SCHEMES MADE BY A RELEVANT PORT AUTHORITY (Hansard, 23 April 1991)

§ Ms. Walley
I beg to move amendment No. 60, in page 6, line 12, at end insert— `(c) he shall require the memorandum and articles of the company to determine port activities as the main activity of that company.'. The amendment speaks for itself. After the transfer of functions, the governing documents will be the memorandum and articles of association of the company. The Secretary of State will ultimately have power to determine the contents of the memorandum and articles. They will presumably be framed in such a way as to be attractive to people who might want to buy the shares. The objects clause in the memorandum of association determines the activities in which the company can lawfully engage and that could provide for diversification or for other activities besides port activities.
The Bill should be about transport. It should be committed to making sure that our ports can properly fit into Britain's transport infrastructure. Therefore, it is incomprehensible that, as happens now, plcs taking over the trust ports will be able to diversify to such an extent that port activities will not be the main activities at the heart of the new company. That is why we have tabled the amendment and seek to deter corporate raiders.
The Bill may free financial constraints on the ports, as the Government claim, but we believe that the ports should then be free to maintain activities and not to diversify into property development and all the worst examples of property speculation that we have seen.
The amendment would keep the essence of trust ports after privatisation. That is an issue on which we had considerable discussion in Committee. I remind the Minister that, in commenting on the Tees and Hartlepool Port Authority Bill, and on the proposals that did not complete their course in this House, the House of Lords Select Committee reported on 21 February 1991: It is envisaged that the new company would enjoy unlimited freedom to expand its business activities into any sector and geographical area it chooses. I emphasise the word "geographical" because right hon. and hon. Members expressed concern that a new company need not even be based in the area of the trust port that it took over.
The report went on: It would thus be possible for the privatised authority to undertake commercial activities of which it has no experience and which are far removed from the business it knows well; namely, running a port and conserving a river. We accept that the authority intends at present only to expand into transport, distribution and warehousing services and into property development, and it has recruited expert managers in these areas. But nothing in the Bill would prevent even further diversification in the future. 1003 The report added: Exposing the holding company to such risks could endanger a successor company's ability to fulfil its statutory obligations and to carry on its core business of running the port. That could have a detrimental impact on local industry and the local community.> Those few sentences make the case. Whatever may be the Government's intentions, and regardless of whether they will force privatisation on trust ports that do not want it, unless we can write into the memorandum and articles of association the direction that the port should be the company's main activity, the Bill will have even less to do with transport than it currently masquerades as having. For those reasons, I press the Minister to say whether port activities should continue to be the function of the new companies, or whether we may expect total diversification and an abandonment of ports throughout the country.

§ Mr. Stuart Randall (Kingston upon Hull, West)
I wish to establish how the Government will use the powers contained in subsection (6), as amended by amendment No. 60, which would give the Secretary of State the authority to direct that a company's memorandum and articles of association could be changed, pending certain representations when a scheme is produced. I should like to hear the Minister's views in the context of recreational users such as yachtsmen and the owners of other pleasure boats.
From the Minister's comments in respect of the Monopolies and Mergers Commission and representations and consultations between various users and the company, I fear that everything will be left to market forces. If there is to be a change of powers and responsibilities, the fear among yachtsmen and other pleasure boat users is that there could be a serious loss of facilities.
We must rid ourselves of the misconception that all people who sail boats are rich, because that is not the case. Boating is one cif the most popular sports in Britain. It is enjoyed by millions of people and millions of boat owners. [Laughter.] The Minister laughs. That is one good reason why I hope that he will be able to answer my question.
I am worried about people on low incomes, who have boats, but who cannot afford to put them in the larger marinas and use all the facilities offered to boats moored on the fingers there. Often their boats are on loose moorings in an estuary or a large harbour. I believe that such people feel threatened by this legislation.
When a scheme is submitted by a port authority, what will be the Minister's attitude if representations are made to him about it by the Royal Yachting Association? Would he say that it was a matter for market forces, or would he use his powers to direct that the memorandum and articles of the company can be amended? Those powers do exist.
Yachtsmen arid pleasure boat users want to know what the Government's attitude will be towards their sport. Will the Minister leave it to market forces or will he have sympathy?
I am not asking the Minister to refer to specific schemes, but yachtsmen and British boat users will want to know exactly what the Government's attitude will be towards using those powers.

§ Mr. Barry Field
As it was a Labour Chancellor who put value added tax on yachts, and in view of the hon. 1004 Gentleman's concern, will he tell us whether it would be Labour party policy to abolish VAT on yachts and pleasure boats?

§ Mr. Randall
What a silly question. I am sure that you would rule me out of order if I answered it, Mr. Deputy Speaker. I have genuine concern for people who enjoy sailing and boating, which is a healthy sport, especially for young people, and the hon. Member for Isle of Wight (Mr. Field) is insulting them. I am trying to find out whether a large number of those people will be threatened by the Government's policy. If the Government are going to leave ports to market forces, one can conclude that millions of pleasure boat users will be threatened.
When the Minister responds to the debate I look forward to hearing whether he will have sympathy or whether he will leave the matter to market forces and not use his powers to preserve an important sport and recreation.

§ Mr. Spearing
Although I happen to be a member of the RYA and therefore understand the remarks made by my hon. Friend the Member for Kingston upon Hull, West (Mr. Randall), I do not speak as a member but because I want to probe the Minister more closely. I fancy that he may reject the amendment because of the words "main activity" or because of the use of the adjective "main" in relation to the word "activity". I foresee a lawyers' field day discussing that.
If the Minister rejects the amendment I shall ask him to concede that hon. Members on both sides of the House are genuinely concerned about the ambit of the activities of the companies that he wishes to come into existence. If he declines the invitation of my hon. Friend the member for Kingston upon Hull, West, will he agree that some sort of clause—it may be too late for this House, but it could he included elsewhere—should be included in the Bill? It could run something like this: "It shall be a requirement of the memorandum and articles of the company that the activities of the company shall be principally those which are closely associated or closely related to port, haven or marine activities", although I admit that that is not a good immediate draft.
Surely that is what the House would expect such a company to be. One does not expect a port and harbour company suddenly to become an office organisation or to sell off land so that a marina is left as a tiny pool in the middle, even if commercial activity stops. That is a matter about which many people are concerned. We have seen how market forces operate along the Thames. Pressure is in their very nature. If the Minister is unable to accept this amendment, will he at least consider the introduction of some such provision as I have just rather badly outlined?

§ Mr. McLoughlin
The hon. Gentleman was right to suggest that I was unlikely to accept the amendment. The Opposition have overlooked one of the main purposes of the Bill, which is to allow trust ports to privatise themselves. They may wish to do so partly for the purpose of gaining the freedom to diversify their activities. Not long ago, I visited one of the trust ports. I shall not say which one.

§ Mr. McLoughlin
I have just been referring to a visit that I paid to one of the trust ports. As we were passing a hanger, I was told that it had been rented out to a company. I said, "No doubt the company's activities are port-related." In fact, I did not realise that the charter requires such activities to be port-related, but there were a number of red faces around when I was told, "Possibly it ships in one or two things each year, but I do not think we could claim that its activities are totally port-related." I do not want to put such a restriction on the activities of trust ports.
Sale objectives will be agreed between the port and the appropriate Minister before the privatisation process gets under way. The Bill provides for a period of consultation. If the Royal Yachting Association, for which the hon. Member for Kingston-upon-Hull, West (Mr. Randall) spoke, has representations to make, it will want to put them forward at the appropriate time. [Interruption.] I did not intend to indicate that the hon. Gentleman was speaking for the RYA. My hon. Friend the Member for Weston-super-Mare (Mr. Wiggin) made a similar point earlier.
I am somewhat surprised that the hon. Member for Kingston-upon-Hull, West (Mr. Randall) rejected as nonsense the very telling point that was made by my hon. Friend the Member for Isle of Wight (Mr. Field). This amendment is too restrictive, and I hope that the House will reject it.

§ Ms. Walley
It may have escaped the Minister's notice, while he has been so busy with this Bill, that VAT has been increased to 17 per cent. Amendment No. 60 refers to the determination of port activities as the main activities of a company. Our intention is to ensure that ports that are operating effectively at present are enabled to continue to carry out their responsibilities. That should not be prevented by the takeover activities of predators. I am disappointed that the Minister has not taken on board the spirit of the amendment. I can assure him that the matter will be pursued with vigour in another place. If he has any regard for the genuine concern of people throughout the country about the state of ports in 10 years' time, the sentiments that are expressed in this amendment will have to be taken into consideration during the period of consultation to which he has referred.