§ [Relevant documents: Memoranda relating to this Order contained in the Fifth Report from the Joint Committee on Statutory Instruments of Session 1996–97, HC 29-v.]
§ 4.9 pm
§ The Secretary of State for Transport (Sir George Young)
I beg to move,That the draft Port of Tyne Authority (Transfer of Undertaking) Order 1996, which was laid before this House on 6th November, be approved.The order will enable me to effect the transfer of the assets, rights, liabilities and duties of the Port of Tyne Authority to a company, which will be offered for sale. All property, rights and liabilities of the authority and all functions conferred or imposed on the authority by any local statutory provision will be transferred to the successor company already set up by the authority when the order comes into force. The most important such obligation is that of continuing to run a port on the Tyne.
I shall start by briefly setting the order in the context of the Government's policy on ports. Our objective for the ports industry has been that it should be capable, innovative and self-sufficient. The Government have done that by removing subsidies, by deregulation—abolishing the dock labour scheme—and by privatisation. They have sought to improve performance by promoting competition.
As a result, the efficiency of operations has been improved, efficiency gains have been made in the use of manpower, labour relations have improved, and substantial investments have been made. Our policies have succeeded and the benefits have not stopped at the ports. They have been to the advantage of all who depend on them and, to some extent, that means everyone in the country and many abroad.
The Ports Act 1991 is part of that story. It was introduced as an enabling measure, to provide a simpler and quicker mechanism than the private Bill procedure for trust ports to privatise themselves and take advantage of private sector input and practice, such as the investment of private capital. We introduced the measure because that is what a number of ports wanted to do. They were right to do so.
Six ports have used the voluntary privatisation procedure in the Ports Act—Tees and Hartlepool, Forth, Clyde, Medway and Tilbury in 1992 and, following their success, Dundee in 1995. New sources of finance have been tapped to provide new and improved facilities. Other advantages have followed and those ports have all prospered as a result.
Let us consider briefly the progress that has been made. Between 1992 and 1995, Tees and Hartlepool achieved an increase in turnover of more than 20 per cent., and an increase in pre-tax surplus over the same period approaching 100 per cent. The chief executive says:I think since privatisation there has been a fairly significant change in the culture of the port. I think there is an awareness that we are providing a privatised business that has to succeed. About 40 per cent. of employees have shares—we were greatly surprised by the number of people who wanted to take shares in the business".
§ Mr. Andrew Smith (Oxford, East)
On the Secretary of State's claims for the privatised ports, is it not the case that the port of Tyne's pre-tax surplus increased by 172 per cent. between 1992 and 1994, which is better than that of three of the privatised ports to which he referred?
§ Sir George Young
The tonnage carried in that period decreased, however. That was not an expansion period for that port. Clyde's turnover and tonnage—it is not just the turnover—increased by 33 per cent. and its pre-tax profits by 58 per cent. between 1992 and 1995. In their 1995 annual report, the directors reported:Another satisfactory year … acquisition of new waterfront facility will provide increased opportunities for expansion and diversification".Lloyd's List in May this year said:In 1992 Clydeport considered closing its Greenock operation due to lack of business … now the group is more concerned it will run out of capacity at Greenock and has therefore bought a neighbouring site".If we look at Forth, we find the same impressive story. In the 1995 annual report and accounts, the chairman notes:Turnover has increased by 32 per cent. to reach £47.3m … Profit before tax was up £15.3m (up from £13.9m in 1994)".The position of Forth has been helped by the acquisition of Tilbury and Dundee. Lloyd's List recently noted:At one time damned by an image of crumbling infrastructure and fractious labour relations, Tilbury has re-emerged over the past few years to mount an increasing challenge to its more recently developed competitors at Felixstowe and the Isle of Grain. Tilbury's recent history has been recounted a thousand times—abolition of the Dock Labour Scheme, followed by a management-led privatisation and ultimately the sale to Forth Ports Group. Those dramatic changes have served to revolutionise the culture and business attitudes at the port, now being driven by Forth Ports' desire to generate realistic returns on investment".That has, of course, been the general experience of privatisation, and it is what we should expect for the privatisation of Tyne. The evidence all points in one direction: port privatisation substantially improves port performance.
Privatisation does not reduce the responsibilities of port authorities. All their obligations under general law continue, and the Ports Act provides that all functions conferred or imposed on an authority by any statutory provision are transferred to any successor company. The Act also specifically applies the Transfer of Undertakings (Protection of Employment) Regulations 1981, which provide statutory protection for employees from takeovers to transfers under the Ports Act. Additionally, there is provision for a clawback levy to be applied on a sliding scale to all land disposals during the first 10 years following privatisation. So the taxpayer would benefit from sale of surplus land.
The users of the port will continue to benefit—as do all users of UK ports—from the Harbours Act 1964, which gives me a statutory right of appeal against unreasonable port dues. The right is important, because the public right of access to ports depends upon the payment of those dues. The right is in reserve, but it is rarely used. There is no doubt—because of commercial pressures generated by the promotion of competition in the ports industry, as I have already mentioned—that commercial 1218 pressure keeps down fees. The right has never been exercised for any of the privatised trust ports since they were privatised.
§ Mr. Don Dixon (Jarrow)
If privatisation is so good, why are the Government not privatising the port of Dover?
§ Sir George Young
The port of Dover has given an undertaking voluntarily to privatise itself in 1997.
With that background on the Government's ports policy and the Ports Act, I come to the privatisation of the Port of Tyne Authority. Our intention in seeking the compulsory privatisation of the Port of Tyne Authority is to create an opportunity for the port to share the benefits gained by the entrepreneurial and innovative approach more generally found in the private sector.
The Port of Tyne Authority has not ruled out privatisation. Indeed, in the authority's response of September 1995 to the consultation on compulsory privatisation, it states that it welcomes the provisions of the Ports Act that enable voluntary privatisation, and even accepts that compulsory privatisation may be needed in certain circumstances. However, it does not consider that its port would benefit. With all respect, however, and in no spirit of criticism, I have to say that it cannot be disinterested, and that it is only natural for the authority, and indeed for others connected with the port, to perceive proposed privatisation as a threat or criticism. It is not.
Privatisation is based on the general experience, in this country and others, that it brings a change of culture that benefits and improves overall performance. Taking the port fully into the private sector will not undermine what has already been achieved. Rather, it will open up more opportunities for innovation and entrepreneurial development, to the benefit of port users and the wider Tyneside community. Privatisation can be expected to lead to a more dynamic approach to investment, exploiting more fully the authority's financial capacity, to the benefit of the region. So we believe that the port's future development will be best handled in the private sector.
I should like to deal with some of the concerns that have been expressed in the consultation exercise. Some concern has been expressed about timing, arising mainly from uncertainties because of decline in the coal trade. It is not surprising that there have been both positive and negative developments in the port's business in recent years—that is the nature of the ports business. Waiting for a steady state would mean that no port could ever be privatised. Potential purchasers and their advisers should have no substantial difficulty in assessing and allowing for any uncertainties in the future business of Tyne. The port has indeed shown that it can adapt to changing trade patterns.
The powers of compulsion in section 10 of the Ports Act enable me compulsorily to privatise any trust port with a turnover exceeding £5 million, at 1991 prices, following consideration of responses to a succession of consultation exercises, and with the consent of Parliament.
My right hon. Friend the previous Secretary of State consulted the Port of Tyne Authority, in June 1995, to ascertain its views on privatisation, and it was asked to respond within three months. As I explained, we were not convinced by the authority's arguments against 1219 privatisation, and I wrote to the chairman on 15 November last year to direct the authority to form a company and prepare a transfer scheme, to enable the authority to transfer all its property, rights, liabilities and functions to that company. A model transfer scheme was provided to the port authority for consideration, and the actions were to be completed by the end of February this year. The Port of Tyne Authority complied with that timetable and advertised its scheme in March, inviting anyone who wished to do so to send representations to me.
The scheme submitted by the Port of Tyne Authority, although based on a model provided by my Department, included a number of additional provisions that would have been likely to constrain the operation and development of the port, which I shall come to in a moment. In my view, it would not have been possible to make the scheme accord with advice previously given. I therefore considered making my own scheme, as provided for in section 12 of the Act, and consulted the Port of Tyne Authority and considered its views before advertising the proposed scheme and inviting representations.
Following consideration of the representations, I was and am still minded to proceed. My proposed scheme forms the schedule to the order before the House. It follows closely the transfer schemes used in previous privatisations, including that in Ipswich, which was approved by Parliament earlier this year. I considered the additional provisions proposed in the Port of Tyne Authority's scheme to be unacceptable and unnecessary. Their removal was the main focus of representations made to me on my proposed scheme.
The provisions raised an important and difficult issue. A transfer scheme concerns the transfer of property, rights, liabilities and statutory functions of the port authority to a successor company. It is not appropriate for such a scheme to contain provisions that are not directly connected with the transfer but intended to impose new, on-going commitments on the successor company. There is even a question whether such on-going provisions would be intra vires.
Such doubts and the difficulty and inappropriateness of each of the proposals led me to propose my scheme. As I said, it follows very closely the schemes used for all the voluntary privatisations and the scheme being followed for Ipswich, which was discussed in Committee earlier this year.
The authority's proposals covered aspects of pension and employee rights. There is, of course, general protective legislation in those matters, which will apply to the successor company, and there is no case for or way of imposing further legal obligations on that company. I of course understand that such matters are of concern and I shall be prepared to consider with the authority what might be included in the sale objectives, to allow prospective purchasers' intentions to be considered in the evaluation of bids.
There was no justification for the authority's proposed consultative committee, with its extraordinary range of powers, which would have shackled any new management in a totally unacceptable way. The successor company will be just as capable as the port authority of continuing 1220 good relations with local interests. Indeed, it will be in its commercial interest so to do, as evidenced by the conduct of port businesses already in the private sector.
The proposed consultative committee was to have held a special share, provided for in the company documents for Port of Tyne plc—the company set up by the port authority in accordance with directions earlier this year. Subject to parliamentary approval of the order, we shall direct that the relevant article—article 30—be deleted from the company's articles of association, that other consequential amendments be made, and that a few minor amendments to bring the company documents into line with Companies Acts regulations also be made.
The authority also questioned whether a new owner would have sufficient funds to invest. The Government's position is that anyone making a bid will do so on the basis that they will be able to operate the port profitably thereafter. No one would make a bid that put them in a position where they were not then able to operate the port profitably.
The authority also maintained that the port's wide legal powers meant that the benefits of privatisation would not be significant. Although in some privatisations, the wider powers available to a company have certainly improved the ability of ports to operate, the benefits of privatisation are not confined to that one factor. Privatisation in the ports and other industries has shown that benefits flow from the conversion to a full commercial operation based on shareholder equity and interest. The authority's scheme also included a general provision relating to on-going maintenance of the port, how profits should be used and local management of the port, but there is no case for such a provision.
Subject to parliamentary approval of the draft order, the sale of the port will be undertaken by the Port of Tyne Authority and its advisers. Ministers intend to discuss the process and the timetable with the chairman immediately. I want to discuss the desirability of encouraging a management-employee buy-out offer—a MEBO—with substantial employee share ownership.
We believe that it is appropriate to proceed with the privatisation. I therefore commend the order to the House.
§ Mr. Andrew Smith (Oxford, East)
The Secretary of State's speech and the imposition of the order mark a sad day in the history of British ports. For the first time, the Government are forcing through the privatisation—indeed, the expropriation—of a trust port against the will of the port and in the face of the views of 98 per cent. of those who commented in the consultation process, including many businesses.
We are witnessing Tory privatisation for the sake of it. That was clear from the fact that the Secretary of State spent half his speech talking about privatisation before he got round to mentioning the port of Tyne.
Unlike the Conservatives, Labour is not obsessed with public or private ownership, but is concerned with what can work best for the users of the port, for those who work there and for those in the surrounding area who rely on the prosperity that the port creates. We believe that ports can flourish in the public or private sector.
It is abundantly obvious that the port of Tyne is succeeding in developing its business, in investing and in sustaining the confidence of its customers. It should not be forced to undergo the uncertainty and cost of privatisation simply to satisfy Conservative dogma.
1221 The Port of Tyne Authority is already meeting the objectives that the Government say that they want privatisation to achieve. The Secretary of State said that he wanted the port to be innovative and self-sufficient. It has been innovative and self-sufficient—it has the widest possible powers of any port to enter into joint ventures to develop its business; it has significantly increased its attractiveness to companies; and it has already successfully taken steps to secure the regeneration of virtually all its developable surplus land, as the Secretary of State has said. Its financial position is such that it has had no need to obtain share capital, nor has it had any difficulty in borrowing from the financial markets. Last year, the port paid off the last remaining part of its debt. This year, it announced an £8 million investment plan as part of its programme to tackle the decline in its traditional trade of coal. All that was managed without recourse to borrowing.
I can understand a Government who have doubled—no less—the national debt in the past six years being jealous of that achievement, but that gives no grounds for this vindictive and damaging order. The port's operating record also does not justify the privatisation: it operates to more overseas ports than any other in the United Kingdom; last year, it was used by more than 360,000 passengers and almost 60,000 cars; and the number of passengers is expected to increase by 50 per cent. next year. It has diversified its trade and won new business. It was chosen by Nissan as its car terminal despite competition from the privatised Tees and Hartlepool Authority. The port of Tyne won because of the competitive pricing structure made possible by its financial position and Nissan's confidence in the long-term stability of the authority's management.
New agreements have been concluded, including one with Warrant Distribution Ltd., involving the construction of a further 16,000 sq m of transit shed accommodation. Exploiting market opportunities in the container business, the authority developed a new berth and storage compound in 1991. Those facilities are now used by Mitsui OSK Lines to provide just-in-time services to Nissan and other key manufacturers in the region. The port now handles 22,000 containers a year—traffic that has been developed in just four years.
The port has developed diversification, made more investment, generated more business and made higher profits. That is a record that should be rewarded, not penalised. Yet the port is being penalised and has already been damaged by the threat of forced privatisation. The port believes that that uncertainty led to DFDS terminating its freight service from the Tyne. Hundreds of thousands of pounds have already been consumed on external consultants, accountants and lawyers in the privatisation process. The port fears that privatisation would be likely to see a rise in port charges, cuts in capital expenditure and uncertainty and upheaval that would prejudice the authority's efforts to find new trade to replace the declining coal traffic.
The authority takes the example of the privatised Tees and Hartlepool port, which has seen a post-privatisation cut in capital investment of almost 60 per cent. since 1992. No wonder that the authority board members—the majority of whom were appointed by the Secretary of State for Transport—recognise the 1222 dangers of forced privatisation and unanimously oppose it. Surely it is entirely reasonable, and in the public interest, for the port to resist the pressure that it fears to cut investment or to strip and sell off its assets. At present, all the profit from the port is available for reinvestment in infrastructure, port services arid local regeneration.
It cannot be wrong, given the port's record, for the authority to choose to continue to have the opportunity to build on its investment and not be driven instead by possibly short-term shareholder pressure, especially given the uncertainties that it faces in its traditional coal business. After all, the Government agreed with that view when they withdrew their plan to privatise the port of Dover after local and national representations. It seems as if the only crime that the users and employees of the port of Tyne have committed is not to be situated in a Conservative marginal seat such as Dover.
Of course, on that plan, the Secretary of State for Transport stated that uncertainties about the impact of the channel tunnel on that port's prospects meant that it would not be appropriate to privatise it until the position became clearer. If that was the Government's case on Dover, there is a comparable one on the Tyne. The decline in coal traffic has had a significant impact on the immediate financial prospects of the port and has created a volatility that will make it similarly difficult to value the undertaking for sale purposes. That is a sound argument and, as the port has pointed out, it is unreasonable for the Secretary of State to attempt to proceed at this stage with compulsory privatisation proposals.
It is particularly unreasonable for the Secretary of State to proceed without incorporating any of the provisions that the authority drew up in its scheme under the Ports Act 1991, to which the right hon. Gentleman referred. Those provisions would have protected port users from excessive increases in dues in the first five years of privatisation. They would have required any new owner to maintain the port to at least the same high standards as before privatisation and would have prevented port profits from being siphoned off for non-port purposes. They would have safeguarded terms and conditions for employees and protected pension rights. They would also have given port users, local authorities and other interested bodies a voice in the privatised port through the consultative committee, with a golden share to ensure that no action could be taken that was in any way detrimental to the port.
In rejecting, as the Secretary of State has, not just some but all of those protections for employees, users and the region, he is giving a signal that he would be happy to see increases in dues, falling standards, and terms and conditions, pensions and the interests of the region undermined. All those important factors are as nothing compared with his obdurate determination to impose privatisation on his dogmatic terms. Where is the freedom of choice that he and his party used to like to boast a belief in?
The proposed privatisation is the first time that any Secretary of State for Transport has imposed the transfer.
§ Sir George Young
That is the second time that the hon. Gentleman has called the order the first. It is not. Proposals for Ipswich were taken in Committee earlier this year, with much less objection from the Opposition. This is the second one.
§ Mr. Smith
The Government submitted a scheme—I see that the Secretary of State is nodding. It is a true sign of a tired and incompetent Government that they are resorting to extreme measures and forcing through their dogma in that way. Indeed, so incompetent were they that they could not even get their own procedures right for advertising the scheme that they put forward, and they had to go round the course again.
If the Secretary of State and the Government will not accept the arguments that I have set out, or the views of the port and its employees, the local authorities or the people of the region, perhaps he will listen to what private business has said about the privatisation.
The chief executive of Mitsui OSK Lines said:My colleagues in Japan and Europe all feel strongly that the process and effect of Privatisation of the Port of Tyne will, at the very least"—[Interruption.] The Secretary of State ought at least to listen to what the European chief executive of Mitsui has to say on behalf of his company. He says that privatisation willat the very least, result in instability and uncertainty, which will damage confidence in the region, to the detriment of present and future inward investment. We therefore request that you make every effort to retain the present status quo as a Trust Port.That plea is directed at a Government who are always boasting of their concern for inward investment. Here is an important inward investor saying that privatisation will damage its business, yet the Government do not respond.
RJB Mining is the company that the Government entrusted with the running of the national coal industry, yet its representatives said:The implications and potential risks of privatisation are something of an unknown quantity, whereas I am confident that the maintenance of the status quo would enable us to build on our existing understanding to secure continued business through the port. Our preference, therefore, would be to see no change to the current arrangements".I could list many more examples of representations made on the port, pleading for it to retain its current status. Opinion among port users, employees, local authorities and others in the region is overwhelmingly against compulsory privatisation of the port. Of 330 representations made to the Secretary of State about his scheme, only four were in favour. And who did those four come from? Prospective bidders—and three of those were so confident of the persuasive power of their views that they declined to have them published.
Instead of Tory privatisation dogma, let us listen to local people and to business, and recognise that forced privatisation would be bad for business, bad for shipping and bad for Newcastle, just like the Government who are driving it through. Let us vote for the freedom of choice for the port of Tyne to remain a trust port, and reject the order.
§ Mr. Neville Trotter (Tynemouth)
Tyneside's strong maritime history goes back to the days of the Romans, although in practice its prosperity is based on the coal trade.
1224 One hundred years ago, more than 3 million tonnes of coal was exported from the Tyne. It was the foundation of the industrial prosperity of the whole river and Tyneside area. In 1923, 22 million tonnes of coal was shipped from the river, and we now have the most modern coal facility in the country, with a capacity of 5 million tonnes a year.
Unfortunately, the market for coal has disappeared. Last year, only 2 million tonnes was exported from the port, and the representatives of the port have admitted that it is prudent to assume that the trade will soon cease altogether. That is an important factor in considering the plans for the future of the port. It must be able to adapt further to changed circumstances. Although the port made a big profit last year, it cannot rely on that continuing if it simply remains as it is.
In 1970, 4 million tonnes of other traffic went through the port; now, it is down to half that figure. In the port's heyday, the number of ships entering the river was 40 a day, or 14,000 a year; by 1970, it was down to 12 ships a day; now, it is down to only four or five ships a day. The Tees has 10 times the amount of business that the Tyne has. When I looked at the official statistics for the port industry, I saw that the Tyne was not in the list of top ports. It is the only major river in the country not listed as a major port. We should bear in mind the realities of the situation.
There is a positive side. We have heard about Nissan coming to the Tyne. That was a big achievement for the port. Nissan exports 80 per cent. of its production to 36 countries, including Japan. It is the biggest car exporter in the country and exports 5,000 cars a week from the Tyne.
We have a booming ship repair industry, which is revitalised and highly competitive. We have a successful offshore industry, with Amec and Swan Hunter employing many people again, and other firms such as A and P Appledore, McNulty and Tyne Tees.
The river has been cleaned up. One of the most remarkable achievements in recent times has been the success of the Tyne and Wear development corporation, in particular, in redeveloping the river frontage. Some years ago, the Tyne had become miles of dereliction—an eyesore. Now, it is revitalised, modernised and attractive to new business.
Fears have been expressed about the sale of port land for development, but we have heard from both sides in the debate that that has already happened. Land has already been disposed of by the Tyne and Wear development corporation, which successfully carried out the redevelopment.
We have heard fears expressed on behalf of employees, but as my right hon. Friend the Secretary of State pointed out, they will be protected by legislation. In his opening speech, my right hon. Friend also referred to the benefit of share ownership. That is important. Employees can participate through share ownership in the new company. That would be encouraged, as my right hon. Friend said in his presentation to the port. In many of the ports that have been privatised, more than half the shares ended up being owned by people who worked in the port. That is a positive development.
There are fears that the new company will have the wrong financial motivation. It must be in the interests of the owners that success should follow from the transfer of ownership. They want the port to succeed—that is why 1225 they are acquiring it. They will achieve that by satisfying their existing customers and attracting new ones. The new company will remain a statutory harbour authority. For reasons that I do not understand, it is feared that port facilities will be closed. The company will have the same duties and responsibilities under the Ports Act 1991 as the present port authority has. It will not be able to dispose of operational land without the approval of Parliament. There will have to be an opportunity for objections to be raised to such a proposal and, if there were objections, there would have to be a public inquiry.
There are fears that charges will be increased. If I read the figures correctly, on a turnover of £14 million, the port made a profit of £5 million. If I were one of the port users, I might already bear that fact in mind. The 1991 Act states that charges must be reasonable. If there were any misguided attempt to increase the charges—I do not see why there should be—there is a right of appeal to the Secretary of State. That right of appeal has never been used in any of the previous port privatisations.
Some ports seemed to be efficient before they were privatised, but they are more efficient now, after privatisation. Port privatisation has been an undoubted success and experience from one end of the country to the other does not bear out the fears that have been expressed. Privatisation has brought increased business, profit and capital investment.
I see no reason to doubt that the Tyne will be another success story. We have a long and proud history on the Tyne, and I look to a positive future. We have a well-situated port for traffic to north-east Europe and we have further opportunities through the offshore industries.
§ Mr. A.J. Beith (Berwick-upon-Tweed)
I declare an interest as an occasional user and licence payer on the river. Why is the hon. Gentleman so ready to ignore the views of all the established users, including Nissan and Color Line? The burden of representations was not just overwhelmingly, but totally, against the scheme proposed by the Secretary of State.
§ Mr. Trotter
I shall not detain the House by reading out the long letter from the chamber of commerce, which was a sensible summary of the views of 3,000 firms that trade in the north-east. It was a rational expression of the matters that must be addressed by the Secretary of State. I was about to deal with the matter in my concluding remarks.
When the Secretary of State judges the bids, he does not have to accept the highest offer. I remind the House that the bids will be assessed in the first instance by the port authority, which will make a recommendation to the Secretary of State. There have been examples where the highest offer has not been accepted for the reasons discussed in the debate. In the case of Tees and Hartlepool, if price had been the only criterion, the highest bid would have been accepted, but the board considered that the high price was not sufficient to overcome its preference. In the interests of the port's independence and long-term stability and the benefit of the community, another offer was accepted.
The Secretary of State hardly needs to be told that, when the time comes to consider the bids, we should not necessarily accept the highest offer.
§ Mr. Jim Cousins (Newcastle upon Tyne, Central)
Will the hon. Gentleman also invite the Secretary of State 1226 to guarantee that the cash reserves of the port, which are substantial, should be reserved for the development of the port and its uses?
§ Mr. Trotter
The future funding of the port must be one of the major factors affecting the consideration of the bids. I am sure that the Secretary of State will bear that factor in mind. Investment should be guaranteed. That should be one of the requirements on those who offer bids.
I want an active and vibrant river for the future. I hope that a successful bid will emerge, and I do not believe that the fears that have been expressed will materialise.
§ Mr. Don Dixon (Jarrow)
I congratulate my hon. Friend the Member for Oxford, East (Mr. Smith), who advanced a good case against the nonsensical scheme that has been proposed by the Secretary of State for Transport.
Having lived on the banks of the River Tyne for 67 years, and having worked all my working life in the shipyards on the River Tyne until I retired from gainful employment in 1979 and came to this place, I speak with a certain amount of knowledge about the area.
Needless to say, I oppose the privatisation scheme. I never thought when I entered the House in 1979 that I would rise to defend a quango, but that is what I am doing today. Unlike most of the trust ports, all the non-executive directors of the Port of Tyne Authority are appointed by the Secretary of State, so it is a quango.
I have raised the issue of the port of Tyne on two occasions. The first was 16 years ago, when I was concerned about the reclamation of the Jarrow Slake. The Secretary of State knows how to step over homeless people sleeping rough when he is on his way to the opera, but he probably does not know a great deal about the Jarrow Slake. It was an area of mud ponds between the River Tyne and the road that runs from South Shields to the Tyne tunnel. They were used as curing ponds for large baulks of timber. I recall that, as a small child, I played on those baulks of timber.
I raised the matter in 1980, because the reclamation of the Jarrow Slake was taking so long. The Minister who replied to the Adjournment debate then is now the Chancellor of the Exchequer. In fairness to him, I should say that he came up and visited the area after the Adjournment debate. During the debate, I was extremely critical of the port of Tyne, having been involved in negotiations with that body when I was a member of South Tyneside council.
The Jarrow Slake has now been reclaimed. My hon. Friend the Member for Oxford, East referred to it. The Tyne car terminal is now situated on that land, from where Nissan recently exported its 300,000th car. It used to be mudflats. It was reclaimed and developed using the reserves of the port of Tyne. It is now one of the best car exporting facilities in the United Kingdom. I must give the Port of Tyne Authority credit for that.
The second time I raised the issue was on 22 May this year, during one of the Adjournment debates prior to the Whitsun recess. I pointed out that the Tyne Improvement Commission was set up in 1850, and that it did a tremendous job in excavating 50 million tonnes of soil to make the Tyne a port and to allow it to deal with large ships. The commission ran until 1968, when the present Port of Tyne Authority was set up.
1227 Under the direction of the Port of Tyne Authority, the port today is one of the most efficient and flexible in Europe—which is why the Secretary of State wants to flog it off. If the port was not a success, the Government would not get a buyer. In the past 12 years, the authority has invested more than £45 million in berths and equipment and played a major role, with the development agencies, in trying to attract investment and new industries to our region. The authority has large capital reserves and no outstanding debts. I can imagine why the four potential buyers are keen to get their hands on the assets of the Port of Tyne Authority.
The port's newly appointed managing director, David Clifford, has said:The Port of Tyne has carefully prepared itself for the needs of the 21st century, and now looks for increased support from port users, for cargoes starting and finishing their journeys in the region.Like everyone else in the area, I am opposed to the privatisation. My hon. Friend the Member for Oxford, East referred to a number of local groups, and I wish to go through the list of representations made to the Secretary of State. What is the good of the Secretary of State having consultation if, after everyone he has consulted has stated that they are opposed to it, he decides to privatise?
Some 173 employees of the PTA wrote to the Secretary of State, and all 173 opposed the privatisation scheme. Eight trade unions wrote in, and all eight opposed the scheme. Seventy-three members of the general public wrote in, and 62 opposed the scheme. The Secretary of State must have some relatives in the area, because 11 people did not oppose the scheme. All five local authorities in the area opposed the privatisation. Some 21 port users were opposed to the privatisation, as were local peers and Members of Parliament. My hon. Friend the Member for Tyne Bridge (Mr. Clelland) is the secretary of the northern group of Labour Members, and he wrote in on behalf of the group. I also wrote in, but my letter is not included in the list of representations. Another 17 organisations wrote in; all were opposed.
I wish to elaborate on what my hon. Friend the Member for Oxford, East said. Among those who wrote in to oppose the scheme was the Tyne Port Users Association, which has a membership of 37 companies with over 8,000 employees. It wrote:We are a non-political affiliated organisation and are extremely concerned about the proposed Government's privatisation scheme".Warrant Distribution Ltd. is a relative newcomer to the port of Tyne; it established there only in 1993. It said:We see no justification in commercial terms for privatising the port at this time, and can only imagine that the Secretary of State's decision is based purely on political dogma.Shepherd's Scrap Metals—a well-known firm on the Tyne—wrote:We have followed the progress of the privatisation with increasing alarm and are dismayed that the Secretary of State has not taken into consideration the views of users of the port".The Institute of Chartered Shipbrokers said:We totally oppose the new proposals outlined by the Secretary of State. It is our opinion that no useful purpose can be gained by privatising the Port of Tyne.Even the South Shields Conservative association has said that the Minister should have regard to port users. The South Shields Conservative association is not the most 1228 progressive organisation in the country, and I mean progressive with a small "p"; at one time its members would stand in local elections only as "Progressive" candidates. A couple of years ago, they became brave and stood as Conservatives. The result has been that, out of 60 seats in the local authority, they have none. But even that organisation is concerned about the privatisation.
Any reasonable person would take note of that opposition, and no one—other than the four potential buyers—is in favour of the privatisation. Every other organisation, every individual, every trade union and every local authority is opposed to the scheme. The proposals are pure political dogma, and are being brought in at the fag end of a Parliament by a Government who have lost all respect throughout the country. They know for a fact that this is the last possible privatisation.
Originally, the Government wanted three trust ports to be privatised—Dover, Ipswich and the Tyne. The Minister referred to them. We know that the Ipswich privatisation went into Committee, where we opposed it and voted against it. Despite the efforts of my hon. Friend the Member for Ipswich (Mr. Cann), that privatisation went through. The privatisation of the port of Dover was stopped after the intervention of Her Royal Highness the Queen Mother and Vera Lynn, who were concerned that a French harbour company might buy the port of Dover. It would be no good singing about the white cliffs of Dover if they were owned by France. That is why the Government dropped that privatisation. In addition, the hon. Member for Dover (Mr. Shaw) will not be here after the election as he has a marginal seat and no one can save him. Even dropping the privatisation of the port of Dover will not save him.
This proposal has been opposed by everyone in the area, and I hope that it will be opposed by enough hon. Members to kill it tonight.
§ Mr. Peter Atkinson (Hexham)
I welcome the proposal, which is an important piece in the jigsaw of the regeneration of the River Tyne. Standing here at nearly 5 pm on a Thursday, in what can be described as a thinly attended House, I am reminded of earlier days when we discussed similar matters. The hon. Member for Oxford, East (Mr. Smith) tried to make a brave fist of it, but I seem to have heard the phrases "price increases", "falling standards" and "pure political dogma" before in reference to privatisations. Labour Members used those phrases about British Telecom, British Airways, British Rail, British Steel and British Coal. Every time the Government proposed a privatisation, Opposition Members have stood up to complain.
We know perfectly well, as do consumers, that privatisation is a success. It is not that the companies that have been privatised were failing—many were, but not all—but they have made significant improvements in the way they are run, and I see no reason why the Port of Tyne Authority cannot do the same. The authority has its critics—we are aware of that. Some say that it has allowed its infrastructure to run down over the years; others have said that it has not been diligent enough in dredging the river. Still others believe that it has allowed too big a cash mountain of assets to build up—it was £19 million at one stage, although I believe it is now lower than that.
The criticisms are unfair. The Port of Tyne Authority has had to deal with a difficult period in the development of the river, following the remorseless decline of 1229 traditional industries such as coal shipping, steel and shipbuilding. For the first time, the Tyne now has some prospects of real growth in the new sunrise industries. My hon. Friend the Member for Tynemouth (Mr. Trotter) mentioned the offshore industry, which will make particular demands on the port. Some companies involved in the offshore business might be interested in the port itself because they would like it to be better designed for their kind of growing business, and it is in such businesses that the Tyne will have a great future.
I will not repeat what my hon. Friend the Member for Tynemouth said; he set out the case extremely well. I believe that a change of culture will be of considerable benefit to the port. Hon. Members who do not know about the north-east of England—there are not many in the Chamber—should be aware of the tremendous renaissance that has taken place on the river, and everyone should be proud of that. I am proud of the way in which the city of Newcastle and its quayside have developed and of the new developments down the Tyne. They are there because of the operations of organisations such as the Tyne and Wear development corporation and the grants given by the Government.
Above all, the Tyne is recovering because of the Government's economic policies. The Government were brave enough to take tough and painful decisions about the coal industry and about the Swan Hunter shipyard when it ran into trouble. Opposition Members called for greater subsidies for the coal and shipbuilding industries, but the Government's tough decisions have allowed new industries to grow on those sites. Without that, there would not have been a renaissance on the Swan Hunter yard site where, rather than a sunset industry there is a sunrise industry. That is what we must build on, and it is why we want the port in private hands, with new ideas and innovation.
§ Mr. Chris Davies (Littleborough and Saddleworth)
Liberal Democrats want efficient, innovative and successful businesses throughout the country. We oppose the privatisation, because the Port of Tyne Authority is just such an organisation. We have heard how the trustees of the authority are appointed, so it might come as a bit of a surprise that Liberal Democrats should give such backing and praise to an organisation that owes its origins so much to the Secretary of State—but we do.
It is worth hearing what the Secretary of State's appointees have to say to him about the proposal. They have written to him submittingthat there is overwhelming evidence that privatisation of the Port of Tyne, rather than enhancing the commercial prospects of the Portas he suggests,would damage customer confidence, jeopardise the Port's prospects at a sensitive time of transition and lead to a loss of trade and investment, with serious implications for the North-East region.As the hon. Member for Oxford, East (Mr. Smith) rightly said, this is privatisation for privatisation's sake. I listened carefully to the Secretary of State. I had looked forward to hearing convincing arguments that would persuade me that there was some flaw in what I had been told by the Port of Tyne Authority and by those who support its case, and that it was in fact a moribund organisation, the removal and replacement of which by a 1230 body purely in the private sector would be to the benefit of the north-east as a whole, but I found no such arguments in what he said.
The Secretary of State referred only to the general experience that privatisation is beneficial. He suggested that all the evidence was one way, but he produced not evidence but a series of assertions that are challenged not only in the House and by millions of people throughout the country but by many of our strongest economic rivals, who run their infrastructure rather differently from the way in which the Conservatives have run ours over the past 18 years.
The Port of Tyne Authority does not even have to work within the straitjacket of financial restrictions such as those imposed by the Government on the Post Office or on Manchester airport; it is able to invest, and it does. In proportion to its income, the port has invested twice as much as the Medway and Forth ports and three times as much as Tilbury and Clyde, and it has plans to invest a further £15 million in infrastructure improvement over the next five years. It is not sitting on the surplus land but handing it over for development by other organisations.
If the Secretary of State can point to any evidence, I suspect that it will be purely one-sided. His point about declining tonnage demonstrated that we were being given selected figures. He said that the port of Tyne had witnessed a decline in tonnage in recent years, and compared that with the situation on the Clyde. He did not, however, mention that the crucial reason for that is that coal production in the north-east is still declining, whereas in Scotland it has been virtually finished off already.
The Secretary of State did not cite one port user who wants the privatisation to take place. We have heard of some of those who do not want it to take place, and I want to draw attention to some other representations that have been made. For example, the chief executive of Mitsui O S K. Lines—not exactly a small company, but one of the organisations that has made Japan great and had a tremendous impact throughout the world—wrote:My colleagues in Japan and Europe all feel strongly that the process and effect of Privatisation of the Port of Tyne will, at the very least, result in instability and uncertainty, which will damage confidence in the region, to the detriment of present and future inward investment.That is from a Japanese company that has invested heavily in the north-east.
A letter from Color Line, which operates from the international ferry terminal, shipping more than 100,000 passengers a year to Norway, said:We regard the Port of Tyne Authority in its present form as giving us very good support, assistance and service … We fear that any major changes in the ownership structure … could have a severe effect on our future operation.A letter from Banks, which is involved in opencast mining and is not likely to be entirely sympathetic to the views of Opposition Members, said:the Tyne Coal Terminal … we consider to be a most efficient and cost effective operation with which we are very pleased … As far as we are concerned the Status Quo is more than satisfactory".A letter from Stanton Grove, the paper handling company, said:The commercial awareness and enterprise of your staff was instrumental in the selection of the Tyne. We cannot see any advantage in privatisation".That is the verdict of the port users. 1231 Will the Minister tell us which port users are calling for the privatisation to take place? My understanding is that of 333 representations made to the Secretary of State, only four were strongly in favour of the privatisation—and those were from potential bidders.
I do not represent a constituency in the north-east and my area in the north-west is not directly affected by the privatisation, but I am concerned about the implications, as the compulsory privatisation of a major transport undertaking may prove a precursor to an attempt to privatise Manchester airport.
The Port of Tyne Authority is owned by a trust that is dedicated to meeting the needs of those who use the facility and reinvests the money that it makes for that purpose. In that sense, it is similar to Manchester airport which, despite being handicapped by Government restrictions, is ploughing back its profits in investment. If the airport were privatised, I fear that the new owners would milk it for short-term profits rather than invest in the future.
The examples of the Port of Tyne Authority and Manchester airport demonstrate that the quality of a company is affected not only by ownership, but by whether the management has a clear sense of direction, is innovative and runs the operation on sound business lines. That is the case with Manchester airport, the Post Office and the Port of Tyne Authority. I strongly believe that the Secretary of State and his colleagues should keep their hands off them.
§ 5.8 pm
§ Mr. David Clelland (Tyne Bridge)
This is a privatisation too far. I was tempted to say a bridge too far, because the river's bridges are as famous and as potent a symbol of the north as the Tyne itself. Indeed, my constituency is named after the most recognisable of the six main transport crossings between Gateshead and Newcastle.
One consequence of the Government's interference in the locality and the dash-for-cash mentality behind it is that the swing bridge may be permanently disabled and prevented from opening to allow vessels upstream. We are not talking about tall ships—even the local ferry boat cannot pass under the swing bridge unless it is open. Any hope of reviving business or pleasure traffic movements upstream of the bridge will be lost. With the proposed industrial developments along the river banks upstream of the swing bridge, who knows how valuable a transport corridor may be lost as road traffic congestion worsens.
One of the Tyne's many famous sons, Jimmy Nail, recently wrote a song about the Tyne called "Big River". He sings of the river's industrial past and its decline, but also about the spirit of the people and the conviction that the river will again become a centre of activity for the community along its banks. That is already becoming apparent, as the work and plans of the local authorities and development corporation come to fruition.
One line in Jimmy Nail's song goes:I was just a kid but it was mine—the coaly Tyne.Tynesiders look on it as their river. They consider the work of the Port of Tyne Authority as work done on their behalf. That is apparently a naive view in the eyes of the 1232 Government, because they propose that the authority and its publicly held assets should be sold to the highest bidder. Even the Government, in drafting the legislation that governs this process, at least paid lip service to the idea that the views of local people and organisations might be worth considering. They wrote into the legislation a requirement that views should be sought during a consultation period.
In the consultation process on the Port of Tyne Authority document and the Secretary of State's proposals, no fewer than 465 representations were made to the Secretary of State. Only four organisations favoured privatisation; all four were potential bidders for the port. Two of them have no previous history of interest in transport, let alone in ports, but a considerable interest in land and property.
My hon. Friends have given examples of representations made by businesses on the Tyne. The Tyne Port Users Association says:May we reiterate that it is the view of the majority of our members that the port must remain under its current status and continue to be established as a regional asset.We can see no advantages to force on the users of this port, a situation that is purely politically driven without any practical safeguards or protection as to its future.Warrant Distribution Ltd. says:We see no justification in commercial terms for privatising the Port at this time, and can only imagine that the Secretary of State's decision is based purely on political dogma.Apart from the responses from companies such as that, hon. Members from the region—at least Labour Members—asked to meet the Secretary of State to put our objections to him face to face. He did not find time to meet us, but we were given the privilege of meeting a Minister who sits in the House of Lords. We found it profoundly objectionable that the Members of Parliament who attended that meeting, who are natives of Tyneside and the north, should be told by an unelected, hereditary peer that he knew better than the Tyne's elected representatives what was good for the area. Our objections are shared by the overwhelming majority of people on Tyneside.
I ask Conservative Members—I know that there are not a lot of them—what is the value of a consultation if so huge a majority is completely ignored? The situation contrasts sharply with the Government's change of mind about Dover, which is not to be given the benefits that the hon. Member for Tynemouth (Mr. Trotter) outlined. Only two objections were made to the Dover scheme: one from the Queen Mother and one from Vera Lynn. They were considered more important than the 460 individuals, organisations and elected representatives on Tyneside who opposed this privatisation.
The reasons why Tyneside objects so powerfully to privatisation are not emotional, but practical. Even by their own criteria, the Government have no case for this privatisation. All the major stated policy objectives have already been met. My hon. Friend the Member for Oxford, East (Mr. Smith) went through them and I shall not repeat them. Privatisation threatens trade on the river, capital development and the security of the livelihoods of hundreds of workers. Most of all, it is not wanted by the people. I hope that there are still at least some Conservative Members who believe that the views of local people are important enough to be taken into account.
§ Mr. Stephen Byers (Wallsend)
It was informative and interesting to hear the Secretary of State speak in favour of the order. The bulk of his contribution had nothing to do with the forced privatisation of the Port of Tyne Authority. It was a Cook's tour of other ports in England and Scotland and an argument for the dogma that drives the Conservative party: the need to privatise everything. He would not address the specific proposals before the House, because he knows that there is no sensible or logical argument for compulsory privatisation of the authority. At risk is the success story of the authority over the past 10 years. It is being sacrificed on the political altar of privatisation.
As my right hon. Friend the Member for Jarrow (Mr. Dixon) said, 15 or 20 years ago many hon. Members would not have been prepared to support the continuation of the Port of Tyne Authority. It was inward-looking, would not work in partnership with the local authorities or local industry and was slow at developing strategic parcels of land on the banks of the River Tyne. I remember some 17 years ago, as deputy leader of North Tyneside council, being responsible for making representations to the authority and arguing that it should make progress on developing the river. It was not supportive of those representations. However, the Port of Tyne Authority of 1996 is a different beast from the authority of the early 1980s. It is a body that reflects the needs and aspirations of the local community, that makes a profit and that has played a key part in assisting the region to overcome the difficulties that have been imposed on it by the Government's economic and social policies.
The Secretary of State failed to address several of the key issues that were raised in the representations of local people and communities and the authority. He failed to address properly employment protection or pensions. He failed to address the way in which profits could be stripped out of the port and used for different purposes, diverting money that is made by the port and is currently ploughed back to make it an even greater success story. That money may be used for whatever purpose the successor body determines; it is being taken away from the Tyne, which desperately needs regeneration and investment. It largely needs them because of the failure of the Conservative Government's policies.
The Government are doing what they always do with privatisations. Two principles motivate their privatisation policy: first, to pay off their friends who donate to Tory party funds; secondly, the triumph of political dogma over reason. The compulsory privatisation of the Port of Tyne Authority shows them in combination as the driving motives behind the order. If the Government win tonight and force compulsory privatisation of the Port of Tyne Authority, they will stand condemned not only by those who represent the Tyne but by our communities and by the northern region in general.
§ Ms Glenda Jackson (Hampstead and Highgate)
I pay tribute to my right hon. Friend the Member for Jarrow (Mr. Dixon) and to my hon. Friends the Members for Tyne Bridge (Mr. Clelland) and for Wallsend (Mr. Byers), who have so passionately defended their constituencies.
1234 When the Ports Bill was introduced in the House in 1991, my right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) said:There are always grounds for change in the ports industry; the argument is about the nature of that change and the purpose of it."—[Official Report, 28 January 1991; Vol. 184, c. 683.]That acid test holds true today. Will this enforced privatisation be a change for the better or, as the management, work force and customers claim, a change for the worse?
The Government claim that enforced privatisation brings three benefits. It reduces overmanning and increases productivity; increases competitiveness and investment in the ports and their infrastructure; and enables ports to extend the scope of their commercial activities, and make better use of surplus land and other assets available to them.
The aim is to achieve better productivity, more investment and a greater expansion of a port's commercial activities. Under the Government's criteria, they are hallmarks of a successful port facility. How does the port of Tyne square up to those tests?
Let us consider the first test of overmanning and productivity. In 1988, the number of workers employed by the port of Tyne exceeded 500; today, that figure is just over 200. In 1988, the payroll costs of the port stood at £7 million annually; but, over the past six years, those costs have fallen by more than 20 per cent. No one in the Labour party takes any pleasure from those figures. Only a fool would rejoice in job losses of that scale, but we appreciate the competitive nature of the ports industry and the requirement of the port of Tyne management to keep their cost base to a minimum. They have done that. They have drastically reduced labour costs and significantly increased productivity without the heavy hand of enforced privatisation. The efficiencies that the Government define as indicative of a successful port have already been achieved by the port of Tyne.
The Government's second benchmark is the achievement of greater competition and investment. How has the port of Tyne, starved of the perceived benefits of privatisation, performed in that regard? As the Secretary of State said, in the first two years following privatisation, the five privatised trust ports increased their pre-tax surplus by an average of 97 per cent. The right hon. Gentleman attempted to dismiss the point made by my hon. Friend the Member for Oxford, East (Mr. Smith) that, over the same period, the port of Tyne had increased its pre-tax surplus by 172 per cent. The port has also embarked upon a capital investment programme worth more than £20 million. Does that programme expose the port as an enterprise failing to develop its full potential? Of course not. It exposes it as an enterprise that is growing and thriving, and the last thing that any such enterprise requires is interference from the Government.
The port of Tyne has already met two of the Government's criteria for a successful port facility. The third one is that a port should stimulate the development of land surplus to its requirements. In 1990, more than 100 hectares of the port's land around the Albert Edward dock was vacant. Today, just 23 hectares of it remain vacant, but they are reserved for operational and port-related use. The number of tenanted areas has 1235 increased by 72 per cent. over the same period. The remaining port land no longer required for port purposes is being developed as the Royal Quays project. That project will include the development of residential housing, a large public park and a vast expansion of leisure and shopping facilities. That project should be well known to the Secretary of State, because, when he was a Housing Minister, he had the honour of launching work on it.
The port of Tyne has achieved the efficiency gains sought by the Government. It has earned profits and sustained an investment programme greater than those of the privatised trust ports. It has a development and diversification programme that enjoys the personal stamp of approval of the Secretary of State. Why, then, do the Government insist on placing all that at risk by forcing through the unwanted privatisation? Will enforced privatisation represent a good deal for the taxpayer?
In 1992, the port of Medway was sold for £29 million, of which £13 million was returned to the taxpayer. Eighteen months later, it was resold for £103 million, representing a loss to the taxpayer of £90 million on the total sale, or £50 million based on the Government's levy formulae. In addition, of the ?169 million owed to the Government after the sale of all five trust ports, just £54 million had been recovered by March 1992. In March 1993, by the time the Government caught up with the remaining £114 million that they were owed, the loss of interest amounted to a further loss to the taxpayer of £4.5 million. We can safely discount benefit to the taxpayer as a reason for proceeding with the privatisation of the port of Tyne.
When the Ports Bill was introduced, the then Secretary of State, the right hon. and learned Member for Edinburgh, Pentlands (Mr. Rifkind), placed great importance on the consultation process. He said:it would not automatically follow that other ports falling within the category would be privatised. That would depend on the response of the port and of other local interests." —[Official Report, 28 January 1991; Vol. 184, c. 675.]Why is the current Secretary of State not showing the same regard for the port and its users? According to his Department's list of representations, 307 were received, of which 292 were opposed to privatisation along the lines currently proposed. The Port of Tyne Authority has received a further 330 representations, of which 315 were opposed to the Government's privatisation.
Several hon. Members have referred to the letter from Mr. K. Mori, the senior managing director of Mitsui OSK Lines, in which he referred to his concerns. He values his contacts with the port of Tyne so much that his company has named one of its new container vessels Tyne.
Are the Government truly prepared to put the understanding, trust and levels of inward investment referred to in Mr. Mori's letter at risk because of their ideological dogma? Despite the arguments put by the hon. Member for Hexham (Mr. Atkinson), that is what the privatisation is all about. It is not about making the port of Tyne more efficient, more profitable or more commercially diverse. It is not about providing a good 1236 deal for the taxpayer. It has nothing do with reflecting the needs of the port's management, work force or customers.
The privatisation proposal is simply the Government's desperate attempt to shore up their bankrupt principle that privatisation is not just the best option, but the only one. The Government do not care how many jobs are lost, how much investment is put at risk and how many successful enterprises will be forced to the wall in the process.
When hon. Members come to vote on the motion, they must ask themselves whether they truly want to place the success of the port of Tyne at risk for nothing more than ideological dogma.
§ The Parliamentary Under-Secretary of State for Transport (Mr. John Bowis)
First, I should like to thank everyone who has taken part in the debate, in particular the Opposition spokeswoman, the hon. Member for Hampstead and Highgate (Ms Jackson). The last time we met across the Dispatch Box, I was concerned about the time taken up in the debate. Today, I congratulate her on doing a "Patrick Moore", given the speed with which she delivered her speech. We can now get on with the rest of the debate, having had that whirr of tirade and ideological flourish from the hon. Lady.
This has been a useful and revealing debate. We have seen ideology flow back through the window of the parliamentary Labour party as well as heard genuine concern expressed by hon. Members on both sides of the House. My right hon. Friend the Secretary of State went out of his way to answer those concerns, and I shall try to do the same.
I should like to respond to the points made by the hon. Member for Tyne Bridge (Mr. Clelland)—I was tempted to call him the hon. Member for swing bridge. I believe that he is confused on the swing bridge proposal. The proposal to remove the duty to maintain and repair the machinery of the open moving platform on the swing bridge came from the Port of Tyne Authority. He can rest assured that it is not part of our proposal, and will not be a consequence of the privatisation.
I always listen to the right hon. Member for Jarrow (Mr. Dixon) with great respect and interest. He raised a number of points based on his knowledge of the area, and expressed particular concern about the assets of the port. There is no evidence of asset stripping at the ports.
§ Mr. Bowis
Perhaps the hon. Lady would like to provide any evidence she has of such asset stripping. Evidence suggests the contrary: in each case, the new regime has led to the development and improvement of facilities. My right hon. Friend was able to quote from newspapers and reports that highlight that fact. I repeat: any gain on land disposed of during the first 10 years after privatisation, whether by way of sale or long lease, will be subject to a clawback levy, which will be payable on a sliding scale. It will be set at 25 per cent. for the first five years, 20 per cent. for the sixth and seventh years and 10 per cent. for the eighth to 10th years.
1237 The right hon. Member for Jarrow also asked what was the point of representation. The point is that the Government listen. I am sure that the right hon. Gentleman listened carefully to what my right hon. Friend said, so he will he aware of the evidence that my right hon. Friend took on board views expressed in those representations. He made specific pledges in terms of the employment and pension interests of the work force at the port. In that regard, he has offered to listen to representations on those matters. He also acknowledged that he did not accept certain other representations and gave the reasons why they were not relevant—either they were unnecessary, because of previous legislation, or they would have damaged the future health of the port.
The hon. Member for Oxford, East (Mr. Smith) made three main points. He, too, talked about consultation and, like other hon. Members, balanced the numbers of representations received. I have to tell him that the overall number of letters and representations was small, and I hope he will not be too disappointed to learn that 129 came in a standard form that had clearly been prepared and supplied by the authority itself. He may want to know how I can be so sure of that—it was because so many of them came in a Port of Tyne Authority envelope. There was evidence of the authority's view and we looked carefully at that view and at the others that were expressed.
The hon. Gentleman expressed concern about the uncertainty, to which my response is, "Fine—so let's get on with it." The sooner the order has been passed and we can move to the next step, consulting everyone as we go, the sooner we can end that uncertainty.
The hon. Gentleman said that this privatisation was being done for the sake of privatisation, but that is not true. It is being done for the sake of the port of Tyne, because we believe that it can be managed even better in the private sector.
I pay tribute to my hon. Friend the Member for Tynemouth (Mr. Trotter) for his rigorous analysis. He looked with a questioning eye at the whole proposal and came down in its favour. He pointed out that the port of Tyne is no longer in the list of top ports and showed that, although Nissan and other inward investment projects have shown the potential in the area, it needs a new boost.
My hon. Friend confirmed that employees are well protected by legislation and made an especially important point about employee share ownership. That is one of the great benefits of the proposal, because without shares there can be no employee share ownership. He rightly highlighted that as a benefit to those working in the port. He also mentioned the disposal of operational land. That cannot, of course, be disposed of without the approval of the planning authority.
My hon. Friend referred to fair charges and the right of appeal to the Secretary of State, and pointed out that that right has not been exercised in respect of those ports that have been privatised so far. That is an encouraging message and my hon. Friend's analysis was fair.
1238 My hon. Friend the Member for Hexham (Mr. Atkinson) said, rightly, that we have heard it all before—we hear Opposition Members' shock horror and their ideological frisson and then everything turns out well. In a few years' time, they will turn around and say that they were never really against the plan—a few years after that, they will try to claim parentage as well.
All hon. Members on both sides of the House share a wish to see the port of Tyne flourish. We believe that that is most likely to occur if the port is in the private sector. That is no criticism of the port of Tyne's past or its recent record—it is simply a fact. The port can do better, it will do better and, with this order, we will make it happen sooner.
§ Question put:—
§ The House divided: Ayes 234, Noes 222.1241
|division No. 27]||[5.33 pm|
|Ainsworth, Peter (E Surrey)||Davis, David (Boothferry)|
|Alexander, Richard||Day, Stephen|
|Alison, Michael (Selby)||Deva, Nirj Joseph|
|Allason, Rupert (Torbay)||Devlin, Tim|
|Amess, David||Dicks, Terry|
|Arbuthnot, James||Dorrell, Stephen|
|Arnold, Jacques (Gravesham)||Douglas-Hamilton, Lord James|
|Ashby, David||Dover, Den|
|Atkinson, David (Bour'mth E)||Dykes, Hugh|
|Atkinson, Peter (Hexham)||Evans, David (Welwyn Hatf'ld)|
|Baker, Kenneth (Mole V)||Evans, Nigel (Ribble V)|
|Batiste, Spencer||Evans, Roger (Monmouth)|
|Bellingham, Henry||Evennett, David|
|Beresford, Sir Paul||Faber, David|
|Biffen, John||Fabricant, Michael|
|Body, Sir Richard||Fenner, Dame Peggy|
|Bonsor, Sir Nicholas||Field, Barry (Isle of Wight)|
|Booth, Hartley||Fishbum, Dudley|
|Boswell, Tim||Forman, Nigel|
|Bottomley, Peter (Eltham)||Forth, Eric|
|Bowden, Sir Andrew||Fox, Dr Liam (Woodspring)|
|Bowis, John||Fox, Sir Marcus (Shipley)|
|Boyson, Sir Rhodes||French, Douglas|
|Brandreth, Gyles||Fry, Sir Peter|
|Brazier, Julian||Gale, Roger|
|Brown, Michael (Brigg Cl'thorpes)||Gallie, Phil|
|Browning, Mrs Angela||Gardiner, Sir George|
|Bruce, Ian (S Dorset)||Gamier, Edward|
|Bums, Simon||Gill, Christopher|
|Burt, Alistair||Goodlad, Alastair|
|Butler, Peter||Goodson-Wickes, Dr Charles|
|Butterfill, John||Gorman, Mrs Teresa|
|Carlisle, Sir Kenneth (Linc'n)||Grant, Sir Anthony (SW Cambs)|
|Carrington, Matthew||Greenway, Harry (Ealing N)|
|Carttiss, Michael||Greenway, John (Ryedale)|
|Cash, William||Griffiths, Peter (Portsmouth N)|
|Channon, Paul||Gummer, John|
|Chapman, Sir Sydney||Hague, William|
|Clappison, James||Hamilton, Sir Archibald|
|Clarke, Kenneth (Rushcliffe)||Hamilton, Neil (Tatton)|
|Clifton-Brown, Geoffrey||Hanley, Jeremy|
|Colvin, Michael||Hannam, Sir John|
|Congdon, David||Hargreaves, Andrew|
|Conway, Derek||Haselhurst, Sir Alan|
|Coombs, Anthony (Wyre F)||Hawkins, Nick|
|Coombs, Simon (Swindon)||Hawksley, Warren|
|Cope, Sir John||Hayes, Jerry|
|Cormack, Sir Patrick||Heald, Oliver|
|Couchman, James||Heathcoat-Amory, David|
|Cran, James||Hendry, Charles|
|Currie, Mrs Edwina||Heseltine, Michael|
|Curry, David||Hicks, Sir Robert|
|Davies, Quentin (Stamf'd)||Higgins, Sir Terence|
|Hogg, Douglas (Grantham)||Rifkind, Malcolm|
|Horam, John||Robathan, Andrew|
|Hordem, Sir Peter||Roberts, Sir Wyn|
|Howell, Sir Ralph (N Norfolk)||Robinson, Mark (Somerton)|
|Hughes, Robert G (Harrow W)||Roe, Mrs Marion|
|Hunt, Sir John (Ravensb'ne)||Rowe, Andrew|
|Hunter, Andrew||Rumbold, Dame Angela|
|Jackson, Robert (Wantage)||Sackville, Tom|
|Jessel, Toby||Sainsbury, Sir Timothy|
|Johnson Smith, Sir Geoffrey||Shaw, David (Dover)|
|Jones, Gwilym (Cardiff N)||Shephard, Mrs Gillian|
|Jones, Robert B (W Herts)||Shepherd, Sir Colin (Heref'd)|
|Jopling, Michael||Shersby, Sir Michael|
|Key, Robert||Sims, Sir Roger|
|King, Tom||Skeet, Sir Trevor|
|Kirkhope, Timothy||Smith, Sir Dudley (Warwick)|
|Knapman, Roger||Soames, Nicholas|
|Knight, Dame Jill (Edgbaston)||Speed, Sir Keith|
|Kynoch, George||Spencer, Sir Derek|
|Lait, Mrs Jacqui||Spicer, Sir Jim (W Dorset)|
|Lamont, Norman||Spicer, Sir Michael (S Worcs)|
|Lang, Ian||Spink, Dr Robert|
|Lawrence, Sir Ivan||Spring, Richard|
|Legg, Barry||Sproat, lain|
|Leigh, Edward||Stanley, Sir John|
|Lennox-Boyd, Sir Mark||Steen, Anthony|
|Lidington, David||Stephen, Michael|
|Lilley, Peter||Stem, Michael|
|Lloyd, Sir Peter (Fareham)||Stewart, Allan|
|Lord, Michael||Streeter, Gary|
|Luff, Peter||Sumberg, David|
|Lyell, Sir Nicholas||Sweeney, Walter|
|MacGregor, John||Sykes, John|
|MacKay, Andrew||Tapsell, Sir Peter|
|Maclean, David||Taylor, Sir Teddy|
|McLoughlin, Patrick||Temple-Morris, Peter|
|McNair-Wilson, Sir Patrick||Thomason, Roy|
|Madel, Sir David||Thompson, Sir Donald (Calder V)|
|Major, John||Townend, John (Bridlington)|
|Malone, Gerald||Townsend, Cyril D (Bexl'yh'th)|
|Mans, Keith||Trend, Michael|
|Marlow, Tony||Trotter, Neville|
|Marshall, Sir Michael (Arundel)||Vaughan, Sir Gerard|
|Martin, David (Portsmouth S)||Viggers, Peter|
|Merchant, Piers||Waldegrave, William|
|Mitchell, Andrew (Gedling)||Walden, George|
|Moate, Sir Roger||Walker, Bill (N Tayside)|
|Montgomery, Sir Fergus||Ward, John|
|Nelson, Anthony||Wardle, Charles (Bexhill)|
|Neubert, Sir Michael||Waterson, Nigel|
|Newton, Tony||Watts, John|
|Nicholls, Patrick||Wells, Bowen|
|Nicholson, David (Taunton)||Whitney, Ray|
|Norris, Steve||Whittingdale, John|
|Oppenheim, Phillip||Wiggin, Sir Jerry|
|Ottaway, Richard||Willetts, David|
|Page, Richard||Wilshire, David|
|Patnick, Sir Irvine||Winterton, Mrs Ann (Congleton)|
|Pawsey, James||Winterton, Nicholas (Macclesf'ld)|
|Peacock, Mrs Elizabeth||Wolfson, Mark|
|Porter, David||Yeo, Tim|
|Portillo, Michael||Young, Sir George|
|Renton, Tim||Tellers for the Ayes:|
|Richards, Rod||Mr. Timothy Wood and|
|Riddick, Graham||Mr. Sebastian Coe.|
|Anger, Nick||Barron, Kevin|
|Ainsworth, Robert (Cov'try NE)||Battle, John|
|Anderson, Ms Janet (Ros'dale)||Bayley, Hugh|
|Armstrong, Ms Hilary||Beith, A J|
|Ashton, Joseph||Bell, Stuart|
|Austin-Walker, John||Benn, Tony|
|Banks, Tony (Newham NW)||Bennett, Andrew F|
|Barnes, Harry||Benton, Joe|
|Bermingham, Gerald||Hodge, Ms Margaret|
|Berry, Roger||Hoey, Miss Kate|
|Betts, Clive||Hoon, Geoffrey|
|Blunkett, David||Howarth, Alan (Stratf'd-on-A)|
|Boateng, Paul||Howarth, George (Knowsley N)|
|Bradley, Keith||Hoyle, Doug|
|Bray, Dr Jeremy||Hughes, Kevin (Doncaster N)|
|Brown, Nicholas (Newcastle E)||Hughes, Robert (Ab'd'n N)|
|Burden, Richard||Hughes, Roy (Newport E)|
|Byers, Stephen||Hughes, Simon (Southwark)|
|Callaghan, Jim||Hutton, John|
|Campbell, Mrs Anne (C'bridge)||Illsley, Eric|
|Campbell, Menzies (Fife NE)||Jackson, Ms Glenda (Hampst'd)|
|Campbell, Ronnie (Blyth V)||Jackson, Mrs Helen (Hillsborough)|
|Campbell-Savours, D N||Jamieson, David|
|Canavan, Dennis||Jenkins, Brian D (SE Staffs)|
|Cann, Jamie||Jones, Barry (Alyn & D'side)|
|Carlile, Alex (Montgomery)||Jones, Jon Owen (Cardiff C)|
|Clapham, Michael||Jones, Dr L (B'ham Selly Oak)|
|Clark, Dr David (S Shields)||Jones, Martyn (Clwyd SW)|
|Clelland, David||Jones, Nigel (Cheltenham)|
|Clwyd, Mrs Ann||Jowell, Ms Tessa|
|Cohen, Harry||Kaufman, Gerald|
|Cook, Frank (Stockton N)||Keen, Alan|
|Corbyn, Jeremy||Kennedy, Charles (Ross C & S)|
|Corston, Ms Jean||Kennedy, Mrs Jane (Broadgreen)|
|Cousins, Jim||Khabra, Piara S|
|Cox, Tom||Kilfoyle, Peter|
|Cummings, John||Lestor, Miss Joan (Eccles)|
|Cunliffe, Lawrence||Lewis, Terry|
|Cunningham, Jim (Cov'try SE)||Litherland, Robert|
|Dafis, Cynog||Livingstone, Ken|
|Dalyell, Tam||Lloyd, Tony (Stretf'd)|
|Davies, Bryan (Oldham C)||Llwyd, Elfyn|
|Davies, Chris (Littleborough)||Loyden, Eddie|
|Davies, Denzil (Llanelli)||Lynne, Ms Liz|
|Davies, Ron (Caerphilly)||McAllion, John|
|Davis, Terry (B'ham Hodge H)||McKelvey, William|
|Denham, John||Mackinlay, Andrew|
|Dixon, Don||McLeish, Henry|
|Dobson, Frank||Maclennan, Robert|
|Dowd, Jim||McNamara, Kevin|
|Dunwoody, Mrs Gwyneth||MacShane, Denis|
|Eagle, Ms Angela||McWilliam, John|
|Eastham, Ken||Madden, Max|
|Etherington, Bill||Maddock, Mrs Diana|
|Evans, John (St Helens N)||Mahon, Mrs Alice|
|Faulds, Andrew||Mandelson, Peter|
|Field, Frank (Birkenhead)||Marek, Dr John|
|Flynn, Paul||Marshall, David (Shettleston)|
|Foster, Derek||Marshall, Jim (Leicester S)|
|Fraser, John||Martin, Michael J (Springbum)|
|Fyfe, Mrs Maria||Martlew, Eric|
|Gapes, Mike||Meacher, Michael|
|Garrett, John||Meale, Alan|
|Gerrard, Neil||Michael, Alun|
|Gilbert, Dr John||Michie, Bill (Shef'ld Heeley)|
|Godman, Dr Norman A||Milburn, Alan|
|Godsiff, Roger||Miller, Andrew|
|Golding, Mrs Llin||Morgan, Rhodri|
|Gordon, Ms Mildred||Morley, Elliot|
|Grant, Bernie (Tottenham)||Morris, Alfred (Wy'nshawe)|
|Griffiths, Nigel (Edinburgh S)||Morris, Ms Estelle (B'ham Yardley)|
|Griffiths, Win (Bridgend)||Morris, John (Aberavon)|
|Grocott, Bruce||Mudie, George|
|Gunnell, John||Mullin, Chris|
|Hain, Peter||Murphy, Paul|
|Hall, Mike||O'Brien, Mike (N Warks)|
|Hanson, David||O'Brien, William (Normanton)|
|Hardy, Peter||O'Hara, Edward|
|Harman, Ms Harriet||Olner, Bill|
|Harvey, Nick||Orme, Stanley|
|Hattersley, Roy||Pickthall, Colin|
|Heppell, John||Pike, Peter L|
|Hill, Keith (Streatham)||Powell, Sir Raymond (Ogmore)|
|Hinchliffe, David||Prentice, Gordon (Pendle)|
|Prescott, John||Steinberg, Gerry|
|Primarolo, Ms Dawn||Stevenson, George|
|Purchase, Ken||Stott, Roger|
|Quin, Ms Joyce||Sutcliffe, Gerry|
|Radice, Giles||Taylor, Mrs Ann (Dewsbury)|
|Randall, Stuart||Thompson, Jack (Wansbeck)|
|Raynsford, Nick||Thumham, Peter|
|Rendel, David||Timms, Stephen|
|Roche, Mrs Barbara||Tipping, Paddy|
|Rogers, Allan||Touhig, Don|
|Rooker, Jeff||Turner, Dennis|
|Ross, William (E Lond'y)||Tyler, Paul|
|Rowlands, Ted||Walker, Sir Harold|
|Ruddock, Ms Joan||Wallace, James|
|Sedgemore, Brian||Walley, Ms Joan|
|Sheerman, Barry||Wardell, Gareth (Gower)|
|Shore, Peter||Wareing, Robert N|
|Short, Ms Clare||Wicks, Malcolm|
|Simpson, Alan||Williams, Alan (Swansea W)|
|Skinner, Dennis||Williams, Alan W (Carmarthen)|
|Smith, Andrew (Oxford E)||Winnick, David|
|Smith, Chris (Islington S)||Wise, Mrs Audrey|
|Smith, Llew (Blaenau Gwent)||Worthington, Tony|
|Smyth, Rev Martin (Belfast S)||Wright, Dr Tony|
|Snape, Peter||Young, David (Bolton SE)|
|Spearing, Nigel||Tellers for the Noes:|
|Spellar, John||Mr. Greg Pope and|
|Steel, Sir David||Mrs. Bridget Prentice.|
§ Question accordingly agreed to.
That the draft Port of Tyne Authority (Transfer of Undertaking) Order 1996, which was laid before this House on 6th November, be approved.