REORGANISATION OF THE PORTS

HL Deb 30 April 1969 vol 301 cc847-68

2.50 p.m.

LORD DRUMALBYN rose to call attention to the Government White Paper, The Reorganisation of the Ports (Cmnd. 3903); and to move for Papers. The noble Lord said: My Lords, on behalf of my noble friend Lord Jellicoe, I beg to move the Motion standing in his name on the Order Paper. In one way this Motion could be described as timely, for only this morning the National Ports Council's Port Progress Report has been issued and will, I hope, be given the wider publicity that it certainly deserves. On the other hand, your Lordships will not have had time to study it, and I must confess that I had to prepare my speech before I had a chance to look at it, although through the good offices of the noble Lord the Chief Whip I was able to see it a little in advance of publication, for which I am duly grateful.

Very broadly, the White Paper proposes that all ports in which more than 5 million tons of goods are handled in a year should be taken into public ownership; that the National Ports Council should cease to exist and be replaced by a National Ports Authority to which the ports so taken over, and also the ports now controlled by the British Transport Docks Board, would be transferred; that the National Ports Authority would be responsible for planning, investment, pricing policies and promotion of research and development in the nationalised sector; that subsidiary authorities based in the main on the principal estuaries should be set up under a scheme of reorganisation prepared by the National Ports Authority and approved by the Minister; that these subsidiary authorities should be made responsible to the National Ports Authority for the efficient and economical management, maintenance and operation of facilities and services, and the preparation and submission of proposals for the development and improvement of the harbours for which they are responsible; that the functions, property rights and liabilities of the National and Local Dock Labour Boards should be vested in the National Ports, Authority, which would exercise those functions subject to the consent of the National Dock Labour Committee and local committees established by Statute; and that the powers of the Minister in relation to ports outside the nationalised industries should be strengthened.

The National Ports Authority would be required to submit to the Minister within one year schemes for the acquisition of businesses providing port services, including stevedoring, within the nationalised ports, subject to the right of such businesses to object and to public inquiry. Finally, it is proposed to set up advisory committees appointed by the Minister to assist the subsidiary authorities, and these advisory committees would have the right to be given information and also to make representations to the National Ports Authority and, if they are not satisfied, to the Minister, who would have power to give directions on the matters in question to the National Ports Authority except on dues and charges. I hope I have with reasonable accuracy summarised the proposals.

There are so many noble Lords with incomparably more experience of the ports than I have that it would be quite inappropriate for me to go into all these proposals in detail. I hope, however, that your Lordships will bear with me while I attempt to cover what seem to me and to my noble friend Lord Jellicoe the main issues. We have at least done our best to visit some of the major ports and to inform ourselves as best we could on this very important problem. The problem we are considering to-day is the best form of organisation of our ports, which are, and will remain, an indispensable link in the supply of food and raw materials on which we depend as an island nation. It is true that air freight is growing and will continue to grow. In value, 10.7 per cent. of our imports and 12.2 per cent. of our exports in 1967 were carried by air, although the proportion by volume of course was rather lower. It is highly desirable that we should remain in the forefront of constructing the means of carrying freight by air as well as by sea, and of developing our airports as well as our sea ports. This is particularly true of relatively short-haul aircraft, for over two-fifths of our exports to Europe, and over one-fifth of our exports to France, West Germany and Italy already go by air.

Sea transport no longer, therefore, has the complete monopoly as the means of carrying goods to and from this island, and indeed is in many respects at a considerable disadvantage in comparison with air transport. But it is through our sea ports that the bulk of our imports and exports will undoubtedly continue to pass. For a country which has to import such a high proportion of its food and raw materials, and has to export so much of what it produces if it is to maintain a high and growing standard of living, it is particularly important to ensure that our imports and exports should be handled at our ports as efficiently and economically as at anywhere else in the world and, if possible, more so.

All this is common ground and obvious enough. What I should like to do is first to establish the common ground between us and then to point to aspects of the White Paper on which we on this side are not yet satisfied. On one thing I would suggest we can all be agreed. The first paragraph of the White Paper pays a tribute to what the National Ports Council have achieved and expresses the gratitude of the Government, albeit perhaps somewhat tepidly. Yet the fact is that since 1964, when the Harbours Act was passed setting up the National Ports Council, there has been a tremendous surge forward. I see that speaking in Bristol in February, Sir Alexander Glen, the Chairman of the British Exports Council for Europe, and since 1966 a member of the National Ports Council, said that while in certain respects he thought we had lost time, perhaps more has been achieved in the past four years than in the last half century. For all this we owe a deep debt of gratitude to my noble friend Lord Rochdale, who presided not only over the Committee of Inquiry which bears his name but also over the National Ports Council themselves until, I think, 1966.

There have been other developments. First of all, there has been the development of container facilities at Tilbury, Liverpool, Southampton, Greenock and Manchester for the deep sea trades. in passing, I would say that Manchester is a shining example of physical handicaps being overcome by highly successful private enterprise combined with municipal participation, with all the advantages to be derived from a strong sense of local loyalty and a keen desire to win trade by competition in service and price.

Secondly, we have seen the development of unit-load services—both roll-on/roll-off and lift-on/lift-off container services—for the Continental and Irish ports. Palletised services have made considerable progress in the same period. Thirdly, we have seen the construction of the new harbour and iron ore terminal at Port Talbot which will be capable of handling ships up to 100,000 d.w.t. and can be improved to accommodate ships up to 150,000 tons. Fourthly, we have seen the development of the docks at Tilbury, at Liverpool, and at Leith for not only the handling but the milling of grain; and but for the Government's veto, against the advice of the National Ports Council, we should have seen also a major development at Bristol.

Fifthly, we have seen also the grouping of port authorities on an estuary basis in the Clyde, the Forth, the Tees, the Tyne, the Mersey, the Humber and at Southampton. Sixthly, we have seen developments for the handling of packaged timber, including provision for large bulk carriers at London, Liverpool and Newport. All that we are agreed on. The second general thing on which we are agreed is that come what may—even nationalisation— competition not only in service but in rates must be maintained. The White Paper says so, and we welcome the Government's statement in paragraph 22 of the White Paper that: It is, indeed, important to ensure that there should be competition on service and on price between individual ports in the public sector, although it is not clear how that can be ensured under national ownership. I shall come back to that point.

The third point on which we are in agreement is that services which we provide at our ports and the ways in which we ship our goods must be compatible with those elsewhere, especially on the Continent of Europe. There must be comparable facilities at both ends of the sea journey, and the manner in which goods are consigned for export must be compatible with the way in which they will he handled after arrival at the other end, whether by road, rail, air or inland waterways.

So far as general cargo is concerned the National Ports Council have expressed the view that the conventional facilities we now have in this country are a match for those anywhere overseas. So far as bulk carriers are concerned, these, of course, are continually increasing in size. Oil carriers have already reached 300,000 tons, and I am told that they may easily double, or more, in size over the next few years. Therefore we are agreed that we must be equipped here to deal with the largest carriers, both specialised, such as for oil and ore, and also ships of the combined type which are now being built. This means not only deep water ports but space on land at the port, both to handle and to process the materials imported. We are agreed about the need, but no decisions have been taken as to how and where to meet it. Then we are agreed that some smaller ports, and some parts of the larger ports, are obsolescent or redundant. The major ports can no doubt cope with their own problems in this regard; the minor ports are outside the proposed scope of national ownership.

On the unification of port services, I am not sure that we are all agreed about this, but I for my part would certainly agree on the importance of ensuring that it should be quite clear in every case where the responsibility lies. Each port authority must be the master in its own house. Not all port authorities want to be the sole employers of labour; some do and some do not. Legislation already provides powers to acquire port service undertakings, including stevedoring, by agreement. I do not think any of us would object to conferring compulsory powers to be exercised in accordance with schemes submitted and duly approved.

Finally, we are agreed on the need for standardisation of accounting procedures and for reorganising the capital structure of the various authorities, in much the same way as the British Transport Dock Board has already done. The first, I believe, could be done by regulations under the existing powers of the Harbours Act. If not, powers could be taken by legislation to do both these things. So much for the consensus.

The impression which the first sentence of the White Paper seems to convey is that everyone at all levels of the ports industry accepts that the present structure of the industry is inadequate to ensure that the best possible service is provided to the nation. From my inquiries I must say that I have not found this to be so. There are ports and port users who think that the structure is adequate. That is not to say that the services and facilities at our ports, individually or collectively, are already perfect and that improvements are not desirable—of course not. But many have expressed the view that the National Ports Council should be allowed to finish their job.

My Lords, I have re-read the debates on the 1964 Harbours Act, and the one thing that stands out is that everyone at that time was in favour of those provisions. Indeed, the speakers from the Labour Front Bench were almost fulsome about them—and I am glad to see that the noble Lord, Lord Lindgren, is here. Above all, they welcomed the central feature of the Act, which was that the National Ports Council should prepare a national ports plan and that development should proceed in accordance with that plan. The first need, of course, to quote paragraph 30 of the Annual Report of the National Ports Council, was: to bring about rapid improvements to the general cargo facilities at the main ports. That was all contained in the Interim Plan, which the Government then welcomed. The same Report of the National Ports Council outlined what they called "the considerations which must affect the formulation of the national ports plan". These considerations could be summarised as follows.

First, the plan could not take the form of comprehensive lists of facilities to be constructed at selected places on specified dates for a long period ahead. Second, technological innovation in the port transport industry calls for a continuous revision of ideas about investment, so that a high degree of flexibility in the planning process would be required. Third, national needs should be more fully considered than they have been in the past, and to enable this to be done more information would be required—information which they have set about obtaining with the aid of the powers conferred on them by the 1964 and 1966 Acts. This information should provide the background to enable the National Ports Council to consider schemes submitted to the Government, and to make recommendations on them. Fourth, each major port would be required to prepare an outline scheme of development for a long period, together with an investment programme for the ensuing five years, and periodically the Council would publish a five-year plan. Lastly, where the port authorities' proposals do not include particular development which the Council consider desirable in the national interest, the Council would urge them to do it.

My Lords, here we come to the nub of the matter. Is urging enough? Ought not the Council or Authority to have power to direct them to do it? And if they have the power, who is to provide the finance for a development which a port authority does not consider to be commercially worth while? Or, to put it colloquially, who is to "carry the can" if the direction proves to have been misconceived and the development misplaced or mistaken in scope or timing, or in any other way?

The White Paper says flatly that a National Ports Authority must have power to determine the nature and shape of the British ports industry, and goes on to say: Such power can only be entrusted to a body which has the discipline of knowing that it is fully responsible for the success or failure of its policies."— and then, with a most astonishing non sequitur— This must mean national ownership".

But not national ownership of all the ports—only of some of them; only those which handle more than 5 million tons of trade a year—at present. And in case any other port should prove too efficient and prosper too greatly, the threat of compulsory acquisition is dangled over it—though, to be fair to the Government, the new Authority are to be given power at any time to submit to the Minister schemes for the take-over of any statutory harbour authority, large or small, successful or otherwise, if the Authority think it in the interests of efficient and economic management and operation of a national ports system. It is difficult to see how such a continuing threat could engender any confidence or sense of security in the ports outside the national sector, let alone encourage them to develop and to be as efficient and economical as possible.

I should be less than frank, my Lords, if I were not to tell your Lordships that while I have found differing shades of opinion, ranging from one extreme to the other, among those responsible for managing our major ports—differing even within individual authorities—there are many who favour national ownership. This is hardly surprising. What most of them seem to want is to end the present uncertainty—an uncertainty that was created by the White Paper—and they think that nationalisation under the present Government is inevitable. As one would expect, some even think that nationalisation is the right solution. But this is certainly not self-evident, and it is not necessary in order to achieve the purposes on which we are agreed. And it is not supported by any argument in the White Paper, only by innuendoes.

For example, it is said that the first necessity is to enable the proposed Authority to concentrate resources in management on essentials"; and the White Paper speaks also of the present diffusion and misdirection of resources. But already schemes costing more than £500,000 have to be approved by the Government. If resources are being misdirected, whose fault is it? Proposals need the approval of the Government It is not as if the Government have always accepted submissions made to them or the recommendations of the National Ports Council; they do not always accept them. It is not even as if the Government have always consulted the National Ports Council. For example, I am told that the Government did not consult them about the proposed bauxite terminals at Holyhead and Invergordon. They did consult them about the terminal at Blyth and the National Ports Council advised against the proposal, as they considered the water not deep enough to take carriers of economic size. Moreover, the Government are proposing to retain their power to veto schemes in the non-nationalised sector costing more than £500,000, but not apparently to extend their power over schemes costing less. So they are obviously not going to have complete control here.

We are often told that we cannot afford any duplication and that therefore there must be an overall control of expenditure on ports. No doubt an overall control was necessary at the time when a great programme of modernisation was about to be launched. Someone had to determine the priorities. But once that is done—and apart from the big developments it seems largely to have been done or to be in the way of being done at the present time—is it necessary to continue to exercise such a control? Where no public money is involved, why should not any port authority which can raise money in the market for a scheme which the market considers viable and com mercially sound be able to go ahead with that scheme? That is the very essence of competition.

But even if it is still necessary for the time being for all these matters to be reserved to a centralised authority to arrange in conjunction with the various interests, under the White Paper proposals the subsidiary authorities will be competing with one arm tied behind their backs. In that case, it may well be that the Authority will have to demand special priority for one port in preference to others at a particular time in the national interest. But otherwise each subsidiary authority must be allowed to compete in the fullest sense. I believe that local problems with which they will be faced can be best solved locally.

If it is accepted that subsidiary authorities under national ownership and statutory port authorities outside national ownership should compete freely with one another, what is the object of national ownership? How will the subsidiary authorities be better off? I do not know, but presumably they will then lose their 20 per cent. investment allowance, while the non-nationalised ports will, again presumably, continue to qualify. Or is the investment allowance to be withdrawn from all ports, thereby increasing the cost of handling goods?

In the 270 or so ports to be left out of the take-over any misdirection of resources that exists—and there is likely to be some misdirection under any system—will apparently continue, quite apart from the mistakes that the Authority itself will make from time to time. But there was one reservation about nationalisation that even those who either wanted it or were prepared to acquiesce in it expressed to me in every case, and that is that the power of decision should remain with each individual major port authority. The White Paper envisages that subsidiary authorities, who are to be based in the main on principal estuaries, should be responsible first of all for the efficient and economical management, maintenance and operation of their harbours; secondly, for the preparation and submission to the National Ports Authority of the development and improvement of these harbours; and, thirdly, for preparing and submitting annual reports containing statements of their financial results.

They are also to compete among themselves in service and on price. But competition means rivalry, in the sphere of ports, in attracting shipowners and especially shipping lines. The amount of freight passing through a port depends on the success of the authority in attracting them, and that in turn will depend not only on the facilities and quality of service provided within the port but on factors such as road and rail access and the markets which the port serves.

We on this side (at least, I speak for myself and I believe for my noble friends) agree that the powers of the National Ports Council could usefully be increased. We believe that the Council should be reconstituted. It should be charged in existing circumstances with the duty not only of co-ordinating the planning of all port facilities—not just the major ports—but so long as overall control of expenditure is needed of submitting programmes of expenditure to the Government from time to time and agreeing with the Government the ceiling of investment year by year. Within those ceilings and programmes the Authority should have the duty of authorising schemes submitted to it by port authorities.

We really cannot go on with the present system at any rate, where an immense amount of work is done by port authorities with feasibility studies and all the rest of it; then they submit a scheme for the Government who in turn submit the scheme to the National Ports Council; the same procedure is gone through again there, and then their recommendations go back to the Government and the same thing is done all over again. Whatever happens, we cannot go on with that.

So far as the possibility of a development coming along which a local port authority does not want to carry out, it seems highly improbable that any port authority would decline to submit a scheme for development which the National Ports Authority considered necessary in the national interest; but if they did the National Ports Authority should be given power to direct them to carry it out. It seems an extremely unlikely possibility. Any such scheme at present is approved by the Government only if the port authority can show that it is likely to be economic in terms of return on capital on a discounted cash flow basis. The Government would, of course, have the usual power to give the National Ports Authority directions of a general character in the national interest, and such power would clearly cover the return on capital to be expected from developments in general. So within that framework there is no need for this complicated present procedure.

Is it not quite clear that if such powers were conferred national ownership of major ports would be quite unnecessary in any circumstances? There are in the case of ports several ways in which national ownership would not only he unnecessary but positively detrimental to the national interest. For example, it would be bound to lessen the sense of individual responsibility of the major port authorities. It would tend to restrict genuine competition between them. Centralisation would be likely to retard decision and action. It would certainly diminish local loyalty and support, and most harmful of all would be the centralisation of labour relations. As one authority put it to me, the implementation of this section in the White Paper on Employees in the Ports Industry would set back sensible labour relations a hundred years. Labour participation is absolutely essential, but surely this should be negotiated at local level. Port authorities could be placed under a statutory duty to work out local schemes with employee organisations by a certain time. It would be asking for trouble to put all this on the national level. Any local dispute would be all too apt to become a national issue. The Government must allow the consequences of decasualisation to be worked out sensibly at local level without committing themselves in advance to a system which could only make labour relations stagnate and fester. The Government's proposals are far too legalistic and far too inflexible in this regard.

Lastly, there is one aspect of port development which is bound to require special Government attention; namely, what is becoming known as MIDAS—Maritime Industrial Development Area Schemes. Other countries are spending the equivalent of hundreds of millions of pounds on port schemes coupled with industrial development alongside, often involving land reclamation. One can mention Rotterdam, Le Havre and Le For (Marseilles), in Europe, and Kobe, in Japan, which I believe is the biggest of them all. All are heavily subsidised. It may well be that we shall want to promote similar developments. It may well be that we shall want also to subsidise them heavily. The oil companies and the British Steel Corporation can probably do these things for their own imports of oil and iron ore, but we may well want to create new deep water ports with ample room for general industrial development before them—at Foulness perhaps, or in the Clyde. Such new developments might well be under national ownership, like New Towns, at least to start with.

Here again, such developments do not require other existing ports to be brought into national ownership. Nor would the National Ports Authority, with all their other commitments, necessarily be the best body to make responsible for their development. For example, any such developments in the Clyde would best be left to the Clyde Ports Authority, or at least done in close co-operation with them.

To sum up, I suggest that the Government should think again about national ownership. It is absurd to maintain that an authority can be fully responsible only if it owns everything it has to supervise. That is not what authorities are for. Moreover, in a major port development the members of an authority will probably all be dead by the time it is known whether the development is a success or a failure. So you can hardly say that they should take responsibility for success or failure, or at any rate that it can be brought home to them. We believe that the port authorities should retain their autonomy; they should be truly masters in their own house and should be empowered to make themselves so. They should put their accounts in order and standardise their presentation. They should be responsible for their own labour relations and should prepare schemes of employee participation. And we believe that they should do all this under the guidance and supervision of a National Ports Authority with substantially strengthened powers.

There is so much common ground that it would be a pity if the Government were to take over the major ports against the wishes of almost all port users and a substantial proportion of people in the port authorities themselves. We do not oppose nationalisation in all circumstances; but in this case we think it would be a thoroughly retrograde step—unnecessary and in some respects positively harmful. We beg the Government to think again. My Lords, I beg to move for Papers.

3.23 p.m.

LORD SHEPHERD

My Lords, this debate arises from the Government's White Paper, and since it is the first debate on this White Paper in either House I thought it would be right for me to speak early, to set out the Government's case for these proposals and then, with permission of your Lordships, to speak at the end of the debate to answer any of the points that are made.

I do not think there is any doubt that the efficiency of our ports system is of crucial importance to the industrial and commercial enterprise of this country, and indeed to the life of the whole community. Efficient ports sharpen our competitive ability. If our ports system is not efficient our costs, clearly, will go up and we shall lose out to overseas competitors. Also with our growing production, with its effect on exports and also on imports, we need ports so styled, so equipped that no bottlenecks should occur. This is why this White Paper and this debate are of such great importance. For that reason I am most grateful to the noble Earl, Lord Jellicoe, for having made this debate possible, and to the noble Lord, Lord Drumalbyn, for the manner in which he has spoken in introducing the Motion. I will seek to answer some of his points in the course of my own speech.

My Lords, as the noble Lord, Lord Drumalbyn, himself said, much has been accomplished since the Committee under the chairmanship of the noble Viscount, Lord Rochdale, made their important Report on the major ports in 1962. On most, if not all, of the conclusions to which the Committee attached special importance significant progress has been made. Investment in ports has increased enormously, from an average of £18 million per year up to 1964 to something like £50 million, a level which is likely to be maintained for some years, helped by Government grants and loans. Here may I say to the noble Lord, Lord Drumalbyn, that it is our intention that the grants should continue to be paid, both to the nationalised sector and to the sector outside, because we believe that this industry is of such great importance to the country that the grants should continue.

Then we had the decasualisation of dock labour which took place in 1967, following the recommendations of the Committee under the noble Lord, Lord Devlin. A reduction in the number of port employers—an essential part of the decasualisation programme—has been brought about under the licensing provisions of the Docks and Harbours Act 1966. On the main estuaries, responsibilities are now concentrated in the hands of one harbour authority. Tremendous strides have also been made in collecting statistical information which is so vital to proper planning. The National Ports Council, initially under the chairmanship of the noble Viscount, Lord Rochdale, and now under Sir Arthur Kirby, have played a significant role in these advances.

The noble Lord, Lord Drumalbyn, referred to the important Report that was made available to-day and is to be found in our Printed Paper Office. It is called a Port Progress Report; it reviews the development which has taken place in the docks during the last five years, and it states the principles on which the Council themselves think that port planning should be based and contains information and guidance to assist port authorities in their own planning. I think that this is an admirable document. It is well set out, and I would recommend all to read it. As I say, it is a notable work of reference and a valuable contribution to overall port planning.

I am sorry that the noble Lord did not think we gave proper justice to the Ports Council. It is right that credit should be given to the National Ports Council and to the port authorities for the important advances that have been made. But no one viewing our ports objectively could claim that the position is yet satisfactory. Much still remains to be done. The world over, ports are facing tremendous changes in transport technology. In the general cargo field the most notable example is containerisation, in which the British shipping industry is moving ahead fast; and a whole new concept of through-transport operation is emerging, offering the pros pect of greater efficiency and opening up new opportunities in competitive trade. In the movement of bulk cargoes, as the noble Lord, Lord Drumalbyn, said, the changes are equally striking. Enormous tankers will shortly be on the seas. The same applies in the case of bulk carriers. The whole pace of change is quickening, and our ports are reacting to it. But this change in itself brings problems.

The question is also raised whether the pace is quick enough. The rapid rate of technological and economic change that has affected the ports industry in recent years has greatly increased the urgency of the need, recognised and emphasised by the Rochdale Committee in 1962, for a properly planned programme of port development and for the concentration of ownership and operation of port and related undertakings. The impact of change will be greatest in the harbours where the great hulk of our trade is handled. These harbours include the harbours on the main estuaries on which the Rochdale Report said development should be concentrated.

It is against this background, my Lords, that the White Paper has been prepared. At all levels of the ports industry it is accepted that changes in the present organisation are required, though there are differing views on what should be done. This is bound to be so with such a complex industry. It is therefore quite understandable that there should be differing views, but I think one thing that will be agreed is that the day of decision cannot now be put off. Nobody—and least of all those vitally concerned in the ports industry—wants a cloud of uncertainty left hanging over the industry. If the uncertainty is not removed now it may persist for a number of years. I believe that it would be a tragedy if, as a result of doctrinaire arguments and the taking up of irrelevant political attitudes, we were to miss this opportunity of implementing what we believe to be a workable scheme which could give the industry the stability it needs. The Government believe that the White Paper proposes a workable scheme which could give the industry stability. As I said at the time the White Paper was published, the scheme of reorganisation is no being put forward in any doctrinaire way.

We have been much heartened by the reception given to the White Paper from all sides. Of course there are points in it that one interest or the other would criticise and would like to see improved. The noble Lord, Lord Geddes, who was President of the Chamber of Shipping when the White Paper was published, referred to the potential for good which the White Paper undoubtedly contains. That is a statesmanlike approach, and I believe it is one which the industry itself shares. His successor as President of the Chamber of Shipping, Mr. Francis Hill, has taken an equally statesmanlike and practical line in saying, as he did recently, that he sees sufficient flexibility to meet the points the shipping industry considers to be of real importance. I stress the words that "he sees sufficient flexibility". That is what we were seeking to achieve in our White Paper. It is noteworthy that Sir Andrew Crichton. Chairman of Overseas Containers, Ltd., welcomed the decision that, at long last, there should be a National Ports Authority. He remarked that one thing we could not afford to ignore was the dispersal of investment and efforts as between ports. Other representative bodies say they accept primary points in the White Paper proposals.

The main proposal in the White Paper is to set up a National Ports Authority with responsibility from the outset for the major harbours. The noble Viscount. Lord Rochdale, to whom we owe so mach for his work in this sphere, did in fact recommend the establishment of a National Ports Authority in his Report of 1962. I do not suggest here that he was recommending the sort of reorganisation now proposed in the White Pacer. But the noble Viscount advocated a central planning body which would have authority. The National Ports Council. which was set up in 1964 has, however. only advisory functions. It has done a great deal. but its terms of reference arc limited and it has no real authority.

It has been argued—as I think the noble Lord, Lord Drumalbyn argued this afternoon—that we do not need such a radical reorganisation as is proposed in the White Paper. It is suggested that we could do all that is necessary by strengthening the National Ports Council and relying, in large part, on voluntary arrangements. The difficulty we see in this suggestion is a fundamental one. If a strengthened National Ports Council were given adequate authority and wider powers in relation to the carrying out of port development considered necessary by them in the national interest, this would be bound to mean. if it were to be effective at all, that the Council should have powers to tell the port authorities what to do, at least in some important areas of activity. But if the port authority were to be left independent this arrangement could mean that the port authority would be left to bear the burden for the success or failure of policies with which it did not itself necessarily agree.

This is why the Government consider that a National Ports Authority is needed, but that such a body can be entrusted with powers to shape the future of the British ports industry only if it has the discipline of responsibility for what it does—the sort of responsibility which goes with the responsibility of ownership. The major ports are already mainly in public ownership, and this proposal naturally means an extension of national ownership. I was surprised that the noble Lord, Lord Drumalbyn, at least seemed to indicate that ownership was not necessary to instil discipline. It is my experience, both as a businessman and now as a Minister that if you are required to take decisions, those decisions are better taken when you are responsible for them and you own the possessions.

The major ports which will be affected by these proposals will, in addition to the already nationalised British Transport Docks Board, be all those harbours where more than 5 million tons of goods are handled in a year. After considering all the relevant factors the Government decided that this was the appropriate criterion. Five million marks a clear dividing line between the ports of major significance to our trade and the ports of lesser importance. The Port of Manchester is the only port included which is not at present in public ownership. But the ports covered by this criterion are those of major significance, irrespective of present ownership. This is true also of Milford Haven, where the tonnage is largely of one commodity—oil.

I know that other views are held on this. But I would emphasise (I think there may be some misunderstanding) that there is no intention to take over the oil companies' own jetties. All these major ports are common-user ports, open to users generally. Of course when one draws a line one must have some criteria. We have drawn the line at 5 million tons per annum. These ports have a total trade of some 267 million tons, as compared with the total annual trade of all ports of some 305 million tons. The Forth group of docks has some 7.3 million tons per year, as compared with Blyth, which is the next in importance (but the first one that is excluded) with some 3 million tons. So your Lordships will see that there is a significant difference between the ports that we are taking over and the ports that have been let out.

The oil companies have, nevertheless, expressed fears that the ship dues they pay at Milford Haven will be increased to prop up declining ports elsewhere in the public sector. My Lords, let me repeat the assurance given by my right honourable friend. The oil companies need have no fear that they will be "milked" in this way. That will not be allowed to happen. And as there will be rights of objection to the Minister of Transport about the level of dues charged, my right honourable friend gives an assurance that he will not see this happen.

The establishment of the National Ports Authority will not mean operation of the ports from some remote centre. The intention is that the ports will be managed by subsidiary authorities of the N.P.A. The N.P.A. will, in practical management terms, stand somewhat in the relationship of a holding company to its wholly-owned subsidiaries. This is essential to the whole framework of the organisation. We are not going to stifle local initiative and competition. The proposed organisation will provide the stimulus for local enterprise and for effective competition both on service and on price between ports. The subsidiary authorities are expected to be based in the main on the principal estuaries, and they will be encouraged to plan the developments called for by the needs of the regions, working in close consultation with the regional economic planning councils.

It will be a priority task of the National Ports Authority to prepare a scheme of organisation for the efficient management of their ports and submit it to the Minister of Transport for approval. Until this has been done it would not be appropriate for decisions to be taken by the Government about the shape of the subsidiary organisation. But I can assure the House that my right honourable friend has taken careful note of the representations already made to him about establishing separate authorities for Milford Haven, the Medway, Manchester and Bristol. He will certainly bring these views to the notice of the Organising Committee which he proposes to set up after the Second Reading of the Bill in another place and, subsequently, to the notice of the National Ports Authority.

The N.P.A. will be given powers to submit schemes to the Minister for the take-over of further ports. It has been suggested—I do not think the noble Lord, Lord Drumalbyn, put this forward—that there should he a "cooling-off" period of five years free from take-over, but I doubt whether that is necessary or would be a satisfactory answer. Further ports will be taken over only if there are good and sound reasons. and objections will he considered at a public inquiry. If approved by the Minister the scheme will be laid before Parliament.

While the boards of the N.P.A. and of the subsidiary authorities would not be appointed on a representative basis noble Lords will appreciate the risks there could be of divided loyalties in such. Appointments—it is the intention that persons with experience of transport, whether inland or sea transport, and of industrial and commercial activities, as well as other experience, including the organisation of workers, should be eligible to be appointed to the boards. Moreover, we think it important to make appointments to the boards of the subsidiary authorities which will ensure that local pride and interest in the ports for which the authorities are responsible are given a proper place in the forefront of the boards' thinking.

We also propose new machinery for giving users and local and other interests an effective voice in the way the ports are managed. This will be done through local advisory committees, as the noble Lord, Lord Drumalbyn, has said. I have heard criticism of the machinery which was set up in other nationalised industries, but in the end the effectiveness of the machinery will depend on the willingness to use it. But these will not be bodies with no teeth. If all else fails they will have a right to make recommendations to the Minister, and he will be able to give directions to the N.P.A. on the matters dealt with.

The noble Lord, Lord Drumalbyn, did not dwell a great deal on the facilities within the docks, and in view of the time I will leave that subject aside, but clearly it is one of the most important and most complex areas in the reorganisation, and careful thought will have to be given to it throughout the country, because there are many varying interests. There are cases where shipping companies have their own labour, do their own stevedoring and the like, and all of these will need to be most carefully considered. But it is quite clear to Her Majesty's Government that the subsidiaries must have as much power and responsibility as possible, and, in particular, we must see a reduction in the number of companies involved.

I think anyone who read the speech that was made by Sir Arthur Kirby in 1965 will agree that, to a certain extent, what he said is still true. It indicates the problem of fragmentation that exists in the docks. He said: To anyone making no more than a cursory study of our ports it must surely seem that had we set out to devise the most difficult way to work our ports we could not have succeeded better than the existing state of affairs in which labour has no regularity of employment, in which there is excessive fragmentation in cargo handling, unco-ordinated transport to and from the ports, a multitude of clearing and forwarding agencies and, within all this, the inertia of long established custom. No one can wholly be blamed, all concerned are able to pass the buck and no port authority has complete authority, or if it has it does not exercise it. Clearly, since 1965 there has been a major change in the docks, but there is still the basic weakness of fragmentation. We shall be consulting with all those concerned with our ports, on both sides of industry—workers and management. During the passing of the weeks—clearly, the Bill will not be introduced in this Session—we shall be carefully examining all the points of view that are expressed to us, as well as the points of view that may be expressed in the debate to-day. As I said earlier, I believe that this White Paper gives us enough flexibility to meet many of the difficulties and uncertainties that are in the minds of industry. I am now going to sit down, and will listen to noble Lords who have spent most of their industrial lives, in one way or another, in the docks and the ports. If there are any points to which I can reply I will do so at the end. But I hope that we shall have a debate on the basis of advice, suggestions and thoughts of a constructive nature, so that this major industry can be developed, as it must be developed if this country is to expand economically.