, or, indeed, the transfer of some of the other industrial activities that it has been involved in to a similar body, presumably to be set up by the ports industry itself and financed in a similar way to the National Ports Council, though no doubt it will be a cheaper body. Presumably the levies will be less. We shall wait to see whether that is the case.
We have recognised that the Government's intention in the clause is to abolish the National Ports Council, but we suggest that by adopting the amendment it will be possible for the Minister, by means of a statutory instrument, instead of announcing the end of the National Ports Council to announce that some activities of the council shall cease and others shall continue.
223 Presumably one could do that. It is not a happy way of dealing with the matter, but this is the vehicle on which we have decided to hold our debate this evening. Perhaps one could say that the Minister, if he so wished, could keep the statutory functions that he has decided to retain for himself, namely, the appeals in regard to dues and ships' charges—another subject that we shall be discussing on a later amendment—harbour reorganisation schemes, and, indeed, even the investment decisions that will have to be submitted to the Minister to deal with these matters.
The requirement for the investment of £3 million is interesting. I think that the Minister has ignored the National Ports Council recommendation to him that the limit that he should impose for the review of such investments should be £2 million. It is interesting that he has chosen to make it £3 million, because out of the 13 or 14 investment projects last year only four came to more than £3 million. Clearly this is one way of reducing the work load that he intends to impose on his civil servants.
Unfortunately—this is one of our arguments for a separate body to make a judgment about these matters—while attempting to lighten the load he is missing some very important investment projects that will determine the flow of traffic and trade in our ports, with consequential effects on a ports industry that, on balance, is only 35 per cent. used. We have a capacity for about 1,000 million tonnes and only 350 million tonnes are going through, with a direction in trade one way or another, either through specialisation in containerisation or, indeed, through the preference of some owners together deciding to use one port, with consequential effects upon others, which means that that investment decision determines not only the trade flows but, inevitably, the possible economic problems that the ports of Liverpool, London, Bristol and elsewhere will be faced with. We do not think that that is a particularly wise move, but we understand why the Minister wants to limit the amount of resources that he has to make the assessment.
What we are doing is reducing that amount of assessment. It is a matter of judgment whether it is better done by the National Ports Council or the Civil Service. I am bound to say, from my reckoning, that the National Ports Council, whose judgments I have not always agreed with, is better placed to provide a continuity of assessment in situations of that kind.
Our amendments are therefore designed to retain the National Ports Council in some limited roles. If the amendments are accepted the Minister will have a chance to reconsider the role of the council and perhaps a more limited function for its activities. Clearly, one of the most important ones could well be the maintaining of an advisory role to the Minister himself. Indeed, I think that he is nodding to my assessment that the limited resources that he has available to him in the ports directorate—if that is what it is called—of his Department are a factor in determining what scale of investment should be considered.
If that is so, I think that in those limited circumstances the National Ports Council, if maintained in an advisory role, would be of very great assistance to the Minister in assessing the future ports problems in terms of finance, organisation and manpower, which clearly the ports are presently plagued with, and have been for the last decade or so.
224 We recognise that the Minister would not wish to maintain the present powers of the National Ports Council—the limited statutory powers that it has had—such as the right to be consulted before going to the Minister. If he wishes to reduce them, so be it. It is not a choice that we would make, but our amendments would allow him to decide whether the council, in some form or other, should be retained, and certainly, perhaps, be able to do some of the things that it does at present.
In the circumstances I suggest that the council has an important rôle, because we foresee a crisis situation developing in our ports industry. In Committee and on Second Reading there was clear evidence of a realisation by the Secretary of State that all is not well in the ports industry. The right hon. Gentleman finds that he must make a reassessment of the policy objectives that he stated when he first took up the office of Secretary of State.
I do not intend to reiterate the "brave new world" statements made by the right hon. Gentleman at that time, but by his firm pronouncements that he believed the less intervention the better, as he processes the various pieces of legislation he will probably feel that that is the best advice. The reality, however, is that he cannot stay out of these matters. The problems of the ports of London, Liverpool and Bristol are of such a nature that he is bound increasingly to intervene. While he may have said that he had no intention of intervening in these matters, he is being increasingly dragged into them.
If that is the case—and legislation before the House shows clear evidence of such intervention—he will have to make judgments. In those judgments he will be assisted by the Civil Service. No doubt the Civil Service gave him advice in respect of his first piece of legislation. He may not have taken the advice of his civil servants. He clearly did not take the advice of the National Ports Council, hence the mess that he is getting himself into now.
I do not know what the right hon. Member's civil servants' advice was, but presumably he acted on it when we had the London Bill. The Opposition told him then that within a short time he would be bringing in a Bill for the port of Liverpool. Right on cue, just before Christmas, there was money to extend the loans to that port and to extend its operations. Now we have a Bill involving hundreds of millions of pounds to deal directly with the problems of Liverpool and London. No doubt when we discuss that Bill there will be other ports which, we may equally predict, will have similar problems, to which the Secretary of State will have to address himself.
We now live in a more realistic climate, and the Minister recognises that. The former ports policy was subjected to a crisis in the 1970s, when the former hon. Member for Yeovil, Mr. Peyton, did exactly the same thing, and rapidly made a U-turn. We have witnessed the same here.
The Minister now has constantly to refer to various types of management consultant bodies, or accountants. In the case of London, the Labour Government did the same. They went to accountants—Peat Marwick Mitchell and Co., and Price Waterhouse and Co. The Minister therefore has to go to accountants who do not carry out a six-months' survey. In the case of London, the firm is still surveying the matter, and in Liverpool the firm will continue. The reason is that the financial disciplines that each Secretary of State hopes to impose on port authorities require regular checking. Unless the Minister is prepared to use his civil servants to that end he has to rely on a highly specialised 225 group of people. No doubt they have specialised skills in respect of the port industry to meet the charge that they have taken on. In those circumstances the Minister is actually going to the private sector's National Ports Council, or to accountants, to give him advice.
When the Minister considers the matter, and particularly when he brings forward his statutory instruments, we hope that within 12 months he will find it wise to keep on some of the people in the National Ports Council, who presumably may find jobs with the accountants whom the Minister will have to employ to assist him with the problems of various ports. Clearly he will need advice, not only on investment decisions but in respect of the entire issue of dock redevelopment schemes to be embarked upon by the Department of the Environment. Manpower problems, too, will be considerable.
I submit that it is worth putting on record the fact that when we see the decline in manpower in this industry, from 130,000 in 1966 down to 76,000 in 1976—which is a 45 per cent. decline—and with a further decline of 30 per cent. envisaged by 1985, the Government will certainly need advice on the problems. I hope that the Government will act on advice, because in the measures which they proposed for intervening on the labour scheme, which everyone thought was sacrosanct and would not be interfered with, the Government' actions interfered to such an extent that when I visited Aberdeen last week I found the dockers on strike. We warned the Minister that that would happen if he sought to have first-class and second-class dockers in respect of redundancy schemes.
The Minister went ahead, and he did it without taking advice. He did not talk to the port employers. They had the shotgun marriage that we had. We were delighted to have five minutes in the Secretary of State's room. He must have been dashing around all afternoon from what I saw of the various parties talking to him in the hour or two that he had. He was a very busy man. I am surprised that he found five or 10 minutes for us. That is not consultation. The industry's protests must be as evident to the Minister as they are to us. If that is the type of consultation that the industry may expect from the Secretary of State in respect of these explosive political and economic problems—which will put considerable burdens upon it—the industry's view is that it will be left with a higher level of redundancy payments. Many who have withdrawn their redundancy payments will not accept them as the minimum.
In that area alone, advice is much needed. The Minister cannot seek consolation from the fact that the industry itself will give that type of advice to him. He needs independent advice which does not conflict with the interests of individual ports. If he asks the ports to achieve a greater level of efficiency and productivity, he will be asking the port industry to be critical of some of the ports in its own trade association, identifying those that are more efficient than others. Frankly, it will not happen, because trade associations do not work like that. The National Ports Council did so. It gave a proper assessment of these problems. Efficiency and productivity problems are relevant matters for all of us to consider. In the matter of advice, it is important that they should be considered. When we know the low price paid for the National Ports Council we see that this is a bit of ideological business, motivated by Mr. Polanski, who wants to make his contribution from the Department of Transport to the 226 ending of quangos. But he is making us less well off, because the advice will not be as independent, objective or full as I believe the Secretary of State needs in the troublesome waters that he will face in the future concerning the problems in the port industry.
The future problems are well spelt out in the National Ports Council's annual report, which was given to the Minister. This report was prepared in 1978 for the former Labour Secretary of State. There are great warning signs to the coming problems.
For the Minister today to divest himself of qualified advice, on which he can rely and from which he can make a judgment and which has been proved by time, is to make himself weaker and less able to deal with the problems. If the Minister accepts the amendment he will have time to rethink the situation and possibly come back to the idea of retaining the National Ports Council in an advisory rôle, as he does with the accountants and management consultants. He is asking them the same questions as he should ask the National Ports Council.
§ 8.30 pm.
§ Mr. Fowler
Some of the comments legitimately made by the hon. Member for Kingston upon Hull, East (Mr. Prescott) in introducing the amendments were raised on Second Reading of the Ports Bill. Doubtless they will be raised again in the Committee proceedings on that Bill.
I agree with the hon. Gentleman that the abolition of the National Ports Council is an important issue. The three amendments reflect the divergence of view between the Government and the Opposition concerning ports policy. That is also a point that the hon. Gentleman made. The Government are firmly of the view that the time is now right for a transfer of responsibility for the future of the ports industry to the industry itself. The ports should have as much freedom as possible to determine their own future, and managements must have full responsibility for their own actions. The ports, in particular those around the country, have for a long time been urging me to relieve them of unnecessary controls. It is probably a unanimous voice coming from the ports industry. They have urged me that the time has come to abolish the National Ports Council, and that, of course, is what we are doing in the Bill.
In contrast to that, the hon. Member for Kingston upon Hull, East, who has great knowledge of the ports industry, offers a number of other proposals. In Committee he offered the idea of a centralised national ports authority, but he has not developed that this evening. The objective of the amendments, which appears to be much more limited, is to provide the Secretary of State for Transport with independent assessments of the problems of the industry. However, I do not believe that those even more limited powers and the even more limited role for the National Ports Council are necessary.
I should like to explain why we believe that the time has now come to abolish the National Ports Council. When the council was set up in 1964 it had a number of major tasks to perform. It followed, as the hon. Gentleman pointed out, the Rochdale Committee of 1962, and the council has successfully implemented and further developed many of the recommendations of that committee. At least some of the credit for the fact that the ports industry is in a much fitter state than it was in 1964 must go to the council. In particular, it has formulated and, in conjunction with the industry, implemented an 227 important programme of port amalgamations and a programme of reconstitution of harbour boards. It has played a major part in the introduction of a commercial approach to ports charging and it has assisted the industry by providing statistics and forecasts and by carrying out and promoting research.
However, it does not necessarily follow that the continued existence of the council represents the best means of securing the further improvements which are still necessary in the ports industry. There is no dispute between the hon. Gentleman and myself that further improvements in the industry are needed. The problems facing the ports are particularly concerned with the adaptation to technological change and are, of course, made considerably worse by the recession. Some ports, notably London and Mersey, have surplus manpower, and all of them need to strive continually to increase efficiency and productivity.
The Government's view is that the problems are clear enough to the ports authorities. There is no need to have a definition of that. But it is only port managements which can take action to put those problems right. It is not a matter of advice to the Secretary of State. Still less, if I may say so, is it a matter of a national ports plan based on the unproven assumption that someone else knows better than the ports industry what is good for it. It is really now a matter of the ports facing up to their problems in the knowledge that the responsibility lies with them.
Of course, we all want a range of ports around the country which are capable of handling the nation's trade. We all believe that they should be efficiently organised and managed, that they should make the best possible use of economic resources and that they should impose the smallest practicable charge on their customers. But the Government, in seeking to put those objectives into effect, would set three conditions for achieving them. The first is that the customer should basically choose which port he wants to use. It is the decision of the customer which should determine how much trade each port gets and, ultimately, which of the ports should prosper and which should not. Secondly, there should be the maximum practicable competition between the ports, because this best serves the interests of port users and of the country as a whole. I simply do not believe that the alternative of greater control is likely to lead to more efficient, more responsive or cheaper services for the customer. Thirdly, the ports must have freedom to settle their own future. Therefore, the Government are seeking to withdraw as much as possible from detailed interference in the industry, and in future they will concentrate on longer-term and major structural issues.
The Bill does not remove from me my responsibility for ports policy. As the hon. Member for Kingston upon Hull, East pointed out, I shall retain the powers which I need to carry out major functions, one of these being the requirement under the 1964 Harbours Act for approval to major port investment. Again, as the hon. Gentleman pointed out, I recently increased from £1 million to £3 million the level below which schemes do not need approval. The exact figure is a matter of balance and judgment, but I judge that that is about the right figure.
I have retained control over investment to ensure that development takes place only where there is a demonstrable need for it, where a customer is ready to use 228 it and where the investment shows a satisfactory rate of return. But, of course, I do not use this power to direct investment to specific ports or to stifle the proper competition between them.
I shall also be taking over a limited number of the council's functions—it is important that this should be understood—which I consider are necessary to the Government's changed role. The main ones are the statutory duty to decide objections by port users to ship, passenger and goods dues levied by port authorities and the collection of a streamlined range of statistics to support the statutory responsibilities. At the same time, the industry itself, acting in particular through the British Ports Association, is taking over some of the council's work. As from 1 April, the British Ports Association became responsible for research and training, and it is currently considering exactly what its role should be in collecting and publishing statistics on behalf of the industry. I am pleased that the BPA is actively engaged in strengthening and enlarging its organisation to perform this new role. The Government look to the association to disseminate advice and good industrial and commercial practices throughout the industry generally.
The council has pointed out, and the Government recognise, that there are still areas of the industry where improvements are required, notably in reducing surplus manpower, in developing facilities to take advantage of technological developments, especially in cargo handling, and in improving the overall efficiency and productivity of the ports. Some of these matters will need concerted action by the association, often in co-operation with port users.
I should like to mention two examples, which are important. First, there have been discussions about taking forward work which has begun on measuring and comparing the way cargo is handled in the ports. Proposals for developing this work were agreed last year between the BPA and the port users' representatives, and it is in the national interest that this work is put in hand. Secondly, proposals were agreed last year for consultative machinery through which the BPA, the General Council of British Shipping, the CBI and the Freight Transport Association should collaborate. Again, I regard those as constructive steps, and I look forward to the machinery being established. These are examples of ways in which the industry is finding practical solutions more effectively than would be possible if it felt that it was being dictated to by another central body.
We should not deceive ourselves by talk of independent assessment, which underlies the amendment. In my view, the problems of the industry are clear enough, and certainly I do not believe that they need research. What is needed basically is determination on the part of those responsible for the ports to deal with the problems. The Government will certainly continue to play their part, where necessary, but we are looking to the industry above all to shoulder a greater responsibility than it has hitherto been able to do, especially on financial and organisational matters. I do not deny that there is a challenge facing the ports, and a challenge, let me stress, facing the British Ports Association.
The Government have responded to the request of the ports and the association to give them the authority to deal with the industry's future and its needs in its own way. But there is, I believe, no room for a National Ports Council sitting on the sidelines charged simply with providing a 229 settlement. Manpower issues at national level are in any case mainly the responsibility of the National Dock Labour Board, and the amendment could create an element of dual responsibility. Finance, organisation and manpower go to the heart of running the ports. I believe that these are matters for which the ports themselves must be responsible. It is their industry, and it is for them to determine their future. We remain convinced that the policies of the Opposition would simply reduce the service to port users and reduce competition between ports, and I believe that they would frustrate sound port investment.
I have tried to set out to the House the background to the abolition of the National Ports Council. It was set up in 1964. It has done some good work over the years but basically we do not believe that it is required in the years ahead. What we also recognise, however, is the increasing responsibility and challenge which we have now given to the ports industry and to the British Ports Association. Therefore, I certainly stand by the policy in the Bill. On these grounds, I advise the House to reject the amendments.
§ Mr. Prescott
The Minister has spelt out how he feels that the ports industry will not progress. As he said, we are in disagreement on the fundamental approach to these matters. We have heard some very kind words. It seems that fine words rather than good judgment still prevail with the Secretary of State. His fine words are that the customer should be right and should choose where he goes and that the ports industry knows what is in its best interests.
I suggest that the Minister should read what the various reports have said about the industry. From well before Rochdale, going back to well before the war, they have unfortunately always condemned the judgment of the industry in looking after its interests, and Governments have had constantly to intervene. It was a Conservative Government who brought in the National Ports Council in the early 1960s. It was a Conservative Government in the early 1970s who strengthened the council. It is the present Conservative Government who are deciding to abolish it in the teeth of the increasing problems facing the industry.
It may sound fine to say that the customer should choose where he goes, but in reality what is the Minister saying in that judgment? We have a ports industry in which only one-third of its capacity is used. Even with the greatest leaps and bounds in world trade, we cannot envisage its capacity being increased to anything more than 50 per cent. It would be optimistic to hope to achieve that. That means that companies will play off against each other ports which are desperate for any business that they can get. The reality is that the price will fall rapidly in all those ports, and everybody will be fighting to get whatever marginal traffic he can.
The logic of the Minister's argument was that the customer should pay and the Government should determine what ports should survive, because in their competitive philosophy the ports would have to be efficient. The successful ones will survive and the unfortunate ones will decline. That is a simple enough analysis, because it is affected by all sorts of trade, from East to West, as we said in Committee, and from West to East.
Even if what the Government say is true, why is the Minister bringing Bills before the House for hundreds of millions of pounds to rescue some of the country's big 230 ports? It is because the Secretary of State cannot face the reality, as the previous Minister could not face the reality, of letting these ports collapse. Indeed, the previous Secretary of State went much further and was prepared to bankrupt the company. At the end of the day, however, he had to rush in with bits of legislation to correct the situation, and one of those changes was the strengthening of the National Ports Council to prevent those problems happening again.
The history is very well written about management's ability to make proper decisions. I hope that the ability of management has improved, but I noted that one of the latest reports of the National Ports Council pointed out that the ports industry had fewer levels of specialised management in its management structure than any other industry of which it was aware. That remark related to today, not to 10 or 20 years ago. That is the judgment of the National Ports Council. If that is the case and if one is relying on the decisions of the management in such circumstances, it looks as though the public assets involved in this situation are likely to move further and further into problems.
There are many other points that I could make in view of the statement by the Minister about his future ports policy. However, in thinking about our debate in the next Committee it is useful for the Minister to have spelt out his views at this stage of the game, and I appreciate his having done so. I think that he is very wrong and that we shall pay the price for it in our ports development
Perhaps my final observation should be that the day when we finished in Committee was the day when the Dutch announced the setting up of a national ports council. We often look to Europe for advice, but in this case we were well ahead of them. Just as we were getting rid of these things, the Continentals were saying "The British are on to a good thing there. They have admitted that the National Ports Council has done a hell of a good job." Now, we are saying that we will abolish it while our Continental friends are adopting the very central agency that they thought had been most useful in bringing about the considerable changes that have taken place in the industry.
In the course of our debates, as has been pointed out to me by the National Ports Council, there was discussion of the National Ports Council's role in regard to supporting the Bristol port authority investment. We thought that the council did not support it to begin with but did so eventually. I am told that it supported it completely throughout the stages. I am bound to say that I think that the judgment was wrong, whether the council supported it before or afterwards.
I have said on earlier occasions that I have not always agreed with all the judgments of the National Ports Council, as, indeed, the Minister himself has said. It is not necessary for us to accept its judgment, but it is necessary for us to accept and to understand the advice that is given to us and make our own judgment, whether we consider that the advice is right or wrong.
In view of the guillotine situation, we do not intend to press the amendment but wall move on to the next stage of the amendments.
§ Amendment, by leave, withdrawn.