HC Deb 11 April 1983 vol 40 cc630-9

Not amended (in the Standing Committee), considered.

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

10.1 pm

Mr. Robert Hughes (Aberdeen, North)

As the Under-Secretary of State for Transport will acknowledge, the Opposition have given the Bill a speedy passage and have not sought to obstruct its progress. I should put it on record, so that there is no misunderstanding outside the House, that our action has not been due to any lack of concern or interest. The reverse is the case. It is precisely because of our great interest in the ports of London and Liverpool that we have been anxious to ensure that the Bill made progress. We have been accommodating to the Government because of the parlous state of the ports. However, we must reiterate that nothing in the Bill will solve the long-term problems of the two ports.

This is the fourth time that the Government have provided financial assistance of one sort or another to the ports of London and Liverpool. The Bill is another ad hoc arrangement to deal with the problems. No one doubts the Under-Secretary's sincerity, but I am sure that he will not take it amiss when I say that everyone who is interested in the ports knows that either in this Session or the next—provided that events that may be decided at 10 Downing street do not interpose themselves on our affairs—the Government will have to return with another Bill.

Everyone connected with the ports is desperately keen to ensure that their financial regimes are arranged in such a manner as to allow their affairs to be settled on a long-term basis. The Bill will not do that.

Clause 1 allows up to £26 million of loans to the Port of London Authority to be written off. Clause 1(1)(b) provides up to £36 million for the Mersey Docks and Harbour Company and clause 1(2) provides up to another further £22 million for the PLA.

In Committee, the Under-Secretary pointed out that until the Bill reaches the statute book and the sums can be written off, some payments of principal will have to be made. That is one reason why we have allowed the Bill to make speedy progress.

The Bill was printed on 18 February and there were obviously discussions before it was presented to the House about how much should be written off. I understand that, precisely because of the principal falling due, an upper limit had to be put on the Bill. We must now ask the Minister whether the sums to be written off have been agreed. If they have not been arrived at and finalised, I hope that we shall be told what the sums of money are before the Bill reaches the statute book.

We have been willing and happy to accommodate the Government, and we understand the peculiar way that the Bill was drafted, allowing sums up to those printed on the face of the Bill. However, the Government should not allow the Bill to pass without agreeing the sums of money. The discussions that I have had with those concerned in the ports recently showed that there had been no agreement. I know that the Government wish to save every penny that they can on these matters, but for reasons that I am sure the Minister will understand we want the uncertainty to be put at rest as soon as possible.

If the Minister is not able to tell us the agreed sum this evening, or unless he can give us an assurance that by the time the Bill reaches the statute book there will be an agreement on what the sums of money are, some Labour Members may come to the conclusion that our generosity over time has been taken advantage of, and it may be that if the Minister brings in another Transport Bill in this Session of Parliament he will find that we are not so trusting again, and he will be in for a rough passage.

It is clear that we do not wish to obstruct the Bill and we want to see it on the statute book. One does not want continually to have Transport Bills, but we expect that once the Bill has passed it will not be long before the Minister is back again because the problems of Liverpool and London are far too deep-seated to be solved in the Government's piecemeal fashion. We shall not oppose the Bill, but we await the Minister's answers with interest.

10.7 pm

Mr. Teddy Taylor (Southend, East)

Before we agree to this £26 million write-off, I should like my hon. Friend to give us an assurance. It is clear from what the hon. Member for Aberdeen, North (Mr. Hughes) said that we are constantly passing Bills to write off cash, and we sometimes gain the impression that the organisations involved are useless and spend a great deal of taxpayers' money. I hope that my hon. Friend will make the simple point that, despite the sums involved, the management of the Port of London Authority—the chairman and the managing director—has achieved a great deal in a short time. It has brought about an enormous reduction in dock areas. The PLA is now nearly down to Tilbury. The management has also had to deal with some of the most difficult labour problems. I hope that as well as pointing out that money has been spent, my hon. Friend will pay tribute to what has been achieved in the PLA by all concerned.

I seek a minor assurance. As my hon. Friend knows, and as is registered in the records, I am the adviser to the Port of London Police Federation. I hope that before we agree to writing off the money, my hon. Friend will give me an assurance that he will take an interest in this small body, which is older than the metropolitan police and has been a major selling point for the PLA because of the good security provided through the work done by the men.

The numbers are now so small that it is difficult to talk in terms of a police force with a proper career structure. My hon. Friend will be aware that the PLA, in an endeavour to deal with the problem, had discussions with the Essex county council with a view to proposing a merger. Unfortunately, these proposals did not meet with the approval of the Home Office and will not now be carried out.

There is now a very small police force with no real career structure, but with experienced, dedicated and good police officers. My fear is that if the numbers go down further, it will not be a police force in any sense at all. I understand that there is a possibility of the transport police thinking of some kind of merger. I hope that people will not wash their hands of an extremely good police force that has a long tradition and reputation for doing good work and has helped the PLA to obtain business from foreign customers.

I hope that my hon. Friend can give me an assurance that in the discussions involved in writing off these sums, he will take a personal interest in the future of the small numbers left in the port of London police.

10.10 pm
Mr. Eric Ogden (Liverpool, West Derby)

The Government ask for support for a Bill of some two pages and two clauses, which may seem modest at first sight. At least the price is modest; it costs only 75p. But it is a much more complicated Bill than that. I suggest that this is one instance where the Government are asking for the support of the House in what is undoubtedly a good cause but with the minimum of information. The Bill was given an unopposed Second Reading because the needs of the port of London and the ports of the Mersey were well known. The only opposition in Committee was some muted objection from hon. Members representing Felixstowe and Bristol, but they agreed about the needs of the ports of London and Merseyside.

Whereas the Bill is modest in its size, £84 million—not £26 million as the hon. Member for Southend, East: (Mr. Taylor) said—is no nominal sum.

Following its unopposed Second Reading, a number of amendments were moved in Committee in the course of which hon. Members sought information. They asked whether the Government could give any hard facts and figures about the Bill and the amount of money that was required, when that amount would be made available to the ports of London and Merseyside, and how much was "up to" £84 million. That final question was the one asked just now by the hon. Member for Aberdeen, North (Mr. Hughes). However, with respect to him, I do not think that it is enough for the Government to say "Pass the Bill, and perhaps we shall tell you." Hon. Members need that information before they give the Bill a Third Reading and lose control of the amount of money involved. Virtually all the information about the Bill that hon. Members have received has come from outside the House and not from the Government.

According to the explanatory and financial memorandum The Bill empowers the Secretary of State, with the consent of the Treasury"— I for one wanted the consent of the Treasury omitted, though that did not prove possible in Committee. We then read under the heading "Financial effects": The Bill will enable the Secretary of State to reduce the debts of the PLA and MDHC by up to £48 million and £36 million respectively. We all have great respect for the Minister and for his judgment. Sometimes we think that he is put up at the Dispatch Box to secure the good will of the House and to get through a measure which some of his more obstreperous colleagues might not get through so easily. However, tonight the hon. Gentleman simply moved the Third Reading and sat down. That is not good enough. I suggest that this is one occasion, among a great many others, when, if the House is to do its duty, hon. Members should have been given a great deal more information in Committee. It is a classic example of the procedural need, which a number of hon. Members are trying to secure. A Bill of this kind should be referred to a pre-legislative Committee so that hon. Members might ask representatives of the port of London and the ports of Merseyside how much they needed.

I do not like using clichés, but here we are virtually giving blank cheques. We know the needs of the ports of London and Merseyside and elsewhere. This is one of several Bills that should be brought forward by the Government. But it is the duty of the Government to prove the need, to give hard facts and to say how much money is required and when. They have failed in that duty.

We are prepared to allow the Government to have their Bill only because we know the needs of London and Merseyside. I see the learned Solicitor-General in his place. He represents Southport, and I hope that he will lend his support to the Bill.

We know, from outside information, that the Bill should be given a Second Reading, not from any information that we have received here. For this Government of all Governments, who are supposed to be careful about money and cautious about expenditure, to ask for a sum of anything from nothing to £84 million with the amount of information that they have given us to justify their case is pushing the good will of the House too far.

I hope that the Minister will give us some more information when he replies to some of the questions that have been asked in this debate. How much money will be made available to the port of London, and when? How much money will be made available to the Mersey Docks and Harbour Company, and when? Will it be all of £36 million and all of £48 million, or will it be part, and in what part will it be paid, and over what period? The need is urgent, and it is only because we recognise that need that we have not been more difficult than we have been in Committee and here tonight. I wish the Bill well, but I also wish that the Minister had given hard facts to justify his asking the House for its confidence tonight.

10.15 pm
Mr. Nigel Spearing (Newham, South)

The Bill writes off £26 million of capital debt of the Port of London Authority and £22 million of loan—£48 million altogether.

The Bill has been characterised by a lack of any information from the Government about future policy for the port of London, as has been amply shown by those hon. Members who have already spoken. Money is policy. Any money spent by the Government should be expended in pursuit of a policy or, if not a policy, linked to a known set of criteria or objectives. That is what the Government, Parliament and the control of public money are all about.

In Committee, we were given little or no information on the policy that the Department of Transport has in mind for the port of London, and in particular what responsibility it has for that part of the port upstream of Tilbury. The hon. Member for Southend, East (Mr. Taylor) said that the port of London is now virtually confined to Tilbury. Of course, that is not so. The Thames goes from the Nore to Teddington, and, as always, a major part of London's traffic has been in and on the river, and has not got into the docks at all. That is an increasing trend. Although I freely admit that Tilbury is now the major dock area, it is still outmatched by a large proportion—perhaps five or 10 to one—of traffic in the river itself. Therefore, we are talking not about the Port of London Authority, but the port of London in the river that would exist even if Tilbury docks were closed, which I do not for a moment think will happen.

I cannot oppose the Bill, nor can any other hon. Member. I tabled an amendment that we should pass it only if there were some form of public inquiry. It would not be in order for me to read my amendment in full, but I took the view that we should not vote this money until the Government took certain steps. My remarks tonight will relate to the way in which the money is spent—that part of the £26 million debt which, in effect, will be expended by the Department of Transport because that Department has the Port of London Authority as a wholly-owned subsidiary.

The first point that I wish to put to the Minister relates to the constitution of the board of the PLA. When the PLA was established in 1908, it was responsible to those who used the port and constituted by election. In 1968 it changed its constitution. In effect, certain bodies nominated the members of the board. In 1975, that was silently changed, and now it is the Secretary of State for Transport alone who appoints 14 members who have experience in certain areas. No doubt they discharge their financial duties well within their limits, but that constitution also says that up to six permanenet members shall be co-opted on to the PLA board. There are aspects of that which at least require some attention. I leave it at that.

The PLA, being in debt, can have no real problem relating to policy-making, because if the Minister tells it to do something, or if the accountants that he has appointed advise that something would be prudent, it must comply. All that goes on in the PLA—a publicly-owned body which is written about in textbooks throughout the world as the prototype of a publicly-owned body—without any public knowledge at all. We did not hear much about the PLA's financial or other policies in Committee.

The PLA's future on the river and in the docks and its financial viability will depend to some extent on how it competes, or does not compete, with the ports of northwest Europe. We have had three debates on those lines, each more unsatisfactory than the last. This is the fourth dose of cash that has been administered to the PLA almost carte blanche. On one occasion, when I was speaking about the port of Dunkirk, one of your predecessors, Mr. Deputy Speaker, pulled me up and asked how it related to the port of London. I explained that nowadays Dunkirk, Le Havre, Antwerp and Rotterdam are competitors of the port of London. Of course, they always have been, but they are more so today.

On Second Reading of the Port of London (Financial Assistance) Bill, my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) quoted Mr. John Lunch, a previous managing director of the PLA who, in 1974 said: It is well known that Continental ports have many of their costs borne by local or central government and provide special inducements to industry in the form of cheap land, low interest rates etc., since the main objective is to attract basic industry to seed economic growth. In contrast the financial policies for Britain's ports are probably at the extreme of world practice. We require our ports to bear all the costs and to charge the customer accordingly. Hence British ports always appear to the user to be much more expensive than Continental ports. My hon. Friend went on to say: That is the subsidy argument. He continued to discuss British ports and said that if we allowed that practice to continue, transhipping would make Britain a feeder port rather than a major port. That is exactly what happened."—[Official Report, 16 April 1980; Vol. 982, c. 1368.] My hon. Friend said that three years ago about a speech that had been made in 1974.

In Committee, I asked about the grid system. I asked the Minister whether the system of subsidising land transport onward from ports by the shipping company applied also to continental ports. I do not know whether he can reply to that question tonight. If not, some other branch of the Government should reply. If that system applies, it is clear that not only the port of London but most British ports will become outports of the continental giants. If the PLA still has to compete under those conditions, we shall be back here time and again. We have said that three or four times already. We shall receive an annual bill; we shall not tackle the basic problem.

I have the annual report and accounts of the PLA for 1981. The 1982 report is not yet available. Under major income, "Dock and conservancy charges on ships" are £12 million, "Port rates on goods" are £11 million and "Sundry services and facilities" are £8 million. Representations received from the London Wharfingers Association were discussed in Committee. It is clear that while port rates apply only to it, continential competitors—as shown by the Touche Ross report—can undercut it by 50 per cent. or more. I shall not quote the figures because they are out of date. When they were brought out, Hamburg rates could undercut London port rates by 80 per cent. Those are charges for ships coming into the river. Time and again these matters are raised, but the Government make no reply. We must conclude that they are not worried about this at all. Continental competition will go on and the House will have to vote more money.

I do not know why the hon. Member for Ripon (Dr. Hampson) laughs. The trouble with this country is that some of its more educated people do not understand the basis of its historical growth and industry. London is the biggest port in this country, and the port is the heartland or core of this city. The amount of interest and knowledge shown by official agencies, especially the Conservative party, is appalling. A social historian will one day map the decline and fall of the port of London and perhaps the whole of British industry because of the Government's lack of knowledge of the basis of their so-called wealth.

As to the writing off of capital, the question is whether the Port of London Authority has written off the upper docks altogether. This matter was discussed in Committee, and I made some remarks about it. In the debate about the London Dockland Development Corporation vesting order just before the House rose for the Easter recess, the Under-Secretary of State for the Environment having refused to give way or to reply to my remarks said: The hon. Gentleman has made a significant attack on people who cannot answer for themselves and I am providing him with the answer."—[Official Report, 28 March 1983; Vol. 40, c. 154.] In my speech I named a civil servant, but I did not attack him. I named him because his name appeared in a document. I would not attack civil servants. They are under instructions and have to do what they are told.

As a result of matters that I related in Committee, I wrote to the chairman of the LDDC drawing attention to the matters therein mentioned and asking him certain questions. If he wishes to reply he can do so. The Minister was wrong on that. The chairman of the port of London authority, Mr. Page, has written letters to me. If I get any facts or judgments wrong, he is perfectly entitled either by letter or speech or in any way to say that anything I have said is unfair, inaccurate or illogical. The trouble is that we have not had a proper dialogue, despite the fact that the port of London is a public highway and a public corporation.

The relationship between the Department of Transport and the Department of the Environment is important. In Committee, I made public the fact that the LDDC had authorised one of its officials to approach the Department of the Environment to get an assurance that it would not approve assistance to the port of London authority in respect of the upper docks. I had no official communication on that. I know that the Under-Secretary of State for Transport is not responsible for the Department of the Environment, but he is concerned with port policy. I say that, because the only reply that I had from the Under-Secretary of State for the Environment was that I should go and talk to the LDDC. In reply to a question that I tabled, he said: I shall be guided in my plans for regenerating industry and employment in the area, including the question of water access by the advice of the corporation, which has initiated a joint study with Newham borough council, the GLC and the port of London authority on the future of the royal docks."—[Official Report, 31 March 1983; Vol. 40, c. 227.] The royal docks, which are a big capital asset, are being written off. I have read before the paper that the LDDC produced, but I want to put on record that, although it is the first report of the officers' working party on the royal docks, there is no mention in the six pages relating to transport of water transport. That is an example of the way in which the fundamentals of port operation and the potential for water transport are being ignored. How can one write a report on the future of the royal docks without discussing their potential for water transport? That would be an extraordinary omission in the literature of any public body, still less that of the "dockland" development corporation.

The administration both of the PLA and of the port as a whole appears to be insensitive to its weaknesses as well as its strengths and potential. In Committee, I related how ship repair had been literally driven out of my constituency by arbitrary action on the part of the PLA, how firms that wanted to use water transport in the royal docks area had effectively been denied the opportunity to do so. and how the PLA arbitrarily and without notice withdrew water access from the royal docks and produced controversial and questionable figures relating to the alleged cost of maintaining water access.

That ship repair has gone down to the Medway. Good luck to the Medway. But why should it be on the Medway and not in London? How much other traffic is being driven away by such policies? How long can the Government connive at this ridiculous policy and at the extraordinary contortions of public organisations for which they are responsible? In writing off £48 million of public money, with very little public interest in London, the Government appear to be writing off not only public money but the port of London and the east end.

10.33 pm
The Under-Secretary of State for Transport (Mr. Reginald Eyre)

The purpose of this short and straightforward Bill is to relieve the Port of London Authority and the Mersey Docks and Harbour Company of certain debts, so as to bring the capital structure of those two port authorities into line with the revenue that they can expect to earn.

Under the Bill, in the case of the PLA, the debt reduction will be in two parts: first up to £26 million of debt to the Government will be written off; secondly the authority will receive grant of up to £22 million to enable it to repay the amount outstanding on a commercial loan, which is currently being guaranteed by the Government. For the MDHC there will be a write-off of not more than £36 million of the company's debt to the Government. The Bill provides for these debt reductions—up to £84 million in all—to count against the £360 million limit on assistance to the PLA and the MDHC which was set in the Transport (Finance) Act 1982.

The hon. Members for Aberdeen, North (Mr. Hughes) and for Liverpool, West Derby (Mr. Ogden) asked me for further particulars about the nature of this debt and how it will be written off. In the case of London, the amount to be written off will be £22 million of commercial borrowing, known as the Lazard loan, plus £26 million of debt relating to unused assets. That is clear for London, but the position is rather more complicated for the MDHC. The exact amount to be written off is being discussed urgently with the company. We should arrive at the precise amount soon. The figure should be about £30 million to £36 million, which will be written off as soon as the Bill receives Royal Assent. Until the write-offs can be achieved, the two port authorities will have to continue making payments of principal as they fall due. We shall provide them with grant for that purpose. That is why I used the words "up to". We cannot exactly determine the amount of the payments until we know the exact date on which the Bill will receive Royal Assent.

Mr. Ogden

If I correctly understand the matter, for the port of London the sum will be £48 million once the Bill receives Royal Assent; for the MDHC it will be £30 million to £36 million, depending on the agreement between the accountants, the Government and the port.

Mr. Eyre

The hon. Gentleman is right in his summary of the position. The factors that I mentioned will obviously affect the amounts to be written off under the Bill.

I wish to refer to the points raised by the hon. Member for Newham, South (Mr. Spearing). He raised a number of matters that come within the management responsibility of the PLA. He mentioned the royal docks. He covered the history of developments in the royal docks in Committee, and I listened carefully to all that he said. I recognise that he remains unhappy about some of the decisions that have been reached in dealing with the royals, and I understand the strength of his feelings. In responding to the hon. Gentleman's points in Committee I tried, at some length, to explain the background against which the difficult decisions must be taken. I know that the PLA chairman, Mr. Paige, has written at length to the hon. Gentleman and remains ready to explain the reasons for the PLA's actions. The hon. Gentleman's further points will be noted by the PLA, which is responsible for the decisions on water access to the royals. It is right that on any operational matters the hon. Gentleman should address his further queries to the PLA.

The hon. Gentleman asked about the extent of the application of the grid system. That matter comes primarily within the responsibility of my right hon. and noble Friend the Secretary of State for Trade. However, I am making inquiries on the points that the hon. Gentleman has raised and I shall ensure that he is written to as soon as possible.

Mr. Spearing

I am grateful to the Minister for his remarks about the grid. However, he is really only explaining the ignorance of his Department. Does not he agree that the matter is of great significance for all British ports, and that it must be followed up? If there is any effect, the matter must be taken up on an international level. While the Minister knows that I have received a great deal of information from Mr. Paige of the PLA, does he agree that in respect of the costs of water access to the royal docks, there has been a stalemate and the PLA has not provided a breakdown of the £700,000 that it claims is the annual cost of maintaining water access from the river?

Mr. Eyre

I shall write to the hon. Gentleman about the grid. I assure him that all necessary considerations will be borne in mind.

The hon. Member for Newham, South spoke also about the role of the LDDC. He was good enough to send my hon. Friend the Under-Secretary of State for the Environment a copy of the letter that he wrote to the chairman of the corporation. I am sure that he will understand that I cannot comment on matters that do not fall within my area of responsibility and do not come within the Bill. I am sure that the chairman will let the hon. Gentleman have a reply to the issues that he has raised in due course.

Whatever differences of opinion there may have been about past decisions I am sure that hon. Members will agree that the urgent priority now is to look forward to the new activities and employment opportunities that will be brought to the area following the establishment of the LDDC.

Mr. Spearing

The hon. Gentleman has shut them out. He has pushed them out.

Mr. Eyre

I know that the local authorities and the PLA are keen to play a constructive part in these developments. We should look to these developments to bring substantial and long-lasting benefits to the constituency of the hon. Member for Newham, South and to those who live there.

The discussion of the Bill in Committee and on Second Reading showed that there was broad support for its objectives. I am grateful to the hon. Member for Aberdeen, North for the support that he gave again this evening for the purposes of the Bill.

It has been suggested that if the PLA and the MDHC cannot meet the remit that my right hon. Friend has set for them, they will be able to turn to the Government for more money. I repeat what I said on Second Reading about the Government's attitude to future financial assistance to the two boards. We shall for the time being continue to meet the full cost of severances, to provide loans for essential capital investments and to guarantee limited overdraft facilities to meet day-to-day trading fluctuations. However, there will be no more operating subsidies for either body. That sort of help came to an end last December and will not be resumed. It is vital that everyone involved in the two ports keeps that essential consideration in mind.

The hon. Member for Newham, South suggested that the Bill was no settlement of long-term problems. The future of the PLA and the MDHC depends not on the Government but on the efforts of the managements and work forces. Further manpower reductions are needed and I hope that they will be achieved under the current extremely generous special severance offer under which dockers in London and Liverpool, as well as other scheme ports, who apply by the end of April can receive severance payments of up to £22,500.

I can confirm in answer to my hon. Friend the Member for Southend, East (Mr. Taylor) that under the present management the PLA, due to the efforts of the management and the work force, has made considerable progress in dealing with its problems. Arrangements are under discussion for the police force and if my hon. Friend will permit me I shall write to him fully on that issue.

I am confident that London and Liverpool will continue to be major ports for many years to come. The assistance that we have made available, culminating in the Bill, has given the PLA and the MDHC a base from which they can achieve financial viability with continued effort and commitment. It is now up to the ports themselves to make the most of this opportunity.

Question put and agreed to.

Bill accordingly read the Third time and passed.