LICENSING OF FERRY SERVICES (Hansard, 30 March 1988)

§ Mr. Adley
I beg to move, That the clause be read a Second time.
I am very conscious that, at this late hour, my hon. Friends, at least, will expect me to be brief, and to try not to repeat any of the arguments already advanced on other clauses.
I tabled the new clause because I feel that the threat of prosecution as outlined in the Bill provides insufficient inducement for the involvement of senior management in ferry safety. I believe that, with a system of licensing, the threat of loss of licence by a major ferry operator would give a far greater guarantee of safety.
The new clause would merely give the Secretary of State powers — along with a possibility for involving the Treasury—to charge substantial fees for the granting of such a licence. I hope that new clause 1, tabled by my right hon. Friend the Secretary of State, will be considered by the Government as a precedent for introducing a full licensing system.
Let me read two sentences from the report of the Sheen inquiry into the Herald of Free Enterprise disaster: The Court has not heard sufficient evidence to express any firm view upon it, but is conscious that the standards in many other industries have been improved by licensing. The court draws attention to this suggestion and expresses the hope that serious consideration will be given to it. That is my earnest hope too, and I cannot understand—perhaps my right hon. Friend will enlighten me—why it is considered necessary to license hovercraft and aircraft, but not ferries.
I understand that heretofore the Department's view has been that, as licensing is an international matter, it would be difficult to introduce a licensing system. I cannot accept that argument. International air service agreements show that bilateral licensing is the norm in that mode of transport. My right hon. Friend the Secretary of State for Transport and I will be boarding an aeroplane at Gatwick in a few hours to take us to Toulouse, and neither he nor I would wish to contemplate the proposition of an inadequate system of licensing of any aircraft on which we shall be travelling.
The Herald of Free Enterprise disaster was one of the first magnitude. It was an example of gross negligence, but it was an accident. On the other hand, the Horsa affair of Sealink, which attracted perhaps a little less publicity, was in many ways a considerably worse example of unacceptable behaviour by a ferry company, although mercifully there was no loss of life. There was nothing less than a deliberate and wilful decision to disregard safety for profit. The crime was compounded by a farrago of lies about the event which was put out in Sealink's press releases.
1228 I shall not weary the House with quotations from letters that I received at the time from passengers on the Horsa. I shall merely say that the Horsa affair gave a new meaning to "flexilink". In terms of Sealink, we can think of flexiboats with bulging sides, designed to enable as many passengers as possible to cram on regardless of safety. Mr. Sherwood of Sealink is, in my view, nothing more than a spiv. He, singlehandedly, has dragged down the standard of management of the United Kingdom shipping industry. That is one of the reasons why many of us feel that a licensing system is becoming essential.
I understand that there are views about the safety of roll-on/roll-off vessels and doubts as to whether they are ships in the conventional sense. Sir Jeffrey Sterling was quoted in Lloyd's List of 19 December 1987. He said: We are not in shipping. Shipping is not a business, it is a method. He described P and 0 as being in the transport of freight and human beings. That is an unusual view of the industry. If Sir Jeffrey is in the method business, not the shipping business, that lends additional strength to my call for a licensing system.
I have received a great deal of worrying correspondence. Standards of management in the shipping industry are far too low and the introduction of a licensing system would be a powerful sanction. It would provide the Secretary of State, the Government, the House and the British people with a powerful additional weapon in the armoury of safety enforcement.

§ Mr. Tony Lloyd
I wish to associate the Opposition with the remarks of the hon. Member for Christchurch (Mr. Adley). The hon. Gentleman rightly drew the attention of the House to the Horsa, and I remember him saying at the time of that disaster that there should be a method of licensing and revocation of licences. I remember also that I supported that concept. In any equivalent form of international transport, it is inconceivable that there would be no form of licensing. If some of the practices that have been revealed over the past 12 months in the shipping industry had been found to take place in the aviation industry, for example, licences would have been revoked.
It has been said, although I do not necessarily agree, that if we institute some form of safety regime specifically for British-based or owned ferries, that could result in an unfair competitive disadvantage to British ferries and an advantage to foreign ferries. If there were a system of licensing, anyone who travelled to United Kingdom ports would be subject to that authority and to the potential revocation of his licence. There is much to recommend such regulation, and I shall listen with considerable interest to the Minister's response. I urge him seriously to consider accepting that helpful suggestion.

§ Mr. David Mitchell
The Government have given very careful consideration to this proposal, but have concluded that there would be no great benefits from, and quite severe problems in, introducing such a system.
Perhaps the most appealing argument is by analogy with other modes of transport — public service vehicle operation or, especially, aviation. My hon. Friend the Member for Christchurch (Mr. Adley) mentioned that. The analogy does not really stand up to close examination. Licensing of air operators is used, first, as a means of economic regulation. That does not apply in shipping where, thankfully, there is an open market.
1229 Secondly, it is used to ensure that the operator has the appropriate technical facilities and personnel to ensure that his aircraft can be maintained and operated safely. That is not really a problem with ships, whose safety does not depend, crucially, on the reliability of masses of technically complex equipment, and there is no evidence that the reliability of such equipment is a major factor in shipping accidents. Safety at sea depends much more, in fact, on the sensible and conscientious handling of the ship by its qualified officers and, up to a point, of its shore management. Thirdly, licensing of air and coach operators allows their financial standing to be checked, but that is not a significant factor in ferry operations.
The Herald families have suggested that a threat to withhold or suspend a licence might be a more effective deterrent against misbehaviour than a threat to prosecute, and my hon. Friend took a similar view. But that is really rather doubtful. Any Minister who sought to withhold a ship operator's licence would very quickly be taken to court for injunctive relief to be granted and the operator would continue to operate until the case against him was proved. In short, nothing less than criminal failings would allow a suspension to be upheld, and if criminality could be proved, prosecution would be available.
Clauses 29 and 30 provide for fines of £50,000 on summary convictions, two years in prison and unlimited fines on indictment. Clause 46 provides for the personal liability of the directors if they have consented to or connived at a breach. On the basis of that information, I do not think that the House would wish to accept the new clause.
I remind the House that shipping is an international business. To impose a licensing requirement, when one does not exist in other countries to which ferries sail, would simply be a further incentive to operators to flag out.
For those reasons, I cannot recommend the new clause to the House.

§ Mr. Adley
In view of what my hon. Friend has said and because of the lateness of the hour, I beg to ask leave to withdraw the motion.