§ As amended (in the Standing Committee), considered. Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. David Mitchell.]
§ 5.1 pm
§ Mr. Peter Snape (West Bromwich, East)
The House will be aware that the Bill was the subject, if not of controversy, certainly of some debate in the Second Reading Committee and at a further stage, initiated by Opposition Members. I shall refer to part II and to the ascertainment of limitation tonnage in clause 12. The Minister will remember from the debates on those two previous occasions that the question that exercised Opposition Members was the vexed problem of tonnage limitation and the historical reason why the damage caused to a structure by a ship is covered in a certain way for insurance purposes. That insurance system for ships bears little resemblance to vehicle insurance, to which hon. Members may be more accustomed, as it is based on tonnage. The result has been that for many years shipowners have, through their insurers, paid for only a small proportion of the damage caused by their ships.
This matter is especially topical at present because, wearing another hat, the Under-Secretary of State for Transport has some responsibility for the future of our railway system. He will be as aware as I am that the problem of adequate finance for our railway system has exercised both Conservative and Labour Governments and is, of necessity, controversial at present.
The limitation of liability under clause 12 has proved to be extremely expensive for British Rail and an application to close a stretch of railway line running from Gilberdyke junction to a point near to Doncaster is now before the Department of Transport. The proposal to close that railway line arises as a direct result of damage caused to a bridge at Goole by passing ships striking it.
Because of clause 12, British Rail has failed consistently over the years to receive adequate compensation for damage caused to the bridge, and it now says that it will cost approximately £2 million to repair the bridge. Because British Rail says that it cannot afford £2 million and there is no other source of funding for the project, it has initiated the closure procedure for that stretch of railway line.
Clause 12 will also have an impact on the railway system further north. The alternative route to Hull by rail, if one does not use the line that is to be closed, is via Selby. With your knowledge of that part of the world, Mr. Deputy Speaker, you will be aware that the railway line from Selby to Hull passes over a swing bridge at Selby. Clause 12 will cause difficulties for British Rail, because the bridge has been struck by passing ships on a number of occasions. After those accidents it has not always been easy to trace the shipowners concerned, and even when they have been traced it has been impossible for British Rail to receive adequate compensation for damage caused to its bridges because of the ascertainment of limitation tonnage in clause 12.
We tried in the Second Reading Committee and at a further stage to persuade the Minister that that was the case. We hoped, because those matters were grouped under the umbrella of his Department, that he would 1003 consider with sympathy the need for adequate repair of one or possibly both bridges. We went so far as to suggest that he might be able to find the funds to replace completely the damaged bridge at Goole so that the railway line closure proposal could be withdrawn.
Understandably, the Minister referred us continually to clause 12 and said that it was not a matter for the Department of Transport to fund those needs from its sources, but for British Rail to trace the owners of the offending ships and to proceed accordingly against them under clause 12. However, regardless of the amount of damage that each ship causes to such a structure, because of the wording of clause 12 the compensation available is extremely limited and has rarely, if ever, covered the cost of the damage caused by the blow from the passing ship.
Opposition Members understand the Minister's dilemma. It is difficult to see how, under the Bill, sufficient funds could be found to cover the problem. It is unjust that a publicly owned industry which provides a service should be forced to withdraw that service because of the tonnage limitation clause.
The Minister will know that, coincidentally, today is the closing date for objections to be sent to the Transport Users Consultative Committee about the proposed closure of that line. I hope that in considering the recommendations of the TUCC the Minister will insist on a public inquiry into the future of the line, so that the Bill can be brought to the attention of whoever conducts the inquiry, and I hope that it will be pointed out to him that clause 12 has caused considerable financial problems for British Rail. Unless another method of financing is found, this line, and perhaps the one from Selby to Hull, will be closed. Any railway line that crosses a navigable river runs the risk of being damaged, the line may eventually be closed, and the people of that area will be deprived of a service.
We are aware that the Department is in difficulty on this matter, since British Rail has promised to keep open the line between Selby and York now that the east coast mainline has been diverted because of the new Selby coalfield. British Rail pledged in the mid-1970s, in agreement with the National Coal Board, that when funding was provided for the Selby diversion, a shuttle service would continue to be provided between Selby and York. However, the continuation of the shuttle service is likely to be prejudiced by clause 12. Having decided to keep open the line—
§ Mr. Deputy Speaker (Mr. Harold Walker)
Order. While the hon. Gentleman has been speaking I have read and re-read clause 12, and it is difficult to find any reference to those railway lines. I hope that the hon. Gentleman will try to relate his remarks a little more closely to the Bill.
§ Mr. Snape
I am grateful for your tolerance thus far, Mr. Deputy Speaker. The difficulty has always been, under our procedures, to debate such matters at all. It is a strange paradox that when a publicly owned industry, which is directly responsible to the Department of Transport—a Minister from that Department is replying to this debate—has a problem, one cannot talk about the problem until a solution to it is found under the umbrella of the Department of Transport.
1004 The Minister will be aware of the depth of feeling in that part of the country about this matter. It would be wrong if shipowners could close this railway line simply because they have not paid adequate compensation to British Rail after their ships have caused the damage. I hope that the Minister can stay within the rules of procedure and find an adequate way of replying to my remarks. According to the Conservative Member of the European Parliament for Humberside, application has been made to the regional development fund for alternative financing so that the bridge can remain open. The House would be grateful if the Minister would agree to reconsider the problem.
§ Mr. Michael Colvin (Romsey and Waterside)
My hon. Friend the Member for Dorset, South (Viscount Cranborne) suggested that it might be possible for me to speak until 7 o'clock this evening, but I assure the House that on no account will I do so. I shall be brief.
I welcome the ingenuity of the hon. Member for West Bromwich, East, (Mr. Snape) in managing to get in a reference to British Rail in a debate on clause 12 of part II—entitled "Limitation tonnage"—which relates to the extension of British possessions overseas. The hon. Gentleman got away with it. I assure him that I do not intend to sail quite so close to the wind.
§ Mr. Colvin
I think that we are talking about different parts of the Bill. I am looking at clause 12 in page 9, but I stand corrected by the hon. Gentleman.
This Bill is welcome and is largely non-controversial, as 'one would expect of a Bill that enjoyed wide support beforehand and that had a smooth passage in the other place. It has the support of the seafarers' trade unions, the General Council of British Shipping Ltd. and, most importantly, the Health and Safety Executive. The Bill provides for the service of prohibition and improvement notices to assist the enforcement of merchant shipping legislation. I accept that that is necessary today, with ships becoming larger and often carrying dangerous cargoes of chemicals, or noxious or explosive gases. The dangers to crews are obvious, but sometimes we forget that there are, equally, dangers to those people ashore. My constituency houses Fawley refinery, where tankers call regularly, and it also faces Southampton, where, equally, dangers could arise. Hon. Members will recollect the tragedy of the accidental blowing up of the Betelgeuse in Shannon, Ireland, in January 1978, with the loss of 50 lives, and no one wishes a disaster like that to occur in the United Kingdom.
Unfortunately, this legislation comes at a time when the shipping industry worldwide is very depressed, and British tonnage is at a low and declining level. There have been several discussions about the analysis of our fleet, which is largely one of definition. Most people would wish more shipping to be registered under the United Kingdom flag. To encourage more shipowners to do so, it will be necessary to remove some of the more petty rules and regulations and perhaps to simplify those specifications for ships which are unnecessarily stringent, such as the width 1005 of hatchways, the tolerances of metals, and the carrying of first-aid kits, and which merely put off the registration of ships under the British flag.
It is appropriate to pay tribute to my hon. Friend's predecessor at another Department, Mr. Iain Sproat, one of whose parliamentary campaigns in his last year of office was the removal of regulations to facilitate registration in Britain. We often hear quoted the example that it would have cost £750,000 to alter a ship so that it could be registered in Britain. The work would have taken six months, and the cost, in terms of cash and time, meant that it was not worth while for the foreign owner to register in Britain. We want a climate to encourage people to register in Britain, and thereby increase British flag tonnage. Perhaps when my hon. Friend replies he can assure us that nothing in this legislation will hinder registration in Britain.
Unfortunately, at present Britain is one of the least attractive countries in which to register ships. If we are to maintain our position as a leading, though declining, maritime nation, it is essential that it becomes more attractive, and we must maintain our position from an economic and military defence point of view. There are far too many Russian ships in British waters today. They can hold us to ransom not only militarily but commercially, so it is of vital national interest to increase the British flag.
I have three questions to ask the Minister. Part II of the Bill refers to the limitation tonnage, which is highly technical. The reasons for part II of the Bill are to bring us into line with our competitors overseas. That is important, but it is also vital that we are in line internationally on enforcement. As the House knows, there are plenty of cowboys around the world who are prepared to bend the rules—countries that may be not so enthusiastic about enforcement when it does not suit them. The House will no doubt like to draw a comparison with what would happen if British lorry drivers in this country were to behave as French lorry drivers are currently behaving in France. I suspect that they would all be in gaol by this time. I hope that the United Kingdom will not be out of line with its international competitors, and I should like an assurance from my hon. Friend on the question of enforcement.
My second question concerns the inspectorate, as set out in clause 7. I should like to know who the inspectors will be, from where they are likely to be recruited and what training they could expect to be given before becoming fully qualified.
My third question relates to compensation for prohibition notices served wrongly. I should like to know what happens in other countries. Can our shipowners expect the same treatment in other ports of call if they are inspected and wrongly detained? Can they expect to be paid compensation in the same way as shipowners in this country will be paid compensation for wrongful detention?
I hope that the Bill will have the same speedy and safe passage that we wish to those who go down to the sea in ships whom it is our duty to protect.
§ Mr. Stephen Ross (Isle of Wight)
The hon. Member for Romsey and Waterside (Mr. Colvin) and I share constituencies which border on to the Solent. Like the hon. Gentleman, I welcome the measure, I hope that it will lead to greater safety in our waters, because we have had more 1006 than our fair share of problems in both the Solent and the English Channel in recent years. I agree with the hon. Gentleman about the parlous state of our Merchant Navy. I accept that it is imperative not to do anything to make life more difficult for the merchant fleet and those who own our ships who are greatly in need of any help that can be given. As a member of the Maritime League, I hope to play some small part in trying to revive the fortunes of our Merchant Navy to which the country owes so much and to which it will owe so much in future. If it is not there to step in and help the country, as it did during the Falklands crisis, God help the country.
I congratulate the hon. Member for West Bromwich, East (Mr. Snape) on his great speech in defence of the Goole and Gilberdyke railway. I hope that the hon. Gentleman will win his battle. If I remember rightly, the bridge was closed completely at one time, and British Rail spent a considerable amount of money getting it back into operation. The Bill clearly makes inadequate provision for such compensation. I hope that, even at this late hour, saner counsels will prevail, and that that line will remain open.
I want to ask the Minister one question about the arbitrator. If this matter was dealt with in Committee, I aplogise for raising it again. Is there any way in which the arbitrator can invite assessors to help him in dealing with complicated and specialised subjects? I am aware of the preference of the National Union of Seamen for an industrial tribunal. The other union concerned has suggested the possibility of bringing in assessors. That suggestion appears sensible, although I accept that the arbitrator will be chosen to meet the requirements of the qualifications set out in page 5 of the Bill.
The General Council of British Shipping is satisfied with the contents of the Bill, but warns that compensation could be considerable in the event of a ship being delayed by a prohibition notice that was decided by an arbitrator to be unreasonable. It is hoped that such incidents will not occur, for the reasons I gave at the beginning of my speech. I recognise the current problems of those involved in the merchant fleet. I hope that the Bill, which is sensible and well-intentioned, will not exacerbate those problems.
§ The Under-Secretary of State for Transport (Mr. David Mitchell)
On Third Reading, a number of interesting points have been raised. It may be for the convenience of the House if I set them within the context of the Bill.
Part I of the Bill will improve the enforcement of merchant shipping legislation through the service of improvement and prohibition notices similar to those which may be served under the Health and Safety at Work etc. Act 1974, and other legislation.
An improvement notice can be served where an inspector is of the opinion that a person is contravening, has contravened or might contravene any of the relevant statutory provisions. The notice will require the contraventions to be remedied by a specific date, and can indicate the appropriate remedy.
A prohibition notice can be served on a person in charge of activities aboard ship related to one of the statutory provisions where the inspector is of the opinion that the activity, if carried out or continued, may involve a risk of serious personal injury, or serious pollution of navigable waters. I know that a number of hon. Members are 1007 concerned about pollution of navigable waters. A prohibition notice directs that the activities should cease, or not be carried out. It may include advice on ways to avoid the risk.
Disputes which cannot be settled by negotiation between the inspector and the person on whom the notice is served before it takes effect are required to be referred to an appropriate qualified arbitrator. The arbitrator can confirm, amend or withdraw the notice. The hon. Member for Isle of Wight (Mr. Ross) referred to the role of the arbitrator, and I shall return to the specific point that he raised.
An arbitrator is empowered to award compensation for the wrongful issue of a prohibition notice where the risk of injury or pollution would arise only if the ship went to sea, and where the effect of the direction in the notice was to prevent the departure of the ship, unless certain specified matters or contraventions were remedied.
It might be helpful if I were to say a little more about part II of the Bill. The House would not want me to enter into all the technicalities, but it may be helpful if I explain that part II of the Bill has a very limited objective. It deals with a technical problem that has arisen as a result of the entry into force last year of the new tonnage regulations, based on the 1969 tonnage measurement convention, and is necessary so that the United Kingdom may continue to comply with its existing international obligations under two international conventions to which it is party. That is important if the victims of maritime incidents are to receive full compensation under the existing regime. I shall respond later to what hon. Members said about changes in the regime.
In Committee I said that the United Kingdom had pressed other states in the International Maritime Organisation to ratify the 1976 limitation convention as soon as possible so that the higher limitation amounts that the convention provides may come into force in the near future. I shall explain later when that may be.
The new limitation amounts are set out in the Merchant Shipping Act 1979. When the four Nordic countries have ratified, as they are expected to do next month, only one further ratification will be required. The convention will then come into force. The 12-state criteria are the basis for international entry. Several other states are working on legislation. I hope that the entry into force conditions will be met this year.
More generally, the United Kingdom has been pressing in the International Maritime Organisation, the headquarters of which are in London, for more realistic limitation amounts when international conventions are revised and for them to be kept in line with inflation. The Government believe that that is the right approach, given the international character of shipping. That was raised by my hon. Friend the Member for Romsey and Waterside (Mr. Colvin). It is important that progress on maritime law should continue to be made through international agreement rather than by unilateral action which could lead to general confusion and not be helpful to British shipping interests, or to others.
The Bahamas, France, Japan, Liberia, Spain, North Yemen and the United Kingdom have ratified or acceded to the 1976 convention. The United Kingdom implementing legislation for the 1976 limitation convention is contained in sections 17 to 19 and schedules 4 and 5 to the 1008 Merchant Shipping Act 1979. The expected ratification by the four Nordic countries will mean that we are only one ratification away from the convention coming into force.
The hon. Member for West Bromwich, East (Mr. Snape) mentioned the Goole bridge today, as he did in Committee. He asked about the implication of liability limitations on that swing bridge. The bridge has been damaged by ships colliding with it on a number of occasions. It has been said that British Rail's failure to get adequate compensation from shipowners to meet the cost of repairs and strengthening is a factor in the British Railways Board's decision to propose the withdrawal of the passenger service between Goole and Gilberdyke. The closure proposal is going through the statutory procedures. About 1,500 objections have been made to the Transport Users Consultative Council, which plans a public meeting to consider them and representations from elsewhere. Today was the closing date for the receipt of objections. I do not know whether the hon. Member for West Bromwich, East has registered his objection with the TUCC, but he has certainly registered it in the House and in Committee.
The final decision whether to allow the closure is for my right hon. Friend the Secretary of State. He and I will take into account any relevant factors. Because of the quasi-judicial nature of the decision, it is inappropriate for me to say more about it, but I can help the hon. Member for West Bromwich, East further in a number of ways.
Mention has been made of the EEC grant towards possible bridge repairs. The hon. Member for Kingston upon Hull, East (Mr. Prescott) wrote to my right hon. Friend the Secretary of State recently asking about the possibility of such a grant. By chance, my right hon. Friend wrote back yesterday, and explained that grants from the European development fund are designed to help to correct regional economic imbalances. They are normally only available for new work, though renewal schemes may qualify where there is a significant amount of technological improvement or where they make for more efficient operation.
I do not know whether the hon. Gentleman believes that it is possible to prove that a significant technological advance could be involved. In the normal way, such a grant would apply to the modernisation of railway signalling and moving technologically from old-fashioned signalling. Such a technological advance might succeed in attracting grant. I am not familiar with the case, but I doubt whether the bridge could be the subject of technological advance.
§ Mr. Snape
I am a recent traveller on the line. Old-fashioned semaphore signalling is used, so perhaps there is reason for a grant. Would it not be a technological advance to do what British Rail would like to do and replace the bridge, at a cost of £2 million, by one that is not liable to be damaged by passing ships? Would not that be covered by clause 12?
§ Mr. Mitchell
With respect, the hon. Member for West Bromwich, East is in error in assuming that British Rail would like to replace the bridge. The hon. Gentleman may have other information, but I understand that British Rail has not made an investment proposal to replace the bridge. It would prefer to deal with the problem in a different way. It is not right for me to go further into the question of the appropriateness of its application for closure, but it is not 1009 true that British Rail proposes a £2 million investment in the bridge or that I have prevented it from doing so. Its judgment is that that is not the way to proceed. Seeking EEC aid, therefore, presents difficulty.
In Committee, I said that the United Kingdom had been pressing other states in the International Maritime Organisation to ratify the 1976 limitation convention. The limitation amounts to which the hon. Gentleman referred are set out in the Merchant Shipping act 1979 which was introduced by the previous Labour Government. Therefore, I do not feel he is on strong ground in suggesting that it is inadequate.
§ Mr. Snape
We shall not get far if we start running back through history and looking at which political party introduced which Act. Does not limited liability for ships go back to an Act of Parliament of 1894? I am sure that that was not introduced by a Labour Government. I am complaining about the principle that the compensation payable as a result of damage depends on the tonnage of the ship that caused the damage. That, in 1984, is somewhat illogical. I hope that the Minister will agree that, regardless of who has done what in the past, liability should be looked at in the future.
§ Mr. Mitchell
I do not have a closed mind on that. The hon. Gentleman will appreciate that we have to move within the terms of the international agreement. In the light of what he said, we shall consider whether in future discussions in the committee of the IMO we should consider further lifting the figure. A considerable lift will come when the new convention has been ratified by 12 states and thus brought into operation.
Under the existing regulations, compensation would be limited to about £48 per tonne of the vessel. At Goole that would mean that on a 1,000-tonne vessel—I understand that the maximum size of vessels coming up the river would be between 1,000 and 2,000 tonnes—there would now be a limitation of £48,000. When the IMO convention comes into force, that figure will go up by three or four times, so the amount of compensation will become considerable. The compensation for a small vessel of 500 tonnes, which at the moment would be about £25,000, after ratification would become about £120,000.
I am not claiming that the new limits are wholly adequate, that I stand on that and that is the end. However, they represent a significant step forward and we should take account of that. That bridge has been struck 19 times since 1974, and on 10 occasions it was more than superficially damaged. Clearly, if the new convention were in operation and the new amounts of money were forthcoming on vessels of the size about which we have talked, the funds to repair the bridge would be substantial were the Bill to be enacted. I hope that the Bill will be agreed to later this evening.
My hon. Friend the Member for Romsey and Waterside, whose constituency marches beside mine, mentioned the complexity of regulations on transfer to the United Kingdom flag. I was delighted to hear the warm tribute that he paid to my predecessor, Mr. Iain Sproat, who clearly identified the need to help British shipping to become competitive. That is a view from which I do not dissent. My hon. friend referred to the need to bring to the minimum the cost of transfer to the United Kingdom flag. We have recently agreed with the Norwegians a harmonisation of the terms upon which transfer from one 1010 flag to the other can take place, and which will make it considerably easier and less costly to transfer to the United Kingdom flag.
My hon. Friend sought the assurance that the Bill would not prevent that transfer, and I give him that assurance. He also referred to it being unattractive to transfer to the United Kingdom flag. However, some 40 per cent. of the United Kingdom flag is foreign owned. It is a flag of convenience to many other countries. It is attractive to nationals in deciding where and under whose flag to operate their fleets. The disadvantages of United Kingdom flags are not quite as many or as large as my hon. Friend feared. There are substantial tax advantages in free depreciation, which has an effect on the numbers who decide to operate under the United Kingdom flag. but that does not take away from the substance of the points made by my hon. Friend about the need to keep the regulations to the minimum. I agree with that, and it is something on which my Department keeps a watchful eye.
My hon. Friend also raised the problem of enforcement and referred to some of the substandard vessels that are to be seen around. United Kingdom operators are having to operate in the depths of the recession. There is substantial overcapacity in shipping, partly because of the recession, partly because of the use of larger vessels and more of them, and partly because of the strictly non-commercial shipbuilding practices encouraged in other countries. My hon. Friend is right to draw attention to the need to ensure that other countries are not able to trade in substandard vessels, so creating, on top of what is already tough competition, unfair competition.
It is with that in mind that we have been re-examining our arrangements for the state control of inspection of vessels in United Kingdom ports. We are identifying more clearly than we have done before the vessels about whose history we know little, so that the deployment of our manpower and services on looking at vessels that need to have inspections to see that they are up to standard is more closely directed to those which have not been seen recently or those which, if they have been seen recently, have something wrong with them. I hope that my hon. Friend will feel that we are making useful moves in port state control, about which he has asked, to ensure that substandard tonnage is not unfairly competing with our own.
My hon. Friend asked me whether the Bill will apply to other countries in the United Kingdom. Yes, it will. There is no difference, and they will be treated alike. That is within the limitation of international law, which binds us all in this respect.
§ Mr. Colvin
My question was also directed towards finding out about other countries with similar legislation such as that proposed in the Bill. For instance, if a British shipowner has his ship inspected in a foreign port and is wrongly detained, could he, under the present legislation overseas, expect compensation following arbitration? That is one of the provisions in this measure. However, will our shipowners get the same treatment when they call at overseas ports?
§ Mr. Mitchell
No, I cannot give my hon. Friend that assurance. We are, of course, constrained by what we can get consensus and international agreement on. Vessels in our ports, under whatever flag, are treated alike.
I was asked about the protection of the safety or health of seafarers on foreign flag ships. In this respect, ILO 1011 convention 147 permits coastal states to protect the safety and health of seafarers on foreign flag vessels, and a prohibition notice could be issued in the event of serious personal injury. I hope that that further assurance will be acceptable to my hon. Friend.
The hon. Member for Isle of Wight, with considerable versatility, having been on his feet in the House last night on the subject of aircraft noise, asked whether an arbitrator could bring in an assessor if he wished to do so. He can do that. It is a matter for his judgment. He is the person best qualified to know whether there are factors beyond his ken and whether he should therefore arm himself with additional advice.
I think that I have covered all the matters that have been raised. On the basis of what I have said, and in view of the reassurance that I have given in this brief debate, I hope that the House will give the Bill a Third Reading.
§ Question put and agreed to.
§ Bill accordingly read the Third time, and passed, with amendments.