§ Queen's Recommendation having been signified—
§
Motion made, and Question proposed,
That, for the purposes of any Act of this Session to provide financial assistance to the Port of London Authority and the Mersey Docks and Harbour Company and to increase the limit on sums borrowed by the National Dock Labour Board (`the Act'), it is expedient to authorize—
- (a) the payment out of money provided by Parliament of any sums required by the Secretary of State for giving financial assistance to the Authority and the Company for measures taken by them to restore the profitability of their undertakings and for the carrying on of their undertakings while such measures are being taken;
- (b) the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable out of money so provided tinder any other other Act;
- (c) to the payment of any sums into the Consolidated Fund.—[Mr. Fowler.]
§ 11. 11 pm
§ Mr. Arthur Palmer (Bristol, North-East)I was unable to catch the eye of the Chair on the Second Reading of the Bill but I believe that I shall be in order if I make a number of financial points affecting the port of Bristol that are relevant to the money resolution. The financial structure of the port of Bristol is different from that of many of the other ports that we have been discussing. In the long run, the Bristol port is funded on the rates.
About 10 or 12 years ago, Bristol did what Conservative Members often advise ports and many other enterprises to do; it modernised and rationalised. Part of that process was the building of a new deep-water dock, which is one of the finest in this country and probably one of the best in Western Europe. Bristol showed great courage, even allowing for the favourable conditions that existed at that time.
The Royal Portbury project—it was originally called the West dock—was controversial, and its history should be of interest to the Conservative Party. The project was proposed in a Private Bill—a fact which seemed to be overlooked by the hon. Member for Bristol, West (Mr. Waldegrave); it came before the House in various forms at different times.
Labour Ministers, including Barbara Castle and Richard Marsh, when each was Minister of Transport, advised against the project going ahead. Conservative Members, if anything, encouraged it, even though the Under-Secretary of State for Transport said earlier that it was made clear to Bristol that it was going ahead on its own responsibility. I voted for the Bill, as did all Bristol Members. he felt that we had an obligation to our own city. There were still opponents on the Labour Benches, especially the Welsh Members. They felt that it increased unfairly against them the total ports capacity of the Severn estuary.
On that occasion, 10 or 12 years ago, there was a vote. It is interesting now to look at the Division list. I find that voting for Bristol going ahead with its new dock were the present Secretary of State for Transport, the present Minister of Agriculture, Fisheries and Food, the present Secretary of State for the Environment, the present Minister of State, Department of the Environment and the present Prime Minister. It was stated austerely tonight that Bristol took this responsibility on its own shoulders following a disclaimer by the Government. That was not 1044 the general attitude of the Conservative Party at the time, or the attitude of Conservative spokesmen in Bristol during the 1970 election.
I suggest to Conservative Members that they have a moral responsibility for the troubles that Bristol now finds by its enterprise in tune with the market economy 10 or 12 years ago. The port of Bristol has all the difficulties of other ports over redundancies, but its finances are founded on the security of the rates. Three years ago, the Bristol ratepayers were finding about £1.7 million towards the maintenance of the port, though it was always understood that that might be the case for a few years. The rate support grant at the same time amounted to £460,000.
In 1980–81, the ratepayers are finding £6 million to support the port while the rate support grant has grown to £1.5 million. The rate poundage for Bristol has climbed from 3p three years ago to lop now, to support the port.
Another menace approaches. The rate support grant system is to be replaced by a new block grant formula under new local government legislation. If the new system works out like the old, in money terms, the situation may not be too bad. It means that Bristol, under the formula of rate support grant that applied last year, would need to receive no less than £3 million.
If the Government choose, as they have the opportunity to do under the new formula, to give Bristol considerably less than £3 million—I understand that the amount could be cut to almost nothing—the rate poundage to support the port could rise by another 6p. That would mean that the total contribution from the rates in Bristol for the support of the port would be no less than 16p in the pound. Indeed, half the money raised from the Bristol ratepayers would go towards compensating for the docks deficit. That is an intolerable burden on any city. I hear one or two Conservative Members saying that we should not have done it. We did it in the name of enterprise, and to modernise the port. We were encouraged by the Conservative Party.
I understand that there will be a meeting next week between the Secretary of State and the leaders of both sides—the majority Labour and the minority Conservative—of the Bristol city council. It will not be the first such meeting. The hon. Member for Bristol, West knows that last year we met the Secretary of State for the Environment and the Minister for Local Government and Environmental Services. It was a hot afternoon in August. We talked for about two hours, and much hope for Bristol was expressed in that conversation. I recently received a note from the Minister that after all this delay nothing more could be done for Bristol.
Bristol has suggested that the area around the new dock should be designated an enterprise zone. We do not like enterprise zones if they are a substitute for something better, but it is part of the Government's policy to create them. It would be possible to make an enterprise zone around the new Royal Portbury dock. We could then obtain assistance from the EEC, because it would be a special area, which I assume would rank for European grants.
Money will flow out to two other ports which, no doubt, need it. Bristol has tried everything, and is continuing to do so, but whichever way it turns it is frustrated. I add my plea to that of the hon. Member for Bristol, West. The Minister was a little brief earlier on in his reference to Bristol. He did not deal with it until the last two minutes of his speech. The hon. Member for 1045 Bristol, West gave a number of facts and figures about the way in which the Bill would aggravate the problems of Bristol. It was negotiating a severance pay agreement which might involve considerably less than the £16,000 that will be paid to Liverpool and London dockers. We cannot blame Bristol dockers for thinking that if the Goverment can afford that much for other places they will have to afford it for Bristol. They do not want their severance pay—which is important to a man's future and to his family—to be less than that for London and Liverpool dockers.
The Bill aggravates the problems at Bristol. I urge upon Ministers that when the leaders of both sides of the Bristol city council meet them once again they should do something to help this time. Bristol has never directly asked for money. All that we have asked for is that conditions should be created so that the intolerable burden now being placed upon the Bristol ratepayers will be lightened.
This matter cannot be dismissed or brushed aside. I therefore again urge the Government to take seriously the points that have been made tonight and that will be made to them by the city council next week. Ministers must take the matter seriously and do something positive to assist Bristol.
§ Mr. Don Dixon (Jarrow)It is getting a bit late now, and although I am sure that hon. Members who have sat here all evening, as I have, during the Second Reading debate, will have heard enough about ports, finance and severence pay, I wish to say a few words on the money resolution as it affects severance pay. There will be problems, and I am glad that my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) pointed out that it could cause industrial disputes.
First, I declare an interest in that I am a Member sponsored by the General and Municipal Workers Union, which organises the dockers on the river Tyne—one of the few ports, incidentally, where that union organises dockers. In company with my right hon. and hon. Friends, I believe that there is a case for financial assistance for the Port of London Authority and for the Mersey docks, but there is a case also for financial assistance for the other ports which face the same problems. They are not as urgent for us, perhaps, but we have the same problems of surplus labour and having to shed labour.
As my hon. Friend the Member for Newport (Mr. Hughes) said, negotiations are going on now between the trade unions and port authorities on voluntary redundancies, and the outcome will have an enormous effect. When the national voluntary severence scheme was introduced—and when the sum was revised in August last year from £8,500 to £10,500—it was a national scheme. It applied to everyone. There was no differentiation. This is where the problem arises.
It is not only nonsense but it is grossly unfair that a docker in London or Merseyside who volunteers for redundancy should get £16,000 while a docker on the river Tyne or in any other port will have only £10,500.
My right hon. Friend the Member for Barrow-in-Furness (Mr. Booth), when referring to the various percentages of surplus labour in the other ports, omitted to mention the River Tyne. I know that it was not a 1046 deliberate omission on his part, because he has a great affinity with and good experience of the River Tyne. But the House should know that on the River Tyne at present our union is negotiating a reduction of almost 23 per cent. of the labour force by September of this year. For example, Newcastle quay is to close for general cargo handling. In future, it will be used only for grain shipments for the flour mills of Spillers and Rank. At present, 84 men are employed there.
At Tyne dock there are 68 men working, and at Albert Edward docks we have 58 men. The union is trying to persuade the older dockers to take redundancy so that the younger dockers from Newcastle quay can be deployed at either Tyne dock or Albert Edward docks.
How on earth shall we encourage or help a union official who is trying to get people to accept voluntary redundancy when he knows, and they know, that in Liverpool and London dockers who volunteer for redundancy can get £5,500 more than their counterparts can get on the river Tyne? It is just not on.
The dockers on the River Tyne are as important as those in Liverpool or London, or any other port. The Secretary of State intervened in my right hon. Friend's speech to say that one of the problems in London, and especially in Liverpool, was unemployment. One has only to go to the Tyne and see some of the unemployment on both sides of the river to understand the problems there. Some areas have more than 20 per cent. male unemployment. Those on the River Tyne who volunteer for redundancy have virtually no chance of obtaining another job. Indeed, the northern region has the highest percentage of unemployment in Great Britain, and the second lowest number of vacancies.
It is nonsense to say that we do not have the problems that Liverpool and London have. Most of the trouble is created by the present Government's industrial policy. We forced our amendment to a Division, and I am speaking in this short debate, because those on the River Tyne who volunteer for redundancy will not sell their livelihood for £5,500 less than the dockers in Liverpool and London will receive.
§ Mr. R. C. Mitchell (Southampton, Itchen)The Minister said that we must approve the money resolution, because, if we do not, the Port of London Authority and the Mersey Docks and Harbour Company will go broke. He said earlier that for the same reason the Bill must have its Second Reading. If that is so, why did the Minister wait until now to introduce the Bill? Why did he not introduce it a month ago? Surely he has not just found out the serious situation that those two organisations are in.
The Secretary of State is trying to bulldoze the Bill through. He has also tried blackmail, saying that if we do not vote for it the authority and the company will go bankrupt next week. Why on earth did he not introduce it earlier?
When answering criticisms from his hon. Friend the Member for Northampton, North (Mr. Marlow), the Under-Secretary kept giving him reassurance. He said "This is only a temporary measure. The redundancy is only for two months; it is not permanent." The hon. and learned Gentleman did not say what would happen is the severance scheme on which we are voting tonight did not work. He told his hon. Friend "We cannot let the company and the authority go into receivership, because that would mean 1047 all sorts of other things for other organisations." I entirely agree with the Under-Secretary, but if the severance proposals do not work what will he do? Will he introduce another money resolution in a month's time to give more money, or will he let the organisations go into receivership, which he told his hon. Friend was unthinkable and could not happen?
The danger of the Bill and the money resolution is that by picking out two particular areas they will sour industrial relations in the whole ports industry. The employers in Southampton have told the National Dock Labour Board "We want to negotiate 200 redundancies with you." I know what the board will reply. It will say "Give us the same redundancy pay as Liverpool and London are getting, and we may talk to you. Otherwise, we shall not even talk to you about it."
We spent years getting a national dock labour scheme built up. After years of bad industrial relations in the ports, we built it up, and it was agreed between employers, the Government and unions as a result of the Jones-Aldington report, but now the proposal before us will endanger the whole thing. I suspect that before long, if the Government are not careful, there will be other Bills relating to other ports, with other money resolutions. This could be only the beginning. It could do great harm to the industry as a whole.
When I listened to the Secretary of State and his hon. and learned Friend I had the impression that they knew very little about the docks industry. They certainly did not know anything about the make-up and temperament of dockers. I did not recognise the people that they were referring to. Having had many years' experience, and having had some dockers in my own family, I know how they think.
The dockers fought for years for a national scheme and now the Government are in danger of spoiling that scheme. We have no alternative but to vote for the money resolution. I object to this form of pressure being placed upon hon. Members.
The Government have brought this Bill forward at the last minute, in such a way that it represents a threat of blackmail. They have said that if we do not vote in favour of the Bill these ports will go bust. I ask the Minister to go away and think seriously about a new redundancy scheme covering the entire port industry.
§ The Under-Secretary of State for Transport (Mr. Kenneth Clarke)I am glad that the money resolution has given us an opportunity to clear up the points relating to the ports of Bristol, Tyne and Southampton, particularly because the hon. Members in whose constituencies these ports lie were present throughout the last debate and were unable to speak. I apologise for not doing justice to Bristol in my winding-up speech earlier, mainly due to the limited amount of time available. I spent a high proportion of the time on London and Liverpool and on the general principles, and rather rushed my response to my hon. Friend the Member for Bristol, West (Mr. Waldergrave).
The hon. Member for Bristol, North-East (Mr. Palmer) has had the opportunity of putting the case for Bristol more fully. I must clarify the distinction which exists between London and Liverpool, on the one hand, and Bristol on the other. London and Liverpool have got into their difficulties because they are our biggest and oldest 1048 traditional ports and because they have had considerable difficulty in coping with the change in trading conditions which has taken place over the last 10 years.
Bristol's current problems are entirely the result of investment decisions fought for by the council against successive Governments. A major investment was embarked upon only comparatively recently. The investment was embarked upon against the background of Government approval under the powers of the Harbours Act and on very clear terms. The then Minister of Transport, my right hon. Friend the Member for Yeovil (Mr. Peyton), set out the Government's position very clearly in a letter of 17 November 1970 to the city of Bristol confirming that authorisation under the Harbours Act had been given. I shall quote again, more fully, from that letter:
I must also make it clear that the responsibility, financially and otherwise, for this project ties solely with the Port of Bristol Authority and that this letter does not commit the Government in any way.Successive Governments, as far as I am aware, have not moved from that position vis-à-vis Bristol. This was a major piece of capital investment by a local authority, sponsored by a Private Bill. It turned out to be speculative and, I am afraid, unsuccessful. It is now posing considerable difficulties for the city of Bristol and its ratepayers. Nevertheless, it is a responsibility of the local authority and certainly not of the Government. It is for the port authority and the city to deal with. There are not very good industrial relations at the port. The authorities must look to the future. No doubt they are getting the necessary reports on the likely financial prospects, considering 'what rationalisation may be needed and deciding what kind of labour force can permanently be sustained. They will be considering what kind of traffic is available to be won. It is for the local authority to do that since it is local authority capital spending.We have a lot of local authority wishful thinking, when authorities seek to go in for major capital investment. We cannot operate on the basis that speculative investment will be bailed out by the national taxpayer a few years later.
§ Mr. PalmerThe hon. and learned Gentleman appears to be saying something new—that the troubles are of Bristol's recent making. Fie seems to hint at poor management. Trade has gone and Bristol's ratepayers cannot escape the obligations upon them. They cannot close down the port. Even if they did, they would have to pay the interest on the loans.
§ Mr. ClarkeI do not minimise the problem. The problem is that capital investment has been incurred and the loans still have to be serviced. Thus far, the investment has proved unsuccessful. The Port of Bristol Authority will presumably be engaging in the necessary studies to decide what can be done, at least to reduce trading losses and to see in what ways the three different docks in Bristol can be rationalised. That is for it, and not for the Government. It seems to me that in no way are Bristol's problems comparable to those of the Port of London Authority and the Mersey Docks and Harbour Company. I have no doubt that the matter will be explored in greater depth when representatives of the city of Bristol meet my right hon. Friend on 1 April.
The hon. Member for Jarrow (Mr. Dixon) complained about the impact on the port of Tyne and the redundancies 1049 that are necessary there, given the rationalisation that is happening of the arrangements that we have made for two months' topping up of severence payments for registered dock workers at London and Liverpool. The hon. Member for Southampton, lichen (Mr. Mitchell) made the same point in respect of Southampton. There has been a predictable and swift reaction in various ports that dock workers there will not accept less for severence than the emergency sums that are on offer in London and Liverpool.
However, that enhanced severance is available for a two-months period only. Only a few weeks are left in which the men can volunteer for severance and get the addition of up to £5,500. Thereafter, payments in London and Liverpool will revert to the level of the national voluntary severance scheme, which is currently £10,500. That two months, once-and-for-all offer is being made because of the drastic conditions in both those places where, including registered men and staff redundancies, a cut of 3,000 jobs is being sought because there is no longer work for the men.
After the end of April, Liverpool and London will be back on the same footing as the other ports. I hope that the impact on the other ports will have been fairly minimal and will pass over. The other ports—Southampton, Tyne, Clyde, Manchester, Hull and the rest—do not have problems on anything like the scale of those afflicting London and Liverpool, and they have the resources to deal with their severence pay arrangements. I have no doubt that, in line with inflation, employers will in due course examine the levels of payments under the national voluntary severance scheme, but I think that the ordinary levels will suffice for redundancies in most parts of the country.
§ Mr. DixonWhat does the hon. and learned gentleman intend to do if he does not secure the necessary number of volunteers during the two-months period? Is he seriously suggesting that those concerned will accept a scheme under which if a man goes on 29 April he will receive £16,000, whereas a man who goes on 2 May will get only £10,500? If he is, he has no idea of industrial relations.
§ Mr. ClarkeThat was the exactly the point raised by the hon. Member for Itchen. As the dockers in London and Liverpool know from the documents that they have, the offer is available only if they volunteer for severance in March and April. Severances in those ports after the end of April will revert to the national level and will be subject to the usual negotiations that go with the national voluntary severance scheme. That is why, although the Bill authorises new expenditure to a considerable extent—£87 million—my right hon. Friend will not make that money, or anything like it, readily available to the ports in the forseeable future. The first step will be to set cash limits which are in line with the minimum necessary for London and Liverpool to continue to trade during the period of the emergency severance programme.
The cash limits will take both ports, on their own estimates, into May. In May, my right hon. Friend will review what has been achieved by the severance scheme and look again at the ports. He will probably then set cash limits to take them through to the autumn, by which time 1050 we shall have had reports from the companies and their accountants about whether they will return to profitability, and, if so, how.
I shall not go in detail into the hypothesis of what happens if voluntary severance does not work. My right hon. Friend gave the figures. In both ports there has been a healthy response. Liverpool already has over 600 applications and I believe that London has over 400. There is a tendency to hang back with applications until the end, just in case more is offered, but that will not happen. We are expecting both ports to be near their targets, and then to move on to the severance of non-registered staff men as well.
However, if the ports fail to get the severance that they require, as I am sure that everyone in London and Liverpool realises, they will be in a serious position. If by May each has over 1,000 men—25 per cent. of its work force, being paid every week, yet with nothing to do—we should look to the authority and to the company and seek their proposals to meet the situation. The Government would re-examine the policy in the light of the failure of the scheme. However, we are advised by the chairmen and by those who know both ports that the extra £5,500 should be sufficient at present to achieve the emergency severance of men. We believe that the scheme is going well and in May we will consider the prospects to take us to the autumn, when detailed studies will be made. Assuming that severance has worked and that the policy has gone through to that stage, in the autumn it will be possible to take a realistic view on the question whether the ports can return to profitability, and, if so, what rationalisation is required.
I believe that I have dealt with the points raised. I apologise to he hon. Member for Itchen for the rush. As we have said, it is an emergency. Had the Opposition's vote been successful, the results would have been calamitous for both ports. It is likely that the PLA and the Mersey Docks and Harbour Company would have had to cease trading next Wednesday. The timing has not helped the preparation of the Bill and the Government's parliamentary timetable.
The problem was brought to a head by a catastrophic loss of trade in London and Mersey last year, the full impact of which was first reported to us towards the end of last year by the boards of the two bodies. Although it was clear that they were getting into difficulties, we had to make an extremely full appraisal. We needed information about the full extent of the difficulties to put together the policy. We had to have an idea of the figures for the rescue. The preparation of the Bill has not been in a leisurely manner, ending with the House being given only one night to make up its mind, with three days to go. The highest priority has been given to its preparation, against a background of late information and quick in-depth studies to see exactly what was needed. The Bill was brought forward at the first possible moment. Fortunately, it has had a Second Reading before the companies were forced to cease trading.
§ Mr. R. C. MitchellHow much, if any, money will be paid out under the provisions of the Bill before it becomes law?
§ Mr. ClarkeI will give the hon. Gentleman a rough figure in writing. The PLA will need help on 1 April and I believe that both bodies will need more help next week. 1051 The convention is that now that the Bill has had a Second Reading, Ministers are authorised to expend moneys, although we shall continue to seek parliamentary approval in the later stages of the Bill. It would not have been possible to anticipate the legislation by spending moneys on the scale required without the Bill having had a Second Reading. That is the background. It reinforces the need for the money resolution, because the whole thing could be frustrated at this stage. I hope that the House will agree to the money resolution.
§ Question put and agreed to.
§
Resolved,
That, for the purposes of any Act of this Session to provide financial assistance to the Port of London Authority and the Mersey Docks and Harbour Company and to increase the limit on sums borrowed by the National Dock Labour Board ('the Act'), it is expedient to authorize—