HC Deb 14 May 1981 vol 4 cc975-97 10.15 pm
Mr. Albert Booth (Barrow-in-Furness)

I beg to move amendment No. 1, in page 1, line 13, at end insert— 'Before giving financial assistance for any measure to reduce the number of persons employed in a port specified in this subsection in a way which would involve the National Dock Labour Board in additional expenditure, the Secretary of State shall consult the Board.'. The purpose of the amendment is to require the Secretary of State to consult the National Dock Labour Board before he uses the provisions in the Bill that enable him to reduce the number of persons employed in the two ports, Liverpool and London.

My great difficulty is that I have a grievous sense of engaging in an attempt to lock the door after the horse has bolted. The principal effects of clause 1 have probably already taken effect, but I make no apology for moving the amendment because it raises an important issue about the work of the board. It also raises a serious point about how the board can carry on its duty, given the action that has already taken place to reduce the registered dock labour force in London and Liverpool in anticipation of the Bill's becoming an Act.

For reasons that we understand but which I do not intend to debate tonight, the Secretary of State has enabled those two port authorities to bring about a substantial reduction in their registered dock labour forces by offering a direct payment of £5,500 per registered dock worker over and above the payment of £10,500 from the National Dock Labour Board. As a result, a considerable voluntary severance has been secured in each of the two ports—about 1,000 men in each. However, the way in which that has been done is causing, and will cause, major problems for the board and the industry. If for no other reason, I believe that the board should be consulted because of the special severance provisions in London and Liverpool greatly increasing the number of severances that will have to be met from the total scheme.

A major part of the Government's case for introducing the Bill is that the number of people who could obtain severance in London and Liverpool are such that they are justified in making this special provision for those two ports. On Second Reading, the Secretary of State made it clear that he considered that the number who could obtain severance justified the introduction of this special severance arrangement. It was therefore inevitable that if this special offer was made the number who would quickly go out of the industry—and, therefore, the amount of severance pay that the board would have to give—would increase substantially. That will have a major effect on the board's finances for this year, and I believe for a number of years to come.

In financing the severance scheme, the board can stand a small increase in severance, and a small drop in the number of registered dock workers who are used to calculate levy, if that takes place during a period in which the wages of dock workers rise to such an extent that the amount of levy compensates the increased severance and the drop in numbers.

When there is a major and sudden increase in the numbers to be severed, for whom the National Dock Labour Board will have to pay £10,500 per man, its finances cannot meet that if it coincides with a period when there is a large increase in the amount of severance that it must pay. From August 1980 it has had to meet an increase in its contribution from £9,000 to £10,500. Within a period of less than 12 months there has been a double increase in the demand on the NDLB's finances—first, the increase in the severance rate from £9,000 to £10,500, and, secondly, a massive increase in the numbers going out of the scheme as a result of the special supplement to severance brought about by the Bill.

The problem cannot be solved, or even diminished, by the loans provision in the Bill. The NDLB has already resorted to loans to cover severance pay. The Under-Secretary of State for Employment probably has exact figures. To have to resort to additional loans to cover additional severance pay will mean that during coming years it will have additional capital to repay and additional interest payments to meet. It will have to do so on a basis of a smaller number of workers in the industry and therefore a smaller levy income.

The second reason why it is essential that there should be a statutory right for the NDLB to be consulted before rundowns of this order are brought about in any port—we are currently discussing two ports with the greatest number affected—is that the time scale of the demand for severance pay is fundamentally changed by such a massive increase. It may reasonably have been expected that without such additional severance pay, or with a uniform increase in severance pay for ports, other ports would have achieved a considerable degree of severance. Certainly Bristol would have been seeking to achieve considerable severance pay to meet its problems, as would Manchester and a number of other ports.

Mr. Michael Colvin (Bristol, North-West)

Does the right hon. Gentleman agree that for Bristol, which has about 250 severance dockers, the passage of the measure—which I fully support—will nevertheless virtually pull the carpet from under the feet of those at the NDLB trying to negotiate severance payments? It raises the question where the money will come from—if it is not to come from the NDLB—to pay the additional money that dockers in Bristol and other ports rightly expect to be paid before severance terms can be properly negotiated.

Mr. Booth

The hon. Gentleman has described one of the problems that arise from this measure for the port of Bristol and a number of other ports. I do not understand why he said that he supports the measure. His special interest would be a good reason for him to oppose it.

Mr. Arthur Palmer (Bristol, North-East)

It is acknowledged in Bristol that the Bill greatly aggravates the financial difficulties of Bristol. As my right hon. Friend has said, there is a contradiction in the hon. Member for Bristol, North-West (Mr. Colvin) agreeing with the Opposition about the issue but still supporting the Bill.

Mr. Booth

I certainly agree with my hon. Friend that there is a strange difference in attitude about how the Bill should be dealt with from two hon. Members who are agreed in their complaint against it in relation to a port that they know better than I do.

Mr. Colvin

If additional money is available for severance payments, and to make severance payments acceptable to dockers, I should prefer to see such payments extended to the port of Bristol. That does not mean that I shall be dog-in-the-manger and will deny the ports of Liverpool and London, which are facing a crisis, the money which is essential for profitable operation.

Mr. Booth

That is a strange form of reasoning, given the purpose of the amendment. The purpose of the amendment is simple. It is to give the National Dock Labour Board a right to be consulted. Had the National Dock Labour Board been consulted, it would have told the Minister that if he went ahead and carried out his intentions there would be financial consequences and problems for other ports in the National Dock Labour Board's voluntary severance scheme. I hope that it will persuade the Minister of the consequences which are now complained of in other ports.

The time scale for repayment for the National Dock Labour Board will undoubtedly be made more difficult, partly because ports such as Bristol will find it difficult, if not impossible, to increase their levy payment at a time when, as a result of the measure, they are unlikely to achieve severances unless—this is a possibility that we must contemplate and the historical precedents suggest that—there is a general increase in National Dock Labour Board severance.

The last occasion on which there was an attempt to increase severance pay in the port of London without increasing it in any other port was rapidly followed by a drying up of willingness to take severance in any other port, and an agreement had to be reached about the general rate of severance. However, I am trying to make the point that the time scale for the severance scheme and the payments has been affected and will continue to be affected by the Bill.

There will be a delay in take-up of severance in all other ports, while a campaign is waged for equity of treatment between registered dock workers in the various ports. The case will be strong.

I doubt whether any Minister will be able to rest on the defence that has been advanced up to now about the total numbers in Liverpool and London being high. Undoubtedly they were high, but not in relation to the total numbers employed in the port. They were lower in relation to the number of registered dock workers than in many ports which are also facing serious industrial trouble.

Mr. Ted Leadbitter (Hartlepool)

The Secretary of State might consider telling the House what kind of representation he has had from other ports on this matter and the extent to which he is able to satisfy them. I understand the immediacy of the Bill; the whole House does. Swift action to solve a critical problem carries with it a number of consequences that are genuintly worrying to the industry. Perhaps in addition to the consultation——

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

Order. The hon. Gentleman may have omitted to notice that the Bill deals with London and Merseyside.

10.30 pm
Mr. Leadbitter

With great respect, I have not omitted to notice that. I am emphasising, with great respect to you, Mr. Deputy Speaker, that the immediacy of this Bill to meet the problems carries with it consequences. Has the Secretary of State had representations made to him from the employers' association and what responses has he given to them? They have problems.

Mr. Booth

I agree that the issues mentioned by my hon. Friend the Member for Hartlepool (Mr. Leadbitter) are of considerable importance to the argument which I was deploying, namely, the effect on the National Dock Labour Board of having the right of consultation, because undoubtedly it is in close touch with the employers' representatives, as it is with the union representatives, whose members are affected by the scheme. Sooner or later the issue of whether or not the there will be any means of achieving equity of treatment as between those taking severance in one port and another must be resolved.

As soon as the Secretary of State for Transport announced that the special severance scheme was to be available in Liverpool and Merseyside, applications for severances in other ports dried up. They came to a dead stop. Some were withdrawn. It was clearly anticipated that better severance terms could be obtained in other ports. Until the question whether this applies only to London and Liverpool is resolved, other ports will have to attempt to trade, to attempt to pay levy and to carry a higher proportion of surplus registered dock workers on their labour force than London and Liverpool. They had a higher surplus to begin with, but now it will be even higher in percentage terms than that of London and Liverpool.

The geographical distribution of severance has been affected considerably by the levy supplement, and it must have been affected in a way which could not have been foreseen by the National Dock Labour Board. There will be pressures to raise the cost of severance, because this has been done with no consultation with either the port employers or the unions. This is the first time that this has happened, and the consequences are most regrettable. Previously, when changes have taken place in the severance terms under the National Dock Labour Board voluntary severance scheme, there has been consultation with port employers and at least two of the unions which organise registered dock labour workers.

The last argument I wish to deploy for contending that there must be consultation between the Secretary of State and the National Dock Labour Board before any further changes of this kind can take place is that this Bill was introduced at a time when we were awaiting the new dock labour scheme to replace the 1967 scheme. While it is awaited, it is of the utmost importance that any Government action which alters the size or composition of the dock labour force, or that part of the dock labour force for which the National Dock Labour Board is directly responsible, should follow only after consultation with the board.

Section 4 of the Dock Work Regulation Act 1976 lays a clear statutory requirement upon the Secretary of State for Employment. It provides: The Secretary of State shall as soon as maybe—(a) prepare in draft, with a view to its being brought into force area by area, a new Dock Labour Scheme to replace the 1967 Scheme". The duty is there; the scheme is awaited. The object of the scheme is set out clearly in section 5, which states: The Secretary of State shall frame the Scheme with a view—(a) to securing stability of employment for dock workers and the creation and maintenance of a permanent labour force of a size and composition appropriate for the efficient performance of dock work". There is no doubt about that. The words are clear.

The Bill impinges on the clear duty of the Secretary of State to lay before the House a new scheme. It will have to be done in consultation with the National Dock Labour Board. The scheme is needed. The amendment is, therefore, reasonable and sensible. It is a way of testing the Government's willingness to co-operate with the NDLB in the serious problem which it faces.

The Under-Secretary of State for Employment (Mr. David Waddington)

The argument by the right hon. Member for Barrow-in-Furness (Mr. Booth) is fair. He says that consultation should take place because the industry, through its obligation to pay levies, will have to bear substantial extra costs as a result of extra severances in London and Liverpool.

One must go back in history and acknowledge that the port employers took on an obligation when they entered the agreement that gave birth to the national voluntary severance scheme. By agreement they assumed a general obligation to pay severance to surplus labour. The extra payments in London and Liverpool have accelerated the process of severance in London and Liverpool. Those severances would have had to take place sooner or later, the ports would collapse. The industry would sooner or later have had to pay for that surplus labour.

It is wrong to say that the arrangement for London and Liverpool has added to an existing obligation. In the long term, what has happened in London and Liverpool will assist the industry. In January this year the National Dock Labour Board made estimates of the number of redundancies required in the coming year. Those estimates will be fairly accurate, in spite of the scheme for increased payments in London and Liverpool. In January the board was budgeting for a substantial number of severances.

The argument is that, as a result of the extra payments, severance in other ports has dried up and has added to the difficulties. I can understand hon. Members' anxieties. However, as the right hon. Gentleman acknowledged, the slowing down of applications for redundancy is the result of the hope that the Government will finance high severance payments at other ports. People who imagine that should remember what has been said time and time again by the Secretary of State—that simply will not happen. Anyone who thinks that severance payments such as have been financed by the Government in London and Liverpool are to be extended to other ports has, to use the vernacular, got another think coming to him. It will not happen.

Mr. Booth

Will the hon. and learned Gentleman accept that that statement would have sounded more convincing if the Secretary of State had stood by his statement last year, that the port of London would be the only port to be assisted? Some of my hon. Friends and I told him that he would have another think coming and that he would be back this year with support for another port, and that is what has happened. It is hard for us, let alone dockers throughout the country who recognise an equity case, to accept the hon. and learned Gentleman's statement.

Mr. Waddington

I am sure that the right hon. Gentleman is not asking the House to accept that London and Liverpool were not faced with a crisis. I am sure that he is not saying that emergency action did not have to be taken. I am sure that he is not seriously opposed to the Bill. He has had to bear heavy responsibilities in Government, and it is ridiculous to assume that the Government money that is involved in the extension of the scheme to London and Liverpool to deal with a crisis is available for the use of all the other ports, almost regardless of their financial situations.

Mr. Palmer

Does the hon. and learned Gentleman appreciate that his remarks are extremely cynical? He is saying to Bristol ratepayers "We do not care what happens to you. You must find the money as a consequence of our actions at other ports."

Mr. Waddington

I know of Bristol's problems. I know how grave they are. However, there are no other ports that have faced recently the crisis that has been faced at London and Liverpool. The Bill was introduced because of the crisis and the need to take emergency measures. The hon. Gentleman accuses me of cynicism. It is rather cynical for anyone to encourage dockers to believe that extra money will be available as a result of Government grants if they wait. That message is being put about by some, but it is not being heeded. Only last week there was evidence that severance is not drying up in other ports. There were no fewer than 52 severances in the port of Manchester last week. I do not accept that the special supplements in London and Liverpool have set a precedent that common justice demands that the Government should follow.

The purpose of the amendment is consultation. The right hon. Gentleman was frank when he said that, in effect, he was trying to close the stable door after the horse had bolted. He freely acknowledged that the passing of the amendment would have no practical effect. He is asking for consultation in advance of an arrangement being arrived at between the Government and separate ports to make extra payments available. That arrangement has not only been entered into; it has been executed in full, with remarkable success.

10.45 pm

Sometimes the wrong impression is given when one talks about the National Dock Labour Board as though it dispenses its own money. It plays a most important role. Nobody would deny that. However, we are discussing severance payments, not administration. In that context, the board is merely acting as the agent of the industry. It collects the levy and doles out the industry's money again by way of severance payments. Only in the most artificial sense can one talk of the board's being involved in additional expenditure. Nevertheless, the amendment is worded as though the board were involved in additional expenditure.

If the Bill interfered with the dock labour scheme and with dockers' rights, the most detailed consultations with the board would have been essential. Anyone would acknowledge that. However, we are not doing anything of the sort. Perhaps I should take this opportunity to comment on an inaccurate report that appeared in Lloyd's List on 11 May.

In Committee, the hon. Member for Kingston upon Hull, East (Mr. Prescott) said: The dock workers' stewards in Liverpool are extremely concerned that the Bill is a forerunner of an intervention in the scheme itself … The stewards think that this might be the first step towards breaking up a scheme".—[Official Report, Standing Committee G, 30 April 1981; c. 40.] That refers to the 1967 scheme.

Mr. John Prescott (Kingston upon Hull, East)

indicated assent.

Mr. Waddington

I am grateful to the hon. Gentleman for acknowledging that that is the case. I am sure that he remembers the exchange clearly. I replied that there were no plans to break up the 1967 scheme. I did not say, as was reported in Lloyd's List, that the Government had no intention of introducing a new scheme. I deliberately put it that way because the Government have not yet come to a firm conclusion. It was right that the right hon. Member for Barrow-in-Furness (Mr. Booth) should mention this matter in the context of this debate. I am fairly new to this subject, but I know the great trouble that my predecessor went to. He went round the docks and spoke to all the interested parties to discover what common ground there was, and to see whether it would be possible to introduce a new scheme that would be acceptable to all interests.

I need not tell the right hon. Gentleman how varied the interests are and how difficult it sometimes is to find the hoped-for common ground. The employers hoped for more flexibility in the recruiting of temporary labour. There were differences of opinion about the handling of disciplinary matters. I freely acknowledge that the Transport and General Workers Union made formal representations to the effect that the 1976 Act should be fully implemented there and then. It claimed that a new scheme would assist in protecting registered dock workers against the loss of work that they regarded as rightfully theirs.

We have gone round the ports, but have detected no feeling among registered dock workers that a new scheme would have that effect. Many people feared that a new scheme might simply extend the scheme to marginal firms that would shortly transfer or discontinue their operations or, in one way or another, leave their labour force to swell the existing dock labour surplus. I shall merely leave it at that, because I must not go on for long in the context of this debate. I am sure that we will not be accused of not having tried to find a solution to the problem. However, we are not yet able to say that we have reached a firm conclusion on the matter.

I know that there have been suggestions that some registered dock workers see the special payments as an attack on the dock labour scheme. I have no idea how that impression has come about. The special payments in those two ports do absolutely nothing to affect the position of a registered dock worker or to restrict his rights in any way. I understand that similar special payments outside the national voluntary severance scheme were made not so long ago, when Preston docks closed. So far as I know there was no suggestion that any attack was being launched on the scheme because special severance payments were being made.

Mr. Prescott

It is a most sensitive area. About 600 dockers in my area of Hull would feel that they would like the same payments for being made redundant, although the docks there are not bankrupt, as are London and Liverpool. The Minister should bear in mind that when the Tory Administration in 1972 brought forward a scheme based on the Jones-Aldington scheme, they made money available to every docker under the scheme, at their choice, and everyone received the same rate of pay. Here, we differentiate between two ports. That is what causes the dock workers' fears.

Mr. Waddington

The hon. Gentleman raises two important points. Back in the time of Jones-Aldington, one was deliberately trying to restructure the situation by getting rid of the unattached register. There is not a great similarity between that situation and today's situation. The hon. Gentleman rightly mentions that some dock workers are fearful about the scheme. When I came new to the subject I found it strange that so many aspects of the matter were assumed to be related to the scheme when they formed no part of it at all.

It was obvious from the exchange that the hon. Gentleman and I had in Committee that he was saying that, wrongly, some dockers' representatives assumed that anything that had a connection with the national voluntary severance scheme was an attack on the dock labour scheme. The two things are separate in any event. Sometimes that is the cause of the confusion.

I can do no more than repeat what I said in Committee—that when they introduced the Bill the Government had not the slightest intention of impinging on dockers' rights in any way. I hope that the House will believe that the amendment has given us the opportunity of discussing some important matters. I am thankful that it has given me the opportunity of clearing up some misunderstandings.

However, at the end of the day the Government had to act as they did. They had to act swiftly because it was an emergency. My right hon. Friend the Secretary of State touched on that matter. One would always desire as wide a process of consultation as possible, but sometimes events do not work out precisely as one would wish.

Mr. Prescott

I hope that the Minister realises that when one is dealing with this scheme about London and Liverpool, although the extra amount may come from the Government and make up the difference, for example, between £10,000 and £15,000, the levies that the employers will pay for the extra amount of demand on the fund at £10,000 become particularly heavy. All ports have to pay the levy at a time of considerable difficulty. The Minister said that the Government always consult fully on matters that affect the scheme, but the employers were informed only an hour before the announcement was made. We were told only within a minute of the announcement. That is not full discussion on matters affecting the schemes and the levies.

Mr. Waddington

I do not believe that I said that the employers were always consulted fully. I conceded that it was an emergency. In situations of less emergency there would have been greater consultation.

The effect of the extra payments is an acceleration of severance, but at the end of the day it is not increasing the obligations of the other ports. As a result of the national voluntary severance scheme, into which the ports freely entered, the obligation to pay for surplus dockers in London and Liverpool was there already. One can argue that it makes life more difficult if the other ports have to face the obligation more quickly, but that is precisely where the Government come in with the loans.

Mr. Prescott

I well understand that the incremental amount between £10,000 and £15,000 is met by the Government, but the £10,000 payments come from the port employers via the levies. If an extra number of dockers has to be paid for as a result of the Government's policy for London and Liverpool, the levy for other ports is significant ly increased, and that is not helped by the Government's paying the £5,000. The Government loan money to the scheme and the employers have to pay the interest, which is reflected in the levy and at 10 per cent. it is far more than they can afford.

Mr. Waddington

The hon. Gentleman again misunderstood what I said. The purpose of the clause is to give the Government power to lend more money to the National Dock Labour Board. One reason why we are taking the power is that we acknowledge that there will be a strain on the ports' finances immediately, because of the accelaration of redundancy in London and Liverpool. That is why we are making the money available.

Amendment negatived.

Mr. Nigel Spearing (Newham, South)

I beg to move amendment. No. 2, in page 1, line 16, after 'Secretary of State', insert 'shall require the Port of London Authority or Mersey Docks and Harbour Company to comply with the requirements in subsection (8) below and he'.

Mr. Deputy Speaker (Mr. Ernest Armstrong)

With this it will be convenient to take the following amendments:

No. 3, in page 1, line 17, after 'such', insert 'other'.

No. 4, in page 2, line 28, at end add— `(8) When any grant loan or guarantee is made by the Secretary of State to the Port of London Authority, or the Mersey Docks and Harbour Company, they shall make to him and shall publish a statement setting out—

  1. (a) the measures taken by them consequent on such grant loans or guarantees;
  2. (b) the uses made of those resources in carrying on their undertaking;
  3. (c) a description of the current activities, plans and present and future financial basis of each of their principal operations and duties;
  4. (d) the effects of, or place of, such plans in the economic development and commercial future of the whole of the Ports of London or Liverpool respectively.'.

Mr. Spearing

Amendment No. 2 is a paving amendment relating to the powers of the Secretary of State or the conditions that he requires from either of the port authorities when making a loan, grant or guarantee. The heart of this group of amendments is amendment No. 4 which states: (8) When any grant loan or guarantee is made by the Secretary of State to the Port of London Authority, or the Mersey Docks and Harbour Company, they shall make to him and shall publish a statement setting out—

  1. (a) the measures taken by them consequent on such grant loans or guarantees;
  2. (b) the uses made of those resources in carrying on their undertaking;
  3. (c) a description of the current activities, plans and present and future financial basis of each of their principal operations and duties;
  4. (d) the effects of, or place of, suich plans in the economic development and commercial future of the whole of the Ports of London or Liverpool respectively.".
In view of the fact that public money is being voted, I submit that that is a reasonable condition that the Secretary of State should place on either of those public bodies.

11 pm

In these or other circumstances, one might have expected an amendment of this nature to have been tabled by Conservative Members. I wonder whether the Under-Secretary will claim that these conditions are too stringent, I shall be interested to hear what he says. We are told that the Government are to intervene again in the autumn. Last year, we had a Port of London financial measure. Now we have this temporary measure. In Committee the Minister said that he would bring forward more legislation in the autumn for London and Liverpool. We are not surprised. If my amendment is not accepted, I hope that the Minister will work some such conditions into his consideration of the next measure.

The underlying assumption of the Bill is that both these ports authorities can be made "profitable". I shall not dwell on the matter, because I put a number of points, perhaps repetitively and in different ways, during discussions on the PLA Bill on 16 April 1980, the Second Reading of this Bill on 25 March 1981, and in our debates upstairs in Standing Committee G on 30 April 1981. I now expect some answers. The Minister of State cannot claim that much of what I shall say is entirely unexpected. No doubt he will have received advice about what I have said. If he does not give us a proper reply, we shall draw our own conclusions.

The Government expect that in future the Port of London will be almost entirely self-financing and run on the lines of any commercial enterprise. The Under-Secretary put it very clearly on 30 April, when he said: With regard to London and Liverpool, it is the Government's minimum aim that they should produce a report in the autumn showing the policies that they intend to pursue to get them back to a position where they can continue trading without the need for such assistance from the taxpayer which this Bill facilitates. The essential condition for the survival of those ports is that they shall no longer need public subsidy or assistance but can continue trading in a free-standing way and service their debts in the usual commercial manner".—[Official Report, Standing Committee G, 30 April 1981; c. 36–7.] I do not say that that might not be a happy state of affairs. However, in making that statement, the Minister equates that with survival, and survival is usually associated with first aid and the sort of things that are being done to the Pope at the moment. He is certainly not standing on his own feet.

That is the basic flaw in the Government's argument on the Bill and on ports in general. They expect not only that our ports should compete with one another, but that London should compete with ports on the Continent. I shall come to that and the Touche Ross report later. The Minister took the Touche Ross argument one stage further in Committee, and I want to come back to that.

The conditions for which I am asking are an attempt to discern and get on record some of the principal operations of the port authorities. The Minister will know that the port authorities are not the same as the port. They are business concerns which are only part of each port. The Thames is the father of London. It may surprise the House to know that in my constituency at the Royal Docks, which, according to the popular view, are too far up the river, the Thames is wider and deeper at high tide than is the Panama Canal. It is a channel 47 ft. deep and 600 ft. wide. In the City of London, at the upper pool, it is 34 ft. deep and 300 ft wide, which compares with the Suez Canal at 42 ft. and 197 ft.

Visitors from the Continent see what is happening to the Thames and say that we must be mad. Think what the Dutch would be doing with such channels. The Thames is a natural asset. It is used not just by the PLA but by riverside manufacturers and a good many riverside installations. Of course many of them are going downstream. I do not question that.

The Minister says that the Bill provides public money for "survival". He used that word in Committee. But the danger is that this might well be public money to encourage extinction. We do not know exactly how the money will be used. The Bill is drawn extraordinarily wide. Clause 1(1)(b) refers to assistance for the carrying out of their undertakings while such measures are being taken. It is an open-ended subsidy, the sort of thing that Conservative Members and Ministers do not like. There is no provision in the Bill calling the PLA to account for what it is doing. Privately the Minister will impose all sorts of requirements. He may require it to surrender land to an urban development corporation, if that comes. But that will mean that he cuts down on the grant. He has made that clear. But that is not in public. The accountability will be to him privately from the PLA and its board. We shall not know what he is asking them to do as a condition of the grants. Unless my amendment, or something like it, is written in—I have used the words they shall make to him and shall publish a statement"— the public who are providing the money will not know how it is being used.

This is not a British Leyland. The port of London is a national asset, different from British Leyland. It is the biggest port in the country and the basis of a good deal of London's economic activity. The Minister says that the Bill is not a slipway to extinction, that it is first aid to enable the port to come out fighting under its own resources. If that is so, he should not be afraid of the amendment which in paragraph (a) requires publication of the details of the measures taken, and in paragraph (c) refers to a description of current activities, plans and present and future financial basis of each of their principal operations and duties". That leads to the duties of the PLA, and they are widespread. One would not necessarily expect roads to make a profit. In many respects the PLA is a highway authority—a water highway authority.

The Port of London Act 1968 lays down these duties and responsibilities in section 5. It states that the general duties and powers of the port authority are to provide, maintain, operate and improve such port and harbour services and facilities in, or in the vicinity of, the Thames … as they consider necessary or desirable. There is the improvement and conservancy of the Thames. It is charged with the duties of the proper development and operation of the undertaking. It has wide functions. It is not a commercial operation, any more than the Secretary of State for Transport runs a commercial operation. The Port of London Authority runs the Thames and the Thames estuary, which is a major waterway. Indeed it is the major water highway of the country. From first principles that cannot be a commercial operation. It can be run as a turnpike, as it is, because it has harbour dues. I am not saying that there are not commercial elements in it, but it is not and cannot be run as a commercial undertaking.

The Minister has granted that the powers and responsibilities of the PLA are anomalous because, while it is the highway authority, it also operates service stations, docks, warehouses—or did—as a commercial operation in competition with those along the highway. The Minister has acknowledged that. He has acknowledged that in 1908 Parliament placed upon the Port of London Authority a number of what are now anomalous functions which have not been designed from scratch but have grown up through history. That is understandable. The Bill acknowledges that the money for a good many of the surplus registered dock workers is being funded through the PLA, although in many cases they have only recently been Port of London Authority employees.

The Minister has acknowledged that the port can be looked at as a whole for severance pay, but he has not yet acknowledged that it should be looked at as a whole in terms of the needs of the country. When I asked him in Committee whether the corporate plan that he was tasking the PLA to produce would bear the totality of the port in mind, he virtually said "No". I asked him whether he would bear in mind that in asking the PLA to draw up a corporate plan it had anomalous functions. He said: The Government have regard to the port's general economic condition"— of the port as a whole— but we do not intend to collar the corporate plan by making other generalised assumptions about the port's economy. We believe that if the Port of London Authority could be restored to a sound financial condition it would ensure not only job security for its own employees, and some stability at last in the Port of London, but be the best contribution that the authority could make to the general economic wellbeing of the port of London." —[Official Report, Standing Committee G, 30 April 1981; c. 19.] That is a non sequitur, because, as the Minister knows, some of the port's commercial operations are incomplete and what he would regard as desirable competition with those on the river. A very small proportion of the traffic of the port of London goes into the docks. Some 20,000 ships a year come into the port of London up the river, but a tiny fraction of them go into the docks. A tiny fraction of their cargoes is handled by the PLA. The Minister knows that very well. Yet the PLA is in competition with people outside. The PLA is losing on some of those operations.

The Port of London Authority publishes reports and accounts, and it published them for 1979. Unless we know where some of these grants and guarantees are to go, as we would under subsection (d) of my amendment, we cannot tell whether the Port of London Authority, in its strenous efforts to get into the black, will kill off, or take action that will be generally deleterious to the port as a whole. There is no guarantee about that. As he is anxious to get the PLA into the black, the Minister will chase it into that position through the accountants in any way he can, whether or not it has a beneficial effect on the economy of the port as a whole.

11.15 pm

I shall give some examples of where the matter is anomalous. In 1979, the operating revenue of the PLA on cargo handling was £47 million and its costs in respect of cargo handling were £46 million—more or less in balance. Where is the loss? That arises in respect of administrative overheads and the cost of restructuring—in other words, severance—and totals £7 million. Interest charges amount to £9½ million. But in speech after speech Conservative Members tell us that cargo handling is unprofitable. That is not strictly correct.

Another great source of revenue for the PLA is its commercial operations as a handler of cargo. That is an historic anomaly of the PLA. As a highway authority, its function is dock and conservancy charges on ships, for which there was an income of £12½ million. The annual accounts do not say how much of that resulted from the conservancy charge, which is a river due, and how much from the dock charge. But the conservancy charge went to the PLA as a harbour authority and the dock charge went to it as a dock company.

The PLA has at least four different functions. It is a harbour authority, a dock company, a cargo handling company and a company engaged in warehousing and other auxiliary facilities. Each of those businesses is separate, although they operate in respect of the same ships.

In addition, there are port rates on goods, because the value of the goods unloaded is subject to port dues. That amounts to £11 million. If added together, we get about £23 million consisting of dock and conservancy charges on ships and port rates on goods. That is a substantial sum.

By no means does the PLA run only on cargo handling, and this is where the whole question of Continental competition comes into play. In Committee, the Minister replied to what we have come to know as the Touche Ross question. In 1974, the National Ports Council asked the firm of accountants Touche Ross to look into the whole question of Continental competition. It was said that if only British ports, and London and Liverpool in particular, were funded in a way that was comparable with the municipal-style undertakings of the Continent, a lot of our problems would be over. I am not necessarily saying that that is so, but that was the Touche Ross point.

In Committee, the Minister said: That report did not deal with cargo handling charges, which is the principal problem of the ports, but only with port and harbour dues. It points out that Continental ports subsidise port and harbour dues whereas we do not" —[Official Report, Standing Committee G; 30 April 1981; c. 36.] However, we would be subsidising the £23 million, which is not inconsiderable. That is a considerable proportion of the PLA's income. As the Minister knows, if Hamburg conditions operated here, those dues would be cut by 84 per cent. I am not suggesting that that is what London or the Government could do. They might be modest and go for Dunkirk conditions, which would mean a 30 per cent. cut, or about £7million. I bet that the PLA would love to cut its charges by £7 million and watch the result—especially for ships in the river.

Hon. Members may ask how Continental ports can reduce their charges to that extent. Touche Ross makes it clear that, at 1974 prices, if Hamburg conditions were operated in London dredging costs would be reduced by £125,000, rates by £2.7 million—much increased now, due to the activities of the Secretary of State for the Environment—police costs by £6.2 million, and so on. There would be a reduction of all financial charges in the transfer to revenue of port modernisation grants of £29 million. Hamburg received that money, and Dunkirk has recently received a similar amount from the French Government. The French understand the national economy and the importance of ports.

The Minister's point that the Touche Ross report applies only to harbour dues and not to cargo handling is only partly correct. The PLA depends for a great deal of its revenue on those charges. It has to pay capital for that charge. The Hamburg condition allows that port to get around many of the modernisation charges that have to be paid.

Dunkirk is a huge port. I do not know whether the Minister has seen it. Perhaps he should visit it one day. I see that he is nodding his head. I am glad that he has seen it. Dunkirk has expanded recently. The Minister may say that traffic does not come to Britain from Dunkirk because the figures from our censuses show that. That may be true now, but what if there is a Channel tunnel——

Mr. Deputy Speaker

Order. Will the hon. Gentleman please relate his remarks on Dunkirk to the amendment?

Mr. Spearing

I shall do so immediately, Mr. Deputy Speaker. I want to know that the money will enable the PLA to compete effectively with Dunkirk. If it does not, Dunkirk will become the port for Britain. If there is a railway to Dunkirk it might as well be a railway to Birmingham.

In giving this money to the PLA, not only now but in the future, the Minister must account not only to his views of port economics but to the House and the British public for the way in which they are spent. He must take into account the effect that the plans and the money spent will have on the port as a whole. Unless he does that he will be open to the charge—he can try to rebut it if he wishes—that much of the money will not help the PLA to gain profitability but will simply assist adjustment when jobs are lost, when ships do not come. It will encourage and assist in the PLA's demise, reduction and, relative to its past, extinction.

The Under-Secretary of State for Transport (Mr. Kenneth Clarke)

I realise that the motive of the hon. Member for Newham, South (Mr. Spearing) in tabling this amendment was to pave the way for the general case that he has expounded before about the Port of London, to which I always listen with interest. I hope that he will forgive me if I begin by dealing with the amendment in a rather narrow and technical way. Taken literally at its face value, it would be impracticable. It requires the reports in the given form to be submitted when payments of grant, loan or guarantee are made by the Secretary of State. In day-to-day practice payments of grant are made only as and when they are required. That gives rise to fairly frequent payments.

For example, the Mersey Docks and Harbour Company has received six grant payments since the Second Reading of the Bill and the Port of London Authority has received five. Further instalments will be made periodically. The effect of the amendment would be to make both authorities produce these rather copious statements on a large number of occasions as the year went on. It would be impracticable to produce them so rapidly. It would be a rather unwelcome diversion of management effort and time at what is a very critical period for the affairs of the two ports.

I know that the hon. Gentleman has a cogent case to put—although I often do not agree with the details of it—about the present condition of the Port of London. Many of the matters raised have been debated in this year's Bill and in last year's Port of London Authority Bill. I am grateful to the hon. Gentleman for quoting my reply to his points. He asked about the definition of profitability, and accurately quoted my reply to him in the Standing Committee. The Government are giving this aid only on the basis that both these businesses are to return to profitability. By "profitability" we mean that they should be able to provide for their own capital, to survive, and to trade competitively in the market without recourse to the kind of assistance from public funds that this Bill provides to both of them for the interim but emergency period.

The hon. Gentleman also talked about the Touche Ross report, in Manchester, many years ago and the difference between harbour dues charged by British ports and Continental ports that were to some extent in competition with them. The point that I made in Committee was valid—that the comparison related only to harbour dues. what makes London and Liverpool to some extent uncompetitive is the problem of cargo handling charges. These particularly reflect their excessive manpower and the working practices that have held them back for so long. that is where the problem arises.

The hon. Gentleman did not quote the second part of the answer that I always give him on what he calls the Touche Ross question. The figures that I quoted in the Standing Committee illustrate the very limited extent to which British ports compete with Continental ports. London and Liverpool are, by and large, in competition with other ports in this country and it is there that their problem arises. The hon. Gentleman would like a great deal more information about the progress of events in London, in particular, and Liverpool. He thought the Government were entitled to much more information about where the grants and loans were going before authorising this sort of money.

The Government have emphasised all along that they are not prepared to hand over the sums provided for in the Bill or any substantial part of them without satisfying ourselves that worthwhile progress is being made towards our eventual objective. We will satisfy ourselves that the necessary manpower reductions and other changes are being carried out.

It follows that a good deal of information about the port authorities' operations is being made to my Department. Procedures for regularly monitoring the position have been set up between the authorities, our officals and the consultants who are advising us. Much of the information that we are now obtaining as a matter of set procedure and routine from both authorities would fall within the categories of the amendment. It would be quite impracticable for this information to be published on the statutory basis proposed by the hon. Member. Quite a lot of it would be commercially confidential, and it would be in nobody's interests for the Government to publish, even to Parliament, financial information and policy decisions that would be of advantage to the competitors of the two ports.

As I said in Committee, the Government will remain answerable to the House. We shall try to give the fullest information possible, consistent with the need to respect commercial confidentiality and consistent with the practicalities of the moment and the need not to divert management from its immediate efforts too much into the business of producing reports and taking part in public debate.

The hon. Member for Newham, South (Mr. Spearing) asked for statements on the effect of the port authority's plans on the economic development and commercial future of the other ports. The hon. Gentleman often draws the valid distinction between the operation of the Port of London Authority as a harbour authority with conservancy functions and as one of many cargo handling businesses within the geographical boundaries of the Thames.

In relation to its harbour and conservancy functions the PLA is under strict statutory duties and has a continuing obligation to the range of port users. Generally, the harbour and conservancy functions are the profitable parts of the PLA's business. The 1979 and 1980 figures show that a surplus was produced by those activities.

The cargo handling activities cause the difficulties. They are the source of the overmanning that led to the supplementary severance scheme. They are the real problem, which resulted in the Bill. We are bound to have some regard to the effect of the PLA's activities on other users and upon the economies of the ports. It is inevitable, when asking the PLA to produce a corporate plan and analysing its progress between now and producing the plan, that we concentrate primarily on the financial position of the PLA, particularly in relation to its cargo handling. The PLA itself has limited knowledge of the commercial and trading position of private operators on the river. There is also a limit to the Government's knowledge. We shall keep in mind the broad responsibilities of the PLA. For the purposes of giving aid we shall concentrate largely on the trading activities, and particularly on cargo handling.

The hon. Gentleman said that there was a risk in giving grants and loans to the PLA for its cargo handling—that that might have an effect on its private competitors on the river. We must have regard to that. It reinforces the Government's aim that the PLA must return to profitability and viability. It cannot look forward to a permanent subsidised future for its cargo handling, which could only adversely affect other port businesses.

The hon. Gentleman is not always consistent. He says that there is a danger of damaging private sector employers. On Second Reading he urged upon us the need to approve the PLA's taking over the business of Mercantile Lighterage, which seemed in danger of closing. If the PLA took over an unsuccessful lighterage business it would adversely affect other lighterage business. Fortunately it was a false alarm, and the company did not close. The awful consequences predicted by the hon. Gentleman did not come to pass.

We are mindful of the interests of private business. For that reason it is right that the PLA should concentrate on a return to viability and profitability. The purpose of the Bill is to provide the essential aid for the remainder of the year, until we can get the two authorities to the state that by the autumn they produce their long-term plans. We shall judge whether there is a case for continued financial assistance and decide whether there is a prospect of bringing back one or both of the ports to viability.

Amendment negatived.

Bill reported, without amendment.

Motion made, and Question proposed, That the Bill be now read the Third time. —[Mr. Kenneth Clarke.]

11.35 pm
Mr. Palmer

I represent a part of Bristol, and I cannot let the Bill have a Third Reading without saying a word of protest about its effect on the port of Bristol, which is in great financial difficulties.

I am glad that my right hon. and hon. Friends divided the House against the Bill on Second Reading. It is a bad Bill in its overall effect, and, as the Under-Secretary of State for Employment, the hon. and learned Member for Clitheroe (Mr. Waddington), demonstrated, it is a cynical measure. It makes light of others' troubles. It helps London and Liverpool by aggravating the financial difficulties of other ports, especially the port of Bristol, because of its financial structure.

I am not alone in expressing that view. The same view was expressed by the hon. Member for Bristol, West (Mr. Waldegrave) on Second Reading. He said that experience shows that it is impossible to create a port differential for voluntary severance payments. The hon. Gentleman was referring to the opinion of the manager of the Port of Bristol Authority. He continued: It is hardly surprising, as it is a national scheme, that the negotiations rapidly become national and that has happened. He later said: There is no doubt that voluntary redundancies have completely dried up in Bristol, as in other docks around the country. I sympathise with the Secretary of State and the other Ministers who are facing the terrible problems in the docks nationally. However, the Bristol dock is caught."—[Official Report, 25 March 1981; Vol. 1, c. 1010.] Bristol never expected to have to meet severance payments on the scale that it will now have to meet them. The Bill, in effect, makes fish of one and fowl of another. In fairness to the ballot's representation of Bristol, although the hon. Member for Bristol, West spoke in the terms that I have quoted he cast his vote for the Bill on Second Reading. I checked the Division list and I found that he supported the Bill. Of course, time changes all things. However, I have had considerably longer experience of these matters in the House. That experience goes back about 16 or 17 years.

In 1970 Conservative leaders came to Bristol and encouraged Bristol to go ahead with the Portbury scheme, in spite of the lukewarm attitude of Labour Ministers. The Conservatives tried to make it an issue in the 1970 general election. I do not think that the memory of such events has entirely faded in Bristol. It may be that that was demonstrated to some extent by the excellent results that were achieved by Labour candidates in the county council elections in Bristol when perhaps alone, apart from London and the South of England, we secured a great victory over the party badly represented in Bristol matters by the hon. Member for Bristol, West.

11.39 pm
Mr. Kevin McNamara (Kingston upon Hull, Central)

I apologise for intervening in the debate at this late stage, but a point that was made on Second Reading should be made most strongly. I regret that I was unable to attend the Committee as I was elsewhere on the business of the House.

Under the Bill, members of my union will be given compensation for losing their jobs. It will be hard for members of my union to accept redundancy proposals in ports that are not as bankrupt as London and Liverpool. Those ports have been struggling harder than the British Transport Docks Board to try to ensure some profitability. Members of my union who are made redundant will find it hard to receive less compensation under the limited terms of the Bill than has been offered to members of my union in Liverpool and London.

The Bill deals with two special ports, but the same problems arise in other areas, and it is ridiculous that there should be a differential. It will be forced on port employers. As a union we cannot accept that fish should be made of the docker in Bristol, and fowl of the docker in Hull, London or Liverpool. It is wrong to expect us to do that. Equally, it is wrong to tell reasonably successful ports that they should expect people to accept unemployment and a lower level of compensation.

It is time that the Government considered putting their proposals to other docks and to others employed under the dock labour scheme. If a reduction is wanted in lie numbers of those employed in the industry, compensation should be offered across the board. If that is not agreed to, one is entitled to ask whether a dock or the BTDB must become bankrupt before it can go to the Government for compensation for those who lose their jobs. If that is the Government's criterion, it is one of mayhem and foolishness.

If the Government wish Ito tell members of my union that they will treat people with justice, they must offer the same compensation overall within the terms of the clock labour scheme. If they fail to do that, Liverpool and London will continue to be in a favourable position, and the other ports will not be prepared to accept that. In addition, Bristol or some other port may find itself in increasing difficulty and may say that what is sauce for the goose is sauce for the gander. They may say that if the Government wish to treat people that way everyone should be treated like that.

It would be wrong to end the debate without expressing the indignation felt by dockers. They ask why dockers in port X should get one amount of compensation while dockers in port Y get another. They must all be treated in exactly the same way or the Government can expect nothing but hostility on this issue from people who work in the docks.

11.45 pm
Mr. Roger Moate (Faversham)

It would be wrong for the debate to conclude without putting on record one's congratulations to the Government for having had the courage to introduce such a scheme. I say courage because it is not an easy decision, nor is it a desirable principle to have introduced such a crisis measure.

It is easy to do things that are self-evidently right. It is sometimes harder to take such steps, which are not immediately palatable either to Opposition Members or to Conservative Members. It is not a desirable principle to introduce such a discriminatory measure, but I believe that it was right to do so. The results that the scheme has produced entirely justify the difficult decisions taken by my right hon. and hon. Friends.

If London and Liverpool were in a severe crisis, something would have to be done. My right hon. and hon. Friends were right to take such steps, which did not immediately bring forth a large amount of taxpayers' money to help all ports, whether or not they were in a crisis. Therefore, I believe that the action has been justified, although I readily concede that it is not an easy, desirable or acceptable principle. Any of us who have been involved in ports elsewhere know that it has not been welcomed by others who are handling port operations.

I wish to make one point in response to the points made by the hon. Member for Kingston upon Hull, Central (Mr. McNamara). He says that it must be a national scheme and that the same terms must be offered to all registered dock workers throughout the country. I understand that that is the general basis on which we have operated up to now. However, the fact remains that we now have only the original figure—£10,500—available to all registered dock workers. The temporary scheme has now come to an end.

It is surely open to other managers of ports throughout the country to negotiate whatever terms can be negotiated in that port with their employees. If a port at the moment is operating profitably or has some resources, but has a heavy surplus of dock workers and is potentially running a heavy loss, it would be sheer common sense for the managers to sit round the table with the local unions to see whether they could come to terms.

The sort of figures that we are talking about are perhaps an extra £2,000 or £3,000—perhaps not the £5,000 available. It makes sense for the port to pay out such a figure to the registered dock workers as a local top-up on the national scheme. It is a much better bargain for the port to do that now rather than to incur major losses ad infinitum.

Mr. McNamara

If one accepts the hon. Gentleman's argument, where is the money coming from? Will there be extra charges on the port and the port dues, or will something come from the Government, or will there be a once-for-all payment, or what?

Mr. Moate

I did not make myself clear. Essentially it is a local top-up made by the local port employer. If that port employer is paying up for hundreds of surplus dock workers in that port—paying out many thousands of pounds every year in wages—it is ordinary commercial sense that a deal should be made locally. The employers would make that top-up themselves. They are entitled to do so out of their resources and income locally. That is ordinary commercial common sense. They do not have to look to the Government to the national dock labour scheme, or to the taxpayer. They ought, as ordinary commercial managers, to sit round the table with the unions and work out a local deal. The hon. Gentleman may say that it should not or cannot be done, but I am saying that it is being done, and it is in the interests of everyone that it should continue.

Mr. McNamara

Why, then, do Liverpool and London have to come to the Government for the money?

Mr. Moate

We have come full circle. The hon. Gentleman has made the case for the Bill. The sheer scale of the crisis in Liverpool and London necessitates the steps that the Government have courageously taken, although they are in many ways unpalatable and unwelcome.

Elsewhere, let us approach the matter a little more commercially and not always look to the taxpayer and the Government to come forward with a national solution to bail everyone out and to hand out money to many ports that do not need it.

11.52 pm
Mr. William Waldegrave (Bristol, West)

I shall make one point only, as I made my basic points on Second Reading.

I shall not follow the uncharacteristically intemperate language of the hon. Member for Bristol, North-East (Mr. Palmer). He and I usually work together on these matters. I can only assume that he had a bad dinner and is less than comfortable. Bristol will not be greatly helped by a vote against desperately needed aid for Liverpool and London. We still have a case to make to the Government. The fact that we are having difficulty in persuading those whom we need to persuade should not make us squabble among ourselves.

I have one request for the Minister. The criterion cannot be the level of crisis in the port. The crisis in Bristol is as severe as it can be. If the port were a separate trading operation it would be bankrupt. I understand the pressure of the sheer scale of the problems of London and Liverpool, and I respect the Government's difficulty in dealing with them.

Faced with a bankrupt dock, we in Bristol may produce a package of measures that will inevitably involve considerable sacrifice by the citizens of Bristol. As part of it, we may run up against a final block. It will be only a relatively small part, because the sums are very large in Bristol. We may have to pay off part of the debt and perhaps sell part of the land. I pay tribute to the Labour leaders of the city council, who are ruling out no option. They are trying with the best advice that they can find from the city and elsewhere to consider all possible steps. If, finally, we cannot get the scale of redundancies that we need—and perhaps elsewhere, such as in the Medway ports, people are persuaded to behave in different ways—may we at least have a hearing from the Government? Otherwise we shall set out on the road to reconstruction with a serious handicap that may end in a disaster that will surprise Ministers by its scale. The cost of helping us will not be large to the Government, and it will be preferable to avoid the collapse if possible.

11.54 pm
Mr. Kenneth Clarke

Like my hon. Friend the Member for Bristol, West (Mr. Waldegrave), I was surprised by the language used by the hon. Member for Bristol, North-East (Mr. Palmer) in making representations about his port. I had understood that the representations from Bristol were unanimous, so I was amazed to hear an exercise in party political debate, trying to relate Bristol's problems to the council election results. The hon. Gentleman seems to arrive at the conclusion because of a difference over the votes on Second Reading. I fail to understand how the problems of Bristol would have been solved had we refused emergency aid to Liverpool and London, with the inevitable consequences for the ports and the economies of those regions. The vote that he cast seems pointless.

Mr. Palmer

People speak strongly because they feel strongly.

Mr. Clarke

Everyone in Bristol feels strongly because there is considerable difficulty with the port, but it is not a partisan matter. There is no doubt that the principal responsibility for Bristol remains with the local authority.

I draw one distinction between Bristol on the one hand, and London and Liverpool, on the other. The main problem in Bristol is not the need for severance or excess manpower, although I realise that it wishes to sever some of its redundant dock workers. The main problems in Bristol result from a major capital investment decision made in the early 1970s. At the time it was made plain, and accepted by both sides, that the implications of that investment were primarily those for the local authority and for the city of Bristol. I do not recall any strong Labour discouragement at the time for the investment, and I do not believe that the hon. Member for Bristol, North-East was in the forefront of those attacking the Conservative Party for making the investment in Bristol.

All I am saying is that the basis on which investment was made, as was spelt out at the time, was that this was a local authority responsibility, and it remains so. That in itself is a distinction between Bristol and the other ports. There are clear and fundamental distinctions between London and Liverpool, on the one hand, and Bristol on the other, London and Liverpool on the one hand, and Hull on the other, and all the other ports in the country about which representations have been made at various stages of our debates. None of the other ports has problems of surplus manpower and a need for redundancy on anything like the scale of London and Liverpool. On Second Reading, we talked about two ports on the edge of closure. They would have ceased trading as cargo-handling businesses within a few days if we had not been empowered to give them aid. They needed to sever over 1,000 men in each case—about 25 per cent. of their work force—and they had no resources whatever to meet the severance payments that the men expected before they could dispose of the numbers that they desired.

Many other ports have their difficulties, but there is a clear distinction in scale and nature between London and Liverpool, our biggest traditional ports, and the problems that are faced by other ports. As my hon. and learned Friend the Under-Secretary of State for Employment said, there can be no question of the special supplementary severance scheme being extended to other ports in the way that is being urged. The supplementary severance scheme is now over. There is a national rate of severance, and no doubt that will be adjusted over the years in accordance with usual practice.

Mr. McNamara

How, then, can the hon. and learned Gentleman explain to a docker in Bristol or in Hull that if he gives way and accepts a redundancy payment it should be less than that which has been accepted by a docker in Liverpool or London?

Mr. Clarke

The national voluntary severance scheme has not been affected by the Bill. Over a period of two months in the two biggest ports, at a time of acute crisis, a special supplement was made available for those who applied then, and it was financed by the Government. Now we have reverted to the national scheme. There is no imminent possibility of any equivalent situation arising in Hull. If the hon. Gentleman uses this opportunity to try to discourage people in Hull from taking voluntary severance which they might otherwise take, because he holds out some fanciful notion that if they argue long enough about it the Government will give a supplement to Hull, I can only say that he would be misleading his constituents and would do no good to the long-term future of Hull or the general state of affairs in the British Transport Docks Board.

The background to the situation was the special supplementary severance scheme. On Second Reading, we talked about a scheme which had just begun. We said that it was an essential precondition for progress that that scheme was a success and that we achieved the level of severance that we were aiming for, and that the Government, with the help of the Mersey Docks and Harbour Company and the Port of London Authority, had made a judgment about the amounts of money that should be necessary to achieve such large numbers of severances as rapidly as were required.

I can give hon. Members the final figures for applications for severance under the special scheme, which has now run its full two months up to the end of April.

In London 1,057 registered dock workers applied, including 837 employed by the PLA. In Liverpool the total was 1,313, including 841 employed by the Mersey Docks and Harbour Company. In both ports the total number of applications received exceeded the target set at the beginning of the scheme. Already about half of those who have applied have left the ports—572 in London and 610 in Liverpool—and more will go shortly. It may take a little time before the final instalment of volunteers can be released, because more volunteers in some particular skills have come forward than can be released straight away. The retraining of men who will take their jobs is needed. Some of the releases also depend on changes in working practices.

Both port authorities are pursuing these points actively with a view to ensuring that all those who want to leave can do so at the earliest possible date. It is clear, therefore, that the supplementary severance scheme has been virtually a complete success and the first objective of the Bill has already been achieved. Throughout, the Government have emphasised that manpower reductions form only a part of the process of rationalisation and recovery. We always said that without those manpower reductions there was no prospect of going further, and that the ports were doomed. What we are therefore now awaiting is to have a look at the position of both ports in the light of the manpower reductions that have been achieved before we make available further instalments of financial aid under the Bill.

The Government will therefore now be considering whether to continue providing assistance pending receipt of the full plans from the PLA and the Mersey Docks and Harbour Company in the summer. We hope in the summer to be able to make decisions on the longer term future of the two authorities and to be able to chart a clear and early return to profitability. Meanwhile, this Bill provides the means for the ports to continue in business until those long-term decisions can be taken. I therefore ask the House to give it a Third Reading.

12.2 am

Mr. Booth

When this Bill becomes an Act it will give a cloak of statutory respectability to what I believe is a last-minute, ad hoc, belated, unco-ordinated reaction on the part of the Government to crises in two of our great ports. It bears little relation to the long-term needs for financial restructuring of the ports, and no relationship to the need to deal with the ports' problems within an overall ports strategy.

We, nevertheless, support the Bill at this stage because it is the best that the Government are prepared to give and because we are convinced that they will have to come back to the House to face in a more realistic way the problems of British ports. They will do so shortly, and we hope that we shall then be able to debate this issue in a more realistic framework.

Question put and agreed to.

Bill read the Third time and passed.

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