Residential Boat Owners (London) (Hansard, 24 November 1997)

§ Dr. Vincent Cable (Twickenham)

It is a pleasure to raise this matter on the Adjournment, albeit at a very late hour, and to resume a dialogue with the Minister for Transport in London, albeit on a very different subject. Perhaps I can summarise briefly the essence of my concern. I am concerned with the behaviour of the Port of London Authority—a public trust and a statutory public authority—which has been behaving irresponsibly. It has imposed large increases in mooring charges—in effect, rents on boat dwellers—on the tidal waters of the Thames in a way that is likely to cause considerable distress. The increases will cause many residential boat owners to leave their accommodation because they are simply unable to pay owing to sharp increases for which there has been no consultation.

I ask the Minister to have a fresh look at whether she can intervene informally, not by using her statutory authority but by using her good offices to bring the parties together to seek an amicable resolution. Failing that—and if the PLA continues to behave in an arbitrary and unsatisfactory way—I ask her to use her statutory authority in terms of the appointment of the non-executive directors of the PLA. Looking further ahead, I ask her to look at whether a more effective system of regulation— possibly an ombudsman—needs to be introduced to protect people from the arbitrary misuses of authority.

This is important, and goes way beyond my narrow constituency concern. There is a broad issue of principle here, and the Labour party's election commitment to provide security in housing is very much part of that. A group of people have been rendered extremely insecure as a result of a large increase in what is effectively their rent. Many already have insecure tenure arrangements, as the arrangements that pertain to boat owners are often not as secure as for those with normal property relationships. The already high level of insecurity will be enhanced by these large increases.

I am speaking on behalf of a substantial number of boat owners in my constituency—approximately 230—the majority of whom are affected by the increases. However, there is a larger community in the country—about 30,000 people occupying 15,000 boats—who will be following this discussion with considerable interest.

The broader interest that I want to highlight relates not simply to the particular problem of the boat dwellers but to the question of the accountability of quangos—in this case, it is a completely, rather than quasi-autonomous, agency, and could be called a "cango"—and the ability of the Government to call them to account for unsatisfactory behaviour. In a letter to me, the Minister said that this was not a matter in which the Department played a part, and that the changes in question were a commercial matter for the Port of London Authority. I would beg to differ: that is, in part, an error. If it is true, it is an extraordinary statement of the ministerial approach to accountability. The PLA is a public body and must be brought to account, and there are mechanisms by which the Government can do this. Let me give a little background. The system of tenure on the Thames and other waterways is extremely 748 complex. Many authorities are involved, but I am concerned only with the Port of London Authority, which was established in 1968. It was given a clear statutory duty; not, as the Minister has suggested, to behave commercially—that is not the language of the Act. The Act says that the PLA should levy the best charges that can reasonably be obtained …. excluding any elements of monopoly power. The principles behind that stricture have been observed for the past 10 years with an amicable arrangement between the Residential Boat Owners Association and the PLA. For 10 years, a general formula, based on the lengths of boats, was applied. It was a simple administrative procedure with relatively low costs which was accepted by all parties. What has caused that to break down is that the PLA has arbitrarily and without consultation imposed a new system without any redress for the boat owners.

Our objections fall into two parts—they relate partly to the process and partly to the charges. As regards the process, the PLA argues—this is part of the Act—that the boat owners can resort to arbitration. In correspondence with me and some of the boat owners, the Minister seems to feel that the concept of arbitration in this case is reasonable. I ask her to consider why, in practice, it is not. Many boat owners cannot resort to arbitration, including the substantial number who are, in effect, tenants of licensees and so have no direct access to arbitration. That is the most vulnerable category, because they can be asked to quit their moorings at 28 days' notice. They are very insecure. I visited some of them last Friday; many were reluctant even to be photographed because of their insecurity. They are not able to pursue the arbitration route.

There is the broader issue of the difficulty of trying to introduce arbitration into such disputes. I shall draw an analogy. If an employer cut the wages of his workers by 50 per cent. and said, "Fine, if you don't like it, you can always have individual arbitration on your individual wages," we would consider that to be a breach of the concept of collective bargaining. Surely the Minister, in her political capacity, accepts that collective bargaining is essential to protect vulnerable groups.

If one of the water authorities increased charges by 200 per cent., 300 per cent. or 400 per cent.—which is the size of increase that many boat dwellers now face—and said, "If individual water consumers want to dispute this, they can take us to individual arbitration; they can take their solicitor along and fight this in the courts," we would regard that as a gross abuse and grossly unsatisfactory. We have regulators to manage such a problem. Asking individual boat owners to pursue the route of individual arbitration is totally inappropriate to the problem. The process is wrong and arbitrary, and, I would argue, an example of maladministration.

I referred to the terms of the 1968 Act. The Port of London Authority is not required merely to observe commercial principles. The Minister is right to point to the fact that it must be commercial, but it must avoid the misuse of monopoly power. It is clear that in this case there is a monopoly, because there is a gross excess demand for moorings. Individual boat dwellers are not able to pull anchor and go somewhere else: they do not have that discretion, so we are talking about an abuse of a monopoly.

749 An important factor is that the increased charges in no way reflect any improvement in services. I visited some of the moorings at the end of last week, and saw that large amounts of driftwood had accumulated over months. The Port of London Authority makes no attempt to provide services to those people. That stands in considerable contrast to some of the other authorities. The waterways authority imposes charges that are somewhat higher than the present PLA charges, although much less than the new ones, but, unlike the PLA, it offers in return a comprehensive range of services on thousands of miles of canals and rivers.

The Minister wrote to me and explained that she expected the Port of London Authority to operate commercially. What exactly does that mean? I have a copy of the PLA's annual report and accounts, which contains about 10 pages of balance sheets and cash-flow statements. There is not a single reference to the charges earned from boat owners. It is an utterly trivial element within the overall accounting framework of that corporation. That is not surprising. According to my rough calculation, the additional revenue that it will earn from these steep increases is about £10,000, which is ridiculously small for an organisation with a turnover of £20 million: it barely pays for half the salary of one of its non-executive directors. It is a trivially small part of its overall commercial operation. The imposition of this increase was an oversight by top management and had little to do with hard commercial principles. If the PLA were seriously interested in applying commercial principles, it would address itself to anomalies such as the fact that pleasure craft are not charged navigation duties.

I now come to what the Minister can do to alleviate the situation. The least that she can do—not acting in a statutory capacity but simply as a reasonable person who has oversight, albeit indirectly, of the Port of London Authority—is to call in the parties to get them to discuss matters, as we and the Residential Boat Owners Association have requested. I find it difficult to fathom why she is reluctant to do so. I do not know whether she feels that I would be bringing along a group of roughnecks who will break the crockery at her Department and behave irresponsibly. I remind her that the honorary president of the association is Madam Speaker. It is a respectable organisation and its members simply wish to sit down and discuss matters with the PLA.

We are asking the Minister, in a reasonable tone, simply to hold a conversation. If she finds that difficult and if the PLA persists in imposing highly unreasonable charges, she might consider the use of her statutory power, as she does have some. That power lies in the appointment of the non-executive directors. I remind her who some of those people are. They were appointed under the previous Government and bear their stamp. For example, the chairman, Sir Brian Shaw, is paid £50,000 a year for a part-time job, which he doubles up with being chairman of the Automobile Association and a director of Enterprise Oil. The gentleman who was probably directly responsible for the increases is a Mr. C. W. Jonas. He has a £19,000 part-time salary and combines that work with being a director of Railtrack.

Those gentlemen have absolutely no background whatever in the sort of problems that I am describing— the problems of managing a sensitive relationship with 750 a group of home owners on the Thames. Their whole background is in commercial shipping—no doubt they are very competent at that. I ask the Minister to try to impose some of her authority on the PLA by asking one or other of those directors to stand down and, perhaps, to be replaced by someone who is a little more aware of the concerns of the houseboat owners.

Finally, as I do not want to prolong proceedings all night, I must ask the Minister to think about some of the long-term and wider implications of the issue. We have here a classic case of a public organisation with a very substantial monopoly power that is able to impose its will; what is required is either a regulator, or at the very least some form of ombudsman as a court of appeal. Neither exists in this case. Clearly, there is a strong case for a change of governance to bring greater accountability to bear.

I ask the Minister to study all those options but in the first instance, to look again—she has already rejected this option—at how she can intercede and produce more reasonable treatment in this case.

§ Ms Jackson

Thank you, Mr. Deputy Speaker.

It may be helpful to the House if I say something about the constitution and statutory powers of the Port of London Authority, before dealing with the authority's relationship with residential boat owners on the river.

The PLA is the statutory harbour authority for the River Thames. It is a trust port with statutory responsibility for conservancy of the tidal River Thames. It owns much of the river bed and foreshore. The statutory provisions relating to the PLA are set out in the Port of London Act 1968. Under that Act, the PLA provides navigational services and is responsible for maintaining shipping channels, moorings and navigation lights. The authority is also responsible for licensing river works. In the case of houseboats, works licences are issued to cover the mooring points.

With regard to the hon. Gentleman's points about requiring changes to the PLA, as I am sure he is aware the Department is conducting a review of trust ports. Accountability is one of the important factors that is being examined. We are also looking at the relationship to be established between the PLA and our proposed Greater London authority.

The PLA funds statutory functions by charging for services provided, including the issuing of works licences. The 1968 Act requires the charge for licences to be the best consideration that can reasonably be obtained having regard to all the circumstances of the case. The PLA regards that as "the market rate". Section 67 of the Act provides for disputes regarding charges to be considered by an independent arbitrator appointed by the president of the Royal Institution of Chartered Surveyors.

751 Arbitration in such cases should be possible at a reasonable cost to all parties involved, as the arbitrator will be able to assess the appropriateness of the charges being disputed without the need for a detailed legal case. I understand that it has rarely been necessary to resort to arbitration, as it has almost always been possible to reach a commercial agreement by negotiation.

There are 234 residential craft moored on the tidal Thames within the PLA's jurisdiction. Those craft range from floating, purpose-built two-storey houses and bungalows to Dutch-type barges, canal narrow boats and various other vessel conversions with much less living space. Residential craft are mainly concentrated on licensed moorings on both banks of the river between Cheyne walk in Chelsea and Swan island in Twickenham.

Six licensees have negotiated long-term agreements with the PLA's agents in respect of 99 of those craft. Fees have been set and reassessment criteria established for 20-to-60-year terms. A further 105 residential craft are moored at 11 separate locations on bulk licences held by seven licensees. The remaining 30 craft are held on river works licences granted to 23 individual licensees.

Thus, the current 234 moorings are licensed to 36 licensees. That means that the vast majority of occupiers are tenants of the licence holder. In those cases, there is no agreement whatever between the occupier of the boat and the Port of London Authority.

I shall now deal with the current dispute between boat owners and the Port of London Authority. In 1986, the PLA consulted the Residential Boat Owners Association and, at that time, arrangements were made for a rate per foot length to be applied to all residential craft moored on the tidal Thames and linked to the annual retail prices index. That arrangement continued until 1993, when the PLA gave notice to licence holders that a review would be undertaken in 1997.

In recent years, a number of new residential mooring developments have been licensed and the PLA's chartered surveyor agents have negotiated long-term agreements with new licensees. The current annual consideration agreements are for greater sums than those paid under the 1986 arrangements. In addition, the nature of houseboats has changed to some degree, with purpose-built floating houses and bungalows now appearing on residential moorings up and down the Thames.

The PLA was advised that an assessment based solely on the length of craft was no longer appropriate, and was not in accordance with the PLA's obligation to obtain the best consideration. Charging by craft length did not produce a market rate as it took no account of the amount of living area available in each dwelling.

Ninety-nine moorings are not subject to the current round of reassessments. Of the 135 that are currently being re-assessed, some 20 are licensed to individuals. To date, notice of the revised annual charge has been given to two bodies and three individuals in relation to 49 craft. The PLA has explained to those concerned the procedure for making objections to the charges. The 752 PLA's assessor would discuss the grounds for the objection with the licensee and, failing an agreement on the annual sum, an arbitrator would then be appointed, as provided for in the Port of London Act 1968.

All those so far reassessed have formally objected in accordance with the procedure that I have described. The Swan Island harbour at Twickenham, with 37 craft, has appointed a chartered surveyor to represent it in negotiations with the PLA. The Richmond Upon Thames Churches Housing Trust and the three private individuals have appointed the Residential Boat Owners Association to represent them. The remaining 86 moorings fall due for reassessment in the first quarter of 1998.

The Residential Boat Owners Association has recently written to me and to those hon. Members whose constituencies cover the Thames. The association wants the PLA to negotiate directly with the occupants of the houseboats rather than with the licensee of the mooring. That would be possible where the harbour legislation provides for the occupants of houseboats to have licences with the harbour authority, but that is the position for only a few occupants under the Port of London Act.

The Residential Boat Owners Association has asked the Government to intervene. The hon. Member for Twickenham has also asked Ministers to hold a meeting. I found the hon. Gentleman's remarks offensive. I would not disregard a request from people, even if they did break the crockery, and it is clearly a duty of Ministers to meet those who have concerns. I am not aware that his letter also contained a request for a meeting, but if he wishes to ask for one, I shall be happy to oblige.

My Department has no locus to intervene in disputes over mooring charges. However, my officials have raised with the PLA the concerns that have been expressed to me. The PLA has shown that it is keen to reach an agreement and that its agent is anxious to deal directly with the licence holders and those who are appointed to represent them. If that is not possible, there is, as I explained earlier, a procedure for objections which has been notified to licence holders. In the last resort, the Act gives them recourse to arbitration as a means of ensuring that the charges imposed are reasonable.

I accept that occupants who are the tenants of the licence holder are unable to use the arbitration route since the PLA is not levying a charge on them. The fact that all the reassessments made so far are subject to objections demonstrates that the licence holders are not simply accepting the revised charges. Therefore, it would appear that the objection procedure is working effectively, and that licence holders are taking steps to protect the interests of boat owners, who are, in effect, their tenants.

I hope that I have reassured the House that the procedures that are currently in force for the licensing of houseboats on the Thames make adequate provision for those who wish to object to the proposed increases in houseboat mooring charges.