§ Mr. Deputy Speaker
Let me now deal with the point of order raised by the hon. Member for Middlesbrough (Mr. Bell). I understand his concern, but I am sure that he 110 would not expect me to comment on either the proceedings or the conclusions of the Committee that considered the Bill. He will have an opportunity to air the matters to which he alluded, and it will be for the House to make a decision in the light of what is said in the debate. The hon. Member for Langbaurgh (Mr. Holt) may choose to comment on what is said before the end of our proceedings.
§ Mr. Holt
Let me continue what I was saying some 20 minutes ago, when I moved the Third Reading.
There is no need for me to repeat in detail the arguments for the Bill, which the Committee has already scrutinised exhaustively. The Committee found, after lengthy consideration, that the promoters had made their case for the preamble. As the Bill's sponsor, I wish to put on record my thanks to the Chairman and members of the Committee for their diligence and hard work.
The promoters agreed to a number of undertakings during the Committee stage. First, and to answer the point of order raised by the hon. Member for Middlesbrough (Mr. Bell), the head office of the successor company will be located in Cleveland. That will be so only for as long as there is a county named Cleveland, but it is my wish and that of most of my constituents that the county name reverts to North Yorkshire as soon as possible. When that happens, the company's headquarters will remain where they are, but the county boundaries will be removed or changed. Nevertheless, the headquarters will remain on Teesside, which is the best way that we can phrase the undertaking given by the authority.
Secondly, the authority recognises the significance of this development and fully agrees that an employee share scheme be established in respect of the holding company. That aspect was the subject of considerable debate in Committee, and the promoters are happy to give an undertaking that employers will have that right. Employee involvement in the ownership of the business has always been viewed by the authority as an important factor alongside other local interests, and we want to maintain that policy.
Since privatisation began, Teesside has enjoyed a considerable upsurge in business. Only 10 days ago, albeit without a great deal of national publicity, we launched a roll-on/roll-off ferry service that will operate between Teesside and Hamburg twice a week. That will open up a great deal more of eastern Europe's market potential to Teesside and to the people living there.
Our third undertaking is that the shareholders in any employee share scheme will carry full voting rights to the successor company. We give that undertaking freely and openly, so that everyone knows that the points raised in Committee have been fully understood by the Tees and Hartlepool authority. I repeat the clear undertakings that it has given.
It is a pity that Labour Members have opposed this opportunity for Teesside, but it is not untypical. Only my hon. Friend the Member for Stockton, South (Mr. Devlin) and I have been fighting for the steel industry on Teesside. Scottish Labour Members and my hon. Friends who represent Scottish constituencies have all been fighting for the Scottish steel industry. Whenever there have been debates or questions about the steel industry over the past few months, not one Labour Member has spoken in 111 support of steel workers on Teesside. We deprecate that in the way that we deprecate the fact that Labour Members failed to support the workers in the Tees port, the developments there, and the jobs and economic well-being that will flow from that first privatisation of a port.
§ Mr. A. J. Beith (Berwick-upon-Tweed)
As the hon. Gentleman has described what the promoters have done since the earlier stages of the Bill, perhaps he will give us their view of the levy that has been imposed on the proceeds of the privatisation since the Bill was first 112 introduced, and which will take perhaps two thirds of the amount for the central Exchequer. Are the promoters happy about that? Does it in any way change their view of the Bill?
§ Mr. Holt
Naturally, when one takes money from someone—and I am sure that the hon. Gentleman is no different—they are not particularly happy about it. Nevertheless, the promoters are happy that they are losing only half the money. They might have lost the whole lot. The money that they retain will be reinvested in the port authority and will provide job security for the future. I again commend the Bill to the House.
§ Mr. Ted Leadbitter (Hartlepool)
One of the most significant aspects of the Bill is that the Government have not remained neutral. In the debate on the Midland Metro Bill, the Minister for Aviation and Shipping made a short intervention in which he gave no encouragement to the promoters of that Bill that they could look forward to any grant under section 56. He said that, as always with a private Bill, the Government were neutral. How the Minister dares to say that, despite the evidence of the Official Report especially in relation to this Bill, is beyond the belief of any reasonable person in the House.
Before I deal with some of the aspects proper to Third Reading, I congratulate the members of the Committee who worked exceedingly hard during hearings on the Bill dealing with the submissions by the proposer and petitioners. The petitioners and the proposer also worked exceedingly hard. Having said that, one would have thought that hon. Members should be reasonably happy but, time and again, especially in this Session, hon. Members have been increasingly worried about the private Bill procedure.
The promoters of the Midland Metro Bill, which we have just finished considering, said that they had spent about £1 million and the petitioners said that they had spent many thousands of pounds. A large amount of money has been spent on the Tees and Hartlepool Port Authority Bill. However, where the functions of the House of Commons are concerned, hon. Members with local knowledge are virtually neutralised. Four hon. Members and the Chairman sit upstairs and objectors have little impact Even though the petitioners perform their services very well, it is at great expense to the authorities and not to the satisfaction of the objectors.
§ Mr. Cryer
Does my hon. Friend accept that one of the difficulties with the private Bill procedure, and with this Bill in particular, is that if the Chair refuses to use his casting vote to allow any hon. Member to talk—as on this occasion—it cuts out any sound and reasonable objections which ordinary citizens are prepared to advance?
§ Mr. Leadbitter
That is the case.
Let us forget for one moment the presumption that because the proposers proposed the Bill they are right. The Tees and Hartlepool Port Authority has a chairman, a chief executive, a kind of secretary and 10 non-executive members. Between them, they have been dilly-dallying with the Government for the past few months. Yet hon. Members who, with great respect to those officers, have greater experience of the area have a right to be heard, too. It should not be implied that hon. Members are not competent to have an input into the argument when we have had many more years experience and service in the area than any of those people, including the hon. Members for Langbaurgh (Mr. Holt) and for Stockton, South (Mr. Devlin). Let us make that clear.
What is an important objection? We will come to the contradictions in a minute. Mr. Bartlett, the counsel for the proposers, was so anxious to make a good case that from the moment he made his submission in Committee he referred to section 12(3) of the Tees and Hartlepools Port Authority Act 1966 and pointed out that responsibilities for the care and maintenance of the port area were a constraint. He did not want them. That was his first argument.
114 Mr. Hackney, the chief executive of the authority, was not running on quite the same track as his secretary. In Committee he referred to those responsibilities and said that a special clause protected Hartlepool. I fail to see how a senior officer can say that a section will look after the interests of the infrastructure, of the breakwater and the piers, when counsel in Committee says that Hartlepool wants none of those constraints. He used the word "constraint" as a reason for promoting the private Bill. If the Bill is passed, we know what will happen to the protection of the port. The history of the last 10 years shows that questions have been raised about invoking the responsibilities enshrined in section 12(3) of the Act.
Hartlepool borough council's petition refers, as a matter of primary importance, to section 12. It is worth reading what the petition says:Section 12(3) of the Act of 1966 states that the authority shall 'take such steps from time to time as may be necessary for the maintenance of so much of the harbour as comprises the existing port of Hartlepool in a condition not less efficient, safe and commodious than it is at the passing of this Act.'I know how important that section is because I was the Member who had it written into the Tees and Hartlepool Port Authority Bill of 1966. The clause was devised by me, the then town clerk of Hartlepool borough council, and the parliamentary commissioners. The clause had legal backing and it was accepted by the House. Since then, however, the Tees and Hartlepool port authority has been reticent about invoking it and in the case of this Bill has said that it is a constraint. On page 12 of its proof of evidence to the Committee, referring to the section, Hartlepool borough council says:The importance of the port and harbour to the well being of the community has long been recognised by the council. Whilst the port authority indicate that the proposed legislation would preserve the burden of that duty upon the operating company, none the less the council suspect that should other interests or priorities demand, the discharge of that duty will be diminished under the proposed arrangements.That is the truth of the matter.
Another truth is that 10 years ago Hartlepool borough council did not support that section of the 1966 Act. There was a long-drawn-out argument about the protection of the breakwater. Contrary to what is said in its proof of evidence, Hartlepool borough council did not recognise its importance for a long time, but it has come round to recognising it now.
§ Mr. Leadbitter
It was suffering from incompetent advice. Other legal advisers are helping us now. In Committee, the port's chief executive said that the section is a protection for Hartlepool but to make out a case for the private Bill counsel said that it was a constraint. Men who are supposed to be honourable and intellectually attuned are contradicting each other. We do not have what I call truth in the House of Commons. That is not unusual. I have been here for a quarter of a century. During that time I have found that it is easier to pursue a lie than to find the truth. The only problem is that when one does find the truth certain people get very angry about it.
§ Mr. Skinner
My hon. Friend plays a leading role in this place. He is on the Chairmen's Panel. Has he noticed that during the past few days the well-paid parliamentary agents who play such a significant role in private Bills, including the Tees and Hartlepool Port Authority Bill, 115 have got it wrong? Those tin-pot agents, if I may so describe them, introduced a Bill last week. Much to the embarrassment of Mr. Deputy Speaker, who, as always, was trying manfully to get it through, my hon. Friend the Member for Derbyshire, North-East (Mr. Barnes) discovered that the parliamentary agents, with their fat wallets, paid for by the taxpayer, had left out clause 6 which had gone through the House of Lords on the nod, not being spoken on by anyone. The result in the House of Commons was like a Monty Python show, talking about clause 6 when it was not there.
I know that my hon. Friend the Member for Hartlepool (Mr. Leadbitter) has scanned the Bill because I heard him speaking on it once before. I hope he has looked at it carefully, because there is a chance that something is missing. These agents, who are similar to the ones who advised Hartlepool council 10 years ago, may well have cocked it up again. My hon. Friend should be ultra-careful about this as there is some chance that we can stop the whole show.
§ Mr. Leadbitter
It is possible that we could still do that. My hon. Friend mentions legal fallibilities.
§ Mr. Leadbitter
It was harder to smoke out Blunt than it was to smoke out the promoters of this Bill.
I turn to the saga of the 50 per cent. sale of the proceeds, which is going into the pockets——
§ Mr. Deputy Speaker
Order: I hope that the hon. Gentleman will avoid turning his back on the Chair. I seem to be missing his jests.
§ Mr. Leadbitter
This part of the story is at least fascinating. We shall take with it the saga of the enabling legislation.
I do not know whether the chief executive was a delegate at the Tory party conference, but we were receiving communications from Bournemouth from time to time. I thought that the Secretary of State for Transport had enough trouble without him being there. The chief executive's statements were outdone by the more robust language of the secretary of Tees and Hartlepool port authority, a man who suffers from a lack of vocabulary and, at times, politeness.
§ Mr. Cryer
One of the questions that we continually raise during proceedings on private Bills is the involvement of the Government. My hon. Friend said that an executive was at the Conservative party conference. I wonder if he could give us further information about that as it implies seedy collaboration between members of the Conservative party and others to get the Bill through. That would be quite outside Standing Orders and the honour of this ancient and honourable House.
§ Mr. Leadbitter
It is more than a coincidence that we have this private Bill and the chief executive in Bournemouth. The chief executive is not an old-age 116 pensioner. He is not thinking of retiring there, but he may say that it was a pure accident that the conference took place while he was visiting that very interesting town.
I have looked through some of the epistles, the communiqués and their dates. On 14 May 1990, during a debate on the Clyde Port Authority Bill, it was indicated that 50 per cent. of the sale of the shares would be paid to the Exchequer whenever a trust port was converted into a company. The percentage was agreed as a broad figure for all trust ports. The House should remember that. The chief executive—through his secretary, of course—claimed that the 50 per cent. left was a gain. He gave the impression that he had negotiated the figure, but the Official Report gives the lie to that. Some of these officials are so imbecilic that they think that Members of Parliament cannot read.
§ Mr. Beith
The situation is worse than that which the hon. Gentleman has described. On 3 July, in the Standing Committee on the Finance Bill, the Chief Secretary to the Treasury admitted in answer to me that the levy would amount to a tax charge of 67.5 per cent. He put it another way. He said that thatmeans a cash injection of 32.5 per cent."—[Official Report, Standing Committee E, 3 July 1990; c. 568.]In other words, what the taxman leaves us is a cash injection. By July, the Government had made it clear that, with the combined effect of the levy and capital gains tax, they expected to get more than two thirds of the proceeds.
§ Mr. Leadbitter
I accept that observation. The hon. Gentleman expressed his concern in my constituency, and I took note of that. The hon. Gentleman jumped to July. I want to go back to June. On 27 June 1990, the Clyde port authority sent a letter to worthy hon. Members, such as myself, and said:We share the Government's view"—that means that the Government have expressed a view for the authority to share——on privatisation".At the end of the letter, the authority adds:This Bill is with the full backing and support of the Government.The Minister for Aviation and Shipping must not sit there naughtily, feeling protected and pretending neutrality. We know what is being done by his mate in a higher office. It is a sham, even if he calls it democracy.
On 15 October 1990, we come back to our worthy secretary of the Tees and Hartlepool port authority. That man has had more mention in the House of Commons than in the whole of the rest of his public life—
§ Mr. Leadbitter
I feel disposed to limit my feelings of friendship.
The secretary of the Tees and Hartlepool port authority wrote:We have also won the return of the 50 per cent. proceeds.He had nothing to do with it—he was told what to do. Later on, the chief executive said that it came as no surprise to him. They cannot even work together. As I said, when we reach privatisation in four months' time, we shall watch their salaries go up. But they have not even worked for it. They are not even in harmony with each other.
On 5 October, the chief executive of the Tees and Hartlepool port authority, in an enclosure to the management and staff, wrote: 117Delay on this Bill could lose us our lead and the benefit of the return to the business of 50 per cent. of the proceeds.What wishful thinking. He is saying, "Do not oppose the Bill. Do not go through the democratic process because if there is a delay we shall lose our lead and run the risk of not getting our 50 per cent." Suppose that someone pinches half my money. If I then say that what I have left is a gain, I ought to be seeking psychiatric treatment.
On 9 October 1990, the secretary of the Tees and Hartlepool port authority, on the announcement of the enabling legislation, said this:The situation that we foresaw has now materialised.I think that he was a bit tired; he had been overworked and had not read the Official Report. Way back in March 1988, long before the Tees and Hartlepool port authority thought about a private Bill, the Secretary of State, in a talk to the ports federation, had made it clear that he saw advantages in privatisation. He then said that he was very disappointed by the lack of response. There is no real upsurge of support for privatisation and he has been bludgeoning on since then.
The proof of the pudding is always in the eating. The chief executive answered the counsel for the petitioners about when he became disenchanted with the present constitution. The House will be pleased to know that this Bill reached this House having received no consultation. It was not challenged in Committee and the counsel for the petitioners pointed out bluntly in the last sitting that there had been no consultation. The board agreed the Bill's contents in June 1989 and the Bill reached the Private Bill Office just before the closing date of 27 November. The summer recess split the board's agreeing the Bill and its appearance in the Private Bill Office, so consultation as we understand it did not take place. Only one or two little representations which had already been agreed upon were discussed.
The secretary of the board claims that the board foresaw, but it foresaw nothing. That is how the Bill's promoters have been twisting the words around. Whether they like it or not, they must accept that the petitioners have addressed the facts. They have not tried to distort or to misrepresent. The latter is characteristic of the promoters. The House should be warned that, when we have an opportunity to discuss the new private Bill procedures, never again will we find ourselves in a position of incurring great expense as with public or enabling Bills.
The House is more than likely to grant the Bill its Third Reading and to pass it to the other place, but the procedure leaves a bad taste in the mouth because a handful of people have determined the course of events. They have tried to suggest to hon. Members and to the petitioners that they have behaved properly, but they have not.
Mr. Bartlett was counsel for the petitioners in the Committee upstairs. On 15 May 1990 he said:So it is by this means that the proceeds of the sale are returned to the holding company and become available for investment in the expansion of the business. Those will be reduced on the basis of the current indications of the Government by some 50 per cent. Taxation might reduce it further, but it is those proceeds which become available as a result of selling the shares.The whole of the property, all the assets and the shares would be sold and instead of all the proceeds going back to the port as they should, the Government are going to take half. Under the present system, the port's revenues go into port expansion programmes or to reduce charges. The 118 hon. Member for Langbaurgh (Mr. Holt) referred to one of the port authority's new ventures. That has been implemented under the present legislation, not under the new proposals.
The promoters knew about the 50 per cent. beforehand. They did not foresee it—it was common knowledge. Rather than include it in the Bill where we could see it, they slipped it in during progress on the Finance Bill so we might not see it. That shows how devious the whole process was.
§ Mr. Skinner
It is a pity they did not slip something into the Finance Act 1981, which produced the massive tax loophole allowing people like Lady Porter and one or two others to invest in offshore companies and make a big fat killing. Has my hon. Friend seen page 17 of the minutes of evidence? I think that it refers to the bloke to whom my hon. Friend has been referring. The minutes of evidence state:Mr. Hackney himself admits that the shareholders of the holding company may or may not be concerned with the welfare of Teesside. If they are to behave as logical, reasonable investors would behave, they will be concerned for their profits.There it is in a nutshell. They are saying, "We are riot worried about the people of Teesside and Hartlepool." All they are concerned about is making money. Hon. Members have argued about the private Bill many times. In this case—I should like my hon. Friend to comment on it—the Government have been promoting the idea. They are not content with just walking through the Lobby and supporting the Bill. They have actually promoted it. There has been a sinister collaboration with people like Hackney and the others, together with the Government, who have now got the Bill through on the private Bill procedure. In reality, it should have been part of their programme if they had really believed in it.
§ Mr. Leadbitter
—the enabling proposals that were announced in Bournemouth, the conference town, the Secretary of State and the chief executive of the port authority have now agreed on one thing. Mr. Hackney said:Our belief is that the Government announcement of an enabling Bill of trust portsthat is, to privatise—would not have happened without our Bill, and the money that was spent on it has been very well spent to that end.That is not the truth. There is a word for that in the House of Commons.
§ Mr. Leadbitter
An hon. Member would not get away with it because it is not the truth. I consider it to be utter impertinence to write to a Member of Parliament or to anybody and say that this enabling proposal would not have existed without the Bill. I now give another quotation to which I referred on Second Reading on 15 Marcxh.
§ Mr. Leadbitter
I remember it well, too. I refer to the report of the minutes of evidence of the first sitting of the Committee on 15 May 1990. Mr. Hackney himself exposed the real position. He said: 119We were also advised"—that is, by the Department of Transport—that the Government would not be providing enabling legislation at that time because of problems with legislation in the House.There was not sufficient time.
Good observers in the House know full well that it has already been announced in the House what things will not come under privatisation in this Parliament. One is British Rail, but there is another. Nothing was mentioned about enabling proposals for the ports. That was on the cards—it has been on the cards for a long time and it has had to stand in the queue, but whatever else is said, once that queue was moved aside everybody knew that the enabling proposals would come to the House. It was not because of the private Bill that the Secretary of State is bringing forward the measures. More than that, I wonder what kind of Secretary of State would have the notion, even if it were possible, to promise enabling legislation for all ports on the basis of one port. It is a non sequitur in that sense and it is an untruth in another.
I now refer quickly to matters in contrast—for example, the port authority of Clyde—in this argument. At least the authority gave a raw, frank admission that its Bill is what the Secretary of State for Transport wanted and what the Chancellor of the Exchequer was to take. That is the difference in the conduct of the Clyde port authority and the Tees and Hartlepool port authority. We must look at the management. As I said, the board is made up of non-executive members. In other words, they are not in the driving seat. At present there are 10, selected by the Secretary of State. The day-to-day management and the authority of the board is left to the management team.
I should like to give a little caveat here. On 15 March I talked about the success of the port. On page 17 of the minutes of the Committee, Mr. Hackney states:In 1967 the authority broke even before taxation and employed 2,177 people. It handled just short of £12 million. In 1989 the profit before exceptional items and tax was £11 million. The labour force was dropped to 828 and the tonnage increased to 38 million tonnes.That shows the streamlining—the economic health—of the port under existing legislation.
Of course, the first step towards privatisation was to get rid of the dock labour scheme. It was a case of "Get rid of these expensive lads—every one of them", and it was done. I feel strongly about the success of the port and that makes it harder to see it run into the more risky waters of private enterprise.
§ Mr. Skinner
My hon. Friend has said that the abolition of the dock labour scheme was the first step towards these proposals. My hon. Friend is a member of the Chairmen's Panel and has been a Member of the House for 26 years. He is saying that, on the one hand, the Government introduced a Bill of their own in the Queen's Speech to get rid of the dock labour scheme, while at the same time they have encouraged and connived with others to use the private Bill procedure to get the second phase of the scheme through.
The Government have a majority of 150 over us and they are tipping off the private Bill people and saying, "Look here, we don't want to stuff our programme with too much, but since we have a majority of 150 and we do not need everybody here to pass a private Bill, you 120 smuggle it in that way; we'll give you a hand and get the Prime Minister or the Secretary of State for the Environment to go through the Lobby at 10, 11 or 12 o'clock at night to support it." That is a corrupt practice of a Government with a big majority who are using the private Bill procedure to tell the nation that this is a private matter when, in fact, it is an addendum to the Government's manifesto and programme. The whole thing stinks. What my hon. Friend says has been said by us many times previously—in relation to Bills relating to British Coal and to Associated British Ports. My hon. Friend has added something new by being able to show that the abandonment of the dock labour scheme is part and parcel of the private Bill procedure—
§ Madam Deputy Speaker (Miss Betty Boothroyd)
Order. Does the hon. Gentleman wish to make a speech? If so, I am sure that he will be able to catch my eye eventually.
§ Mr. Leadbitter
Having covered the success of the port in that thumbnail sketch, I now remind the House that, apart from the constraints that Mr. Bartlett wanted to remove because they were a costly item in the port's financial affairs, he mentioned two other reasons for the Bill. One was getting ready for 1992, but I will not waste time on that——
§ Mr. Leadbitter
No, there is plenty of time for other things. The other idea was to be free to go into other investment ventures.
In pages 25 and 26 of the proceedings of the Committee Mr. Hackney said:The authority over the years has built up considerable sums of money initially invested in the money markets but the stock market suggested better returns so surplus funds were divided into two and given to professional investment managers. There has been a significant growth in the return achieved on investment income and it is a very successful part of the business.That is under the present Act. He then says:A sum was set aside to invest in companies in the north-east.There is nothing wrong with that. He goes on:A sum was set aside for port-related companies"—there is nothing wrong with that either—and money was set aside for companies that were not port related.That brings me back to the Second Reading on 15 March. What can be done under the Bill that it can be claimed could not be done under the Act? The companies were listed on page 26 of the report. The chief executive of the port authority said that the Tees and Hartlepool port authority set up a company called Port Authority Distribution Services and another called Tees and Hartlepool Port Authority Developmentsto utilise in future in distribution and property business.I find that of interest. He was asked by counsel upstairs: 121What corporate plan have you got for this investment in non-port activities?The answer was:Integrated transport business"—which he said was dear to his heart—and property.Yet I find in the evidence that it could deal in property. I do not think that I misread the minutes. It is interesting that there is no corporate plan. There is no plan of any kind for what might be called the financial strategy requirements of those non-port activities. Yet under the present Act the port authority can invest in non-port related activities. The list of them appears in the Official Report. I did not put them there. Mr. Hackney put them there.
One matter is outstanding in the new Bill. On Third Reading we should examine it by what I call the question and answer process, which was used in Committee. We dealt with what are called the holding company and the successor company. I shall not go into the details but the report lays out specifically and with clarity that the holding company would deal with the financial side, the funding and so on and the successor company would deal with the responsibilities to the port such as those under section 12(3) of the Act which requires the authority to maintain the ports and the piers which are constraints. The report said that the port would become an integral part of a group business and that failure in the performance of the group was likely to affect the core port business and the economy of Teesside. The funds of the core business are for group purposes.
In other words—in short, thumbnail language—if the port is one of a group and the group does badly in its investments, does the port suffer? Or if there is an investment proposal, should the money go into the port or where there are better returns to be found in the market? Does this organisation of infrastructure deal positively and certainly with the need for adequate resources for the port? The evidence appears to show some considerable doubt.
On page 39 of the Committee's proceedings Mr. Hackney concluded the part that I described by saying:£20 million in cash surpluses was not invested in Teesside but in stocks and shares, some in London, some abroad.Counsel put to him:This Bill is venturing the resources of the port capital invested at risk.Mr. Hackney agreed. He was asked:Two aspects, public and statutory responsibilities which have to be preserved and supporting plans to make the responsibility work.Mr. Hackney agreed. He was asked:They go together but with this Bill the control of the funds goes to the holding company.He agreed. It was put to him:The responsibility goes to a successor company and the funds are in other hands.He agreed. He was asked:The kernel of your case is that if we were purely concerned with port business the present constitution would be satisfactory.Mr. Hackney said yes. He was then asked:But because you want to engage in wider trading activities that constitution is unsatisfactory.Mr. Hackney said: "That is so." He was asked:If the aims and object of the authority is the port then the present constitution is adequate.Mr. Hackney said yes. 122The result of privatisation is that 50 per cent. of assets built up and held for future port development goes into the pocket of the Government.Mr. Hackney said yes.
Page 34 records Mr. Hackney's answers to counsel for the petitioners who said that there was no groundswell among ports for privatisation. Mr. Hackney said:At that time most ports felt that there would probably be some Government enabling legislation and we were waiting for that.If they were waiting for it and knew that it was coming, why in God's name have they spent so much money? Why are my poll tax payers paying for their profits? Privatisation is like a little mouse running about and the little trap waiting for it is set by the takeover boys. Those who created this nonsense will find themselves out of a job.
Without prevarication, Mr. Hackney said that he was waiting for the enabling legislation. It will come during the next Session. I shall try hard to get the Lords to keep this Bill ticking over until the enabling legislation arrives.
§ Mr. Skinner
I have agreed with my hon. Friend for three quarters of an hour but he is now on dodgy ground. He wants the House of Lords to keep up the work. I wish him well, but the people who wanted to save the GLC said, "Wait until it gets to the House of Lords. Those independent men and women will stand up for us." What happened? The Prime Minister waved her wand and the Lords all turned up and got rid of the GLC. People said, "Wait until the poll tax gets to the House of Lords. By God, the Lords will make a difference. The SDP and the party that dare not speak its name will band together and stop the poll tax." What happened? Lords turned up from Canada, Scotland and Ireland. Two cousins met in the Lobby and were introduced by the Chief Whip of the Tory party and said "Hello, Charles." They had never met but had turned up to vote to get the poll tax through.
My hon. Friend will fight to the bitter end, but I do not want him to waste his energy. They were going to give us a chuck on with the Associated British Ports (No. 2) Bill, which was similar to this, and what did we get?—a gnat's whisker. My hon. Friends tried, but we could not get any amendments. My hon. Friend should battle on. but he should not put too much faith in the odd bods in the other place.
§ Mr. Leadbitter
My hon. Friend is quite right. I never dreamed that my threat had so much weight. However, I want to conclude.
§ Mr. Cryer
I am listening carefully to my hon. Friend, who is a man of authority, with many years experience. Before he rushes to his conclusion, could he dwell a little on asset stripping? That is what he is talking about—the seizure of these ports by private interests, and then the selling off of all the lands and assets on which the new owners can get their greedy hands. As a man of the area, he will naturally deeply resent the way that public assets are frittered away by private greed.
§ Madam Deputy Speaker
Order. We cannot have one intervention on top of another. I am sure that the hon. Member for Hartlepool (Mr. Leadbitter) will want to respond.
§ Mr. Leadbitter
My hon. Friend the Member for Bradford, South (Mr. Cryer) is right. I have much experience of asset stripping. I used to call them professional enclosures. I used to mix with what was called the high-risk entrepreneurs, who would put their hands in the public purse for grants and loans, and when the time came to repay, would close the shop and go to other countries to open some factories, taking the equipment with them.
There used to be a company in my constituency called Foster Wheelers, which employed a lot of people. Rolls-Royce took it over, and it is now shut. The £15 million worth of defence nuclear orders that we had for many years disappeared, with some of the equipment going to a company in Newcastle called NEI, and some going to Derby. I hear that Parsons is talking of getting rid of 650 men because of the Gulf crisis. That is nonsense. There are not 650 men working out there. It just so happens that Rolls-Royce is working behind the scenes. They call it restructuring and reorganisation.
I have here another question from the minutes. Counsel asked:If we had minutes now, we would find nothing until recent times which would suggest that you were disenchanted with your position.He was referring to the minutes of the authority. Mr. Hackney said, "Yes." The significance of the reference to the minutes is that counsel, who was paid a lot of money for his services, applied to the port authority for a look at the minutes of the undertaking over the previous three years, and was refused. So counsel had to formlate his question in that way to find out when Mr. Hackney and his secretary, and possibly a couple of others, became disenchanted.
I notice that the chairman of the authority has not said a ruddy word. He has been a silent partner—the do-as-you-are-told boy, whose name I do not even know. He was not in the Committee. He thinks that he rules the roost, but he does not. There is a kind of freemasonery working over there. Counsel wanted to get to the meaning of the minutes. He wanted to pinpoint the stage at which there was thought of privatisation. As he could not find that information in the minutes, he had to rely on the word of the chief executive. He asked:At what point were you disenchanted with your position?—only recently?The chief executive replied:That is so.Question:You can carry on Port-related business of every kind under your present powers.What we have to say to one another in this place must not and does not interfere with our regard for one another, but I say to the House, and especially to the hon. Member for Langbaurgh, that when the chief executive answered the question, he simply said yes. That appears on page 11 of the second volume of minutes.
Counsel then asked:Can development sites anywhere in the country be done, financed and invested in if they contribute to the welfare of the port?Mr. Hackney's reply was "Yes". There is no doubt about that answer. He was then asked:Could you establish an outpost, if you wished, on the Continent instead of the service between it and the port provided that it benefited the port?The answer was yes.
124 The important words are "benefit of the port". As there is a holding company, a successor company and resources generally, surely any operation should be carried out to benefit the port. What is there in the Bill that differs from that?
A member of the committee—my hon. Friend the Member for Derbyshire, North-East—asked a significant question which appears on page 20 of the second volume of minutes. My hon. Friend asked:What advice have you received from the Department of Transport?This was the answer:The Department of Transport advised that the harbour revision route was not a route that the port authority could go down. We were advised by the Government that they would like to pass legislation, but because of the backlog of the legislation business"—that is the enabling Bill—within the House it was unlikely that enabling legislation to enable trust ports to privatise could be passed. We know there was a degree of sympathy.I have a list of the foreign and domestic traffic in the major ports that is split into five groups.
§ Mr. Skinner
My hon. Friend has been in articles for 26 years as a Member of this place. That being so, what is the view of the people of Hartlepool? If anyone knows the answer to the question, it will be my hon. Friend. Should there be a ballot? Should that sort of consultation with the people be organised? The Government talk about ballots for trade unionists and for everybody but themselves, and I should like to know whether steps can be taken and whethere they are in place to draw the people into the argument.
§ Mr. Leadbitter
Since the town was formed, since it started shipbuilding, since the related trades were established, since the beginning of steelmaking and since the importation of timber—the gamut of activities arising from the coal trade—the people of Hartlepool have had what might be described as a complete link with the port. It was one of the few ports where the public were able freely to walk from the new town of Hartlepool to the then ancient borough of Hartlepool. One was called West Hartlepool and the other Hartlepool. Educationists—I taught more than a quarter of a century ago—were able to take their children through the port and give them lessons about the origin of the ships and their cargoes. There were 4,500 people working on shipbuilding and a further 6,000 working for Richardson and Westgarth. That was more than 10,000 people, and with the related trades there were often as many as 15,000 people working in the port and its surrounding area. There was complete access.
When the Tees and Hartlepool port authority put forward its fancy ideas, footpaths were closed and the shipbuilding work disappeared, as did Richardson and Westgarth. There is hardly any work left, certainly not for that number of people. The authority said that it was dangerous for people to walk through the port. Once a year it carried out its daft notion of closing the remaining parts of the port for a couple of hours. I was there on one such occasion. I was not given access, but after a couple of hours I was told that I could walk through. What a farce. It is an attempt to justify the authority's behaviour. It says, "We have listened to our legal advisers", but some of them could not defend a man against a parking ticket.
§ Mr. Tim Devlin (Stockton, South)
The hon. Member for Bolsover (Mr. Skinner) asked the hon. Gentleman an 125 interesting question about a ballot. Will the hon. Gentleman answer? What communications has he received from his constituents either for or against the privatisation measure? Indeed, has he received any correspondence, because I have not?
§ Mr. Leadbitter
I have been involved with the port for many years—indeed, I was the chief policy witness for the Bill in the House of Commons in 1966. The hon. Gentleman was probably going to school then. I went to school in Hartlepool, and sometimes I played truant. There is a strong affiliation between the public and the port. In fact, the port and the public are synonymous. They belong to each other.
§ Mr. Holt
The hon. Gentleman has twice had the opportunity to answer a simple question. How many letters has he received from people in Teesside opposing the privatisation of the port? I am the promoter of the Bill, but I have yet to receive one letter from any trade union official, any trade unionist or anyone other than the two local authorities that are opposed to the Bill. I have not heard from one member of the public.
§ Mr. Leadbitter
The hon. Gentleman lives in Langbaurgh, which is about nine or 10 miles from Hartlepool, with a river in between. The hon. Gentleman is living in foreign parts. We are not used to writing to Conservative Members.
§ Mr. Hardy
A number of hon. Members have referred to the long experience of my hon. Friend and to his deep knowledge of his constituency. Many private Bills have been presented while the Conservative party has been in office, many of which have been harmful to the environment. That is one reason why I am attending this debate. I should be obliged if my hon. Friend could give me some information or offer an opinion on whether there will be any threat to the environment in his constituency if the proposed changes are made and the constraints removed.
§ Mr. Leadbitter
On 15 March, I referred to the Secretary of State's appointment to the board of an environmental officer. We set a good deal of store by environmental matters in the Teesside area—we are currently involved in a number of issues connected with the environment. It must be borne in mind that we are living in possibly the largest industrial-growth area in Europe—an area that houses petrochemicals, nuclear power, chemical and metallurgical industries and shipping.
According to the Committee, the port authority has made it clear that some 30 per cent. of people employed in the Cleveland area depend on the port for work. Obviously the parameters can move a little, but the port is nevertheless a very important element, which is why we are concerned about its success.
I have here some figures relating to the share of foreign and domestic traffic handled by major ports in the United Kingdom. Associated British Ports is listed, and so are other major company ports, major trust ports and major municipal ports. Not one of the 17 Associated British Ports has obtained a higher percentage of the foreign and domestic trade than Tees and Hartlepool; not one of the nine major company ports obtained the same percentage.
We have already dealt with more than half the ports in the United Kingdom. Of the 10 major trust ports, only one obtained a marginally higher percentage than Tees and 126 Hartlepool, and only one of the major municipal ports obtained a slightly higher share. The Tees and Hartlepool port authority is a success—as it is now constituted, that is.
§ Mr. Harry Barnes
My hon. Friend has demonstrated very effectively that the port is viable, that it is performing fantastically well and that there is therefore no case for change. If that change comes, however, what will be the impact on Hartlepool? It seems that about three quarters of the port's activity—including employment and output—takes place on the Tees. Surely Hartlepool will find itself very much at a disadvantage in the event of privatisation: if investment is made in other areas, it will be the most vulnerable section covered by the authority.
§ Mr. Leadbitter
That is, indeed, a problem and one that I referred to on 15 March.
An expert witness who appeared before the Committee, an authority on port activity and port-related trade at home and abroad and a qualified consultant—I cannot hold that against him, of course—tried to summarise the implications of the Bill. His assessment made it abundantly clear that there was a poor case for privatisation. He pointed out that, although the port is very successful—the chief executive concedes this—it depends on a narrow base consisting of three or four large companies.
This is a captive trade. It is not a question of competition; the companies have no means of receiving or disposing of their materials and finished goods other than the port. The port is essential to them, and they are essential to it. The whole complex of industrial activity—80 per cent. of which is related to the port—is an important element of the economic welfare of the region; that is why I was so disturbed to hear what that expert witness had to say.
§ Mr. Ronnie Campbell (Blyth Valley)
As a member of the Committee, I received about half a dozen letters from members of the public in Cleveland concerning the environmental aspects of Shields sands and the birdlife and other wildlife that exist there. Among them was one from a 10-year-old girl begging me to stop the Bill being passed because she knew that the development would mean Shields sands being lost to nature.
§ Mr. Bell
Before my hon. Friend concludes what has been a sterling speech, I recall that when he served on the 1966 Committee he was given the promise, which was incorporated into the Bill, that the port of Hartlepool would continue in perpetuity. That undertaking was also given in the Committee on the Bill now before us, and may be reflected in the final legislation. However, my hon. Friends the Members for Bolsover (Mr. Skinner) and for Bradford, South (Mr. Cryer) know what happened in the past, when the Government promised a golden share to keep companies in the public domain for ever.
We can see a whole scenario developing whereby the new company will end up in private hands in the City. When that stage is reached, how will the port for which my hon. Friend fought so hard in 1988 be kept in public hands in perpetuity?
§ Mr. Leadbitter
The 1966 Bill was the subject of 18 months of consultation, because its promoters at least displayed courtesy and an understanding that input from various local interests would benefit them. There were, as 127 always, one or two exceptions—pompous, arrogant individuals who thought they knew it all, but who outside their ivory towers were as incompetent as one could find. Some of them came from the list of the good and the great, and felt that they were not accountable to anyone. In Committee, they even had the cheek to say that the port did not belong to anyone. If that was so, what business was it of theirs to be involved in those proceedings?
Some of the debates on the 1966 Bill lasted two or three hours. We were even given special rooms at the Grand hotel so that the public could have their say. That was something quite different. I remember one or two of them sniggering at us. One man said, "You'll never win." That was the way it was. I do not like mentioning names, except when the individuals concerned enter the House and are recorded in the Official Report. Then they are on a hiding to nothing.
I ended my speech on 15 March by indicating that even a guarantee from the company's executives in golden letters would be worthless because they are not in a position to give any guarantee. The sad thing is that when the Bill is passed, those executives have no guarantees about their own jobs.
In Committee, counsel made it clear from the start that the Bill was a piddling little thing in terms of high finance, and that it is all because the promoters want to invest in integrated transport. I have more years' experience of transport than all of them put together. One can never get an integrated transport system in a competitive market. The market can never decide on integrated transport. That is the first lesson that one learns. As to saying it is dear to one's heart—that is trying to take wooing a little too far.
Then the authority talks about putting in two offices, and surely it can do that, but it does not have a plan. Hon. Members might ask the Tees and Hartlepool authority if it has a corporate plan—a strategy for investment in property. If so, what kind of property and where is it? What is the risk element of the venture?
If we want to talk in terms of track record on investment, we should not go to the present Tees and Hartlepool port authority because it does not have a good record. If it has a failure, it says that it will try a rescue operation.
Let us consider all the expense and time the authority has spent trying to side-track parliamentary procedure of enabling legislation—it has been devious and has not told the truth—but in a few weeks from now there will be enabling legislation and the House will be able to scrutinise and examine the Bill in Standing Committee rather than in the way in which we examine private Bills in Committee, with four members. They can work hard and be as diligent as they like, but they are working against the law of diminishing returns—the harder they work, the less result we seem to get. The authority goes on and on misrepresenting, but the question and answer powers that the Minister gave to the House are factual and give it the lie.
Whatever happens to the Bill, if the port is privatised, undeserving people will get full support from people such as myself because we want to make the port work. We are used to doing that because our conduct is always better than the example that we have had to put up with in the past few months.
§ The Minister for Aviation and Shipping (Mr. Patrick McLoughlin)
I shall speak briefly to put the Government's case.
As I explained on 15 March, the Government support the underlying principle of the Bill, and I welcome the initiative shown by the Tees and Hartlepool port authority in the proposals in the Bill.
I was somewhat surprised by some of the comments of the hon. Member for Hartlepool (Mr. Leadbitter). Most of his speech was an outright attack on the management and leadership of the port authority. However, he told us, rightly, how successful the port is and has been in the past few years. One of the reasons for that success is the Nissan car company and the way it operates its business; it exports many cars through the port. I am sure that the hon. Gentleman will join me to pay tribute to my right hon. Friend the Member for Chingford (Mr. Tebbit) who got the company to go to that area. It has subsequently given a lot of support to the Bill and a lot of custom to the port.
§ Mr. Leadbitter
It cannot be true that the hon. Gentleman is giving the full credit to the right hon. Member for Chingford (Mr. Tebbit). With great respect, and without wishing to diminish the right hon. Gentleman's reputation—which is beside the point—for the very first time we worked in unity in the northern region with a positive plan to attract Nissan's investment. The northern region succeeded, not the right hon. Member for Chingford.
§ Mr. McLoughlin
I have obviously touched a raw nerve. I did not mean to do so. I meant merely to suggest how successful the port had been. I did not want to excite the hon. Gentleman.
The Government welcome the port authority's initiative. It will stand the port in good stead. It is no surprise that the Finance Bill contained a clause relating to this matter. As the hon. Gentleman well knows, and as the whole House knows, I made that clear in my speech on 15 March. I said at column 749 that one of the options that we were considering was the inclusion of a provision in the Finance Bill. I am pleased that we were able to do so. It was my right hon. Friend the Member for Southend, West (Mr. Channon) who first urged trust ports that wished to pursue a private venture to introduce private Bills.
The Bill is particularly important. I wish it well.
§ Ms. Joan Ruddock (Lewisham, Deptford)
The Minister was so quick to sit down that one has to conclude that he had had enough of the mood of the House.
In a desperate search for support among the Tory faithful at a recent conference the Secretary of State for Transport announced that the Government intended to introduce a Bill to privatise trust ports. In doing so, he has made this private Bill wholly redundant. The privatisation of the trust ports should be debated on its merits, though I doubt very much whether Ministers will be able to bring such merits to the attention of the House. I assure them that Labour will vigorously oppose any such measure.
§ Mr. Devlin
The hon. Lady cannot predict—nor can I, or any other hon. Member—what will be in the Gracious Speech. Even if what she has said were true and such a Bill 129 were to be introduced, would not it be in the interests of the people of Teesside and Hartlepool if our port were to be privatised before the others so that it had a competitive advantage in the marketplace, since it would be in the private sector before the rest? That is probably why her hon. Friends have not received a single letter of protest about the measure.
§ Ms. Ruddock
I cannot believe that my hon. Friends have not received any letters. Some of them have taken the trouble tonight to say that they have. I have certainly received letters on the topic. People are opposed to the privatisation of this local port. If the hon. Gentleman has such faith in this procedure, he, like everyone else, ought to be willing to wait for a proper debate by the whole House on the privatisation of all trust ports. Then at least a Government Bill would be before us that would afford the House the opportunity properly to examine the case for radically changing the status of around 60 British ports.
§ Mr. Devlin
Is the hon. Lady saying, therefore, that during the Bill's progress through the House she and her hon. Friends have not had an adequate opportunity to discuss the merits of the Bill? The House has given two formal readings to the Bill and it has been discussed in Committee. We have been kept up late at night upon it so that both sides of the House could put their views at great length. The hon. Member for Hartlepool (Mr. Leadbitter) has just detained us for over an hour. Is she saying that the House has not had an opportunity adequately to discuss the merits of the case? I believe that it has.
§ Ms. Ruddock
I am saying that the private Bill procedure is inadequate for a proper debate, for proper accountability and for proper decision-taking. I repeat that if the Government and party of the hon. Gentleman had so much faith in their arguments, the Bill would come before the House as a proper Government measure, not in this inadequate and somewhat underhand way.
§ Mr. Cryer
Will my hon. Friend contrast a Government Bill, which a Minister would have to explain in perhaps a 20 minute or half-hour speech and pilot through perhaps 20,30 or 40 hours of a Committee's sittings, with the paltry few, fumbling, halting sentences that we heard tonight as a paltry, feeble excuse for ministerial comment, which was less than adequate for any procedures of the House?
§ Mr. Harry Barnes
There is an additional procedural problem with the Bill, even under the private Bill procedure. No amendments were made in Committee, despite numerous attempts to table them, and therefore there was no Report stage. It is said that an amendment will be moved in the Lords for the new port authority to be based at Cleveland. If such an amendment has been made in Committee, hon. Members could have tabled further amendments and had a fuller discussion, including answers from the Minister on each of the amendments, and we could have had a decent debate on Report. We were not allowed a Report stage because of Whipping in the Committee as well as generally inside the House.
§ Ms. Ruddock
I am delighted to be able to provide so many opportunities for my hon. Friends to make such important interventions.
130 The trust ports, of which Tees and Hartlepool is one, were set up with Government aid to stimulate the development of industry in their regions. The Tees and Hartlepool port is the third largest port undertaking in the United Kingdom. We acknowledge its success. It has attracted new business and reinvested the money made in that enterprise. It has been an important source of employment in an area which has been hard hit by unemployment. In short, it is the kind of local undertaking, with a degree of accountability, that is anathema to the Government. They require private shareholders to get their hands on any worthwhile asset, regardless of the consequences for the local interests and for the local community.
§ Ms. Ruddock
As my hon. Friends have repeatedly explained, we believe that there is a degree of accountability and involvement of the local authority, the local community and its interests. Provision is made under the trust arrangements for constant reinvestment of the money made by the local enterprise of a port. As has been shown repeatedly by my hon. Friends, removal of trust status will mean that money made in the community will not be returned to it. That is where accountability will be lost. There are no guarantees that privatisation will bring local benefits, more investment or more jobs.
Dock workers have every reason to be suspicious of measures such as this. Last year, we were assured that the abolition of the dock labour scheme would not lead to the return of the notorious cattle market for casual labour, yet all the signs are that it has. In Hull, three managers who were previously employed by Associated British Ports have set up a company and two agencies to employ former employees. They are not prepared to recognise the Transport and General Workers Union, which previously represented those men. In September, all the remaining registered dock workers in Hull were made redundant, as were all but 19 in Bristol and Avonmouth.
§ Ms. Ruddock
I am coming to Teesside.
Furthermore, the taxpayer picked up the bill of £130 million, compared with the Government's prediction of £25 million. That is what privatisation means. The Government are prepared to back any measure at any cost—and to use the taxpayers' money—to give private profits to private individuals.
As my hon. Friends have repeatedly said, the Bill is not an independent private measure but an integral part of the Government's proposals to privatise every part of the ports industry. As my hon. Friend the Member for Hartlepool (Mr. Leadbitter) said with such clarity, the Bill is a licence for asset strippers. It does not have the job-creating potential the promoters claim for it.
I shall not take any more of the House's time tonight. The Bill does not deserve the support of the House, and I shall be pleased to join my hon. Friends in opposing it.
§ Mr. A. J. Beith (Berwick-upon-Tweed)
The Bill has already been the subject of a fair amount of discussion in the House and, as we have discussed it, there has been a tendency for new developments to emerge. I shall focus on one of them—the port levy.
From the earliest stage, there has been anxiety, even among friends of mine—the Liberal Democrat councillors on Teesside, who are not opposed in principle to the privatisation of the port—that the resultant company could be subject to takeover and that Teesside might then be controlled by a company that had an interest in suppressing its position in favour of that of a port somewhere else. Those anxieties have not gone away. They cannot be dispelled by guarantees given by the present management or potential management of the port because too much depends on what could happen far into the future. There is to be no golden share—whatever value one attaches to that—and no other procedure whereby a guarantee can be provided. That must be set in the balance against some of the advantages that can flow from the greater commercial freedom that the new ports structure can provide, but it weighs heavily with the Teesside people who are concerned that their port may be taken away from them.
I am not suggesting that the existing trust structure is ideal. I am surprised that the hon. Member for Lewisham, Deptford (Ms. Ruddock) should have implied that it was so satisfactory. At certain times, the Labour party has thought it very unsatisfactory and has proposed to nationalise all the ports and put them under direct public corporation control. That is not a route which I favour either. But the present structure leaves the port accountable to nobody in particular. I think that there would be a lot more sympathy for the privatisation route if we could be certain that there would be substantial ownership of the port within the local community—on a scale that would make it difficult for the port to be taken over by interests from a long way away.
One of the things that makes that aim more difficult to achieve is the port levy. During our proceedings on the Bill, the Government have introduced a swingeing form of taxation of the privatisation process for which there is no real logical justification. The Government have discovered that there is money in privatisation and, if there is money around, they want it for themselves. It is proposed to claw a large part of the proceeds of privatisation into the Exchequer. That proportion is sometimes described as 50 per cent., but we all know that it is a lot more than that. In answer to my question during the Committee stage on the Finance Bill, the Chief Secretary to the Treasury pointed out that when one adds in the capital gains tax charge, one reaches a tax charge of 67.5 per cent. on the proceeds of privatisation.
That is not the end of the story. If the company disposes of shares in the initial stages at less than market value, it will still have the tax levied upon it at 50 per cent., as if the disposals had been made at market value.
One of the effects of that is that if the company makes special arrangements to ensure that there is a substantial shareholding by local institutions and local individuals or by its own employees, it will be taxed as if it has made those disposals at market value.
Suppose that the new port management decides that the route to follow is that set out by the Government. Let us 132 consider electricity privatisation as an example. Let us suppose that the port authority decided not to take up the ludicrously expensive advertising campaign, but simply adopted the incentives. Suppose it wanted to offer the customers, the local community and the employees advantageous terms for shares, such as bonus shares and special shares, if they are held for a certain period. In all those respects, the authority would increase its liability to tax. The tax that the Government have devised would discourage the port authority from making provision for the maximum ownership of shares by its employees, by the local community and by institutions based in Teesside.
The Government are not merely robbing Teesside of money that should go back to the local community; they are discouraging that community from owning shares in the port. The Government's attitude to employee share ownership schemes is odd. They have provided for only a 3 per cent. stock of employee share ownership, although they have raised the figure from 2 to 3 per cent. in response to criticisms made during proceedings on the Bill. However, in another context Ministers have pointed out that that is a small amount to make the subject for tax relief for employee share ownership schemes.
When speaking about employee share ownership schemes on a different Bill the Secretary of State for Trade and Industry said:10 per cent. strikes the right balance, representing as it does a stake large enough to ensure the employees a degree of involvement in the company's affairs, while not being so large as to make the new relief unattractive."—[Official Report, 16 May 1990; Vol. 172, c. 960.]However, in the context of the ports, the Government are allowing for only 3 per cent. They know that 10 per cent. represents a reasonable employee involvement which could have some influence on the company's affairs, but they have made certain that the employees do not get 10 per cent. by limiting the tax relief to 3 per cent. What is the logic of that? If it is a Government objective to encourage employee share ownership at a significant level, why do they not allow the 10 per cent. level to apply to the port? The Government have found another way of discouraging the new port body from distributing its shares to employees.
I believe that the port levy is the most outrageous provision. The hon. Member for Stockton, South (Mr. Devlin) has criticised it in the past, but I could find no Conservative Members to support me during proceedings on the Finance Bill to oppose the levy, to try to reduce it to 25 per cent. or to ensure that exemptions were made to it in respect of the various categories of potential shareholders.
§ Mr. Devlin
This is a very interesting and intricate issue which lies at the centre of the privatisation. There is a legal question: to whom does the port currently belong? That person, body or group of people is entitled to the proceeds. If the port authority as presently constituted is a public body, the Government must be entitled to all the proceeds. That is like saying that if the company's assets are worth £1 million and they are to be offered at £1 million, the company will have a cash injection of £1 million thus doubling its asset value. By taxing at 50 per cent., the Government are trying to sell an asset for the amount that it is actually worth without putting in a massive capital injection which would mean that the shareholder was paying £1 for a £2 asset.
§ Mr. Beith
I think that the hon. Gentleman has been got at by the Whips. During earlier stages of the Bill he was rather more robust in his criticism of these proceedings.
The hon. Member for Stockton, South said that no one owns the port. Legally that is true, but that does not mean that the Government own it either. If the same principle had been applied to the Trustee Savings Bank, the Government would have seized the entire proceeds of the bank's disposal. However, they knew that panic would have set in if they took over the proceeds. It is ludicrous to pretend that money that is already in the port and which everyone assumes is there for the port and its development somehow belongs to the Government and can be removed by them.
That is not the argument that was advanced in proceedings on the Finance Bill. The argument was that, over the years, the Government had made a significant investment in the port of Tees and Hartlepool and that they should get some return on that investment. They will be getting a pretty grand return on the investment if they get the kind of money that they expect to get from the 50 per cent. levy. I simply cannot accept the argument that the Government are somehow entitled to 100 per cent. There is a legal judgment on which is based the conclusion that it is not the Government who own the port but the state—in this case a rather diffuse concept that again does not give any moral entitlement to the central Exchequer to claim the benefits of the privatisation of the port.
Who, after all, should have the benefit of privatisation? Surely the local community in which the port is situated should have it. The local community has to maintain and build roads around the port. The local community has to cope with the additional traffic in and out of the port areas. Over the years the local community has invested in the port, both financially and through the hard work and effort of all the people of Teesside and Hartlepool who have worked in the port. The industries and activities of the areas have made the port what it is. If there were no industries in the areas using the port, it would not have had the success that it has enjoyed so far.
The Government do not have that moral case. They are actually taking out of the port a much larger share than 50 per cent., and they are doing it in a way that will make it less likely than ever that the ownership of the port will be transferred to the people of Teesside and Hartlepool.
I want also to refer to what was said at the Conservative party conference about port privatisation and the future. There seemed to be some suggestion that we are talking about leaks of the Queen's Speech and things that are uncertain. It may be that what the Secretary of State says has an element of uncertainty about it, for reasons more related to his potential tenure of office than anything else. However, he said:Many of our great ports are Trust Ports. Many of them want to expand, diversify and develop. And they want to be privatised.Quite how those bodies that nobody owns could have wants and feelings of that kind I am not sure, but, according to the Secretary of State, they want to be privatised. He went on:And I am delighted to announce today that within the next year they'll be free to be privatised.I make it quite clear that this is enabling legislation and that no trust port authority will be required to take the route to privatisation. I wonder whether the Minister can offer me any guidance on that point. Several Opposition 134 Members have talked about enabling legislation, but that is not what the Minister said. It can be interpreted in that way. He says that they will be free not to be privatised. If we do not pass the Bill tonight, will the Tees and Hartlepool port be able to say, "We do not think that we will go ahead. We have looked again at the figures and we have decided that the Government are raiding the till to such a massive extent that we will wait until they think again and perhaps reconsider privatisation under future legislation when we can get rid of that absurd levy" Will the port be free not to be privatised? The Minister's smile does not tell me anything at all, so I encourage him to intervene.
§ Mr. McLoughlin
I am sure that the hon. Gentleman realises that it would be quite inappropriate for me to speculate on what may be in the Queen's Speech, and therefore I cannot do so.
§ Mr. Beith
I certainly would not wish the Minister to do that, but I thought that he could offer me some commentary on what the Secretary of State said. I thought that he, as the Minister responsible for ports, would have been told what the Secretary of State meant when he said that next year they will be free to be privatised. I shall certainly want to challenge the Minister if he comes along next year and says, "Folks, you have to be privatised," because that is not what I understand to be freedom. It might be what the Government understand to be freedom, but freedom to do what one is told is not what I understand to be freedom.
There remains a certain lack of clarity about future intentions, but it is perfectly clear that, if the Bill goes ahead and the port of Tees and Hartlepool is privatised, the central Exchequer will rob Teesside and Hartlepool of a great deal of money which should be invested in the local community. That tips the balance quite decisively against giving the Bill a Third Reading.
§ Mr. Stuart Bell (Middlesbrough)
I am pleased to follow the hon. Member for Berwick-upon-Tweed (Mr. Beith), who was kind enough to mention the Committee stage of the Finance Act 1990, on which he obviously served, and referred to some of the Minister's statements to persuade the Committee to accept the new clause which provided that 50 per cent. of the assets of the Tees and Hartlepool port authority should go to the Exchequer. I understood the hon. Gentleman to say that the Committee had been told that the Government had made a substantial investment in the port and that it was therefore quite proper for the Government to take 50 per cent.
In that context, I should like to quote from what the Minister for Aviation and Shipping said on 15 March:Admittedly it is a long time since such grants were paid to the THPA, and the amounts were small; but the grants were paid about 20 years ago towards investment projects in the port, and some of those assets are still in use. There is a general rule that, when assets acquired or improved by a non-Exchequer body with the aid of Government grants are disposed of, an appropriate proportion of the proceeds should go to the Exchequer.—[Official Report, 15 March 1990; Vol. 169, c. 749.]If the Government make a small investment in a port authority and then, 20 years later, ask for 50 per cent. of the assets, which, with capital gains, amounts to 67.5 per cent., we are talking about nothing short of daylight robbery. When it was first proposed that the THPA should 135 be privatised, and when the THPA executive took on board the suggestion of the former Secretary of State for Trade and Industry, the right hon. Member for Southend, West (Mr. Channon), it was not told—at any stage—that the Government would take 50 per cent. of the assets or that capital gains tax would also be deducted.
It therefore came as a shock when the Minister made that statement on 15 March. It came as a bigger shock in Committee when the Treasury counsel, or a Treasury representative, announced that, in addition to the 50 per cent., there would also be the capital gains tax to take into account. As the hon. Member for Berwick-upon-Tweed has said, 67.5 per cent. of the profits will be taken immediately out of the pockets of the port authority and its people.
We have had a great discussion tonight, led by my hon. Friend the Member for Hartlepool (Mr. Leadbitter), on the proposed shareholding. We have also had a great debate about whether the shares or the trust port itself belong to the local community. A number of curious statements have been made by Mr. John Hackney and Mr. Charles Wellington about what will happen to the shares, who will be their ultimate owners, and whether there will be a stock market flotation. I asked my hon. Friend the Member for Hartlepool how we could guarantee the perpetuity of the port at Hartlepool if the shares belong to unknown people, if they were held by unseen hands, and if we cannot even guarantee the future of the site of the headquarters. Although it was agreed in Committee that the site should be in Cleveland, the hon. Member for Langbaurgh (Mr. Holt) has pointed out that Cleveland may not exist for much longer. It may well disappear and become North Yorkshire, which the hon. Gentleman said was his ardent desire. What sort of promise is being made when people talk about having the headquarters in Cleveland when Cleveland itself may not exist? What kind of promise is it to say that the port of Hartlepool will exist in perpetuity when we do not know who the shareholders are?
I refer now to the story that appeared in the business news section of The Daily Telegraph on 19 October, which stated:A last ditch attempt to halt the privatisation and subsequent stock market flotation of Britain's third largest port will be made in the Commons tonight.It was ahead of itself, but it referred to the subsequent stock market flotation. How does that statement square with the statement of Mr. Charles Wellington, the secretary of the Tees and Hartlepool port authority, in the Evening Gazette on Thursday 18 October, the day before? He wrote:May I please correct your recent editorial Steam Ahead regarding shares in the THPA's privatisation. Our shares will be offered to the following:All our 800 staff without distinction between management and others; all our pensioners and pension fund; the pension fund of the local authorities; the pension funds of our major users.The next paragraph is significant. It says:That spreads the shares as widely as possible. If we went further we would need a general flotation. That would open us to takeover from the start.What is one to make of that contradiction? Are we to understand that there is to be no stock market quotation because it is afraid of predators, the City boys, the takeover boys to whom my hon. Friend the Member for 136 Hartlepool referred? Of course, there would be nothing to prevent—certainly we have heard of nothing so far—those workers, pensioners and local pension funds selling their shares to the highest bidder and thus the management of Tees and Hartlepool losing control. That is exactly what Opposition Members have consistently warned against ever since privatisation was mooted.
The article in The Daily Telegraph included a photograph of Mr. John Hackney, the chief executive of Tees and Hartlepool port authority, who was reported as saying:We want to be in the private sector.However, according to Mr. Wellington, the authority does not want a stock market quotation because those nasty bogey men called the whiz kids could take its shares from it. Yet everyone knows that the ultimate of a private company is one that is quoted on the stock exchange. The purpose of a company being on a stock exchange is to raise money through share issues for more investment. I presume that in years to come the Tees and Hartlepool port authority would not be interested in further financing itself through so-called junk bonds.
While Mr. Wellington said that there would be no stock market flotation, Mr. John Hackney told Mr. John Petty of The Daily Telegraph:Stock market flotation would come three to five years after privatisation.There we have it. That was just the time that Mr. Wellington said that workers would have to hold on to their shares for them to gain in value. Did Mr. Wellington think that that increase in value would come about through a stock market flotation? Perhaps he did not want that to appear in the local evening paper. Who should be brought up under the trades description legislation? Are the shares of the Tees and Hartlepool to be quoted on the stock exchange or not? Will they be traded on the big board or over the counter? The secretary of the Tees and Hartlepool says no but the chief executive says yes. Of course, when one starts to give interviews to the unsuspecting press, it hardly matters what one says, for the journalists will write it down and repeat it anyway.
In the same interview with Mr. Petty, Mr. Hackney said:We want to be in the private sector, ready to welcome other ports into it.Can you imagine that, Madam Deputy Speaker? The local press has been bombarded with stories about the terrible Labour Members of Parliament who are letting down the area because they are preventing Tees and Hartlepool from being the first trust port to be privatised. The hon. Member for Stockton, South (Mr. Devlin) said just that in an interview with Tyne Tees Television. But all that Mr. Hackney wants to do is to open the door for privatisation, to put out the welcoming mat, to grab it warmly, I presume, by the throat. What is the nonsense about wanting to be there to welcome the other ports?
In effect, Mr. Hackney is saying that Tees and Hartlepool wants to be first through the door so that it can beat the others to it, gain an advantage and be rewarded for carrying out Government policy before the Government. It wants to be first so that it can divest itself of any intention to invest in Tees and Hartlepool and can invest elsewhere in Britain and on the continent. Mr. Petty, of The Daily Telegraph, was right when he predicted that Conservative Members were expected to stay late to ensure that the Bill was approved and sent to the other place for 137 further consideration. The Opposition will certainly see that Conservative Members are kept up late on Third Reading. It will be given a Third Reading only with the help of the payroll vote. That is hardly surprising because the Minister for Aviation and Shipping said on Second Reading that he would vote for the Bill. He did support it, and so did his colleagues.
Labour has had one success in its efforts to oppose privatisation of the Tees and Hartlepool port authority because Opposition Members have forced the Government to cease corrupting the private Bill procedure. That will ensure that the Gracious Speech will contain a provision for the privatisation of all the trust ports by way of public rather than private Bills. We have had some small success in modifying Government tactics.
The hon. Member for Berwick-upon-Tweed was right to draw the Minister's attention to the question whether there would be enabling legislation to permit all our trust ports to go private if they wished or whether the legislation would be such that the ports would be obliged to go private. The heart of the matter is that the Treasury is the guiding force behind this privatisation. It has seen that there is about £50 million worth of assets in Tees and Hartlepool and knows that it can take 67.5 per cent. of that. It knows that there must be about £200 million worth of assets in the trust ports and that on privatisation those assets can be taken over by the Government. Everyone knows that the Government are trying to get their hands on every possible penny before a general election year, and £200 million would be very handy. Again, we come back to ideology and the Treasury and to the idea of taking money from local communities.
Labour Members are modest, but the Treasury knows a good thing when it sees it. It does not need to watch "Howard's Way" to see how Jan Howard can be ripped off by a local con man because the Government are capable of such rip offs. Having lifted 50 per cent. of the assets of Tees and Hartlepool, they will lift the other 27.5 per cent. As the hon. Member for Berwick-upon-Tweed knows, in this Session the Government had to modify the Finance Bill so that they could take that 50 per cent. It was done with a private Bill and an amendment to the Finance Bill, which means that the Government are obliged to take the public Bill route and present enabling legislation.
The Government were able to lift half the assets of the Tees and Hartlepool authority because of the incompetence of a management which sought to privatise the port before all the others and was not aware of the Government's intention to take half the money. As I have said, the other ports may be in a situation similar to that of the Trustee Savings bank. On Second Reading the Minister said that that bank was different from trust ports because there had been no Government investment. There was no Government hand in the till and therefore the Government were not able to take money out. Perhaps the trust ports that they propose to privatise will not have had even modest Government investment because in 1981 the Government ended investment in the trust ports. The Government are trying to get their hands on trust port money, but they may find that the money is not there. The Daily Telegraph article implied that the Treasury had changed its position, and was no longer interested in whether taxpayers' money had been invested as an excuse to take 50 per cent. of the money raised through the sale of trust ports assets.
138 The interview given by Mr. Hackney shows a change of position, which the hon. Member for Berwick-upon-Tweed might notice and seize upon as significant. The article shows that, whereas in the past the Treasury has had its hand in the till because money has been invested by the taxpayer, in future the simple fact of privatisation will lead the Government to take 50 per cent. of the assets of a trust port, whether or not there has been an investment. Thus, the Government are clawing back money for the Treasury.
§ Mr. Leadbitter
My hon. Friend will bear in mind that no Minister for Aviation and Shipping can make a statement about a 50 per cent. stake without saying something else. When analysing any statement, an obvious question is why? The answer by the Minister was that the Government had given grants. Perhaps my hon. Friend will develop this point. A grant is a grant. I did not know that it was a qualification for taking back the proceeds of the sale of a company or trust port.
§ Mr. Bell
I take my hon. Friend's point. That did not happen to companies such as Courtaulds in County Durham, which took a lot of grant money from the Government to open a plant, but when it closed it, took the machinery and moved it to another plant. We are not aware that the Government asked that company for the grant money to be returned. Again, we see the long fingers of the Treasury in the till.
The Daily Telegraph article on the interview with Mr Hackney said:Still at balance is the Government's plan to claw in up to 85 per cent. of total flotation income by applying capital gains tax as well.If we take Mr. Hackney's scenario of the trust port going first into the hands of the pension funds, then to flotation on the stock market, the Government will take even more money—up to 85 per cent. of the assets of the port authority. The article also tells us:A consortium will be set up to buy the port from a trust being formed to hold it on privatisation. It would be a mixture of staff, management, local pension funds and city institutions. Tees and Hartlepool are being advised by Rothschilds as the financial adviser.If we read carefully the statements of Mr. Wellington and Mr. Hackney, we see that they are not mutually exclusive or self-contradictory. Mr. Wellington's statement in the Evening Gazette is true as far as it goes, but Mr. Hackney unveils for us the rest of the truth—that a stock market flotation is planned and will take place three to five years after privatisation.
There we have it. The port authority will be privatised if the Government get their way, and this is a Government measure, as we have said time and again. Its shares will then be distributed among pension funds and local employees. The hon. Member for Stockton, South asked how many jobs with the port authority had been lost on Teesside since the dock labour scheme had been abolished. I told the House in December 1989 that some 130 jobs had been lost on Teesside, and 70 in Hartlepool. We were talking then of about 200 job losses. It is curious to offer to give shares to members of the work forces when 200 of them have been made redundant and when others have replaced some of those who invested a lifetime of work in the local docks, in the dock labour scheme, on behalf of local communities.
There are no guarantees that we can ensure that the Tees and Hartlepool port authority will maintain its 139 pre-eminence as a port on the Tees and in Hartlepool once it has fallen into the hands of a conglomerate. I shall mention one for the sake of providing an example, the Peninsular and Oriental Steam Navigation Company. Assuming that a company such as P and O gets its hands on the THPA, where will investment moneys go? Will the headquarters stay in Cleveland? Will the port continue to thrive, or will it go steadily downhill if investment is taken elsewhere?
I would not like to leave Mr. Petty of The Daily Telegraph without a parting glance at the advertising copyist's pen. My hon. Friend the Member for Hartlepool was robust in his language when he referred to some of the statements made by Tees and Hartlepool representatives. Mr. Petty stated:London is the biggest port because it handled 54 million tonnes of cargo last year. It was followed by Sullom Voe oil port in the Shetlands with 41 million tonnes compared with 38 million tonnes for Tees and Hartlepool.That is the crushing journalese that we might expect from those who listen with care to the statements of the THPA. If oil is excluded, Tees and Hartlepool becomes the second port after London. If oil is excluded from Sullom Voe—it is an oil terminal that imports nothing but oil—I am sure that Tees and Hartlepool will take a higher place in the league. Of course, that is not the sort of argument that would appeal to journalists in the course of interviews.
I am glad to see the Minister for Aviation and Shipping in his place. He is a modest man and—
§ Mr. Bell
Since he entered the House as a result of a by-election, he has enjoyed a swift rise to the Government Front Bench to ministerial status. We have followed with care the statements that he has made, with much modesty, on the Bill. I have referred to some of them.
We have always known that the Bill is a public and not a private measure. It is to the Minister's credit that he has persuaded the Secretary of State for Transport that there should be enabling legislation for all the ports. Ministers should not try to hide behind the cloak of secrecy that covers the Gracious Speech. Many Ministers have told us that they would not like to reveal the contents of a Gracious Speech, and that is because they would not wish to offend the Prime Minister. There was, however, the promise last year that there would be a children Bill. The Secretary of State for Social Services looked askance at the Prime Minister as the right hon. Lady sat next to him, but said, "I could not give a promise but I believe that we might look for legislation to be outlined in the Gracious Speech."
The Secretary of State for Transport made a significant announcement at the Tory party conference. There was even greater glory—Tees and Hartlepool have come a long way—when the Prime Minister said, before her 14-minute standing ovation, that the Government would privatise the trust ports. She did not say whether all of them would be privatised or only those with assets that the Government could take. The Minister for Aviation and Shipping should not be too modest in his presentation.
I shall deal briefly with some of the comments of the hon. Member for Langbaurgh on Second Reading. What has happened to THPA Distribution and Services Ltd. and 140 THPA Developments Ltd.? We have not heard a squeak from the hon. Gentleman about those companies this evening. However, he said on 15 March:The creation of the new companies is one of the first practical steps towards creating new wealth and jobs in the north-east."—[Official Report, 15 March 1990; Vol. 169, c. 734.]That was another bit of parliamentary newspeak—an expansive statement about new jobs and new wealth for the north-east.
What has happened since Second Reading? Have we heard any more about those companies? What are they doing? I understand that when those questions were put in Committee the answers showed that there was not even a plan of action for those companies. It was the creation of yet another media event. The message is the medium or the medium is the message. News is made, but jobs and investments are not. Statements are made about jobs and investments and, suddenly, Tees and Hartlepool become greater ports.
The hon. Gentleman was also right when he said on Second Reading that the number of people employed by the authority had steadily declined. I have no idea why the hon. Member for Stockton, South—who rapidly left the Chamber once it reached midnight—asked how many jobs had been lost.
§ Ms. Marjorie Mowlam (Redcar)
It is important to put on the record that not only have there been job losses, but since the employment of contract workers an increasing number of workers have come to my surgery with problems of compensation for accidents.
§ Mr. Bell
That is an important and sad statement. In a speech on a motion for the Adjournment in December 1989 I referred to the fine health and safety record of the port authority. If one of the consequences of these changes, and the fact that the dock labour scheme has been abolished, is a fall from the high standard that we have come to expect, it will be a sad day for those working at the docks and for the contractors.
The hon. Member for Langbaurgh also spoke on Second Reading of a cash injection of many millions of pounds into the local economy. He said that that would have a knock-on effect, creating a host of jobs in the construction, transport, leisure and other industries. My hon. Friend the Member for Stockton, North (Mr. Cook) cannot be here tonight because of ill health, but he put the kibosh on that bit of parliamentary-speak when he pointed out that the port authority had been investing in property, finance, aviation, air travel, timber, importing, transport, display signs, storage, security, fencing and engineering. None of that has been denied.
I wrote to the Minister asking for an inquiry into the affairs of the port authority. He had a lengthy consideration of the issues that I raised, but reached the conclusion that there were no grounds for an inquiry. What does that tell us? It is that the port authority was acting properly when it made investments in property, finance, aviation, air travel and so on. It had the power, so it did not need to come to the House to privatise the port. The powers existed and the investments were made. I went through every one of them with a fine-tooth comb on Second Reading.
§ Mr. Leadbitter
It is not only a case of the power being there. My hon. Friend may recall that, in my speech, I referred to the holding company: under the Bill, it will have financial control.
Here is a proposition. Investors may make a large-scale investment in the port, with a long-term payback and the prospect of a smaller financial return; or they may make a short-term investment with a quick payback and higher profitability. What would they decide? That is the difference; that is where the port will lose out under the new system.
§ Mr. Bell
How many companies over the past 11 years have taken the Tory route to easy investment—as they perceived it—borrowing from the banks to advance themselves by moving from hotels to property, construction or some other business, and then going down the Swanee? We have seen three examples on Teesside alone of substantial firms—involved in, for instance, construction work, and knowing what they were doing—being lured by the Tory philosophy of quick profit, investing in property and finding that they could not make ends meet. They have lost out, brought in the administrator and shed labour, leaving work that had to be finished by other firms.
We are seeing the lure of quick profit again now: wherever that profit may be—whether it is in the south of England or in Amsterdam—that is where Tees and Hartlepool proposes to invest. The idea of investing in the ports and building them up will be deemed of secondary importance.
§ Mr. Leadbitter
Which is more likely to be successful—a port authority whose objective is to look after a port's operations and maintenance—that is, the port of itself—or a port within a group of other interests, a group that may invest unfortunately and lose out? Will a port's chances be lessened if it is part of a group in which other interests and decisions are involved, and will they be increased if it is a port authority of itself? The answer is obvious—except, of course, to the chief executive.
§ Mr. Bell
As my hon. Friend has said, we must return to the question of accountability. To whom is the present trust port accountable? We know where its priority lies: its priority is the port, and that is where its investment is directed. If its accountability is redirected to its shareholders, what will happen to the port?
I had a chat with a very senior bank manager the other day. He said, "In my youth we lent money against proper security, and we got a return on it. Now we are obliged to invest to keep up with the competition: we have to show a return on that investment, and it does not much matter what the security is." If a port authority is answering to shareholders who want a quick buck—another phrase imported from the United States—its interest in the port will be diminished still further.
My hon. Friend the Member for Hartlepool, in his lucid speeches, made points that have escaped members of the THPA who think that they are involved in a new vogue, "Privatise and be damned". And that, indeed, will be the consequence of privatisation.
Opposition Members have said time and again that there are adequate powers for the THPA to invest locally, expand locally and take all the action that would keep it on the local map, and also enable it to retain all those who 142 work in the port and in the subsidiary industries mentioned by my hon. Friend the Member for Redcar (Ms. Mowlam).
On Second Reading, the hon. Member for Langbaurgh said that it was a myth that reconstituting the port would prevent a local say in the way that it is run. Can the hon. Member tell the House whether the company will eventually be quoted on the stock exchange? Does he share Mr. Wellington's view that it will not be quoted, or Mr. Hackney's view that it will? If it is to be quoted on the stock exchange, will the local community have a say in how the port is run? The existing committee includes trade union representatives in the form of dock workers, as well as local council representation. In that way, the local community can oversee the running of the port.
In his Second Reading speech, the hon. Member for Langbaurgh mentioned that the trust port dated back to 1808. None of us wants to be caught in a time warp, but the hon. Gentleman described how members of the local community, including four women—so it seems that the north-east was in the forefront in women's rights even in 1808—had the interests of the port at heart.
§ Mr. Holt
I highlighted those four ladies not because they exercised their own rights but had duties imposed upon them, as riparian owners of part of the port authority. When the king wanted to ensure that the estuary was kept clear, he instructed those owning the land on each side to keep it free. The four ladies that I mentioned happened to be among those who owned land on the Tees at that time.
§ Mr. Bell
Nevertheless, women's rights were being advanced in the north-east as long ago as 1808. I suppose it was a proper response for a Tory Member to explain that, if women had any rights in those days, they were based on their riparian interests.
On Second Reading, the hon. Member for Tynemouth (Mr. Trotter) suggested that the authority's commercial headquarters should remain within the area. However, that amendment does not appear in the Bill.
Incidentally, I am glad to see present in the Chamber at least two Labour Members of the Committee, but hard as I look, I cannot see any of the Conservative Members who sat on the Committee. I have no idea what has happened to them.
§ Mr. Cryer
Is it not disgraceful that the Chairman of the Committee has not turned up either, especially given that the hon. Member for Isle of Wight (Mr. Field) so often used his casting vote against amendments? By contrast, Labour Members of the Committee remain sufficiently interested to follow the Bill's progress in this Chamber.
§ Mr. Bell
As my hon. Friend said, the Chairman of the Committee represents constituency interests on the Isle of Wight, which are rather divorced from those of Teesside. When it was put to the hon. Member for Isle of Wight (Mr. Field) that members of the Committee should visit Teesside and Hartlepool and the port, and benefit from local input, the Chairman declined and refused to allow the Committee to make an official visit of that kind. It is 143 the regular practice of many Committees to visit the location in question on any Bill, but on this occasion that was not allowed. Members of the Committee were instead compelled to make an unofficial visit, at the risk of having to offer the House an explanation for their action—but at least the THPA was able to provide the necessary facilities to enable that visit to take place.
§ Mr. Harry Barnes
The Committee record shows that the initial vote on the proposal that it should visit the Tees and Hartlepool port was 2:2. Discussions led up to that vote. Hon. Members had different views about the necessity of the visit, and that was legitimate, but the casting vote should have been used by the Chair for the good of the Committee. It was obvious that my hon. Friend the Member for Blyth Valley (Mr. Campbell) and I were insistent that a visit should take place, and that it would be disruptive to the Committee if the casting vote was not used to allow such a visit. However, the Chairman refused to use his casting vote in such a way and that caused disruption to the Committee for about nine weeks.
§ Mr. Bell
Those people who say that the Labour Opposition have delayed the Bill in Committee and on the Floor of the House should take note of the points that my hon. Friend has just made. That delay need not have happened if there had been a common sense approach in Committee.
Mr. Deputy Speaker, you may recall that the hon. Member for Tynemouth, who had come to support the hon. Member for Langbaurgh on Second Reading, suggested that the commercial headquarters of the Tees and Hartlepool port authority should stay in the area. That amendment is not on the face of the Bill tonight. We have not had a Report stage, on which that amendment, had it been made properly, could have been debated because there is no such amendment—there is merely an undertaking that that will be incorporated in the other place.
You will be aware, Mr. Deputy Speaker, of the criticism of the Bill that it was effectively a Government measure, since they did not have time to make a public Bill of the privatisation, and had urged the promoters to take the private Bill route, thus corrupting parliamentary proceedings.
It is true that, within the framework of private Bills, there was nothing hybrid or public about the Tees and Hartlepool Port Authority Bill, but the then Minister for Aviation and Shipping said on Second Reading that the Government intended to privatise all such ports but they did not have the time. So that we may understand that we are discussing a Government Bill, I shall quote the Minister for Aviation and Shipping who stated:We believe that there are advantages in the main commercial trust ports being transformed into companies. So far we have not been able to make room ourselves for the legislation needed to bring about such a change. Meanwhile the Clyde and the Tees and Hartlepool port authorities have promoted their own private measures."—[Official Report, 12 February 1990; Vol. 167, c. 105.]We have already covered this ground in points of order made on Second Reading. I do not propose to labour them tonight.
I raised the second issue earlier as I wished to draw it to the attention of the House, and you said that I could mention it in the debate, Mr. Deputy Speaker. In 144 Committee on which my hon. Friends the Members for Derbyshire, North-East and for Blyth Valley sat, the promoters accepted two proposals made by the Committee: first, an undertaking that would be incorporated in the Bill, and, secondly, a promise which would not be incorporated. The undertaking was that the headquarters of the successor company should remain on Teesside. That is not in the Bill. The promise was that there would be a share option scheme for employees. We have only the Tees and Hartlepool port authority's word on that, as it will not be incorporated in the legislation.
Because of assurances given by the promoter, the amendment on the Teesside headquarters was not referred back to the Floor of the House so that there could be an appropriate Report stage. When a Committee considers a Bill that has been referred to it by the House, and when it requires amendment, there is an obligation on the Committee to refer it back to the whole House. I prayed in aid during my earlier point of order the wording of a recent special report by the Committee that considered the King's Cross Bill. It said:We are quite clear that if a House of Commons committee considers that a Bill referred to it stands in need of amendment, then it is the duty of that committee to make that amendment.That was not the case in this instance. Again there was corruption of the procedures of the House and a disregard for hon. Members whose duty it is to scrutinise legislation, whether it be Committee work, or a private Bill, or a public Bill.
It is also our duty to scrutinise Select Committee work. Our duty is to hold Ministers of the Crown, and even Committee chairpersons, accountable. We were not given that opportunity because the procedure used was clearly designed to avoid having a Report stage. The House ought to draw attention to that time and again.
I said earlier that our democracy is diminished by a thousand small cuts, not by a frontal attack either by the Government or by Ministers. It is diminished by a variety of small cuts of the kind that are evident here. One thing is said in the Finance Bill Committee about how much money has come to the authority; another thing is then said by the Minister—that very little money has come to it.
The Tees and Hartlepool assets stood at £52.508 million—a hefty sum of money for any trust port. The Opposition say that it should stay within the community. Therefore, this Third Reading ought not to take place and the Bill ought not to be passed. We ought not to have to go through this laboured exercise of privatising the port.
My hon. Friend the Member for Lewisham, Deptford (Ms. Ruddock) mentioned the number of jobs that were lost following the demise of the national dock labour scheme. About 3,800 jobs have been lost in the docks industry since privatisation. The structure within which workers had security has been replaced by the market free-for-all.
In his short speech the hon. Member for Langbaurgh said that there had been lengthy scrutiny of the legislation. There was proper scrutiny in Committee. Again, I commend my hon. Friends who served on it. I commend also the local authorities that opposed the Bill from the beginning. Spurious points were made by the hon. Members for Langbaurgh and for Stockton, South about how many letters had been received. They did not take into account, however, the objections of Langbaurgh borough council, Hartlepool borough council, Stockton borough 145 council, Cleveland county council and the Transport and General Workers Union. All those councils were duly elected to represent their constituents and to act in their best interests. The Transport and General Workers Union has a vested interest on behalf of its workers who worked, and who still work, in the docks.
From the very beginning there has been a great deal of opposition to the Bill. I personally regret that Middlesbrough borough council did not add its voice, in the sense of petitioning against the Bill in Committee. It passed a motion objecting to it, but that was not sufficient. It ought to have followed up its objections with a properly-lodged petition.
The hon. Member for Langbaurgh said that the head office would always be located in Cleveland, even if it becomes North Yorkshire and even if there is a change of Government. The Opposition believe in regional assemblies. We believe in a regional assembly for the north. Cleveland county council may become part of that assembly and Cleveland may become Yorkshire and Durham again. Where would that leave the port authority's location on Teesside?
The hon. Member for Langbaurgh referred to considerable interest in the fact that 10 days ago a roll-on/roll-off service had been inaugurated with Hamburg. He did not say that it could have been inaugurated at any time in the history of the trust ports without a private Bill and without privatisation. The eastern European market to which he referred could have been developed without any of the procedures that we are discussing.
The hon. Member for Langbaurgh mentioned the clear undertakings that had been given, but I challenge the possibility of them being kept in the many years that lie ahead. Following an intervention by my hon. Friend the Member for Bolsover (Mr. Skinner), I referred to the clear undertakings given from the Dispatch Box for other companies such as Jaguar and BP and for the golden share. Guarantees of Government control have been given for a host of companies whenever a statement has been made, but when an offer has been made by British Aerospace or anyone else those undertakings have been eroded and discarded.
§ Mr. Holt
It is not so long ago that the House received a deputation of Indians from Canada, who brought with them the parchment that had been signed by a British colonel on behalf of the King when he granted lands in perpetuity to Canadian Indians in the 1700s. That was signed in good faith, but time moves on. The undertakings that were given by the port authority and I were given in good faith. No one can speak of what will happen in 200 or 300 years' time.
§ Mr. Bell
I have seen Mr. John Hackney, the chief executive, in many lights but not as a British colonel in the Army serving in Canada 200 years ago. We must look after our constituents, but even we do not look 200 or 300 years ahead. We look three or five years ahead, by which time Mr. Hackney tells us the company will be privatised. If the company is to be floated on the stock exchange within three to five years, we have a right to ask how valid the undertakings are. How cart we be sure that the headquarters will be based in Cleveland, and how can we be sure that investment will be made?
146 The hon. Member for Langbaurgh used his opportunity of speaking on Third Reading to criticise the attitude of Cleveland Labour Members to the Teesside steel industry. He said that only he and the hon. Member for Stockton, South asked questions about the Teesside steel industry. I sat on the Bill to privatise the steel industry. My hon. Friend the Member for Redcar and I are aware of British Steel's investment in Teesside. We do not have to make spurious points when investment is forthcoming or say, "We are the ones who asked questions on the Floor of the House." We can get our assurances, make our points and get investment privately. We do not have to make media events from what will happen.
We knew, and we work to keep it this way, that the Teesside plant would be successful. From whom was it under attack? It was from the Tory Government of 1979 onwards. My memory goes back to when two blast furnaces were ordered for Redcar because demand was going to be so great. We built the Kielder dam to supply water from Northumberland right through to Teesside for those two plants. It was a Tory Government who decided that—
§ Mr. Bell
It was decided by Geoffrey Rippon because it was feared that there would be a drought in 1976 or 1977. I shall not digress too far, Mr. Deputy Speaker. It was certainly a Tory Government—the Government elected in 1979—who scuppered the second blast furnace and the second steel mill. That meant that we had to concentrate on one steel mill. We know who to hold responsible for that episode.
§ Ms. Mowlam
My hon. Friend is making an important point. Opposition Members are interested in the long-term industrial development of Teesside—strategic development with secondary and tertiary industries feeding off our main industries. We are not interested in what Conservative Members constantly indulge in—cheap points intended to get media coverage. The work put in by county and district councils and by other bodies in the area has been towards long-term investment, and that is what we want, having lost 43,000 jobs in the past 10 years not only in the docks generally but at British Shipbuilders, at Smith's Dock and in the dismantling of ICI and British Steel.
I should also like briefly to reinforce the point about individual shareholders—
§ Mr. Bell
I am grateful for your protection, Mr. Deputy Speaker. My hon. Friend is perfectly right, and has encompassed, in a short period and very succinctly, the points that I have laboured to make. Those of us who have the interests of Teesside at heart, especially in relation to the steel mill, are not obliged to come to the House and make statements about how much we have done. We know that long-term investment is the result of many consultations over many months and years.
My hon. Friend the Member for Hartlepool was perfectly right to say that the Government have not been neutral. We suspect that they are not even being neutral tonight and that the payroll vote may be called in to secure Third Reading. Judging by the effervescence that is in evidence in the Chamber, those who constitute the payroll 147 vote are coming back after a sojourn in more clement and favourable surroundings than one is likely to find in the House. As I said earlier, the Minister said that he would be voting for the Bill.
My hon. Friend the Member for Hartlepool referred to the private Bill procedure and to the amount of money that had been spent on the Midland Metro Bill, which we discussed earlier. We have not been told just how much money the THPA has spent on this exercise. I estimate that another £1 million-worth of the trust ports' money has been spent in connection with the Bill—whether on hiring new press officers to put out lovely press statements in The Daily Telegraph telling us about the stock market flotation or on hiring bankers such as Rothschild, who no doubt have a strong interest in the ports of Tees and Hartlepool, or simply in terms of the amount of time that has been spent. I am sure that all that will add up to £1 million.
The Government are to take 67.5 per cent. Add to that a further £1 million and bear in mind the fact that the THPA already has the power to do what it will with its assets and one wonders why we have got ourselves into this intellectual and ideological bind—
§ Question put, That the Question be now put:—
§ The House divided: Ayes 127, Noes 28.148
|Division No. 328]||[12.59 am|
|Amess, David||Forsyth, Michael (Stirling)|
|Arbuthnot, James||Forth, Eric|
|Arnold, Jacques (Gravesham)||Freeman, Roger|
|Arnold, Sir Thomas||Gale, Roger|
|Atkins, Robert||Glyn, Dr Sir Alan|
|Baker, Rt Hon K. (Mole Valley)||Goodlad, Alastair|
|Baker, Nicholas (Dorset N)||Grist, Ian|
|Baldry, Tony||Hamilton, Hon Archie (Epsom)|
|Beaumont-Dark, Anthony||Hamilton, Neil (Tatton)|
|Bennett, Nicholas (Pembroke)||Harris, David|
|Bevan, David Gilroy||Hind, Kenneth|
|Boswell, Tim||Hogg, Hon Douglas (Gr'th'm)|
|Bottomley, Mrs Virginia||Holt, Richard|
|Bowis, John||Howard, Rt Hon Michael|
|Brazier, Julian||Howarth, Alan (Strat'd-on-A)|
|Brown, Michael (Brigg & Cl't's)||Howarth, G. (Cannock & B'wd)|
|Browne, John (Winchester)||Howe, Rt Hon Sir Geoffrey|
|Burns, Simon||Jack, Michael|
|Burt, Alistair||Jackson, Robert|
|Butcher, John||Janman, Tim|
|Butler, Chris||Jones, Gwilym (Cardiff N)|
|Butterfill, John||Key, Robert|
|Carrington, Matthew||King, Roger (B'ham N'thfield)|
|Chalker, Rt Hon Mrs Lynda||King, Rt Hon Tom (Bridgwater)|
|Chapman, Sydney||Kirkhope, Timothy|
|Chope, Christopher||Knight, Greg (Derby North)|
|Clark, Hon Alan (Plym'th S'n)||Lang, Ian|
|Conway, Derek||Lawrence, Ivan|
|Coombs, Anthony (Wyre F'rest)||Leigh, Edward (Gainsbor'gh)|
|Coombs, Simon (Swindon)||Lennox-Boyd, Hon Mark|
|Cope, Rt Hon John||Lightbown, David|
|Couchman, James||Lloyd, Peter (Fareham)|
|Curry, David||Lyell, Rt Hon Sir Nicholas|
|Davies, Q. (Stamf'd & Spald'g)||MacGregor, Rt Hon John|
|Davis, David (Boothferry)||MacKay, Andrew (E Berkshire)|
|Day, Stephen||Maclean, David|
|Devlin, Tim||McLoughlin, Patrick|
|Dorrell, Stephen||Malins, Humfrey|
|Douglas-Hamilton, Lord James||Mans, Keith|
|Eggar, Tim||Marshall, John (Hendon S)|
|Fallon, Michael||Mawhinney, Dr Brian|
|Fishburn, John Dudley||Mellor, David|
|Mitchell, Andrew (Gedling)||Smith, Tim (Beaconsfield)|
|Morrison, Sir Charles||Spicer, Sir Jim (Dorset W)|
|Moynihan, Hon Colin||Stern, Michael|
|Needham, Richard||Stevens, Lewis|
|Newton, Rt Hon Tony||Stewart, Andy (Sherwood)|
|Nicholson, David (Taunton)||Summerson, Hugo|
|Page, Richard||Taylor, Ian (Esher)|
|Paice, James||Taylor, John M (Solihull)|
|Parkinson, Rt Hon Cecil||Tebbit, Rt Hon Norman|
|Patnick, Irvine||Thompson, D. (Calder Valley)|
|Patten, Rt Hon Chris (Bath)||Thurnham, Peter|
|Patten, Rt Hon John||Trippier, David|
|Portillo, Michael||Twinn, Dr Ian|
|Redwood, John||Waddington, Rt Hon David|
|Renton, Rt Hon Tim||Waller, Gary|
|Rifkind, Rt Hon Malcolm||Wheeler, Sir John|
|Roberts, Sir Wyn (Conwy)||Wood, Timothy|
|Rumbold, Mrs Angela||Yeo, Tim|
|Ryder, Richard||Young, Sir George (Acton)|
|Sackville, Hon Tom|
|Sainsbury, Hon Tim||Tellers for the Ayes:|
|Sayeed, Jonathan||Miss Ann Widdecombe and|
|Shaw, David (Dover)||Mr. William Hague.|
|Shaw, Sir Michael (Scarb')|
|Armstrong, Hilary||McKay, Allen (Barnsley West)|
|Beith, A. J.||McWilliam, John|
|Bell, Stuart||Mahon, Mrs Alice|
|Campbell, Ron (Blyth Valley)||Marek, Dr John|
|Cryer, Bob||Michael, Alun|
|Cummings, John||Mowlam, Marjorie|
|Dalyell, Tam||Pike, Peter L.|
|Davis, Terry (B'ham Hodge H'I)||Prescott, John|
|Dixon, Don||Ruddock, Joan|
|Flynn, Paul||Skinner, Dennis|
|Foster, Derek||Turner, Dennis|
|Golding, Mrs Llin||Wise, Mrs Audrey|
|Lofthouse, Geoffrey||Tellers for the Noes:|
|McAllion, John||Mr. Kevin Barron, and|
|McCartney, Ian||Mr. Harry Barnes.|
§ Question accordingly agreed to.
§ Question put, That the Bill be now read the Third time:—
§ The house dividied: Ayes 127, Noes 27.149
|Division No. 329]||[1.11 am|
|Amess, David||Cope, Rt Hon John|
|Arbuthnot, James||Couchman, James|
|Arnold, Jacques (Gravesham)||Curry, David|
|Arnold, Sir Thomas||Davies, Q. (Stamf'd & Spald'g)|
|Atkins, Robert||Davis, David (Boothferry)|
|Baker, Rt Hon K. (Mole Valley)||Day, Stephen|
|Baker, Nicholas (Dorset N)||Devlin, Tim|
|Baldry, Tony||Dorrell, Stephen|
|Beaumont-Dark, Anthony||Douglas-Hamilton, Lord James|
|Bennett, Nicholas (Pembroke)||Eggar, Tim|
|Bevan, David Gilroy||Fallon, Michael|
|Boswell, Tim||Fishburn, John Dudley|
|Bottomley, Mrs Virginia||Forsyth, Michael (Stirling)|
|Bowis, John||Forth, Eric|
|Brazier, Julian||Freeman, Roger|
|Brown, Michael (Brigg & Cl't's)||Gale, Roger|
|Browne, John (Winchester)||Glyn, Dr Sir Alan|
|Burns, Simon||Goodlad, Alastair|
|Burt, Alistair||Grist, Ian|
|Butcher, John||Hamilton, Hon Archie (Epsom)|
|Butler, Chris||Hamilton, Neil (Tatton)|
|Butterfill, John||Harris, David|
|Carrington, Matthew||Hind, Kenneth|
|Chalker, Rt Hon Mrs Lynda||Hogg, Hon Douglas (Gr'th'm)|
|Chapman, Sydney||Holt, Richard|
|Chope, Christopher||Howard, Rt Hon Michael|
|Clark, Hon Alan (Plym'th S'n)||Howarth, Alan (Strat'd-on-A)|
|Conway, Derek||Howarth, G. (Cannock & B'wd)|
|Coombs, Anthony (Wyre F'rest)||Howe, Rt Hon Sir Geoffrey|
|Coombs, Simon (Swindon)||Jack, Michael|
|Jackson, Robert||Portillo, Michael|
|Janman, Tim||Redwood, John|
|Jones, Gwilym (Cardiff N)||Renton, Rt Hon Tim|
|Key, Robert||Rifkind, Rt Hon Malcolm|
|King, Roger (B'ham N'thfield)||Roberts, Sir Wyn (Conwy)|
|King, Rt Hon Tom (Bridgwater)||Rumbold, Mrs Angela|
|Kirkhope, Timothy||Ryder, Richard|
|Knight, Greg (Derby North)||Sackville, Hon Tom|
|Lang, Ian||Sainsbury, Hon Tim|
|Lawrence, Ivan||Sayeed, Jonathan|
|Leigh, Edward (Gainsbor'gh)||Shaw, David (Dover)|
|Lennox-Boyd, Hon Mark||Shaw, Sir Michael (Scarb')|
|Lightbown, David||Smith, Tim (Beaconsfield)|
|Lloyd, Peter (Fareham)||Spicer, Sir Jim (Dorset W)|
|Lyell, Rt Hon Sir Nicholas||Stern, Michael|
|MacGregor, Rt Hon John||Stevens, Lewis|
|MacKay, Andrew (E Berkshire)||Stewart, Andy (Sherwood)|
|Maclean, David||Summerson, Hugo|
|McLoughlin, Patrick||Taylor, Ian (Esher)|
|Malins, Humfrey||Taylor, John M (Solihull)|
|Mans, Keith||Tebbit, Rt Hon Norman|
|Marshall, John (Hendon S)||Thompson, D. (Calder Valley)|
|Mawhinney, Dr Brian||Thurnham, Peter|
|Mellor, David||Trippier, David|
|Mitchell, Andrew (Gedling)||Twinn, Dr Ian|
|Morrison, Sir Charles||Waddington, Rt Hon David|
|Moynihan, Hon Colin||Waller, Gary|
|Needham, Richard||Wheeler, Sir John|
|Newton, Rt Hon Tony||Wood, Timothy|
|Nicholson, David (Taunton)||Yeo, Tim|
|Page, Richard||Young, Sir George (Acton)|
|Parkinson, Rt Hon Cecil||Tellers for the Ayes:|
|Patnick, Irvine||Miss Ann Widdecombe and|
|Patten, Rt Hon Chris (Bath)||Mr. William Hague.|
|Patten, Rt Hon John|
|Armstrong, Hilary||McAllion, John|
|Barnes, Harry (Derbyshire NE)||McKay, Allen (Barnsley West)|
|Barron, Kevin||McWilliam, John|
|Beith, A. J.||Mahon, Mrs Alice|
|Bell, Stuart||Marek, Dr John|
|Campbell, Ron (Blyth Valley)||Michael, Alun|
|Cryer, Bob||Prescott, John|
|Cummings, John||Ruddock, Joan|
|Dalyell, Tam||Skinner, Dennis|
|Davis, Terry (B'ham Hodge H'I)||Turner, Dennis|
|Dixon, Don||Wise, Mrs Audrey|
|Foster, Derek||Tellers for the Noes:|
|Golding, Mrs Llin||Ms. Marjorie Mowlam and|
|Leadbitter, Ted||Mr. Peter L. Pike.|
§ Question agreed to.
§ Bill read the Third time, and passed.
§ Mr. Deputy Speaker
Towards the end of the last debate I had occasion to reproach the hon. Member for Redcar (Ms. Mowlam). In case the House is beginning to doubt the quality of my eyesight, I assure the hon. Lady and the House that my remarks were aimed only at her intervention.