Ports (Finance) Bill

HC Deb 23 April 1985 vol 77 cc798-830 7.25 pm

The Secretary of State for Transport (Mr. Nicholas Ridley)

I beg to move, That the Bill be now read a Second time.

This is a short, but necessary, Bill which I commend to the House. It is in three parts, and it deals with three distinct aspects of port finance.

Clauses 1 and 2 enable the Government to continue to help with the cost of restructuring an industry which has undergone enormous changes in the past 20 years. The reasons for those changes are well known the development of bigger but fewer ships; the need to minimise the time ships spend in port because of the high costs of ship operation; the effect on our patterns of trade of the development of North sea oil and of our membership of the European Community; improvements in our inland communications, both road and rail; and, of course, the evolution of new techniques of cargo handling, in particular the "container revolution." Ships now spend less time in port, so port facilities must be used more intensively; fewer berths are needed, and therefore fewer dockers. At the end of 1960, there were 74,000 registered dock workers. At the end of 1970, the number had fallen to 45,000; at the end of 1980 it had fallen to 23,000. By the end of 1984, the number of registered dock workers had fallen to 12,500.

Those dramatic changes have not been easy for the industry to cope with, but there has been remarkably little friction.

That contraction has been achieved largely through voluntary severances. In 1981–82 it became clear that the cost of this to the industry was becoming too severe, arid the Government decided to assist in two ways.

First, we recognised that the ports of Liverpool and London faced severe problems. Those ports had dominated the conventional break-bulk cargo business in deep-sea trades, and were therefore hard hit by the containerisation of so much of this traffic. They were faced with enormous problems of rationalising their labour, their organisation, and their port facilities. We therefore decided that it would be right to assist them in reducing their manpower and in enabling them to continue to operate while these changes were carried through. The Ports (Financial Assistance) Act 1981 empowered the Government to make available to London and Liverpool up to £160 million by way of grants, loans and guarantees. That ceiling was raised in the Transport (Finance) Act 1982 to £360 million.

Secondly, in 1982 we decided to help the industry as a whole to meet the cost of severance payments to registered dock workers. As the House will know, special arrangements for severance apply to registered dock workers. They are not covered by the Redundancy Payments Act 1965; nor is their severance paid for directly by their employer. In 1969, the employers of registered dock workers entered into a national voluntary severance scheme, which is administered by the National Dock Labour Board. The board makes severance payments from a fund that it administers on behalf of the employers, and which is paid for ultimately by a levy on the employers.

Although by 1982 the fund had been substantially supported by Government loans, it was clear that at the rate at which voluntary severances were continuing, it was beyond the means of the employers both to service that debt and to meet the continuing cost of new severances. So we agreed to a three-year moratorium on the servicing of that debt, provided that the employers paid to the National Dock Labour Board a levy of £12 million annually to meet the cost of new severances.

A large part of the assistance which the Government have given to the Port of London Authority and the Mersey Docks and Harbour Company under the 1981 Act has been in the form of grants to pay the full cost of severing registered dock workers in those two ports—no less than £106.7 million. That has not been a discrimination in favour of London and Liverpool. The money has, in fact, benefited all ports in the dock labour scheme, because it has relieved the ports collectively of a cost that would otherwise have fallen directly upon the national voluntary severance scheme, and which they would otherwise have had to fund themselves.

London and Liverpool have continued to pay their share of the levy although they have not, because of special Government assistance, been drawing benefit in return from the scheme.

I have described the background in some detail because I believe that it helps to explain the reasons for clauses 1 and 2.

Since 1982, the reduction in port manpower has continued apace. In just over three years the register of dock workers in scheme ports has fallen by about a third and now stands at just under 12,000. In London and Liverpool, the decline has been proportionately greater, and the Government have committed in full the £360 million that Parliament authorised in 1982 for assistance to the PLA and the MDHC.

Moreover, the three-year moratorium on the servicing of the debt of the national voluntary severance scheme has now expired, and though the package of assistance for the scheme agreed in 1982 has made a major contribution to dealing with the severance finance problem, it has not yet solved it. The past year has been a particularly difficult one for the ports industry. As a result, the number of approved applications from registered dock workers for severance under the scheme has exceeded expectations. The number is well in excess of that which could be financed from the board's £12 million annual levy income. In fact, the rate of dock worker severances in scheme ports outside London and Liverpool has been running at over 1,000 a year, which on present scales costs £25 million a year.

To help the industry we have made a series of stop-gap arrangements to enable the board to fund those severances. The last of these, announced by my right hon. Friend the Secretary of State for Employment in his minute laid before Parliament on 30 January, was a Government guarantee of the board's bank overdraft of up to £17.2 million, in addition to outstanding Government loans of £44.5 million. As we made clear at that time, our agreement to guarantee the commercial loan was intended to provide time to pursue alternative proposals for financing severances. We believe that there must be a continued strategic approach to the long-term restructuring of registered ports.

Dr. Norman A. Godman (Greenock and Port Glasgow)

The Minister must forgive my parochialism, but I see that there is no specification of Scottish ports in clauses 1 and 2. Does he anticipate that part of the grant mentioned in clause 1 will go towards redundancy schemes in one or more of the Scottish ports?

Mr. Ridley

Yes, any moneys paid under the Bill—whether under clause 1 or clause 2—will go to the national voluntary severance fund and, as such, will be used to pay for the redundancies of any registered dockers in any scheme port. Therefore, any Scottish scheme port will benefit just as much as any English scheme port. Non-scheme ports are totally outside the scheme.

Mr. David Marshall (Glasgow, Shettlestone)

Will all dock workers be treated equally? Will the same severance scheme payment apply in Glasgow as applies in Liverpool or London?

Mr. Ridley

Hitherto, that has been the case, and I see no reason why it should not continue to be so. I must make it clear that there is also the interest of the employers in what they pay redundant workers. What we do is to provide the money for a certain level of severance—in this case £25,000 per head — but making a docker redundant is first suggested by the employer, then approved by the National Dock Labour Board, and at that point the final decision is taken. It is a fairly complex matter, but there has never been any discrimination.

Since our agreement to guarantee the commercial loan, discussions have been proceeding and are continuing with the port employers. But it is already clear that the scheme ports cannot meet the full cost of future severance needs and at the same time service and repay their outstanding severance debts. It is against that background, and the unique circumstances of the manpower regime in this industry, that clause 1 is necessary.

We cannot be sure of the future level of severances, but we must make provision now for some extra assistance towards severance costs. Therefore, we propose a new power to pay grants to the NDLB as a contribution towards the cost of registered dock worker severances. These grants are limited to £10 million, but a contingency provision is included to increase the amount in future years up to a maximum of £40 million, subject to affirmative resolution of the House.

This help is merely a recognition by the Government of the special difficulties of the dock labour scheme ports as they move towards providing an unsubsidised and competitive service to their customers. I have emphasised to the employers that while these powers will enable the Government to continue to contribute to the cost of dock worker severances, the cost of severances in this industry, as in other industries, is very properly a charge on the ports themselves. Soon they will have to shoulder the burden unaided.

Clause 2 relates to the Mersey Docks and Harbour Company and the Port of London Authority. Both have made strenuous efforts to adjust, and, with Government assistance, they are moving towards viability. They have, however, some way to go, and, in view of their importance, we believe that we should continue to help them towards that goal.

Mr. Roger Moate (Faversham)

Is it not a matter of the utmost regret that we are now raising the grants and loans to those two ports to £500 million, which by any standard is an enormous sum of money? Is not my right hon. Friend now doing what he often accuses others of doing — throwing money at a problem and thereby deferring the day when we reach a competitive position and place those two ports on a viable and independent basis?

Mr. Ridley

This is not discrimination in favour of London and Liverpool, because the money actually goes towards the total expenses of the severance fund. It benefits London and Liverpool only to the extent that any of it may be used on non-registered dock workers' severances. I hope that my hon. Friend will agree that, as shown by the figures that I gave earlier, we have come a very long way towards achieving a position where scheme ports stand on their own feet and do without subsidy.

The fact that we have come down from 70,000 to 12,000 registered dock workers shows the immensity of the task that faced the industry. I believe that there was no alternative but to assist at least with compensation for those who lost their jobs due to the technological revolution in the docks.

Mr. Donald Anderson (Swansea, East)

The Secretary of State appears to be maintaining that clause 2 does not provide for any discrimination in favour of those two major ports as opposed to other scheme ports, yet the explanatory memorandum states that part of the additional sum of £140 million is for supporting them while such measures are being taken". What can that mean other than a subsidy to those two major ports which is not available to other ports, and which must, by definition, make those other ports less competitive?

Mr. Ridley

The explanatory memorandum may be misleading on that point. It is the Bill that matters. The only determinant of how much the Government have paid in the past has been the number of redundancies declared by and accepted from Liverpool and London, and that determines the sum of money — £25,000 by 1,000 redundancies, which makes £25 million — that the Government have paid to the fund. That sum is then available to all scheme ports for the redundancies that arise within them. At the same time, all scheme ports, including London and Liverpool, pay a share of the levy that is based on their number of employees. Therefore, in that respect the Bill does not produce any discrimination.

There is an element of discrimination in that the Government have been paying towards the cost of severing the non-registered dock workers in London and Liverpool, but not in other ports. As the hon. Gentleman will soon hear, we intend to phase out that assistance so as to take away the last element of discrimination.

The £360 million of assistance authorised by Parliament under previous legislation has been fully committed. Some £145 million has been made available to the MDHC, £170 million to the PLA and £24 million to the National Dock Labour Board in respect of severance payments made to registered dock workers in London and Liverpool before 1981. The remainder—£21 million—is earmarked for a debt write-off for the PLA. The authority to write off part of the PLA's debt to the Government and to repay commercial loans which the Government had guaranteed was given in the Ports (Reduction of Debt) Act 1983.

Regrettably, neither the PLA nor the NDHC is yet in a position to manage its own affairs unaided, so the Bill proposes to raise the limit for financial assistance from the Government by £140 million up to £500 million. I cannot say how much of this additional money it may be necessary to draw upon. A substantial amount will be needed for further severances, as there are still substantial surpluses in both ports.

Scheme ports should not be under any illusion that this increase in the potential funds available would mean that they can slacken their efforts to restore their industry to health — far from it. The tasks facing the industry remain tough ones.

I add two points. First, my predecessor, my right hon. Friend the Member for Guildford (Mr. Howell), said at the end of 1982 that we were no longer prepared to make grants to the PLA and the MDHC to cover any deficits on their annual profit and loss accounts. We have stuck to that. I intend to continue to stick to that. There is to be no return to deficit funding.

Secondly, it is my firm intention to phase out assistance to these two undertakings. They should be in no doubt that public finance will be deployed for one purpose only: to put those ports under strong and steady pressure to make the changes necessary to achieve full commercial profitability, so that they can compete fairly with other parts of the industry. I therefore intend, as I told the hon. Member for Swansea, East (Mr. Anderson), to phase out, over a period, the Government grant towards the cost of severing their non-registered employees. These payments have given the PLA and the MDHC an advantage which other port undertakings have not had. It is right that in a competitive industry we should insist upon an equitable framework for competition.

The second and third parts of the Bill carry forward our general policy of deregulation and removing unnecessary Government controls and restrictions. My hon. Friend the Under-Secretary of State will be able to expand on what I briefly say when he comes to wind up the debate, if he is fortunate enough to catch your eye, Mr. Deputy Speaker.

Clauses 3 to 5 remove various ministerial controls over trust port borrowing and other matters. These controls take no consistent pattern and are no longer appropriate. Their removal is consistent with the decision, announced in the autumn statement and confirmed in the recent public expenditure White Paper, to transfer trust ports' capital investment expenditure to the private sector from 1 April 1985. Up to that date, their investment had counted—increasingly illogically — as public expenditure. I say "illogically" because most ports — other than local authority ports—now obtain capital for new projects from the private sector anyway.

The funding of trust ports' capital investment in the main from private market sources has led us to conclude that the hotch-potch of ministerial consent provisions in trust ports' local legislation should be removed—partly because they are no longer needed and partly because their application and effect differ widely from one undertaking to another. Indeed, no trust ports' local legislation is alike in this respect. In practice, the powers of many ports are so framed that they can borrow all that they need within the basic limit specified in their local enactments, so they do not have to seek specific ministerial consent.

The third part of the Bill is clause 6. A year ago I announced my decision to do away with Government controls over new harbour development. Under section 9 of the Harbours Act and the control of harbour development orders made under that section, no harbour development costing more than £3 million could be undertaken without my approval. This was an anachronism in a commercial, competitive industry. Accordingly, I made an order to revoke the orders which gave effect to section 9. The order was debated, on an Opposition motion, on 19 June last year, and approved by the House.

Section 9 itself, however, still remains on the statute book. Clause 6 of the Bill repeals it, along with all the consequential provisions which relate to it. The clause fulfils the undertaking that I gave a year ago, to repeal section 9 at an early opportunity.

The Bill is needed to help our ports to bring their manpower numbers into line with the requirements of the traffic that they now handle. Without these powers, scheme ports risk being forced to keep, and to pay, staff for whom they no longer have any need. This adds to their costs and hampers their ability to compete with non-scheme ports. It makes it more difficult for our ports to meet the competition from continental ports.

Therefore, I urge the House to give the Bill a Second Reading.

7.45 pm

Mr. Roger Stott (Wigan)

I apologise to the Secretary of State for the absence of my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) who, as the Secretary of State is aware, is serving on the Standing Committee on the Transport Bill. She is at dinner at the moment, but she is going back to the debate on deregulation of the bus industry. As we do not have as many shadow spokesmen as the Secretary of State has Ministers, it is important that my hon. Friend remains in her place. I hope that the hon. Member for Southwark and Bermondsey (Mr. Hughes) will not seek to gain possession of the Dispatch Box, because I shall be in my place throughout the debate.

The Secretary of State has given the reasons why the Government have yet again found it necessary to come to the House to seek approval to increase the limits of the financial assistance to the scheme ports, particularly to the ports of Merseyside and London. I shall not be encouraging my hon. Friends to seek to divide the House, because we are all too well aware of the financial difficulties that both these ports have undergone and in many respects are still undergoing.

The port authorities covered by the scheme will have to pay £800,000 a month in April and May to finance the voluntary redundancy fund; that is 20 per cent. less than last year. I understand that the severance scheme is about £58 million in debt, most of it to the Government. The Bill will mean that the National Dock Labour Board, as the Secretary of State said, will get £10 million grant, with further powers to receive another £30 million some time in the future. I have watched the hon. Member for Faversham (Mr. Moate) through transport debates over the years. It makes a refreshing change, although he may not agree, to see this particular Secretary of State making public funds available to ensure that the scheme works properly.

Mr. Moate

I wish that it were a refreshing change. In this industry, this Secretary of State and this Government have consistently, time after time, come back to the House and asked for more money. Every time, we are told that it is likely to be the last time, so why should we believe it now?

Mr. Stott

It makes a refreshing change for this Secretary of State to say that he is prepared to put more public money into making the scheme work properly. We are not complaining about that.

The decline in manpower in the port of London and in Liverpool illustrates in our view the chaotic state of the British port industry. When I left the Merchant Navy in 1964, my home port of Liverpool employed 13,500 dockers. Today, that has shrunk to 2,841. Some 301 jobs were lost through voluntary severance during the last 12 months, and more jobs could be lost in Merseyside as a consequence of the loss of the Isle of Man trade. I am sure that my hon. Friend the Member for Liverpool, Garston (Mr. Loyden) will enlarge on that problem if he catches your eye, Mr. Deputy Speaker.

According to the Port of London Authority's latest annual report, the number of people employed by the PLA has been reduced from 4,406 to 3,553. That reduction included 400 registered dock workers and 453 nonregistered personnel, and represented a reduction of 17 per cent. in registered personnel and 22 per cent. in the rest of the work force. In the past twelve months alone, we have seen in those two ports a drastic reduction in manpower.

We have had a number of debates in the House on ports and harbours since the Government came to power, and under successive Secretaries of State. My hon. Friend the Member for Aberdeen, North (Mr. Hughes) in 1983, and my hon. Friend the Member for Kingston-upon-Hull, East (Mr. Prescott) in 1984, with every justification, repeated the assertion that the Government have no long-term strategy for the British ports industry other than selling off the profitable assets of Associated British Ports and Sealink harbours and dissolving the National Ports Council. That lack of a proper strategy has accelerated the rapid decline of the once great natural highways of the Mersey and the Clyde. It has encouraged Antwerp to become, one might almost say, another British seaport, just as Schiphol has become another British airport.

The Secretary of State's response to the decline of this great industry has been predictable. The Secretary of State and I and a number of our colleagues are engaged in a titanic battle in Committee because the Secretary of State is putting into practice his obsession with market forces by deregulating Britain's buses.

The Bill merely confirms the statutory instrument introduced last year. The right hon. Gentleman is deregulating Britain's ports by replacing section 9 of the Harbours Act 1964.

Among other things, section 9 included the words: Subject to the provisions of this section, the Minister, with a view to securing the proper control in the national interest of schemes of harbour development that appear to him to involve expenditure of a capital nature". The important words are in the national interest". That section was inserted because it was felt at the time—and I still feel—that the development of ports is a national issue and should be treated on a national basis. That is what the Secretary of State seeks to do.

Mr. Ridley

If the hon. Gentleman wants endlessly greater investment in the infrastructure, why is it in the national interest to have powers that are limited to preventing investment being made in the infrastructure?

Mr. Stott

It is interesting that the Secretary of State should raise that point, given his views on the alleged profligacy of bus support. However, I shall answer it shortly.

Last year, at the annual dinner of the British Ports Association, the Secretary of State made his intentions clear. They were not surprising. The Secretary of State is well known for his neolithic views about how we conduct our affairs. He said: Our predecessors saw"— even this point is wholly wrong— the ports as part of the infrastructure needing to be centrally planned, protected from so-called 'wasteful' competition, regulated by Government, with investment vigorously controlled by the state … We regard the ports industry as a normal industry like any other. Ports can and should compete among themselves. We have made them compete with each other as well as the continental ports". That is typical of statements by the Secretary of State. As my hon. Friend the Member for Kingston-upon-Hull, East said in the debate on the statutory instrument: This naive belief in the absolutism of competition shows an ignorance of port activities and of the industry. I subscribe to that view.

Mr. Nigel Spearing (Newham, South)

Is not the situation even more serious? My hon. Friend mentions Antwerp. On the philosophy of the Secretary of State, Dunkirk, Antwerp and Rotterdam are competing directly with London. The right hon. Gentleman says that there is more surplus labour in London to be discarded. He did not give the figures. Is he not devoting public money to subsidising the elimination of port facilities in London necessitated by subsidised competition from municipal ports on the continent?

Mr. Stott

My hon. Friend is quite right. That point was made by the managing director of the PLA when I visited Tilbury last year.

It is generally acknowledged in the industry—

Mr. Ridley

The hon. Gentleman has not given his hon. Friend the Member for Newham, South (Mr. Spearing) a very satisfactory answer. Rotterdam is probably the biggest port in western Europe. It handles about the same amount of trade as the whole United Kingdom. It employs about 4,400 dockers—about a third of our total. That is why overseas ports take our trade. They are more efficient in the use of labour.

Mr. Stott

We could stay here all night disagreeing with the Secretary of State's interpretation of facts and figures. Neither I nor my hon. Friend believe what the right hon. Gentleman says for a moment, and I am sure that my hon. Friend preferred my answer to the helpful intervention of the Secretary of State.

Mr. Spearing

I certainly did.

I visited Rotterdam last October. It is very different from the British ports because it fulfils a somewhat different function although it can compete with the ports of south-east England.

Mr. Stott

It is generally acknowledged by those in the industry—even if not by the Secretary of State—that there is serious over-capacity in our ports now, and has been for some time. That became abundantly clear last year when Southampton, regrettably, ceased to function as a port for a considerable time. The cargo was absorbed quite easily by other United Kingdom ports.

During the 1983 debate, my hon. Friends graphically illustrated to the House the way in which their ports had declined—especially the ports on the west coast. My hon. Friend the Member for Glasgow, Shettleston, (Mr. Marshall) summed up the debate for the Opposition. My hon. Friend the hon. Member for Glasgow, Garscadden (Mr. Dewar) said: It is horrible to think that 10 years or so ago there were over 2,000 shipping movements on the Clyde, but last year there were only 112. We have seen a collapse from about 1.6 million tonnes of general cargo to under 500,000 tonnes."—[Official Report, 14 March 1983; Vol. 39, c. 86.] My hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) can confirm that there has been an even bigger decline in traffic movements on the Clyde and in cargo movements.

With my hon. Friends from the shadow transport team, I paid an official visit to Glasgow some years ago. At Gushetfaulds freightliner terminal, we discovered that crates of bottles of Scottish whisky were not bei:ag exported through the great natural highway of the River Clyde but were being put aboard freightliner trains, sent to south-east England and shipped out from Felixstowe. That is the result of a lack of strategic planning.

It will not have escaped the Secretary of State's attention that the Felixstowe Dock and Railway Company has introduced a private Bill with a view to extending its facilities. I want it to be understood clearly by all concerned that we shall vigorously oppose that Bill because of the damage that it will do to other port facilities, especially to the port of Ipswich, which I shall visit tomorrow with my hon. Friend the Member for Ipswich (Mr. Weetch). We shall discuss that matter with the work force and the port managers.

Britain's ports are in decline. There are now 87 per cent. fewer registered dock workers than there were 12 years ago. The redundancies have been accelerated by the Government, under whom there are more than 12,000 fewer registered dock workers—a decline of nearly 50 per cent. Investment has also declined by the same proportion. Government policy is to leave the development of ports to the market place, with no assessment of the needs of the country.

The fortunes of British ports are tied closely to the patterns of foreign trade, and they have shared a fate similar to that of the merchant shipping industry in the past 20 years. The pattern of development of ports has also been closely connected with the demands of shipowners, dock companies and the users. The Government believe that ports ought to develop according to the demands of the market place, and they have removed powers to control port development from the statute book. That was done primarily to ensure that they did not have to make a decision on whether to allow Falmouth's container port to develop.

It is nonsense to say that ports can develop without any implications for the Government. Southampton has all the facilities of a port, including the benefits of past. Government investment in developing the road network to cope with the traffic. Falmouth, however, is developing without the necessary infrastructure having been built. If developments at Falmouth go ahead, it will not be long before the industry and port users demand new and expensive roads and railheads to the terminal.

Ports are vital to the British economy and involve millions of pounds of public money. There should be sensible planning and proper use of resources. The history of British port development in the past 20 years is one of poor planning, uneven development and decline in traditional port areas.

Another sign of the decline in ports traffic comes from the figures of tonnage that has gone through British ports in the past 20 years. Traffic has increased, but the increase in oil traffic accounts for most of it. The development of North sea oil has meant an increase in the overall oil traffic through ports and a turnround from petroleum imports outweighing exports to exports outweighing imports.

The figures disguise what has happened to the distribution of traffic. There has been a substantial loss of trade on the west coast of Britain, especialy in south Wales, on the Mersey and on the Clyde and a concomitant gain on the east coast and in channel ports. The increasing use of container or railway traffic is likely to continue. That will probably mean a further increase in spare capacity in British ports, and further redundancies and loss of port investment.

The Government's policy towards ports has been counter-productive. They have often sided against the unions on the operation of the national dock labour scheme, ducked out of crucial decisions on port development by removing legislative controls, abolished the National Ports Council and privatised Government-owned ports.

Mr. Ridley

Hear, hear.

Mr. Stott

The Secretary of State says, "Hear, hear," but the Public Accounts Committee criticised the Government for under-pricing Associated British Ports when it was privatised.

Britain's ports are suffering from the problems of excess capacity, financial instability, fragmented control and insecurity among the work force. For the sake of our ports, we should have a rational policy. We must assess the needs and invest in the appropriate ports accordingly. Rather than shirk their responsibilities, the Government should be engaged in rational planning which maximises the potential of the ports and does not force the Government into unnecessary infrastructure costs around new ports.

The Labour party will develop its policy and continue to insist on the establishment of a national ports authority. We believe that that is essential for the control of our major ports. The Government have taken a laissez-faire attitude to the problems of the port industry and dissolved the body—the National Ports Council — which took a central view about how our ports should develop. When we return to office we shall reconstitute the National Ports Council and bring some order to the chaos that the Government have brought to our industry.

We shall not quarrel with the Secretary of State about providing more money for the severance scheme, but the repeal of section 9 of the Harbours Act 1964 is a further example of his inhabiting the planets of lunacy. That step will not help the British ports industry but increase uncertainty and ensure that ports develop haphazardly. It will also turn the ratchet once more against the west coast ports and in favour of south coast ports. We know what redundancies and problems will result from that. We might return to this matter in Committee.

8.7 pm

Mr. Michael Stern (Bristol, North-West)

Despite my natural reluctance to welcome a Bill which increases public spending and subsidises an industry, knowing all the distortions that such subsidy creates, I welcome the measure as part of the long process of bringing a sense of reality to many of the country's ports.

Despite the 1950s style of maundering and harking back to the golden age when everything was under the control of the Secretary of State offered by the hon. Member for Wigan (Mr. Stott), it is worth considering why some of the Bill's provisions are necessary. They are necessary because the dock labour scheme, as amplified by the Jones-Aldington agreements, created an aristocracy in the ports. As is always the case, the only peaceful way to get rid of an aristocracy is to buy it out. It is not easy to buy out an entrenched aristocracy.

On the current problems of the port of Bristol, that city's Evening Post reported as follows on 18 April: manpower cutting plans are being held up by a wrangle between management and the Transport and General Workers Union...port bosses find they have no work for two electrician labourers and want the jobs declared redundant. The union is insisting the previously agreed manning scales should be met and the posts filled. In other words, the attitude in the ports is that it does not matter that they have no work or that providing labour increases the cost of the port and therefore continues its decline, the posts must be filled.

In most ports, only the taxpayer funds the costs of removing the aristocracy 'created by the dock labour scheme. In Bristol, however, the same taxpayer pays twice, for it is the only major municipally owned port in Britain, and all the losses of the Bristol port fall on the ratepayer. Thus, the ratepayer in Bristol, as a result of the dock labour scheme, pays not only for the local losses but contributes his share, as a taxpayer, to the losses of all the scheme ports in the country. What the Opposition principally resent about the non-scheme ports is that they are not dependent upon the state because, in most cases, they are making a profit.

I listened with interest, though with an air of disbelief, to the comments of the Secretary of State when he attempted to answer what might have been an examination question, "Compare and contrast London and Liverpool ports with all other ports in this country." It is a major difference not only that the ports of London and Liverpool are covered by the National Dock Labour Board, as dealt with the clause 1, but that they need special provision because that funding is provided not just for the voluntary severance of registered dock workers, but for the voluntary severance of non-registered dock workers.

Such a policy, while it continues, cannot but cause resentment, not only among non-registered dock workers, in particular in the port of Bristol, but among the ratepayers of Bristol, who find themselves contributing twice to the severance pay of non-registered dock workers.

In addition, considerable resentment is created by the London and Liverpool schemes as between registered and non-registered dock workers in the port of Bristol because, again, the setting up of an aristocracy by the dock labour scheme has meant that some dock workers are more equal than others.

It is generally accepted that the drip feed into the Treasury, which the special schemes for London and Liverpool comprise, must continue, but I want a more specific assurance than the Secretary of State gave about when, and in what manner, the drip feed will end. It has gone on for a considerable time. We, who as ratepayers pay for the non-drip-fed ports, are entitled to an assurance that sooner or later the drip will be cut off.

I welcome the aspects of deregulation in clauses 3 to 6. Can anyone, even the hon. Member for Wigan, seriously maintain that it is a necessary factor in modern port operation that the Minister should be entitled to name the auditors for the port? If so, I shall willingly give way to enable the hon. Gentleman to explain why ports alone are incapable of choosing their own auditors.

Similarly, given that it is the policy of the Government that ports should look more to private finance—in the case of Bristol that is unfortunately the local ratepayer; in many other ports private finance is obtained, and Bristol is moving in that direction—it is nonsense that an additional borrowing constraint should be placed on ports, unlike other industries. We are not talking about public sector borrowing controls. We are talking of an additional constraint as if investment in a port did not require borrowing. Because of that, according to Labour Members, it should be made more difficult for them to obtain it.

I shall not repeat what was said in the debate on 19 June 1984 in relation to section 9 of the Harbours Act. The remarks of the hon. Member for Kingston upon Hull, East (Mr. Prescott) that night and those of Labour Members tonight were, as I said in the June debate, the language of Stalinism and the language of Mussolini-type Fascism. All other commercial entities can make commercial decisions, but in the ports alone commercial decisions must be at the behest of the Minister.

Mr. Stott

The hon. Gentleman must not be allowed to get away with accusing the Opposition of being in any way, shape or form related to Mussolini-type Fascism. I greatly resent his remark and I hope that he will have the decency to withdraw it.

Mr. Stern

I shall certainly not withdraw it, because the policy of the Opposition, as related to the House tonight, and as related in June 1984, is indistinguishable from the state-operated control of major industries that occurred in Italy in the 1930s. I am not accusing Opposition Members of advocating other aspects of Fascist policy. I am only saying that in this area their policy is indistinguishable from it.

Mr. Stott

The hon. Gentleman has not satisfied me. Nor do I think that he has satisfied my hon. Friends. We want that section of the Act to be retained because we believe that it is in the national interest that ports policy should be controlled. The hon. Gentleman suggests that, simply because we hold that view, in some way we subscribe to the views of Mussolini and the Fascist dictatorship in Italy in the 1930s. Many of my hon. Friends fought against Fascism in the second world war and we greatly resent remarks made in the House suggesting support on our part for Fascism. I hope that the hon. Gentleman will now have the decency to withdraw the remark.

Mr. Stern

The hon. Gentleman continues to refuse to listen to what I am saying. I repeat that the policy of the Opposition to ports is identical to the policy that was adopted towards major industries by Mussolini. I could, if the hon. Gentleman wished me to do so, draw other parallels, for example with the economic policy of the Roman empire as it was applied to certain outlying states. [interruption.] I am sorry if Labour Members resent that parallel too and choose to draw one that goes far further than was inherent in anything that I said.

On the subject of the revocation of the order in relation to the Act, I agree with the hon. Member for Wigan on a point that was raised in the debate on 19 June. I seek, as he sought, an assurance from the Minister which has so far not been forthcoming. Unlike Opposition Members, if business men feel that there is profit to be made and employment to be created from the development of a new port, my attitude is to tell them to go ahead. It is no concern of mine. However, if, as the result of that development, the Minister finds it necessary to seek additional expenditure on the infrastructure surrounding that port, then, like Opposition Members, 1, representing the ratepayers of the city of Bristol, who already pay heavily through their rates for one port, strongly resent my constituents being asked to pay to support an opposing port. I hope that the Minister will give the House an assurance that in any port development in future expenditure on the infrastructure will be entirely out of the pockets of the developers of the port.

Against normal principles, I welcome the Bill. It is part of a process that has perhaps gone on too long but, nevertheless, once started in 1946 by the introduction of the dock labour scheme, and all the problems that it generated, the process must be brought to a conclusion. I share the hope expressed by my right hon. Friend that the process can be brought to a conclusion as quickly as possible.

8.20 pm

Mr. Eddie Loyden (Liverpool, Garston)

I shall not follow the hon. Member for Bristol, North-West (Mr. Stern) except to point out that his knowledge of port is probably of port out of a bottle rather than ports such as we are talking about in the debate.

The hon. Member referred to the national dock labour scheme that was established by Ernie Bevin in 1946. The hon. Member and the House should understand that it is the very processes that followed the establishment of that scheme that we are debating today. The Secretary of State has never made any secret of his abhorrence of the national dock labour scheme. If he had been around at the time and had had his way he would probably have strangled it at birth. Fortunately for many people, he was not around then.

The hon. Member for Bristol, North-West referred to the privilege—I think that was the word he used—of registered dock workers. In the period that the hon. Member was talking about, there were 16,000 registered dock workers working in the port of Liverpool on a system of casualisation. They went to the docks three, four or five times a week to seek work. They had to stand on stands, being treated worse than animals, to be selected for work at the whim of the ship's boss. That period is a blot on British industrial relations. The hon. Member should recognise that casualisation and hyper-exploitation through the pen system of hiring ended long since and that we do not want to see that system again.

When we consider what the Secretary of State wants to do in this Bill, we have to ask if we are moving back to that state of affairs. In spite of what has been said from the Government Front Bench, it has been the clear intention of the Government and the Secretary of State to abolish the national dock labour scheme. They knew that if there had been a blatant and direct attempt to do so in the past it would have resulted in prolonged industrial disputes in the docks. Therefore, the Government decided that the non-scheme ports should be developed. That is why we have in this Bill the amendment to section 9 of the Harbours Act 1964. That means that through control — the word "control" should be seen in its proper context as planning control — non-scheme ports should be efficient and should be spread around the United Kingdom in accordance with trade in and out of the ports.

Mr. Stern

rose—

Mr. Loyden

It has to be recognised that the modernisation of the ports following the Devlin report in 1967 resulted in a transformation of the national dock labour scheme. As I said, it has been the clear intention of the Government to abolish that scheme.

I was surprised that hon. Members in interventions this evening suggested that Liverpool and London were being treated better than the rest of the ports. Since the money that is to go to Liverpool and London is for buying off more jobs, I wonder what those hon. Members meant. With the Isle of Man ferry company leaving Liverpool after more than 150 years, the dock company will be obliged to go to the National Dock Labour Board to report a further surplus in requirements for registered dock workers. In that sense the Secretary of State is enabling the Mersey Docks and Harbour Company to destroy more jobs in Liverpool through redundancy payments.

The House is well aware that that area already has one of the highest unemployment rates in the United Kingdom. We do not welcome the Secretary of State's action, nor will registered dock workers welcome the fact that further money will be made available for redundancies. At the end of the day, they may be compelled by the nature of the industry to accept it, but there will be resistance for a further reduction in the registered dock labour force in Liverpool. In the 1950s that force stood at 15,000: by the 1970s it was down to 7,000, and now it is less than 2,000.

It is not just the port industry that has been affected by that downward spiral. The whole hinterland of Merseyside has been affected because industries and commerce were linked to the port economy. The Government must consider seriously the effect that the reduction in the dock labour force has had not just on the port, with seven miles of docks closed, but on the community that lives adjacent to the docks. With the exception of the development of the Albert dock and other places at the south end, those communities have been left with the obsolescence and problems that empty docks create.

The Parliamentary Under-Secretary of State for Transport (Mr. David Mitchell)

Could the hon. Member develop more fully the point he is making and bring out for me what he believes will be the help to Liverpool in competing for trade if it has to carry large numbers of dockers for whom it has no work? Does he think that will help Liverpool to get more trade or will it do the reverse—hasten the loss of trade, which neither he nor I would wish to see?

Mr. Loyden

I shall give the Minister an example of how it would not help Liverpool. Two or three months ago, Saex moved from Southampton to Merseyside. For the purpose of this debate, the reasons are irrelevant. Liverpool was struggling to cope with the additional trade. Is it not fair comment that a continuing reduction in the number of registered dock workers in the port of Liverpool will limit its possibilities of attracting trade? If the Government are intent upon reducing the number of registered dock workers in Liverpool, London and elsewhere, they are minimising the possibility of those ports ever attracting more trade. There will be no question of further recruitment in the event of trade going to those ports.

In that sense Saex is a perfect example of how the port of Liverpool is restricted in developing further opportunties for trade. It could cope with the Saex trade only with great difficulty. Had there been a further reduction in the work force it would not have been able, in my view and in the view of the registered dock workers, to cope with that increase in trade.

Therefore, such scheme ports face a clear impediment in that situation.

That discloses the real intention behind the Bill. The non-scheme ports are now being given virtually unlimited powers to carry out the functions of the scheme ports, which can be done, because of the finite nature of the trade, only at the expense of the scheme ports. The scheme ports happen to be in areas of very high unemployment. The north-south syndrome comes into the argument again.

Through those powers and many other things, the ports' functions are being restricted. I worked in the port of Liverpool for 28 years and claim, for that reason, to know something about the port transport industry. If I do not, after 28 years, there must be something radically wrong with me. I have seen the development of the ports from the early post-war years in 1946 up to the present day. I have seen the effects of the lack of investment in the scheme ports over the years, which were run by shipowners in the interests of shipowners. They were both the landlord and tenant of the ports because they were sitting on the board of the dock company, and the shipowners and merchant princes used the ports as tenants. Therefore, they regulated the costs of the ports in accordance with their own whims, which meant that they were kept at a low level. There were startling revelations in the 1960s, when 12s 6d was still being charged for the hire of a crane. That shows the way in which the ports were run by those people. It had nothing to do with the so-called elitist registered dock workers. The misery and hyper-exploitation of that pre-war period should not return.

In view of what the Secretary of State and the Under-Secretary of State have said now and on previous occasions, I wonder what the answer would be if Liverpool were to win trade and could not meet it because of the manning levels—the number of registered dock workers in the port. One answer is to go to casual labour in the ports and docks. Therefore, we may not have seen the end of casualisation. I am very concerned about the possible effects that this limitation will have on the ports of Liverpool and London and, indeed ports in Scotland and the north-east.

During the debate on what became the Dock Work Regulation Act 1976, the Secretary of State made it clear that he wanted to see the end of the national dock labour scheme. The industry may now be drifting back, at least in the scheme ports, to a form of casualisation if the required numbers are not met by the number of RDWs employed.

That is the Government's clear intention, and it is underpinned by the decisions taken by the Secretary of State to enhance the non-scheme ports. As he sees it, and as the Government probably see it, the scheme ports will wither on the vine if the jobs there are brought off and restrictions are placed on their capability of taking on further work and bringing further trade into the ports. The obvious consequence is that the non-scheme ports will flourish and the scheme ports will die away. There is sufficient evidence that we have already gone a long way along that road.

Mr. David Mitchell

If the hon. Gentleman believes that scheme ports will wither on the vine as the non-scheme ports gain their trade, what solution does he offer? If the non-scheme port is more economic and able to attract custom, in his scheme of things how would he put right the withering on the vine of the scheme port?

Mr. Loyden

I think that I have made a sufficient contribution to that argument. I thought that the Minister would now understand the situation. There has been an act of deliberate policy on the part of those controlling the scheme ports to see that the investment does not go there. That has nothing to do with the scheme ports as such. The non-scheme ports have developed without a history in the docks industry. It is the clear intention of the Secretary of State and the Government to use the clean slate of the new complexes in the non-scheme ports as a way of breaking down the national dock labour scheme and the tremendous efforts put in by the registered dock workers to establish a decent standard of living for themselves and their families and decent conditions in the docks where they work.

I see the Bill as taking us much further along that road. My hon. Friend the Member for Wigan (Mr. Stott) paved the way in the debate in exposing the Government's intentions for the national dock labour scheme. It has nothing to do with Liverpool or London having more money. That money will be provided to reduce the number of jobs in Merseyside, an area of high unemployment, and the port of London.

8.36 pm

Mr. Simon Hughes (Southwark and Bermondsey)

I come to the debate, not as the Liberal party's spokesman on transport, but, as is fairly self-evident, as someone who has inherited a constituency the name of which is most associated with the docks and the port industry of the past. The Minister will know that the vast bulk of the constituents who are mine today in Southwark and Bermondsey are people whose families earned their living and made their way because of the success of the port that was London.

Let me reflect briefly over the 33 years of my life. I was born in the last days of the second post-war Labour Government, when the scheme ports were very much places where activity was concentrated and planned and we sought to make sure that we retained our place in the markets of the world, with ports guaranteed to provide those facilities. I jump ahead to a date when the figures are nicely rounded. In 1966, 25,000 dock workers were registered in London. Today's figure has been given to the Minister: it is about 4,000. Of course, the port has moved downstream from the docks on my side of the river—the Surrey docks in Bermondsey—to Tilbury and so on.

I should like to ask the Minister a couple of questions which the Bill does not answer. I welcome the ability of the scheme to pay for people who do not have work and for those who wish to take voluntary redundancy. That is right if people want to move out of the industry. It is better that they should have money to go in search of work elsewhere. The financing has needed to be upgraded on a regular basis. This is the fourth occasion since 1979 when the Government have come to the House with proposals for increasing the financing for ports. That is right, and I do not object to it. Therefore, clauses 1 and 2 are unexceptionable.

However, what begs the question is what the Minister failed to say in answer to questions that were asked earlier. It has been accepted that trade has moved over to the east and south coast ports. The pattern between the established ports and the new ports has been that ports such as Felixstowe have become effective and important contributors, while we have retained our old ports and sought to make sure that, inasmuch as they can compete for trade and hold it, they are able to do so. Merseyside and Liverpool are those two ports par excellence.

London is an east coast port. It is the capital city. There will always be a need for a decent port facility on the Thames. There is a great demand for goods to be brought to London, whether in containers to Tilbury and then by road on the M25 or elsewhere, or broken down at Tilbury and brought upstream and unloaded for servicing London. What concerns me is that in the contribution of the Secretary of State there was no projection of the need for grant or labour in London.

I obviously have a vested interest and wish to address my remarks primarily to that issue. What is the Government's projection of the future need in terms of labour and trade for the port of London? If the Government are saying that they will leave it to the market place, it could be—I do not say that it will be—that the port of London, to use the phrase of the hon. Member for Liverpool, Garston (Mr. Loyden), will wither on the vine. It is a ludicrous proposition, when we are competing with Rotterdam, Antwerp and the major entry ports of our neighbours and allies in commerce in Europe, to think that our capital city, which has good port facilities, might not be able to have a planned development which retains its importance, given the facilities which it has historically inherited.

I hope that the Government do not believe that we can apply at some early time in the future the principle of the magic of the market place when we start, not from here, but from the fact that this inbuilt infrastructure of the ports exists with the potential for the port of London to be efficient, effective and important as part of the port network throughout the United Kingdom. This could be done without any detriment to potential competing demands for ports elsewhere.

First, what is the Government's plan for the port of London? All that the Bill does is to provide money to pay off those who will not have work. We need to ensure that there is a positive and not just a negative side to the coin of paying off what would be a reduced labour force.

Secondly, there have been consultations. The Minister, following the public inquiry last year into the rates imposed by the PLA on private operators on the Thames, will be aware of the decision to retain, but to reduce, rates. There is a new private sector in the Thames, the wharfingers. They can play an important, and I believe increasing, part in the prosperity of the lower river and of the upper port. My constituency and the Government's plans, through the urban development corporation, envisage such developments.

If, at some stage, the Government plan to take away the rates which the PLA charges, which effectively subsidise its commercial undertaking—that is, to take from the private wharf owners to subsidise the PLA—can they guarantee that that will not be done simply on a commercial basis if that would act to the detriment of the PLA's finances? Will the phasing out procedures envisaged as a result of the inspector's report and the Secretary of State's response take into account on the one hand the need to reduce the burden on the wharfingers and on the other the need to ensure that an unmanageable burden is not imposed on the PLA?

My last point relates to the planning of our ports policy. The pattern of events seems to show that there is some potential for developing new ports round Britain. However, it seems that there is also great potential—the case has been argued in many erudite reports — for ensuring that the river which comes up to London and services London is better used for commerce than it has been hither to. I do not expect the Minister, in the context of the Bill, to accept that it would be right to make such a provision, but it would be reassuring to know that the Government take seriously the interest which I believe the Docklands Corporation has shown in trying to maximise the commercial use of the Thames as an adjunct to, support for and extension of the existing dock and port facilities of London.

There is enormous potential, possibly for different sorts of trade. The technological revolution means that things have moved on. I hope that the Minister can say something encouraging about what he and his Department are doing, and are prepared to do, to ensure that the port of London and the PLA, which is responsible for the two different parts of the river, can—without detriment to anybody else's commercial success against other competitors—maximise London's unique potential for trade. That is why in the first place the port of London was the subject of a scheme, with all the infrastructure and planning and regulations that were established.

I do not propose to oppose the Bill. However, we look for more than merely financial temporary measures, which in my view is what the Bill is accepted to be. We look for something that will inject health, and not just money to pay off people. We look for more than the statement that the magic of the market place must rule irrespective of the interests of the port of London. I hope and believe that the Minister can be more reassuring, but I have yet to hear it.

8.46 pm

Mr. David Marshall (Glasgow, Shettleston)

I fully support and endorse all that my hon. Friend the Member for Liverpool, Garston (Mr. Loyden) said about the intentions of the Government towards a national dock labour scheme and registered ports. I think that I need not elaborate on what he said.

I wish to bring to the notice of the House the serious situation in the Clyde port authority. If no action is taken soon by the Government, there will not be a Clyde port in the true meaning of the term, and the authority will be reduced to carrying out the role of a conservancy agency. It is inconceivable to think of the Clyde without any port at all. The indications are already there because the former Queen's dock is now the site of the new Scottish exhibition centre, and the former Prince's dock is now the site of the 1988 international garden festival. Welcome as these new ventures are, there is no shortage of alternative sites for them. It would be preferable if the docks had continued to work as a part of a busy port, as was the case not long ago.

Since its inception in 1966, the Clyde port authority has been a fairly profitable operation, but since 1980 it has made steady losses each year, and the total work force has been reduced from 2,000 to 500—a redundancy level of 75 per cent. in the short span of four years. The workers have not benefited from some of the enhanced payments proposed in the Bill.

In addition, to the best of my knowledge, the Clyde port authority never received any special grants or aid from the Government, and it has been forced to sell off many of its assets, such as land, in order to meet its day-to-day operating costs. I understand that my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman), if he catches your eye, Mr. Deputy Speaker, will give detailed facts and figures relating to activities on the River Clyde. In my brief remarks, therefore, I shall confine myself to some general issues of concern not only to Glasgow but to west central Scotland as a whole.

For the benefit of hon. Members who are unfamiliar with the Clyde, the port is like a stack of dominoes. There is the Hunterston ore terminal, Greenock container dock, Ardrossan harbour company and Meadowside granary. Take one away, and they will all eventually come tumbling down. Yet each and every one of them is at risk at present. The key domino to the future of the port is the Hunterston ore terminal. That terminal is crucial to the future of the port, yet its very existence hangs by a thread. That thread is the continuation of the Ravenscraig steelworks at Motherwell. Without Ravenscraig there would be no need for the Hunterston ore terminal, and without that terminal there would be no Clyde port at all.

I hope that the Secretary of State for Scotland, who is one of the Bill's supporters, will take steps to ensure the continuation of Ravenscraig, and so guarantee the future of the Hunterston terminal, thus making the provisions of the Bill unnecessary, at least for Hunterston. The Greenock container terminal has only one container firm remaining there. I hope that the Secretary of State will do all that he can to keep it there. In addition, the Ardrossan harbour sea wall needs repair.

I mention these points because the Clyde port authority cannot afford from its own resources to make concessions to container operators or to invest in the necessary new infrastructure and equipment that would make it a modern, competitive port. It is unable to do that, because it has never received the assistance that other ports have received. Indeed, I hope that the Minister will bear that in mind.

The Meadowside granary in Glasgow is the second largest in Europe, with a capacity of well over 100,000 tonnes; yet it is lucky if, at any time, there are 10,000 tonnes of grain in it. It is operating at only a fraction of its capacity. All that could be changed substantially for the better. I understand that recently the EEC intervention board visited it regarding the possibility of storing EEC intervention grain there. If that is to be done, improvements will need to be made to the loading facilities. Will the Minister give an assurance that he will do all that he can to get that grain into Meadowside? Will he tell us what the prospects are for any shipments of intervention grain going to the Clyde this year?

I am glad that earlier, in response to my intervention, the Secretary of State confinned that all dockers covered by the national voluntary service scheme, regardless of location, will receive the same treatment and that the sum will be £25,000 per person. I understand that until a week or two ago the figure for Glasgow was £16,000, but that happily there were no takers. Will the right hon. Gentleman again confirm that the figure for Glasgow workers will be £25,000?

Dredging on the River Clyde costs the port authority about £1.5 million per annum, yet there is no statutory obligation on it to carry out that work. If it has to stop doing it because of its desperate financial position, what will happen to the shipbuilding industry on the upper Clyde? What future will there be for Govan Shipbuilders and for the newly-privatised Yarrows yard in Scotstoun? Severance schemes, even at an enhanced rate, are not the answer to such problems.

My hon. Friend the Member for Wigan (Mr. Stott) referred to the speech made in the House by my hon. Friend the Member for Glasgow, Garscadden, (Mr. Dewar) in March 1983. I am sure that my hon. Friend the Member for Greenock and Port Glasgow will confirm that we take no pleasure in informing the House that the situation on the Clyde is much worse than it was only two years ago. One reason why the Clyde is experiencing such difficulties is that the traffic is diminishing. In recent times 75 per cent. of our trade has been with South America. We are concerned about the need to bring more business to the Clyde. Will the Minister give an assurance that he will do all that he can to attract new business to the Clyde and to build on the South American connection, whether or not it is to the Government's political liking?

As Clydeside Members of Parliament, we expect some evidence from the Government that they are aware of the major problems confronting the largest port in the west of Scotland and of the imminent threat of closure. The Clyde has been treated inequitably compared with other ports. I am glad that the Secretary of State has returned to the Chamber, as he will no doubt recall meeting the delegation of workers from the Clyde, as well as my hon. Friends the Members for Garscadden, and for Greenock and Port Glasgow, my right hon. Friend the Member for Glasgow, Govan (Mr. Millan) and me on 26 April last year. We were asking for parity of treatment with Liverpool and London. We were asking not for any additional aid or concessions, but only for parity. Surely that is not too much to ask for.

I hope that the Secretary of State will make a positive response to the appeals that I have made on behalf of the Clyde port.

8.54 pm

Mr. Michael Fallon (Darlington)

I give the Bill a general welcome. It is good evidence—

Dr. Godman

The hon. Gentleman has only just come into the Chamber.

Mr. Fallon

Does the hon. Gentleman wish to intervene other than from a sedentary position?

Dr. Godman

Perhaps I should apologise, but 1 was pointing out from a sedentary position that the hon. Gentleman has only just come into the Chamber.

Mr. Fallon

I do not know whether the hon. Gentleman was asleep earlier, but I was here for both the opening speeches. I then had to leave the Chamber for another engagement, but I have now returned. I hope that that satisfies the hon. Gentleman.

The Bill is good evidence that the transfer of ports from the Department of Trade and Industry was a good move. They are now covered by one of the more enterprising Departments. I only hope that one day the Department of Transport will complete the exercise by taking from the Treasury control of the freeports and encouraging the development of a second generation of freeports under the auspices of my right hon. Friend the Secretary of State rather than under those of the Customs and Excise.

The Bill is about freeing our ports. I welcome all the dismantling of controls that it contains. If I have one small reservation about it, it involves clauses 1 and 2. What my right hon. Friend the Secretary of State is doing is not unreasonable—he is a reasonable man—but the amounts of money involved are large, and he is taking a considerable power.

I wonder whether hon. Members are not entitled to a slightly clearer statement from my right hon. Friend the Secretary of State—I am not sure whether I have his attention at present—on the timetable that he hinted at. He spoke of the unique circumstances and the special difficulties. That might seem to be rather Department of Energy language to those of us who consider the various borrowing powers Bills that are presented to the House. But I put it no stronger than that.

My right hon. Friend the Secretary of State said that it was his intention that assistance generally should be phased out. I wonder whether we could be given a slightly clearer idea whether he envisages the clause 1 arrangements, in particular, having any sort of medium-term permanency. The difficulties that have arisen and that clauses 1 and 2 are intended to tackle arise in no small part not because of the absence of a scheme but because of the very generosity of the scheme and the enormous costs thus imposed. It seems to me that the scheme as a whole has quite clearly destroyed rather than protected them. The clearest evidence for that is the ports to which reference was made by the hon. Member for Wigan (Mr. Stott) and his hon. Friend the Member for Newham, South (Mr. Spearing)—that is, Antwerp and Rotterdam. It is to those ports that we should look and that ports in this country hoping for commercial success should look.

Like the hon. Member for Newham, South, I paid a visit to the port of Rotterdam some three or four years ago and was enormously impressed by its efficiency. It may well be a different type of port from some that we have been considering tonight, and there is no doubt that it has very different working practices. It was made absolutely clear to me that no-strike agreements were at the heart of those working practices. Under his contract, an employee of the port of Rotterdam authority is not allowed to go on strike.

Dr. Godman

The hon. Member, by what he has just said, has obviously had more experience than I of the workings of the Rotterdam docks and industry and also the industrial relations that exist there. Can he tell the House whether there have been any industrial disputes since his last visit there three of four years ago?

Mr. Fallon

I cannot tell the House that, and I certainly do not claim great experience. I made a visit there, which lasted two days, as a guest of the port of Rotterdam authority. Strikes certainly did not seem to feature very high on their agenda, nor did they anticipate many in the future.

I would have hoped that in clauses 1 and 2 my hon. Friend would have laid as great stress on the need to modernise working practices and reform labour relations in the docks as he is quite evidently laying on the need for port employers to address their minds to the problem of restoring their finances.

9 pm

Dr. Norman A. Godman (Greenock and Port Glasgow)

I start by asking the Minister if, in winding up, he will elaborate on the observation made by his right hon. Friend during his comments on clauses 1 and 2 to the effect that soon the ports will have to shoulder their burden unaided. I ask that because I should like to know if the Government envisage phasing out the severance scheme. this was the fate, as the House will recall, of the British Shipbuilders' severance scheme and I wonder if the right hon. Gentleman is pointing us in the same direction.

Representing a port on the Clyde, I have a great deal of sympathy for the plight of the docks on Merseyside and in London. However, like my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall), I would remind the Secretary of State of the very serious economic circumstances of the ports not only on the Clyde, but on the Forth as well.

The deterioration suffered by Britain's maritime industries is nothing short of scandulous. Historical trends in maritime trade have pushed us in the direction that we have taken over the past 20 or 30 years, and some would say that those trends extend much further back. There has suddenly been a shift in maritime trade from the west of Britain ports to the east coast ports and much of this has been brought about by the growing importance of the short sea trade—the trade between those east coast ports and continental Europe.

There has also been over the past 20 or 30 years a disastrous, deeply worrying shift from Scottish to English ports, as outlined by my hon. Friend the Member for Wigan. Until he mentioned the Clyde, I was beginning to think that here again we were listening to a debate concerning the Government's policy for the English ports. There seems to be little or no ministerial concern for the plight of the Scottish ports.

There are understandable reasons which partly explain the decline in the Scottish ports. I am not talking here about Aberdeen or some of the other ports in the north-east of Scotland which have benefited dramatically from the development of the offshore gas and oil industries, but certainly other ports on the Forth and on the Clyde have suffered severely over the past 20 or more years.

Every day, Scottish goods are shifted to England by road and rail transport. Scottish cargo, including whisky, whether malt or blended—that is the best known cargo—knitwear, textiles, engineering products and goods produced by our burgeoning information technology industries, bypasses the ports on the Forth and Clyde and is shipped to places such as Felixstowe. That harms not only the Scottish ports on the Forth and Clyde but other industries in Scotland.

The only new cargo that has been offered to the Greenock container terminal in recent weeks has been the contaminated soil from the Faslane nuclear submarine base. An outlet had to be found for that soil so that the base could take the wasteful Trident programme. I am tempted to say that that soil should be shipped to English ports, but I am not that parochial or nationalistic.

The Government's ports policy may mean—if the Conservative Government survive this long, but recent signs are that they will not—that they will preside over the collapse and disappearance of most of the Scottish ports, and even Merseyside. What is the future of the ports on the Clyde and Forth? Will they eventually close? Will all or the major part of Scottish imports and exports pass through English ports? That has certainly been the trend during the past couple of decades.

Much of the coastal trade is carried on foreign vessels—in "foreign bottoms", according to the colloquial phrase. I believe that the state can play a major role in shaping developments in our maritime industries. Does the Secretary of State believe that the pattern of maritime trade that has evolved during the past two decades will remain as it is today, with an overwhelming emphasis on traffic moving through English ports?

I make a plea on behalf of the people employed by the Clyde port authorities—my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) also made this plea—and by the Forth ports authorities. Although it is essential that help should be given to Merseyside and London, the Secretary of State and his ministerial colleagues should not overlook the desperate plight of Scottish ports.

9.9 pm

Mr. William Powell (Corby)

It is always a great pleasure to follow the hon. Member for Greenock and Port Glasgow (Dr. Godman) and to listen to him speak about Scottish affairs. I listened to him with considerable pleasure, bearing in mind that I represent more Scottish people than any other English Member of Parliament and, indeed, more Scottish people than many Scottish Members of Parliament.

Dr. Godman

I am grateful to the hon. Member for giving way. However, as someone who was born south of the border I have to correct what he said about the "little Scotland" in Corby.

Mr. Powell

I have no doubt whatsoever that my right hon. Friend the Secretary of State for Transport will have noted carefully the hon. Gentleman's observations on the future of Scottish ports. There are no more ingenious or inventive people than the Scots. They have gone to every corner of the earth and created prosperity there. I have little doubt that if the dead hand of state control were to be removed from their endeavours, Scotland would enjoy the prosperity which its people so richly deserve. Of course they will need help to create that prosperity—that is why many of the hon. Gentleman's observations were of such value—but help does not mean state control. Nothing is more likely to ensure that Scottish ports have no future whatsoever than to arrange, by our legislative mechanism, for the Secretary of State, Ministers and Whitehall, far away from Scotland, to have a decisive influence upon what happens there.

The reason I welcome the Bill so wholeheartedly is that it will reduce the level of Government and Whitehall interference and control. Liberalisation and deregulation will make a real contribution to the future prosperity of our ports. In making that observation, I am conscious that little has been said about Scottish ports in this debate. The most prosperous ports in our land are situated on the east coast and in the southern part of England. Only a few years ago, they barely existed. They have grown up because of the demand for the services they provide.

The hon. Gentleman referred to traffic being transferred from Scottish ports to Felixtowe. I have no doubt that both he and others will have asked themselves why Felixtowe has become such an attractive port to so many people. Geography is one factor. The hon. Gentleman is in the unfortunate position of representing a constituency in a part of the country which a century ago was ideal for the trade which passed through the ports on the west coast of Scotland and England. Because of the switch of international trade to Europe, those ports are now on the wrong side of the country. Those areas which, 100 years ago, were far from prosperous and endured periods of considerable depression and poverty are now the most prosperous in our land, while those areas which, 100 years ago, were the most prosperous now find that they are in the opposite position.

I am not one of those who believe that the state has no role to play. Far from it. The state has a role to play, but at best it is a regulatory role. State control is unhelpful and has led to the accelerated decline of ports whose prosperity was so evident only a generation ago. For that reason, the provisions in the early clauses of the Bill are very welcome.

My right hon. Friend has many matters on his desk. I welcome the fact that, despite his many other responsibilities, which take up a considerable part of his time, he has devoted part of his time to bringing before the House this measure which will make a real contribution to the future of our ports.

9.14 pm

Mr. Donald Anderson (Swansea, East)

I was somewhat intrigued to hear the hon. Member for Corby (Mr. Powell) say that in his political ideology the state should have only a regulatory role. Corby has suffered more than most places from the decline of the steel industry. I have yet to hear the hon. Member criticise the substantial assistance which has properly been given to Corby by way of regional policy by both major parties after the ending of steel production. That is not a regulatory aspect of state activity. It is far more positive and against the spirit of one of the key clauses in the Bill.

This has been an unusual debate in that the Minister, who has the reputation in the House of being essentially a Treasury man parachuted into a spending Ministry, determined to reduce expenditure at all costs, and who has followed that to the full with the bus industry, now comes to the House without a blink of an apology with a Bill the key clause of which increases public financial assistance to two major ports by £140 million in an open-ended commitment. He knows that he loyally follows a number of predecessors, because the casualty rate of Secretaries of State for Transport has been high in this Parliament. He follows a number of his colleagues who have put forward schemes for subvention. He said, with his hand on his heart, effectively, "This is the last such subvention. We believe that the industry will be able to stand on its own feet after the process has been completed."

There has hardly been a whimper from those Conservative Members who normally are so alert about such public expenditure, save perhaps his hon. Friend the Member for Faversham (Mr. Moate) who made one or two sceptical noises earlier.

The hon. Member for Corby will no doubt have noted the removal of section 9 of the Harbours Act 1964 which relates to the control of harbour developments. That was debated at length in the House on 19 June last year. The Secretary of State supports the removal of that section his proposition that it is an anachronism in a competitive industry. The points made during the debate on the order in June last year are still valid.

I wholly support what my hon. Friend the Member for Wigan (Mr. Stott) said about the lack of strategy in the port industry. That is in part reinforced by the removal of that section. Surely the Government cannot maintain that in all circumstances a project involving substantial capital investment in the ports can be viewed on its own merits without seeking to examine its effects on the industry as a whole.

The Government appear to be saying, "If people are prepared to risk their money, so be it. Let market forces predominate." Even this Government, despite the way in which they have dismantled much regional policy since they came to power in 1979, maintain a regional policy, because they believe that if the ports were left entirely to market forces there would be substantial dislocation, with adverse social effects.

The Government are depriving themselves of what admittedly is only a last stop, but nevertheless, a means of placing decisions on port location and port investment in a wider context. There will now be no opportunity to exercises a wider national control or to examine any port investment decision in a wider regional context.

An example is the viability of the new port project at Falmouth, which may now be in doubt. Not unexpectedly, the promoters are still saying that it is going ahead. They are still optimistic. Can it be said that the development at Falmouth has no relevance to the national interest, and that the Government can simply say that if private promoter:; are prepared to risk their money, so be it? Obviously, it must have an effect on other ports, especially at a time of over-capacity and when that intended investment is aimed at ocean-going container ships and piggy-backing the imports to other ports.

Obviously, the project will also have an effect on infrastructure within that region. It is not enough to say that the local planning authority—Cornwall county council—exercise sufficient control. It will warn to attract as much private and public investment into its area as possible. But that investment has public investment implications. If the project goes ahead, it will no doubt be said that the road pattern to Falmouth is inadequate and there will be pressure for an increase in road spending. If that road spending is not sufficient, there will be pressure for increased rail investment and section 8 grants.

Therefore, one private investment without any Government supervision will not only have an effect on other ports within that area, but will trigger off a substantial amount of public investment. Can it be said that the Government, exercising the national interest as they would have done under section 9 of the 1964 Act, have no proper role in such an investment decision? I believe that that is wrong and that anyone looking objectively at a major investment location decision will surely conclude that Government should have a role in considering such an investment in a wider national context.

My second point relates to the additional £140 million to finance the severance pay at London and Liverpool. Will the Minister clarify his remark to me that there is no element of subsidy in that? He said that the explanatory memorandum was loosely drafted and he implied that it did not say what he had intended it to say. That memorandum states that the effect of clause 2 is to raise from £360 million to £500 million the ceiling on financial assistance to those two ports by grants, loans, and guarantees for measures to reduce manpower in their ports and"— this is the key phrase— for supporting them while such measures are being taken. I concede the Minister's point that the wording of the Bill is the key factor, not the explanatory memorandum. However, is he seriously saying that those words in the explanatory memorandum have no meaning? If they have a meaning, what is it? Can it be other than that there is a subsidy to those two ports and that they are therefore receiving a form of assistance that is denied to other ports and making them that much more competitive than other ports?

I remind the Minister that other scheme ports contribute finance, for example, for the servicing of debt, much of which is used for the purposes of those two ports. All registered ports have to pay a levy that is now roughly £1,000 per annum per man. I think that my arithmetic is correct. There are roughly 12,000 dock workers and the Secretary of State said that the cost of the scheme is £12 million per annum.

All the operators within the registered ports have the burden of financing severance, but some are more favoured than others, and this has regional implications. A port such as mine in Swansea suffers from the same problems, albeit not on the same scale, as the PLA and the Mersey ports. We too are subject to the effects of the same recession.

My port has been heavily dependent on the steel industry and there has been a major decline in the manufacturing base of south Wales. Queen's dock in my constituency is virtually dependent on British Petroleum. Within the past few weeks, that company has announced the closure of its refinery at Llandarcy in my constituency. This is bound to have an effect on the port because ports are a service industry. They reflect the pattern and volume of industry and the health of industries in their areas. The recession hits ports outside the two favoured ports just as much. They too will be affected by the same factors of over-capacity and the new technology of containerisation. I ask the Secretary of State to look carefully at this.

Have we not come to the point, in seeking to meet the problems of these two major ports, at which there can be adverse effects on the other ports, also in difficult parts of the country, that are suffering from the same factors, including the way that scheme ports are harmed by developments in unregistered wharves? These are developed alongside the scheme ports and have problems about safety. There are also concerns about the pensions available to the men and they are not burdened —properly burdened — with the obligations laid on the scheme ports.

Will the Secretary of State look carefully at the philosophy behind the Bill? Is it not going too far in the direction of favouring two ports at the expense of other ports, often in difficult regions and often facing the same problems?

9.28 pm

Mr. Christopher Chope (Southampton, Itchen)

I apologise for not having been able to be present at the Outset of the debate. I was detained upstairs in a meeting of the Select Committee on Procedure.

Any debate concerning ports is of interest to an hon. Member representing a Southampton constituency, and it is a pleasure for me to be able to rise in a debate on ports policy in a rather more hawkish frame of mind than I have on recent occasions.

There has been a great and welcome revival in the fortunes of the port of Southampton this year. That is due to good management, to a much better relationship with the work force and to an increase in realism, which has been sadly lacking in the past.

Last year, the troubles in the port resulted in a trading loss of £6.4 million. This year as a result of negotiations between management and work force, the total number employed in the port has been reduced from 2,400 to 1,400. That is sad, but in consequence there has been a 25 per cent. reduction in the rates offered to people wishing to use the port, most of the port's principal customers have returned, and business is booming.

On 29 March, my hon. Friend the Under-Secretary of State made a speech at a lunch organised by the British Ports Association. It was reported in the Financial Times on 30 March. He referred to the fact that British ports cost an average of 50 per cent. more for handling deepsea container cargoes than their Continental rivals", according to research by his Department. He said that this had raised the costs of imports, resulted in lost export orders, and increased unemployment. It was also disclosed that negotiations were taking place between the National Association of Port Employers and the Government over the cost of the national dock labour scheme. The employers had argued that if the Government continued to refuse to scrap the scheme, which makes compulsory redundancies difficult, they should bear the costs.

There is little evidence in the Bill that the burden placed on the scheme ports is being reduced to any significant extent. I welcome clause 1, which will give a £10 million subsidy to the national dock labour scheme. The clause will stop that burden falling upon employers in the scheme ports. However, compared with the additional subsidy of £140 million referred to in clause 2—I look forward to my hon. Friend's replies to the points made about that by the hon. Member for Swansea, East (Mr. Anderson)—it is pretty small beer and goes no way towards dealing with the principal complaint of scheme port employers—that a levy of about 10 to 13 per cent. is added to their costs because they belong to the scheme and carry the enormous burdens that it places upon them.

The port employers' chairman, Mr. Donald Stringer, was quoted in the Financial Times as saying: It is one thing to know that we are to continue to be beaten but it adds insufferable insult to painful injury if we have to pay the cost of the beater and his overheads. That feeling is shared by scheme port employers throughout the country and by those who work for them. The scheme adds to the costs of the ports and makes it more difficult for them to compete with other British and continental ports.

Many of the problems that the Bill seeks to address have been caused by the national dock labour scheme. I do not call for the abolition of that scheme, but it is clear that it is expensive, inflexible, outdated, and in need of major reform, if not abolition. The Bill does not deal with that problem.

The purpose of the scheme was to secure 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. In 1955, there were 81,000 registered dock workers. Today, there are 13,000. The scheme has failed to maintain the size of the labour force. It has also failed to provide a work force of a composition appropriate for the efficient performance of dock work.

Today, I received from the National Dock Labour Board figures for the numbers of people employed and the age groups into which they fall. There are 12,822 dockers on the register. Only 50 are aged under 25, 349 are between 25 and 29 and 994 are between 30 and 34. A grand total of 1,391 are under 35. I calculate that figure to represent less than 11 per cent. of the total, whereas 44 per cent. of the generally employed population are under 35. That shows the extent of the problem for scheme ports. They have the continuing burden of an aging work force and potentially large severance costs.

Moreover, this restrictive scheme denies entry to younger people. A young person who lives near Felixstowe can join a thriving port, but it is a non-scheme port, so, when he is taken on, the employer does not have to think about the consequences of employing him. It is rather different for scheme ports.

The national dock labour scheme has failed to achieve its declared objectives, and there are other elements of it about which I am deeply suspicious. I asked whether there is a guaranteed minimum rate of pay for dock workers and how much it is. I was told that there is no set national figure, but that it is agreed by the local joint council at each port. That is significant for both London and Liverpool. To what extent will the joint councils in those ports respond to the cold wind of competition if they are given the enormous additional subsidy outlined in the Bill?

I also asked about privileges for dock workers' children and was told that preference is sometimes shown to sons on the waiting list, again subject to local agreements. As somebody who believes in equality of opportunity of employment, I raise an eyebrow at the likelihood of preferential treatment being given to those whose fathers are dock workers.

I also asked about surplus labour in the ports of London, Liverpool and Southampton. The most recent available figures are for the last quarter of 1984. The average was 179 for London, 104 for Liverpool and 465 in the special circumstances of Southampton. The burden of those 465 was borne solely by employers in Southampton, yet there is to be a subsidy to London and Liverpool. If they are subsidised, others will be disadvantaged.

The hon. Member for Swansea, East said that it is a pity that section 9 of the Harbours Act 1964 is to be repealed and he said that the Government should be involved in the control of harbour development. That was the attitude of the Transport and General Workers Union in Southampton last summer when I met one of its officials to discuss the threat from Falmouth. I told him that the best way in which to beat off that threat was to increase efficiency in Southampton. Yet he told me that there was no way in which he could increase efficiency in Southampton and reduce costs. I am glad to say that that official has been proved wrong by what has happened since. We have been able to be more efficient and to reduce our costs by 25 per cent.

The hon. Member for Swansea, East said that the Falmouth project may now be in jeopardy, but he must accept that one reason for that is that Southampton is now a thriving competitor. A prospective investor might not think it worthwhile to invest in Falmouth when he can see a well-established, thriving port just up the road in Southampton.

For those reasons, I welcome the Bill and, although I have reservations about it, I shall, if necessary, support it in the Lobby tonight.

9.41 pm

The Parliamentary Under-Secretary of State for Transport (Mr. David Mitchell)

We have had a useful and wide-ranging debate on the Bill and hon. Members in all parts of the House have made interesting contributions. Rather than repeat what my right hon. Friend said at the outset, I shall deal with the points that have been raised in the course of the debate.

The hon. Member for Wigan (Mr. Stott) said that he was not proposing to divide the House, and I was glad to hear that. He has adopted a sensible approach, showing that on many issues we need not have strident division. In other words, there are areas in which there is agreement and about which there is no reason to create artificial disagreement.

As the hon. Gentleman went on to develop his speech, there was much with which I could not agree, and he will not be surprised to hear that. He referred to drastic reductions in manpower, particularly in Liverpool and the port of London, and he illustrated the decline of the ports industry. He claimed that it was all because the Government had no strategy.

I assure the House that the Government have a strategy. It is based on the recognition that, as a trading island, reliant for jobs in manufacturing and service industries on our ability to get goods in and out of the country at the minimum cost, we have an overwhelming national need to ensure that the disadvantages of being an island—in terms of our ability to compete, particularly in continental markets—are minimised. For that reason, we must have ports which are as cost-effective as possible, so enabling us to get goods in and out of the country effectively and efficiently, with the quick turnround of ships and the safe movement of cargo.

There are areas besides the handling of ships which impose costs and burdens on goods coming into and going out of the country. They include the cost of pilotage, a problem which the Government have sought to tackle in a recently published Green Paper, in connection with which we are consulting on major reforms in the archaic system which governs pilotage in this country. There is also the area of lights. A major report has just come into our hands on what we should do about the burden of lights, which are perhaps unfairly distributed as between one vessel and another.

Thus, for the hon. Member for Wigan to talk about our not having a strategy is wrong. Our strategy is designed to ensure that we do the best possible for the many people whose jobs depend upon our being competitive in international markets. That means cost-effective movements through our ports.

The hon. Gentleman gave his alternative strategy. He said that he wanted to see planning, and he demonstrated that, I thought helpfully, by describing the Scotch whisky trade. He said that instead of the whisky being loaded from Glasgow, it was sent to Felixstowe for export. That was a very good illustration of the divide in the House on these matters. We would say that that whisky should go by whatever means its owners found to be most competitive in selling it abroad. The hon. Gentleman thinks that it should go by a planned system which would ensure that it went out through the Clyde by ship. As it would probably be destined for somewhere on the continent, it would have to go round this island before reaching its port of destination. That would add so much to the cost of the whisky that orders would be lost. That would mean not only that there would be no jobs for people on the Clyde, but that people in the whisky trade would lose their jobs because their product was not competitive in the markets in which people were trying to sell it. That is the sort of madness that would come from the planned system which the hon. Gentleman seeks to visit on us.

Dr. Godman

rose—

Mr. Mitchell

I shall cover the points made by the hon. Member for Greenock and Port Glasgow (Dr. Godman) if he will give me time.

The hon. Member for Wigan opposes the Felixstowe expansion scheme. It is not for me to comment on that today. He said that he would be visiting there tomorrow, and that he would also be visiting Ipswich. I hope that he will see the Transport and General Workers Union representatives in both ports, as I have done, and not just the union representatives in one of them, so that he can get the pure flavour of their views.

The hon. Gentleman went on to attack the possible development of Falmouth, on the grounds that it might justify investment in road construction and in railways. Those are odd grounds on which to attack the idea. I had thought that there were other reasons which he might have used.

I do not know whether Falmouth is the right place for a port to be developed. That is for potential investors and the management to form a judgement on. However, a major transformation is beginning in the movement of international container cargo. Huge vessels are going round the world with the minimum number of stops. They will make one stop in Europe. It may be—I do not know; it is for the investors to judge—that if there were a transhipment port somewhere on the south coast—perhaps Southampton, Falmouth or some other place—it would attract all of that transhipment trade. Therefore, the employment would come to this country rather than go to Le Havre or another European port with us being missed out. I urge the hon. Gentleman not to wear blinkers when considering the possibilities that are opened up by new investment.

The hon. Gentleman claimed that ports had been privatised at too low a price but in the same breath he said that there was a surplus of capacity. I cannot think of a better way of the hon. Gentleman shooting his argument in the foot.

The hon. Gentleman also said that a Labour Government would go for interventionist policies. He illustrated that by saying that the ending of Government control had led to the loss of jobs in west coast ports and consequential gains on the south coast and the east coast. It is not the Government's ending of controls, but rather the movement of trade, which has led to that. It is the fact that continental markets have been opened up. Our trade is increasingly into Europe. Therefore, it must follow logically that it takes the short sea route from the east coast direct to the continental ports. The hon. Gentleman is living in cloud-cuckoo-land if he believes that one can expect to be competitive by shipping cargo from the west coast of this country into continental ports. That would destroy the prospect of those goods ever being sold. They would become uncompetitive because of the burdens which the right hon. Gentleman would add by the cost of transport. Transport is a very important part of the cost of delivery of goods and of our being competitive in world markets.

I respect the hon. Member for Liverpool, Garston (Mr. Loyden) for his intimate knowledge of the port of Liverpool. I believe I am right in saying that he worked in that port for just short of 30 years. He referred to the national dock labour scheme as having been founded by Ernest Bevin, that great man of my old union, the Transport and General Workers Union. Many have a great deal of respect for the hon. Gentleman's approach to trade union matters. He referred to the inequity of the former casual labour system, and I join him in his condemnation of it. When going around the ports I have met no one who would seek to bring it back. There are good Transport and General Workers Union members who work in non-scheme ports and who can demonstrate that one does not need to have a scheme to put an end to casualisation.

The hon. Gentleman said that, in his view, it was the clear intention of the Secretary of State to end the scheme. The Government have no plans to change or abolish the national dock labour scheme. However, I thought that the hon. Gentleman had a glimpse of reality when he said that we should plan ports so that they are spread around the country where the trade is. It is "where the trade is" that is the glimpse of reality. The problem is that the trade has moved from the west coast ports—from Glasgow, the Clyde, Liverpool and Manchester—to the east coast ports. The fact that one must have ports where the trade is provides the reason for the reduction in the amount of cargo going through the west coast ports.

The hon. Gentleman believes that if Liverpool won a large new service the port could not take it on because of the shortage of labour. Is it not ironic that at a time when there is so much unemployment in Merseyside, the hon. Gentleman, representing a Liverpool constituency, can get up and say that he believes that the port could not take on extra work if it were available? I do not take as unhappy a view, because my reading of the recent report of the Mersey Docks and Harbour Company is that it could, and would, willingly seek to take on considerable extra work. Therefore, I do not take as despondent a view, though the hon. Gentleman does do so. If the company would not dare to take on a contract because of a lack of labour when so many people are unemployed, that shows that it is because people cannot be asked to leave that others are not being recruited. Potentially, that is preventing jobs being created.

The hon. Gentleman referred to scheme ports withering on the vine because the non-scheme ports are free from the penalties of history. We should all recognise, as my hon. Friend the Member for Southampton, Itchen (Mr. Chope) has recognised, and as the experience of the unfortunate major strike in Southampton last year illustrated, that when we are talking about the penalties of history and the penalties of restrictive practices that go with it, those are things that men and management can tackle if they are determined to do so. They can break through and shed the shackles of history so that they can complete successfully for trade. in the way that Southampton is now winning back trade which, for some time, it was thought it would never succeed in resecuring.

In an intervention in the speech by the hon. Member for Wigan, the hon. Member for Newham, South (Mr. Spearing) referred to unfair competition from subsidised continental ports. I agree that there is an area that is unsatisfactory. My right hon. Friend the Secretary of State has recently given notice to one of the EEC Commissioners of our concern about state aids for port infrastructure. He is actively considering how we should pursue that matter in the European Community. It is linked with the area of shipping policy on which the Community is taking a new initiative and, more directly, with the treaty requirements concerning state aids. The hon. Gentleman was right to draw attention to it, and we are pursuing this at present.

The hon. Member for Southwark and Bermondsey (Mr. Hughes) described the London area's need for goods, and he wants to maximise the commercial use of the river. He and I may have some glimpse of what it could be, and a great sense of loss of what it is not. Here in the capital city there is a huge requirement for an enormous amount of stuff that is imported into the country, yet it lands at Felixstowe on the east coast and is dragged all the way along our road system to London. The simple reason for that is that London is not competitive. If London would get its act together, it would be the natural place into which all those goods should come.

I trust that the hon. Gentleman would not wish, and I certainly would not wish, to impose a requirement on people to send their goods in through the estuary and through the Port of London Authority if that were not the most economic way of doing it. His constituents would not thank him if the cost of the commodities that they bought in the shops had a loaded 2p or 3p on each item to pay for the extra cost of moving goods in less than the most economic way.

I therefore have to say to the hon. Gentleman that. unlike the Opposition Front Bench, who seem to have learnt nothing, we have a vision. It is not a vision of directing cargo to go to one port or another because that is what the planners think is good for people, but a vision in which that port gets its act together to the point at which it is the most attractive place for goods to come. A great deal more cargo ought to be coming into London, because it is the natural place and has all these advantages, but this will never happen until it can become an efficient and attractive place into which people can bring their cargo.

We have been seeking to strengthen the board of the Port of London Authority. We have appointed new members to it, who bring with them a breadth of business experience. Recently we have appointed a new chairman, Sir Brian Kellett. I am confident that, when he has become embedded in his new job, considerable progress will be seen, in a way that we would both wish, in London receiving its proper share of the cargo that is available.

My hon. Friend the Member for Bristol, North-West (Mr. Stern) exposed some of the petty conflicts in the port of Bristol. He and my hon. Friend the Member for Darlington (Mr. Fallon) are worried about the way in which the PLA and Merseyside are given special provisions and favoured by the Bill, as is my hon. Friend the Member for Itchen. They referred in particular to the generosity of the finance that is available on severance of non-registered dock workers. I understand their concern. We have announced today that we intend to phase out for these two ports the extra assistance for non-registered dock workers' severance costs. That is an important indication that we are moving in the way that my hon. Friends seek.

I was asked when the drip feed from the Treasury would come to an end. I can say only that there is no firm date, but we are moving perceptibly in the right direction.

My hon. Friend the Member for Itchen made a perceptive speech which I do not have time to cover in the depth that it warrants. Clause 1 is designed to move in the direction in which he seeks to go in beginning to mitigate the disadvantages of the burden of the scheme.

This is a small, useful Bill which I believe can do a little to help in a number of ways. It provides further funds to Merseyside and the Port of London Authority. It makes available limited resources to help scheme ports. It takes useful steps to reduce the burdens on trust ports, and finally formalises the end of section 9. I believe that it should be welcomed as a small step towards fairer competition in the ports industry. On that basis, I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 42 (Committal of Bills).