PORTS BILL

HL Deb 07 May 1970 vol 310 cc320-94

3.57 p.m.

Second Reading debate resumed.

LORD DRUMALBYN

My Lords, I should like to start by congratulating the noble Lord, Lord Shepherd, on having explained in such a relatively short period of time the contents of a Bill which runs to 138 pages. While, necessarily, a great deal of what he said was in general terms, I would not wish to hold that against him in any way. At the same time, I think we may have to press him for a little further information on some points. The second thing I should like to say at the start is that I am sure the whole House regrets—I certainly do—the absence of the noble Earl, Lord Jellicoe, to-day. He ought to have been doing what I am now doing, but owing to illness he is unable to be present. I only hope that the House will not have cause to regret his absence too much.

My Lords, the task that lies before a Government when they present a Bill to Parliament is, I think, to show that something is seriously amiss and then to show that what is amiss can be remedied only, or can best be remedied, by the Bill which they are proposing. I listened very carefully to the noble Lord, and I came to the conclusion that the only real argument that he put forward for taking over the ownership of the ports lay in his reference to the recommendation of the Committee presided over by my noble friend Lord Rochdale that it was right to strengthen the National Ports Authority.

The noble Lord then went on to draw attention to what I suppose must be the nub of this debate: that there is a theoretical difficulty about the National Ports Authority, or any such body, giving directions to independent bodies. My Lords, the theoretical difficulty is obvious. What I think noble Lords have to make up their minds about is whether there is a real difficulty here. Obviously, if a port authority decided that it was not in its interests to carry out the wishes of the National Poets Authority this would create a difficulty. But if it can be clearly shown that it is in the national interest that certain developments should take place at a particular port, I have the greatest difficulty in seeing that a port authority would object to carrying that out—always provided, of course, that it was made financially possible for them to do so. Here again is the rub. But I do not think it can possibly be argued that there would be resistance to carrying out what was in the national interest. I should have thought, knowing the development being proposed now, that our port authorities would be only too pleased to do what was in the national interest, particularly where this would be bound to benefit the localities as well. That, I think, is the nub of the debate.

A great many suggestions and charges have been made, and I should like to repudiate some of them. I referred, for example, to the charge about diffusion and misdirection of resources. The noble Lord has answered that, in the sense that this does not apply to the major ports, where of course the Government have the last say in whether or not the development should go on. But as to capital expenditure as a whole, the National Ports Council have this to say on the expenditure of £170 million on capital development in all ports between 1965 and 1968. They say: The Council believe that the money has been spent usefully and that the developments will prove of long-term benefit and are providing a sound basis for a national ports pattern. It seems to me that if the Government really believe that there is likely to be resistance they must base this on some evidence. What evidence have they in the past of resistance to developments that would be in the national interest? As Sir Arthur Kirby has pointed out, there can be no question of establishing a national plan that will be fixed and immutable. "This", he said, "can never happen in a progressive economy". What is needed (I paraphrase) is an evolving pattern that would encourage development in the right places, and not a fixed plan to which development must conform. It is of course a question of judgment which are the right developments and the right places for them; in a word, where and when developments should be carried out. Sometimes judgments will prove wrong; sometimes, no doubt, they have proved wrong in the past. But what is important is that those whose exercise the judgment have access to all the facts and have the experience on which to base a sound judgment.

As to diffusion of resources, the major ports themselves are diffused, and resources also must necessarily be so, if the different parts of the country are to be served and the ports are to be provided with sufficiently modern facilities. Where particular developments—for example, container facilities—come along, it is surely desirable that they should be suitably dispersed over the country. This could admittedly be overdone, but the Council's verdict was that in the pattern as it is emerging, there is not over-dispersal. The trouble has been not over provision but of use, as is illustrated by the lamentable story at the Port of London Authority. In my belief such development is much more likely to be too little and too late if it is left to a combination of Government and a centralised authority to decide what and where it should be. It is quite a different thing to say that the Government should decide the priority of developments submitted by independent port authorities—when total expenditure has to be restricted—although I doubt whether that is justified in the national interest, if the ports were required to raise their own finances.

The second sort of charge levelled is about the inability to meet the challenge presented by the use of larger ships. That, I take it, is what the noble Lord had in mind when he talked about "the right shape to face the '70s". The existing system has shown that it can meet this challenge if given the chance—on the Tees and at Port Talbot, for example. Here again it is the slow pace at which the Government have been moving—for example, in their researches on MIDAS (Maritime Industrial Development Areas)—coupled with the stagnation of the economy. Above all, there is the uncertainty which the Government have themselves created. By putting nationalisation of the ports in their 1966 Manifesto, the Labour Party undermined the confidence that was needed to produce a real drive forward in this direction. Yet a great deal of preparatory study has gone on, and there is no lack of willingness to provide imaginative and forward-looking developments. One has only to read documents such as Oceanspan, prepared by the Scottish Council (Development and Industry), to realise that. Whether one has a National Ports Council or a National Ports Authority it will be for a body of that sort to advise the Minister on the priorities, as even the Bill envisages.

The truth is, my Lords, that the Government themselves have in the past fallen down on the job by sometimes failing even to consult the National Ports Council on matters involving the provision of port facilities. I believe that this was so at Invergordon. There is nothing in the Bill to prevent the Government from falling down on their job again. It is left to the Government to seek advice.

The third general criticism that one hears is that the financial and administrative structure of some of our major ports is inadequate and out of date. That may be true in some cases—though not in all—but it could be put right without nationalising them all, or indeed any one of them. If the machinery provided by the Harbours Act for their revision is inadequate, legislation can be introduced to improve it. The Bill that we should be dealing with is one to do this.

The fourth criticism is that more unified control of operations in the major ports will be needed. That, too, may be so. But here again that can be done without taking them under central ownership. The powers that are conferred in the Bill on the National Ports Authority could just as easily be conferred on the major ports individually. Then there is the criticism about grouping ports together. Ports have been grouped under the existing legislation: Tees, the Tyne, the Humber, the Clyde, the Forth and at Southampton, The port authorities at London and Liverpool have revised their constitutions. If the machinery for grouping and extending groups needs to be streamlined, that can be done without central ownership. It is said that many of our harbours are archaic. Certainly; but the Council reported that some 12 miles of quay length of port facilities are being closed down and that another 12 miles may be withdrawn in the next decade. This, too, is happening without nationalisation.

Then there is the criticism that there is no means of comparing the cost of port services. That is true. But the noble Lord himself referred to the independence of the port boards in this matter under the Bill. The National Ports Council have laid stress on the "need for a uniform approach to managament accounting". If this cannot be achieved voluntarily it could be achieved by regulations. Again it provides no excuse for nationalisation. The Council expressed the hope that Ministerial regulations specifying the form of accounts for harbour authorities would be made in time to apply to the accounts for the 1969 calendar year. I hope that the noble Lord, Lord Hughes, who is to reply, will be able to tell us whether the Minister has succeeded in implementing this recommendation in time.

My Lords, I turn now to the disadvantages of central ownership. These are very considerable. It would be futile to pretend that when port boards are appointed by the National Ports Authority and are responsible to the Authority they will have the same sense of independence and self-reliance as they have now. Admittedly they may have some sense of local patriotism and loyalty, as the noble Lord said, but not the same. Nobody can honestly pretend that taking over the Manchester Ship Canal Company, with its local authority majority, and taking away the Port of Bristol from the Bristol Corporation will have no effect at all on local loyalty and local involvement. Unquestionably there will be much less local drive behind the operation and development of these ports than if they had remained autonomous. In consequence both Manchester and Bristol, in my view, will suffer.

Moreover, the White Paper had this to say: The impetus of change must be directed to ensure that new investment and the rationalisation of facilities produce the best services at the right places. The right places are those that can produce the best services at the lowest cost in time and money to the users. But the word "rationalisation" has an ominous ring in this connection and I fear that both Bristol and Manchester will be victims of it, to the detriment of those cities and their populations.

Then there are the Clyde and the Forth port authorities. My Lords, this "State grab" involves something quite different from railway lines. It seeks to take over without compensation what are surely among Scotland's most precious natural assets. We shall certainly have to consider at a later stage what should be done about this. It would be equally futile to claim that central direction will not affect competition between the major ports. To do it justice, the White Paper did not make that claim. It merely promised that competition will not be eliminated, either in service or in price. But what is the essence of competition? The essence of competition is that a customer who is dissatisfied with the service he is getting, or the price he is paying for it, should be free to use any other port of his choice, be he a British shipper or a foreign shipowner. It is this, above all, that keeps enterprises from becoming bloated, authoritarian and complacent, putting administrative convenience before the interests of their customers.

My Lords, the raison d'être of our ports is to enable goods coming into this country by sea to be handled as speedily and as cheaply as possible. The higher the port dues and charges and the less efficient the services they provide, the worse it is for our exports and imports and for our coastwise trade; the more we pay for our imports and seaborne home trade and the less we get for our exports. Everyone agrees that the ports should compete among themselves in the service they give; but will there be real competition on price? Are the Government prepared to guarantee that? If this Bill goes through, it should be the Minister's first direction of a general character, in the national interest, to ensure that the ports are free to compete on price. Even the Government seem to agree that the charges each port makes should depend on the cost of providing the services. If that is so, what do the Government mean by a "pricing policy"? Do they accept the Council's recommendation that as a general proposition charges should be related to estimated costs on average through-put and their other recommendations as to charges? Do they accept the Council's view that simplicity of administration in any charges structure is "very much a matter for local determination"?

If ports are to be genuinely competitive, it is particularly important to ensure that they stand on their own feet financially. That means that in no circumstances must one port be subsidised by another, and no port should be allowed to run at a loss, taking one year with another. One thing is certain: the requirement in the Bill that the port boards' financial results should be published in the National Ports Authority's Annual Report is not in itself enough to stop cross-subsidisation. If it is a question of cross-subsidy or Treasury subsidy, which do the Government think that the Treasury would choose? We shall be happy to help the Government to ensure that price competition is not eliminated by cross-subsidisation and we shall do so by moving appropriate Amendments at the next stage of the Bill.

I recognise that some degee of competition can be expected from ports which remain independent. But it is not to ensure such competition that the Government are limiting the takeover of ports at present outside State ownership to those handling over 5 million tons. The Minister has indicated that it is because it is not administratively possible to absorb the smaller ports as well at this stage. The House will know that in another place a Motion was put down to extend the takeover to a lower phase of 100,000 tons. That was rejected by the Government. I would guess that another reason is that the Government do not consider that the major ports will be affected to any great extent by competition from the minor ports, largely because the smaller ports are not in a position to attract the sort of cargoes Which are the main users of the major ports.

But what about competition between the major ports? Nobody can tell what the National Ports Authority will do, but can anyone imagine that competition will be so keen as it is now? The trouble about monopoly is that there is no compulsion to hold down costs. Here, again, it is the port users who will suffer, and through them the public, and no number of advisory committees are going to alter that. Of course, it may be that not all the harbours within the major ports to be nationalised will in fact be taken over. The noble Lord has referred to Clause 24 and has mentioned the ports and the harbours at Purfleet and Erith used for the import of newsprint. There may be others which it has already been decided to exempt. That clause exempts from takeover: any harbour used exclusively or mainly for ships … bringing or receiving goods which have either been manufactured or produced by the person owning or managing the harbour or are to be used by that person for the manufacture of goods or electricity. And it goes on to include consortia.

I should like to ask: will the harbours at Milford Haven and elsewheree, owned or managed by the oil companies, also be exempted? We all know that there is no practical or logical reason why Milford Haven should be taken over. It is only because of the way in which the Government have felt obliged to define the ports to be taken over, in order to avoid procedural difficulties, that Milford Haven is included at all; 95 per cent. of the cargoes handled in the bay consist of petroleum and petroleum products, so the "exclusively or mainly" condition is certainly fulfilled. I suggest that if Purfleet is exempted the oil wharves at Milford Haven should be left out, too. If they are, the remaining cargo handled at Milford Haven falls very far short of 5 million tons and therefore comes outside the scope of the Bill.

There are many matters that will need to be discussed in Committee, notably Part III on Terms and Conditions of Employment; and the decision to take over all port businesses except where the Minister is satisfied that by their nature they need to be carried on independently, or that to continue them as they are is essential for the conduct of the rest of the undertaking, or that they are of a specialised and unusual nature. We shall want an assurance that existing and future arrangements for through transport will not be subjected to the fragmentation of operational control which the Government profess to want to avoid.

We shall want better safeguards for ports which are at present not being taken over. We cannot see how these harbours can be expected to plan their own development and to prosper if they are under the constant threat of seizure. As I have said, the port authorities in this country have suffered badly from the uncertainty that the Labour Party's threat to nationalise them has held over them for the past four years. Socialist policy of causing anxiety and confusion by threats of nationalisation, and then claiming that only nationalisation can cure them, is all too familiar. The truth is that, considering the handicaps Socialism has wilfully and wantonly put in their way, the National Ports Council and the port authorities have done remarkably well—even the noble Lord himself admitted that—and if they were relieved of those handicaps, and of this Government, they would do even better.

My Lords, I do not recommend my noble friends to vote against this Bill on Second Reading, bad as it is. But I do say this of the Government: that it would be the height of irresponsibility on their part to bring the Bill into operation before the General Election. If they do so, they must accept entire responsibility for any further confusion that might result after the next General Election, when the new Government would have to take such steps as are necessary to mitigate the harm that this Bill might already have done. This is a bad Bill. It is bad because it is wrong in itself and because it represents an inexcusable surrender on the part of the Government to the extreme Left of their Party. I was really shocked to hear the noble Lord refer in the same breath to the Commission, presided over by my noble friend Lord Rochdale, and the Labour Party Study Group under Mr. Mikardo.

There was all-Party agreement on the Harbours Act less than six years ago. No doubt, in the light of subsequent experience some changes in that Act are now needed, but to expropriate the owners of our major ports, two with inadequate compensation and the rest with no compensation at all; to seek to impose upon them a uniform pattern despite the great differences that exist between them; to reduce competition between them and so make it certain that the costs to users will be much higher than they would otherwise be; to expropriate all ports businesses automatically and leave it to individual businesses to claim exemption on narrowly defined grounds, and to hold under perpetual threat of expropriation all the harbours exempted from seizure, a threat no doubt to be carried out if the harbours compete too vigorously with the N.P.A. monopoly—all this is utterly abhorrent to us. We deplore utterly the taking into fewer and fewer hands decisions which vitally affect the nation. We shall not vote against the Bill to-day, but we are sure that the people of this country will when the General Election comes.

4.22 p.m.

LORD GEDDES

My Lords, I must first of all declare my interest. I am a director of shipping companies, and when the White Paper, The Reorganisation of the Ports, was published I was also President of the Chamber of Shipping. Since then the Department has changed Ministers, the Chamber has changed Presidents and the Ports Bill has superseded the White Paper. But, though I am no longer President of the Chamber, I am still closely associated with it and I hope therefore that I can reflect in what I say the views of the shipping industry generally.

When we debated the White Paper just about a year ago, I laid my main emphasis on the significance of what was proposed to the users of the ports. Now to-day, when we are considering the Ports Bill, I mak no apology for again focusing your Lordships' attention on the view-point of the shipping industry. They certainly are not the only users of our ports, but there can be no doubt of their importance or of the immensity of what is at stake for them.

I talked a year ago about the heavy proportionate weight of port costs in the total of ships' running expenses, especially for cargo liners, which carry most of our exports. The broad facts are well known, and so, too, are the pressures which those same facts have exerted towards reducing time spent in port through capital intensive container operations. The tragedy of Tilbury, which I described in its early stages a year ago, has dragged on ever since. The prospects now, thank heavens! are brighter and better, but it has been a hard and difficult story for the companies concerned. So, too, has n been for conventional liner operators in many of our other ports, notably Liverpool.

The British shipping industry is strong and resilient, surging ahead confidently in its diverse sectors. All of this is described and analysed with so much care and understanding in the Report of the Committee of Inquiry, published only yesterday. Doubtless your Lordships will be considering it in due course. Meantime, may I take this opportunity of saying to its Chairman, the noble Viscount, Lord Rochdale, how grateful the entire shipping industry is to him and to his Committee for the immense labour and scrupulous fairness that they have devoted to their task. It is a massive achievement, comparable, indeed, with their earlier Report, under the same Chairman, on our major ports.

But strong and resilient though the shipping industry may be, it needs an efficient ports system in this country. The industry has consistently supported what was one of the principal conclusions of the earlier Rochdale Report; namely, that in respect of development planning, capital investment, research and the like, the powers of the central ports authority needed reinforcement. But, like the noble Viscount, Lord Rochdale, we have equally consistently questioned the wisdom of endowing the central authority with wide powers of intervention in practically every aspect of port operation.

These and other general issues of principle were debated in this House a year ago. I would only repeat now that what the shipping industry is concerned with, first and foremost, is working efficiency. Political theory and dogma are to us, as users of the ports, a different matter. I said then: Your White Paper is not what we should have liked and it is doubtful whether it will achieve the efficiency in port operation which it claims. Even so, it offers a basis of reorganisation on which a lasting, effective ports system could be built. We, as port users, have a real stake in ensuring that this is achieved."—[OFFICIAL REPORT, 30/4/69, col. 894.] Those words are as true to-day as they were then. They epitomise the attitude which the Chamber of Shipping has followed throughout in its consideration of and its dealing with the Ports Bill we are now discussing. Doubtless in a perfect world we could devise other arrangements and organisations more to our own liking.

The debates in another place have illustrated in almost textbook form the basic dilemma of the mixed economy; namely, how and where are the boundaries to be drawn between public and private, between central and local? This Bill draws them in a way which perhaps not all of us would have chosen. But they have been chosen and, that being so, for better or for worse, our main concern now is to contrive for the ports industry a respite from the tragedy of order, counter-order, disorder, with which the transport industry generally is all too wearily aware. The ports industry needs the best brains, skill and devotion that can possibly be found for it. It needs many years of undisturbed constructive work. How can all that be done, if it is living under the perpetual shadow of change, staggering from one legislative shake-up to the next?

The Minister of Transport, in moving the Third Reading in another place, said frankly that the Bill he had introduced was a better measure than the White Paper, and the Bill as it was being sent to us in this House was yet better still. I agree with that view. I hope that we can improve it even further. But when it is on the Statute Book, let us then strive to make it work. As I see it, it contains within itself sufficient scope and flexibility to allow whichever Government are returned to power after the General Election to make it work after its own fashion. That is one of its prime virtues and I am glad that it is so. Naturally, there would be differences of emphasis in this respect or that, some more important than others. But the main structure would be the same, which will give it the opportunity it needs to work and evolve soundly.

It was of profound interest and importance to see that the Minister, on Third Reading in another place, stressed that the Bill had been designed to preserve scope for local enterprise, that the ports will be run by the local port boards, each of which would have substantial independence within the central planning framework laid down by the N.P.A. Now, this relationship is of key importance. It is for the central Authority to prepare a coherent plan for the long-term development of the ports and to provide an institutional framework, which will ensure that there is sufficient capital for development, that it goes to the right places and that it is used responsibly. The local port authorities must have and must exercise genuine initiative and carry proper responsibility for it. There must, in short, be the right balance of responsibility and independence, financial and managerial. I would urge the noble Lord, in winding up this debate, to assure us that the Minister's words do mean that the relationship is intended to work in practice in the way which I have described.

I was glad, too, to hear from the noble Lord, Lord Shepherd, that it is now intended that the financial results of each port shall be shown separately. This is a welcome recognition of an important ingredient in efficiency which was missing from the White Paper, and it should avoid the cross-subsidisation between ports which many of us had feared.

A year ago I pleaded also for flexibility in handling the problem of port businesses. I said that we did not dispute the right of a port authority to be a substantial operator of port services and facilities. The intention behind the Bill is to make it the principal provider. What the shipping industry has opposed strongly is the creation of a monopoly situation. The Parliamentary Secretary, on Report in another place, said clearly that nothing in the Bill will give the N.P.A. such a monopoly position. This is reassuring. I welcome the appeal procedures that have been built into the Bill, and especially the recently added provision giving successful appellants a degree of security of tenure. Even so, there will be an immense responsibility upon the Minister of the day in administering these procedures. I can only trust that in doing so he, whoever he may be, and whatever else may be his guiding priciples, will not, by his decisions in individual cases, undermine the basic concept of through control. This is what matters to so many shipowners.

By the same token, I was glad to see the assurance by the Minister in Committee that there is nothing to prevent shipping companies from leasing land and berths from the N.P.A., and to be given security of tenure. This could be of great practical importance to shipping companies anxious to create their own facilities, as indeed it has been elsewhere on the Continent and in North America—and with success.

My Lords, there have undoubtedly been great improvements brought about since the White Paper. Not that there are not still blemishes; indeed, there most certainly are. I will not repeat the arguments about Milford Haven and the Med-way. I will only say that the Chamber of Shipping looks forward to being consulted, as has been promised, over the port reorganisation schemes for these harbours. We hope to find that our advice has been heeded, and that there will be separate local boards for Bristol and Manchester also.

I must say one word here about Scotland. The case for a single board for all the Scottish ports has been strongly argued in another place. Under the Bill, the N.P.A. will indeed be required to consider this possibility. But there is another side to the argument, and, for their part, shipowners in the main support the case for separate port boards for the two main estuaries.

A major organisational mistake in the White Paper still regrettably remains. It is the provision for the future transfer of harbours into the ownership of the N.P.A. The Minister has admitted that in practical terms it would have been unwise to have taken over further ports at this stage. To me, the argument for not doing so is more positive than that. The continued existence of independent ports will, and indeed should, provide the necessary competitive element in the ports industry—a sort of gadfly to the nationalised sector. But what happens if they prosper, as many of them have indeed been doing? The Minister has expressed it differently: he has described it as the development of the smaller ports to the detriment of the large ports. If that happens, the N.P.A. can apply to Parliament for those harbours to be brought within its ownership, as the Bill says: with a view to furthering the efficient and economical operation or development of the system of harbours in Great Britain". I cannot think that this is right. What an inhibiting effect those words are bound to have. "Strive and thrive" used to be the maxim. Now it seems it must be "Prosper and be nationalised". What a pity! I should have thought that the two sectors of the port industry could co-exist to the mutual benefit of each. My plea for a cooling off period of, say, five years before takeovers has gone unheeded. I only hope that, if and when Parliament is faced with a specific application under Clause 29, it will take a wider and wiser view of efficiency and economy of port operation.

One final word, my Lords, about the interests of port users. The Minister has said—and the shipping industry thanks him for it—that the Government are prepared to write into Clause 6 of the Bill (that is the clause that prescribes the general duties of the new Authority) a specific reference to the duty of improving the services to users. As he said, the ports are a service industry, and their success will depend on the quality of the service they provide. My Lords, I echo those words, for they go to the heart of the matter.

In the same spirit, I would repeat some words of the present President of the Chamber of Shipping, which to me epitomise the view of the industry. He said: We must learn to live with this Bill as it is, warts and all. For we would be foolish if we failed to recognise that it does offer a basis for living, even for stability, however much we may hanker after some other Eden.

4.37 p.m.

VISCOUNT SIMON

My Lords, a Bill such as this, which provides for a substantial extension of State enterprise, has naturally led to keen political argument, and I think that the speeches we have heard from the two Front Benches this afternoon bear that out. The main political Parties have established views on the subject of nationalisation, and that clearly influences their attitude to this Bill. I should like to invite your Lordships to consider quite objectively certain aspects of the Bill and to see whether you reach the same conclusions that I have reached.

Let me say at once—because even on these Benches we have to fly our colours—that, on balance, I regard this as a desirable measure. I say "on balance" because, of course, we can never get, as I think the noble Lord, Lord Geddes, said, an arrangement that either satisfies everybody or is perfect in every respect. I must first declare my interest, which I think is well-known to many of your Lordships: I am the Chairman of one of the port authorities which, when this Bill becomes an Act, will be a superseded authority, and I am also a member of the National Ports Council. But the views that I propose to express are my own views; some of them may be shared by one or other of those bodies, and some may not.

The noble Lord, Lord Shepherd, reminded us of the back history of the recommendation of the Committee presided over by my noble friend Lord Rochdale, that a National Ports Authority should be set up, and of the fact that two years later the Government of the day, in the Harbours Act 1964, rejected that advice and set up a National Ports Council. At the time I agreed with the Government of the day, for this reason—and it is a reason to which the noble Lord, Lord Drumalbyn, has referred: that in their Report the noble Viscount, Lord Rochdale, and his colleagues recommended that the National Ports Authority should have power to direct the independent port authorities to undertake schemes which they regarded as desirable without accepting any financial responsibility. That seemed to me to be wrong at the time, and it seems to me to be wrong still.

The noble Lord, Lord Drumalbyn, suggested that the objection is only a theoretical one. I think that it is an objection in principle—although I am not sure whether that is very different from a theoretical objection. But I think that what he suggested might happen, or would happen, is really over-simplifying the position. If the National Ports Authority are set up to decide upon the national interest, and recommend to a particular port that it should do something which that port considers to be uneconomical or undesirable, while I am sure that the port authority would not wish to be thought unpatriotic, it might well take the view that the National Ports Authority were wrong about the national interest. After all, these matters are not as simple as all that: that anybody saying that something is in the national interest will necessarily find his opinion accepted by everybody else. I feel that events have shown that there is a gap in the machinery for planning the development of our ports. That gap derives from the fact that there is only a negative planning power—a power to refuse something that is proposed, but not a power anywhere to propose it.

LORD DRUMALBYN

My Lords, will the noble Viscount forgive me for intervening? I accepted this, and accepted my noble friend Lord Rochdale's view that the National Ports Authority should have powers of direction. The consequence of that is that if the National Ports Authority give a direction, in my view it should accept part of the responsibility for the results of that. There should be some form of guarantee attached.

VISCOUNT SIMON

My Lords, I apologise to the noble Lord if I misrepresented him. I picked up the point that he said that in circumstances like that there should be some financial adjustment. But if the National Ports Authority have no ownership in the ports I do not know where they get their financial resources from in order to pay the compensation. However, perhaps we might return to that later.

It seems to me that this Bill remedies this defect; but if it is to be remedied the National Ports Authority must assume financial responsibility, and I do not see how it does that without acquiring the assets and exercising a general control over the individual ports. It would be possible to argue—although I do not think it has been argued—that the National Ports Authority should be set up rather on the same basis as the public trust ports; that is to say, it should be set up by legislation, appointed by the Minister, but thereafter should not have direct responsibility to the Minister or, through him, to Parliament. I always remember a respected Member of your Lordships' House, the late Lord Morrison of Lambeth, complaining bitterly about the public trust ports, and describing them as "soviets", by which I think he meant that they were public bodies responsible to nobody.

Public trust ports (and I have had the privilege of working in one for some time) have worked pretty well. They exercise responsibility, and certainly they feel responsibility to the community as a whole, and particularly to the trading community. Nevertheless, there is no one to whom they must answer for that responsibility. While that may be a permissible arrangement where there are a number of ports which, as the noble Lord, Lord Drumalbyn, has said, are in competition with each other, it would not be permissible or acceptable to Parliament if it were applied to the whole of the major ports of the country. Those are the grounds why I came to the conclusion that the right solution was a National Ports Authority which should be the owner of the major ports that it administers.

On the composition of the National Ports Authority I have one comment to make: I should have thought it completely wrong for members of port boards also to be members of the National Authority. There was at one time a suggestion that the National Authority should consist of all the chairmen of the port boards meeting together—a federal body—but I cannot believe that this is right. If the National Authority is not to include members of each of the port boards, it must lead to even greater trouble if some port boards are represented on the National Authority and others are not.

There is in any proposal of this kind a risk of over-centralisation. If the National Ports Authority has the responsibility it must be given the power, and in the last resort the reserve power to interfere. I should have thought that the Government have gone as far as they are able in this Bill, in Clause 2(2), which ensures effective devolution to port boards. The subsection does not say that the National Ports Authority "may" delegate powers—the powers to operate the port: it must do so. This is absolutely essential, and the Bill has gone as far as it can to produce this result.

As regards competition, there is a great deal in what was said by the noble Lord, Lord Drumalbyn. I will accept that competition between ports under a common ownership cannot be as keen and as sharp as competition between entirely independent ports. This is the price we pay for getting a more efficient structure. On both sides of the House there is sometimes a tendency to over-emphasise the importance of the profit motive as a spur to efficiency. Do we forget that, particularly in the past 25 years, there has been a tremendous growth in professional management? The professional manager, although, like anybody else, he is concerned about his salary, is far more concerned about doing a good job. Where you have professional management you will have a spur to efficiency and a spur to competitive efficiency that will be just as good as the results of direct competition.

I want to say a few words about advisory committees, dealt with in Clause 4. The advisory committees were attacked with absolute devastation in the Committee in another place by the honourable Member for Poplar. I do not always agree with what he says, and I did not agree with all the arguments that he advanced; but he produced a devastating attack on the advisory committees. Unfortunately, for reasons which I can understand, he did not follow it up, with the result that advisory committees survived by one vote. These advisory committees seem to be a nonsense. They are to consist of representatives of shipowners, exporters, importers, fishing interests, local authorities, persons concerned with navigation, persons concerned with amenities and, of course, the trade unions. My Lords, what can a large committee, composed of all these different interests, effectively do? The duty of the port board is to keep in touch with all these interests in relation to matters that affect them. If all the interests are brought together on one committee I cannot see how it becomes effective.

I had an unworthy thought (which I am sure the noble Lord, Lord Hughes, will be able to remove from my mind): that was that the advisory committees were introduced for the purpose of killing criticism, because it appeared that criticism could not be advanced unless the committee agreed. The Parliamentary Secretary referred to the fact that it would be inappropriate for individual users to go over the heads of the committee; the committee will have to decide whether matters shall be taken up. I do not understand what the thought is behind this. Surely an exporter who has a complaint against the port board does not have to lobby the local authority, the amenities society or even the trade unions to get support. The port board's doors should be open to complaints from anybody, and the board should deal with them. I do not suppose that at this stage of the Bill the Government will do much about this. I had a thought during my lunch to-day whether it would be possible to provide that this particular clause should not come into operation until a later date, and only if at that date there was real evidence that the port boards were not dealing with complaints in a proper way.

As regards the appeal procedure, this will do a great deal to undermine the independence of the port board. Finally, if we are to have advisory committees, may I urge the Government to consider removing the provision that there may be on the advisory committee a member of the port board? I do not understand that. Supposing the advisory committee, dissatisfied with the treatment it received from the port board, decides to appeal, does the member of the port board go along with the advisory committee, or with the port board? I simply cannot understand that at all. Of course, the advisory committee will have to meet the port board to discuss matters, but the port board members should not be, I am sure, members of the advisory committee.

I turn now briefly to port businesses. This subject is rather more difficult. I must confess that I found Clauses 33 to 36 very difficult to follow. I asked myself whether there is any discretion or whether there is not any discretion. I think the answer is that there is very little. The Explanatory Memorandum on Clause 36 is not very explanatory; and the noble Lord, Lord Shepherd (if he will forgive me for saying so), was not very explanatory, either. He referred to the fact that in certain circumstances agreements could be reached between the port board and a port business; that for a period of time it was safe from takeover. But neither he nor the Explanatory Memorandum said that one of the conditions is that the port business has been through the original hoop and got exemption. I do not think anyone reading the Explanatory Memorandum would get that idea.

I think that the effect, and the intended effect, of this provision is that most of the port services offered to all comers, and not those which specialise in a particular customer, will in fact be taken over and there will be an effective monopoly. The noble Lord, Lord Geddes, referred with pleasure to the fact that the Parliamentary Secretary had said that that was not the intention. I cannot help thinking that the Parliamentary Secretary had his tongue somewhere in the direction of his cheek when he made that remark, because surely the effect is, and the effect is intended to be, that the port authority provide the general services, stevedoring and so on, in the ports. This gives rise again to the dangers of monopoly. Here it will be perhaps a little more difficult to ensure that efficiency is maintained. As I say, there will be competition between the ports, but within a single port if there is only one public stevedore it will test the management's ability to maintain the efficiency of that stevedoring concern. That is a challenge which must be accepted.

The advantages, to my mind, quite outweigh the disadvantages. First, there is the operational advantage that many operations which are now carried out by three employers working in a more or less loose combination can be carried out by one employer, and that must increase the efficiency of the handling of cargo. The other advantage, I am sure, is in industrial relations. The long delays which have taken place in getting matters settled largely arise from the multiplicity of employers. Everyone with experience in this field will agree that there is nothing that ensures bad industrial relations so much as delay in reaching decisions; and the advantage of a single employer will be very great indeed.

Now that I have come to the subject of industrial relations, I want to say a few words about them. We must bear in mind that the unhappy relations in the docks industry in recent years derive from two things. They have, I concede at once to the noble Lord, Lord Drumalbyn, nothing whatever to do with nationalisation or non-nationalisation. The first reason is that we are going through a revolution in cargo handling which everyone knows, including all the employees, is bound, in a relatively short time, to involve substantial redundancies. Naturally, because of this situation, the trade unions and the men themselves are in a rather touchy position. The other reason is that there is much too much harking back in this industry. Some people who ought to know better are rather apt to exploit the bad old days. The bad old days are over, and if we want to have successful industrial relations in the ports the men, as well as management, must be forward rather than backward looking.

In any well-managed business management must keep in touch with employees at all levels. Against this background my only criticism of Clause 42 is that it seems to me, in spite of what I think the noble Lord, Lord Shepherd, said, to contain too much detail, and the procedures that are set out there may lead to a great deal of machinery rather than to getting together with people. This machinery may prove in practice to be restrictive and obstructive rather than helpful. I hope it will not be so, but the machinery will have to be very carefully devised to ensure that that does not happen.

I like the wording that this is to encourage the participation of persons employed … in the processes leading to the taking of … decisions, because this is immensely important. It makes it quite clear that the decision itself must be taken by the management. I know many managers who would be delighted if it were said that the workpeople must take part in the decisions, because they are very often unpopular, but I know that that is not the way it can be done. In the last resort, having consulted, the management must be prepared to take the decisions, unpopular though they may be.

A very late addition (I think this was referred to briefly by the noble Lord, Lord Shepherd) was paragraph 4(3) of Schedule I, introducing the worker directors. I was a little surprised to hear the noble Lord say that all the Amendments had been argued in another place, because, if my information is correct, that Amendment was not argued at all. It was brought in under the guillotine, and, indeed, the noble Lord's explanation to-day was the first explanation that has been given, at any rate in public. I wonder whether this question has been well thought out. I like the idea, but the suggestion that one or more workers should be appointed to the port boards after the procedure has been worked out with the Trades Union Congress is all very well until one starts working out the procedure. I wonder whether noble Lords realise the number of groups involved. We tend to think that, because the greatest trouble with labour relations has perhaps been with the registered dock workers, they are the only people employed, but I believe there are more people who are not registered dock workers employed at the ports than registered dock workers. Most of them belong to different unions, but some belong to no union at all. Are we not going to get either jealousies or, alternatively, so many of these worker directors appointed that the port boards will become top-heavy?

Some of your Lordships may have had the privilege I had of sitting at the feet of the noble Lord, Lord Brown, in a different capacity and learning about the work that has been done on worker participation in the Glacier Metal Company. There, if I remember rightly, he had a council which represented all the different groups and they were brought into discussion. But that of course was not a board; it was a council for discussion. The other point which I think is not at all clear is the position of the worker directors. I have seen it suggested (not of course in your Lordships' House) that the worker directors would be in the nature of delegates. That, I am sure your Lordships will agree, would be quite unsatisfactory. If they are members of a board, they cannot be referring back to their constituents.

We must be careful in this matter that we do not get any confusion in the contacts between management and men. We are going to have worker directors; we are going to have the machinery under Clause 42 for consultation on a number of matters; we are going to have all the time the normal contacts that go on every day with trade union officers and what are called in other industries shop stewards—we usually call them "men's representatives" —and (let it not be forgotten) we have contacts also through the National Dock Labour Board. We shall have to be extremely careful to get the terms of reference of all these various committees well worked out, so that we do not have complete confusion. There is a Bill in another place now which is going to set up safety committees as well, although safety is, as I see, one of the subjects dealt with in Clause 42 of this Bill.

Finally, my Lords, on the subject of employment, there is one point which I think is of fundamental importance. Throughout the Bill reference is made to the employees of the National Ports Authority, but by far the greater number of the employees are in the ports. I do not know whether there is some legal nicety here, but I feel that the employees should be the employees of the ports boards and their contracts of service should be with the port boards. A man wants to know who his boss is, and he wants to see him from time to time. I do not know where the National Ports Authority will set up its office, but it certainly cannot be in all ports at once, and I should have thought there was a certain psychological advantage in having the employees as actual employees of the port boards.

We then come to the subject of the vesting date. Here I am treading on dangerous ground. This point has already been referred to, but I hope that the Government will not feel that, for political reasons, it is necessary to advance the vesting date until time has been given to complete the great deal of work which must be done before the National Ports Authority can possibly be ready to take over this complicated system.

The noble Lord, Lord Shepherd, paid a tribute to the ports of to-day, and I should like to reinforce that. If noble Lords think that I should except London I am quite willing to do so, but I would say that the ports of this country are not inefficient and they are not backward. I have had the privilege of being the president of the International Association of Ports and Harbours for two years, and for eight years I have been a member of the executive committee. I meet ports people from all over the world, and I can assure your Lordships that the British ports stand very high in their regard; they are constantly coming here to see what we are doing. Our ports are served by an experienced and devoted staff and I hope that everything will be done to hold together the ports as they are at the moment. Do not let us break up their loyalties.

The noble Lord, Lord Robertson of Oakridge, has left the Chamber but I see the noble Lord, Lord Hurcomb, here and it is perhaps a little dangerous to say this. Looking back, I think that most people would feel that some of the trouble which occurred with the nationalised British Railways was because the companies were broken up, as also was the company loyalty of the servants of the old railway companies. I do not want to see that happen to the ports. We have so much that is good in the ports; let us try to retain them as they are. They will act subsidiary to the National Ports Authority but still with their own identity.

5.4 p.m.

VISCOUNT ROCHDALE

My Lords, the subject that we are discussing in this Bill is really the same subject that confronted my Committee in 1960/61. It is not a question, as with so many other nationalisation Bills, of the transfer of ownership and so on. It is a question of organisation, and that is the fundamental question that we have to discuss this afternoon.

I say straight away that I dislike the Bill very much indeed, but it is always a good thing to start off with one aspect that one appreciates—at least, it looks not too bad. So I will begin by dealing with one aspect that I find reasonably satisfactory; that is, that there is nothing in the Bill that runs counter to one of the main proposals in the Report of my Committee, that the ports of this country should be organised on an estuarial basis. The Ports Council over the years has been doing a tremendous amount of work on this. The esturial authorities have been set up and they are working satisfactorily, and as I read the Bill there is nothing to prevent this aspect of it continuing.

Having said that, I must now turn to three fundamental points about which I feel very unhappy indeed. Reference has been made in the debate this afternoon that we, in our Committee, recommended the establishment of the National Ports Authority. Let us be absolutely clear, my Lords: the National Ports Authority in that Report and the National Ports Authority in this Bill are totally and absolutely different types of body. The body that we suggested was a strong body at the centre which would be independent but non-operational, and there would be no suggestion that it would, or indeed could, interfere with the day-to-day management. This solution would, for example, have allowed the central body to do certain things, and I will mention a few in passing. It would have been able to prescribe its right to standardise forms of accounting on a wide basis for port authorities, including management accounting. It would have been able to authorise investment schemes within a total investment programme approved by the Government.

It could, on its own, have prescribed standards of training, and it would itself have been established on the basis that initially it would have been paid for by the Government. But it would not, my Lords—and this is a most important point and other noble Lords have argued this from both points of view this afternoon—have owned any of the ports. And I agree with other noble Lords who say that this is a crucial point. Whether or not the central body should own the ports is the crucial point.

This suggestion of my Committee was never tried. Instead, the then Conservative Government, with Mr. Marples at the Ministry of Transport, proposed a National Ports Council, and I will admit straight away that when he invited me to be the first chairman of that Council I felt considerable reluctance because it did not have the powers that we wanted. On the other hand, I recognised that given whole-hearted and positive co-operation, first by port authorities; secondly (perhaps less important but still important), by port users, but above all by the Government, the Council could be made to work satisfactorily. But—and I stress this again—its success, its satisfactory working, would be entirely dependent on whether it had positive co-operation and backing from the Government. Without that—not only without the backing but without the backing being seen to exist—the Council could not achieve success. I shall say more about that a little later.

We then had the Harbours Act. As my noble friend has said, it was substantially an agreed measure but very soon afterwards that positive backing was not forthcoming. I say that quite categorically. Within a very few months of the Council being set up after the General Election we had, first, rumours of a "little Neddy" (it was changed into being the "little Neddy" for the movement of exports), and then within a year of the Council being established rumours began to circulate about nationalisation. It would really be hard to conceive of anything more calculated to undermine the Council's position. It is tempting to say a great deal about that but I shall try not to give way to that temptation.

I come now to what I regard as the three basic faults in the Bill. The first one has of course been discussed already, but I make no apologies for going into it again. With the National Ports Authority of the Bill owning and having responsibility for the operation of all ports handling more than 5 million tons, or, as the White Paper tells us, 87 per cent. of the port capacity in the country, there will be virtually no competition between the ports throughout the industry. I should like to look at that in somewhat greater detail. I know that it may be asked: what about the other 13 per cent. that are remaining independent? The 13 per cent. capacity outside the State-owned ports is, I submit, bound to feel itself dominated by the National Ports Authority, and I should expect that these private ports, which are at obvious risk under Clause 29, will go out of their way to seek business that will avoid direct competition with "big brother"; in other words, they will try to keep out of the limelight. As regards the 87 per cent. capacity—that is to say, all the ports within the public sector that are to be taken over—to suggest that there can really be commercial competition between any of them is, to my mind, just a pipe-dream.

I am well aware—and it has been mentioned this afternoon—that in the Bill there is provision for devolution schemes. I have also noted the very categoric statement which the Minister made, on Second Reading in another place, when he said: And I confirm that the policy of the Government is to encourage competition on service and on price between individual ports in the public sector."—[OFFICIAL REPORT, Commons, 18/12/69, col. 1572.] I think, from what has been said this afternoon, he confirmed that at subsequent stages of the Bill in another place. But is there any evidence from other nationalised industry to suggest that competition is possible, or indeed is seriously intended? Certainly the latest example of that, the steel industry, does not offer much encouragement. The Bill I think very conveniently avoids, or at any rate blurs, the question of the relationship between the centre and the ports. We hear talk of the kind of relationship that exists between a holding company and subsidiary companies. But I am not sure whether even that is a very good analogy to illustrate the concept of competition that the Minister himself is trying to give us. It sounds well, but I feel that it means little.

I happen to know the gentleman who I understand is Chairman-elect of the new Authority. I have the greatest respect for his ability, and I am sure that he will do as well as anyone; and he will try very hard. But, like all of us, he is still a human being; and since he must know, and know all too well, that on his shoulders will rest the responsibility for all his ports, he will take good care to see that all his ports prosper; he cannot risk anything else. The cold fact will therefore be that the new set-up must, in practice, become highly and progressively centralised. Competition between one port and another, whereby one port might prosper to the serious disadvantage of another, will just not be capable of being allowed, and what cannot fail to follow as a consequence is that port costs and port charges will rise. I am very well aware—and I would not wish to be misunderstood on this—that in certain areas in port activities charges to-day are too low. We said a good deal about that in the Report, and although there have been many changes since then, even to-day there are still areas where some charges are too low. So they will rise. But there will be other reasons why charges will rise—for instance, the ordinary effect of inflation, which we know in every other activity—and those other reasons will conceal the fact that it is the passing of this Bill that has caused charges to rise very substantially.

This question of charges is therefore a very important one, and it leads me to put this question to the noble Lord who is going to reply. Will the Government come out squarely and admit that centralisation is really inevitable, and, indeed, is what they intend? I do not know what the noble Lord's answer will be, because I feel sure that he will be unable to go back on what has been said in another place and again here to-day by the noble Lord, Lord Shepherd. On the other hand, I should find it extremely difficult to believe him if he said that centralisation was not inevitable.

THE MINISTER OF STATE, SCOTTISH OFFICE (LORD HUGHES)

My Lords, if I am going to reply the noble Lord is putting me in an impossible position. He is asking me to say a particular thing and then says that if I do say it he will not believe me. Will it not be rather a waste of time?

VISCOUNT ROCHDALE

No, my Lords, it will not be a waste of time. I agree with the noble Lord that I have put him in a difficult position. But he is in a difficult position, and cannot get out of it, and that is endemic to the whole basis of the Bill. The truth is that the Bill sweeps this very fundamental issue under the carpet. But in due course it will, I think, dawn upon those who have responsibility in the ports, or who come to be given and offered responsibility in the ports, that they will count for less and less.

I know very well (it has been mentioned this afternoon) that there are counter-arguments to this. There is the very plausible counter-argument that the centralised structure we are now discussing will make rationalisation of investment much easier, and will avoid wasteful duplication and, therefore, excessive capital charges, which I freely admit form a substantial and important part of port charges. But as a counterargument that, I think, will not really hold water, because under the Harbours Act the Minister already has substantial powers to control investment in the ports, and if there has been any wasteful duplication of investment the Minister must already share a substantial degree of responsibility. To to be fair to him, and to his predecessors, I would add that I do not think there has been wasteful duplication. But this is not an argument in favour of the Bill.

The other counter-argument I should like to mention, one which I think has not so far been referred to, is the comparison that might be made with the very successes of the existing nationalised ports under the British Transport Docks Board. They have been a very great success, and their success is due very largely to their first Chairman, the present Chairman of the National Ports Council, Sir Arthur Kirby. But in that particular case the British Transport Docks Board were never more than one-third of the whole industry, and they operated in three main port areas of such a character as not to be in serious competition the one with the other; and none of them was of such a size as to be capable of throwing the whole industrial competitive system out of balance. Indeed, I will go further and say, to show how open-minded I am about nationalised ports, that in the early days of the Ports Council we gave a lot of thought to our views on the Docks Board, the nationalised ports, and we came to the conclusion that there was even some virtue in having them as a counterbalance to the independent ports. But, as I say, they amounted to only one-third of the whole industry.

My Lords, I turn to my second main point of criticism. Towards the end of his most interesting speech my noble friend Lord Simon made reference to the National Dock Labour Board. As I understand the Bill (and perhaps the noble Lord, Lord Hughes, will tell me if I am wrong here) the port boards will become, broadly, the sole employers in their area. So the question therefore arises: why retain the National Dock Labour Board at all? If ever there was an industry which suffered from a lack of proper and direct relationship between employers and employees it is the port industry. And I should have thought that if ever there was an opportunity to do something better, to construct something rather better, now is the time, under the Government's proposed scheme. Yet as I understand it, from reading, as I have done, all the debates, the Minister seems to be making a virtue of leaving the board substantially as it is.

I was rather surprised a week or so ago when, in a television programme, a senior official of the Transport and General Workers' Union, in discussing the subject with the Minister, said that the Rochdale Report had not dealt with dock labour. I think he was corrected. In fact, when we were considering the ports my Committee paid considerable attention to port labour. We recognised that, like all questions of organisation, the human factor was one of the greatest importance, and we were very conscious of the responsibility that lay on our shoulders. We devoted four chapters to it for that purpose. Indeed three years before the Devlin Committee ever met we urged pressing ahead with decasualisation, which at that time had already been agreed by the National Joint Council. We urged the drastic reduction in the number of port employers; and we pointed out the tremendous importance of proper amenities for port employees.

I mention that only to underline why I feel that I have the right to say what I am going to say now. I am well aware that the National Dock Labour Board has been regarded by port workers since its inception as sacrosanct: it is their "bible"; to them it is all-important. But without wishing to lay blame at anyone's door, whether employer or employee, I can say that this attitude of the port workers towards the National Dock Labour Board was quite understandable. It was their lifeline. But under the unified system that is now proposed it surely becomes a nonsense, at any rate if and when port businesses are taken over under Part II of the Bill. I think we should aim to do better than we have done before on this aspect of organisation. I am sure I am right in saying that Mr. Ernest Bevin, the founder of the National Dock Labour Board, recognised very well that it was not the end of the road but was merely the beginning.

I come to my third main point, which is a quite different one. Under the present arrangements, the Council is responsible in respect of the whole industry, both large and small. It is the focal point for the industry, and through the position that it holds it is able to acquire and to pass on, to the benefit of both large and small ports, the best available experience on a whole range of subjects. Take the question of training. The National Dock Labour Board is responsible for training in dock work—the actual handling of cargo. But in all other training, such as general training, management training and so on, the Ports Council has become the recognised sponsoring and co-ordinating authority. Or take port research: here again the Council is the central co-ordinating body. Recently it has been doing great work. It has produced major reports on port charges, on structures and on heavy lifts—to name a few.

The Council is also the centre of the statistical side of the industry; it produces the most comprehensive information on a national basis. When I was Chairman, the Council were constantly being asked by independent ports of all sizes—I do not know, but perhaps I am not right in saying more particularly the small ones; but both small and big—for advice on many subjects: on engineering, on technological questions; on such matters as organisation structure, management and finance, and so on. The question and the doubt that I have here is, what is going to take the place of this central fount of advice for the independent ports? How is this advice to be given? The Authority cannot do it. It can do it, no doubt most capably, for its own ports, but is it really realistic to think that this advice will be acceptable for the independent ports, with whom it will be in competition and by whom, therefore, it must be regarded in some respects as prejudiced and suspect?

Who can do this work for them? It might be thought that it could be done by the Ministry of Transport. In the case of statistics, I think that probably the Ministry of Transport could do this work; but in other questions I believe that the Department itself would be regarded as suspect, knowing the great interest that it might rightly have in the success of the Authority. How this is going to be dealt with I do not know. Nothing has been said about it that I can find, either in another place or elsewhere. Our concept of a single industrial structure will be shattered. This, I am afraid, must be regarded as a retrograde step.

I think the Minister has an obligation to tell us how he is going to deal with this problem. Speaking for myself, I can imagine no answer that would be satisfactory. One is therefore left with the rather regrettable conclusion that the independent ports not only will be liable to be taken over under Clause 29 but will, in the meanwhile, have to operate without the benefit of expert services which until now they have been enjoying from the Council, and which I believe have been both valuable and appreciated.

Some reference has been made to the exceptional case of Manchester—exceptional in the sense that it is the only private port that is being taken over, and therefore the question of compensation arises. It may be that your Lordships will think that this question of compensation is better dealt with in Committee. I would merely say now that I hope that, before we come to look at it in Committee, the Government will think again: because to many of us the compensation offered is hopelessly inadequate. I say that without any vested interest; I have no shares in Manchester. The only possible interest I could have would be a purely sentimental, historic one, seeing that the Ship Canal combines in its various assets the Bridgwater Canal, which many years ago was in the ownership of my mother's family.

I was going to raise a point which has already been mentioned, a rather less important one, as to whether shipping companies will be able to lease berths. I did not notice whether the Minister said that this would be possible, and I should like to ask the noble Lord, Lord Hughes, if he is able to say whether it will still be possible for a shipping company, if it wants, to lease a berth, so that it can then erect its own structures, have its own labour and run it entirely on its own, as happens in many other countries with great success. It is not quite clear to me whether, under Clause 35 or elsewhere, this very efficient way of doing things is still possible. I can think of one notable example in the great port over which my noble friend Lord Simon presides with such wisdom.

My next point is not covered in the Bill, but it emerges directly from it. I should not want this to be in the Bill, and I think it is right that it is not. There is no reference to the relative functions in the new Authority as between the chairman and the chief executive. I personally hope that these two functions, which are immensely important and quite distinct, should not be held by the same person. The chairman is appointed by the Minister, and can be reasonably dismissed by the Minister. This can happen at very short notice; and if he is also the chief executive his sudden dismissal can have devastating results. I am not suggesting a hypothetical situation which could never happen. None of your Lordships has to look very far to remember a regrettable example of this within the lifetime of the present Government. On the other hand, if the chief executive is a quite separate individual from the chairman, appointed by the Authority and not by the Minister, then the risk that I am referring to will be avoided. I hope that the Minister will give very careful consideration to this, even if it is necessary for him, as he can under the provisions of the Bill, to give some form of direction.

On the question of staffs, I should like to say something about the staffs not only of the Ports Council and the British Transport Docks Board, but also those of the Port Authorities—though perhaps to rather a lesser extent. The possibility of legislation on some such lines as we are now discussing came up some four or five years ago. There had been rumours and counter rumours, proposals and discussions, withdrawals and so on, and yet it was only last year that the White Paper was published, and we discussed it in April of last year. The uncertainty that must have been created in the minds of the members of the various staffs can only have caused alarm and despondency, and for this the Government alone were responsible. I can remember very clearly that this was so myself. When I was Chairman of the Council—it was about May, 1966—the uncertainty, the feeling of unrest and disturbance in the Council was such that after having spoken to the Minister herself I had all the Council's staff together and did my best to try to allay their fears so that the work of the Council could proceed smoothly. To allow this uncertainty to go on for something like four years seems to me completely intolerable.

To sum up, I find this Bill hardly relevant to the real problems of the docks. If the Government consider that some development has been approved which ought not to have been, let them identify it; if some development has not taken place which should have taken place, let them identify that, too. I think the Government—and I am afraid that I must couple the noble Lord, Lord Shepherd, with this—painted a far too dismal picture of the industry as it is to-day. Despite all this, I would say that the industry has done remarkably well and has achieved considerable results over recent years. Here, if I may, I should like to pay a warm tribute to my successor at the National Ports Council, Sir Arthur Kirby. It is no small credit to him that the work of the Council has gone forward over the past three years with ever increasing momentum. There has been a substantial reorganisation; there has been standardisation of accounts, and notable changes have taken place in the fields of research and training. And as other noble Lords have said, there are very welcome signs of a growing light on the labour scene.

My Lords, is all that to be thrown into the melting pot again? The truth of the matter is that in 1965, as a result of a completely arbitrary decision (the reasons for which there have been some interesting and almost amusing speculations put forward), the Government decided to nationalise the docks. They then spent the next five years, first, in producing the working document which was based on the Labour Party report, and then a White Paper defining how to carry the arbitrary decision into effect. Surely here was a case of the decision first and the argument for it after; an extreme case of the cart before the horse. They have ended up with a compromise which, I believe, really pleases no one, and which leaves unresolved the issue of the relationship between the centre and the periphery.

We are all entitled to our own views on any subject, and it is rare for there not to be more than one good way of doing the same thing; indeed, if change can clearly be seen to be an improvement on the present, then let there be change. I would be the last person to suggest that we ought to stay where we are, but I can see no signs that the changes proposed in the Bill are an improvement. They are not the result of any carefully reasoned argument to improve the industry. I should have found it all too easy to succumb to the temptation to be rather bitter. I have tried, instead, as I have many friends in the industry whose careers I would not wish to harm, to be factual and constructive, and I can only hope that the Government, any Government, will allow those in the industry, from the top to the bottom, to get on with the job and do the best they can, in whatever difficult circumstances they may be forced to work.

5.39 p.m.

THE EARL OF SELKIRK

My Lords, we have had three authoritative speeches from experts on this subject, and I want to take up shortly one theme which has run through all those three speeches. Before doing so, may I say how glad I was to hear the noble Viscount, Lord Simon, say that the standards which were maintained in the ports of this country were looked to as leading examples throughout the world. I found those words slightly out of line with the description which the noble Lord, Lord Shepherd, gave earlier.

The noble Lord, Lord Geddes, in a very impressive speech, quoted the crucial words which the Minister used: I have sought throughout to preserve what is best in the present structure, namely, the scope for local enterprise."—[OFFICIAL REPORT, Commons 29/4/70, col. 1365.] The noble Lord said that he approves of those words. I think that everybody approves of those words, but they are not in the Bill, and therefore it is something about which Parliament has absolutely no assurance whatever. What the Government have set themselves up to do is to run the whole of the industry, which is quite disconnected except for providing a common service, by one centralised Authority in, I presume, London—because these committees are always in London.

The noble Viscount, Lord Simon, said that he thought the balance between the Ports Authority and the boards was about right, but he went on to say that it was proper that the national Authority should give general instructions. But as the noble Lord, Lord Shepherd, has said, not only will the central Authority give general instructions; they will have managerial responsibility. That is perfectly clear from the wording of the Bill. Secondly I would say to the noble Viscount, Lord Simon, that it is all very well to have a centralised Authority which you can get at quite easily from, say, the Port of London; but it is an entirely different proposition when the controlling Authority are a long way away and possibly not very familiar with local circumstances. The whole industry depends on the efficient running of this centralised body, and if they are inefficient it will redound to the disadvantage of all the major ports in the country, which will be able to do very little about it and will probably have what almost amounts to a standard pattern imposed on their way of conducting business.

As I am sure the noble Lord, Lord Hughes, knows, this proposal is generally opposed by the Scottish Council, by the Scottish T.U.C. and by the Rochdale Committee; and against that the noble Lord, Lord Shepherd, placed the report by Mr. Mikardo and a couple of reports produced by the Minister. That is the balance of authoritative opinion which has been taken. The Minister is fully aware of the criticism and fully aware that there is excessive centralisation. He tries to get out of it by saying, "We attach the greatest importance to consultation with Scottish opinion." It is a curious fact that between the publication of the White Paper and the Bill, the Secretary of State for Scotland has completely dropped out. He has disappeared. Therefore, so far as the Statute is concerned, there is no assurance whatever that anybody living in Scotland will be consulted at all.

That is the position which we are now in, and it really is not good enough simply to depend on the good will of the Minister of Transport. The noble Lord the Minister will of course say that there is provision for delegation in the Bill. That is true. But it has to be approved by the Minister, and what delegation will there be? The only sure delegation is the simple day-to-day running, and there is nothing else whatsoever. Not only that, but the delegation can be revoked at any time. Therefore it is very difficult to say that any effective decentralisation can take place.

May I mention one or two of the disadvantages which seem to flow from this highly centralised organisation? First of all, the Secretary of State for Scotland is responsible for roads and these should be co-ordinated with where the harbours are and where they are to be developed. Is this not a common matter of physical planning which should take place in the area for which he is essentially responsible? Secondly, initiative will lie entirely with the centralised body. There is no scope for initiative on the part of the port boards. They have no authority except by permission, and they are responsible not to anyone in the locality but only to the central body. Also, their duty is to do as they are told if they want to hold down their jobs.

Thirdly, since they will have to be obedient, men of ambition will, without doubt, go away from the port boards and seek positions where they can have authority and responsibility. That is not good for an area, and it is not good in matters such as labour relations to have to deal with people who cannot take a final decision. In almost every case it will mean that decisions will be referred to the central Authority. Finally, if you denude an area of responsibility, many of the voluntary acts of local authorities, hospital boards and so on, can no longer be performed by people in the area. You are therefore denuding people of responsibility.

For all those reasons I think it is a great pity that the Government wish to go on with this highly centralised system when they are not, as I am not, very happy about it. Is it conceivable that anyone who was not very familiar with the position on the Clyde would have thought out the scheme of Oceanspan, which will, I hope, be discussed in this House in greater detail? It is very difficult to think that anyone who was not very familiar with the area would think out such a scheme at a considerable distance. No doubt there will be what: is called a "statutory Scotsman" on the central Authority, but I suggest that: it is fundamentally wrong that all authority should be taken away from the place of action. We shall have to go into this matter in Committee. I want merely to put to the noble Lord certain points, one of which has already been suggested.

Are the port boards going to be effective employers of those working in the ports? That is an important point. Are they going to decide the charges which a port has to make, and will they have financial responsibility for the operation of the ports? Is there any other way by which they can be made effectively responsible for what they are doing? I do not doubt that the noble Lord, Lord Hughes, is a bit sensitive as to whether or not the Minister really meant what he said. I take it that he did mean what he said, in which case I want to see it in the Bill. That is what I am going to ask the noble Lord to look at very carefully in Committee stage, so that the standing of port boards is really effective.

5.48 p.m.

THE EARL OF LAUDERDALE

My Lords, the noble Viscount, Lord Rochdale, concluded his speech by saying that the Bill is hardly relevant to the problem of the docks. He might have added that it is also hardly relevant to the wider question of Britain's place in the Western economy. Where time and circumstance beckon with a challenge, this Bill bears the age-marks of an epitaph. It has been offered to us with a rhetoric of beneficence, telling us time and again, with a regularity to make a clock blush, that there has been some "diffusion and misdirection of resources", only to be put right by what is known as the "discipline of national ownership". And this is claimed when every piece of capital investment above £500,000 must in the past five years, under the Harbours Act, have been vetted and open to the veto of the Government of noble Lords opposite.

Though they have been ignored on some matters, such as MIDAS, and ostentatiously put on one side on others, such as the siting of the smelters, the National Ports Council have indeed done a fair job, guiding some £120 million worth of capital investment to up-date the classical ports at classical sites for classical cargoes and even for neoclassical containers.

But, looking to the future—and that is the context in which the Bill is brought before us—that is not all that we are here to discuss. The vortex of truth surely embraces this: that ship-scale to-day has outstripped the landward infrastructure almost everywhere; that geography and ship mathematics impose new imperatives; that a cargo ship's economics are a function of its size and distance; that the square root of length gives optimum speed—and when all this means larger ships with deeper draught going faster, the volume relation is the cube of the length relation, with consequences in harbour provision that are utterly explosive.

My Lords, the Rochdale Report, which we received yesterday, points out in paragraph 489 that in 1968 ton-mileage of cargoes by bulk carriers above 18,000 tons had multiplied more than 12 times in the previous eight years; that ton-mileage of the five most important bulk goods had gone up 128 per cent. during that period; that in 1968 more than 75 per cent. of the seaborne trade of major bulk cargoes was in bulk carriers above 18,000 tons. Since 1968, mammoths of more than 150,000 tons at sea have multiplied by five. There are more than 100 of them afloat to-day, and there are nearly three times that number on order. These offer to open up richer sources of denser material from further afield, be it from South America or the Antipodes; from Alaska, from the Antarctic or from Siberia. My Lords, a like pattern in the growth of container ships was foreseen by the McKinsey consultants, I think four years ago, when they saw the ships carrying 2,000 containers which are now being built being matched by jumbos with loads of 10,000.

This raises problems of turn-around and back-up space in our port planning for the future which are, as I say, literally explosive. It may be said that a single container berth for a through-put of half a million tons a year needs about 20 acres. But supposing ships are coming along to take one-twentieth of that amount at a single sailing, how much extra back-up land must be required and must the National Ports Authority, under this Bill, be prepared to enable port boards to acquire and provide? It could be ten times as much.

If one bulk carrier is twice as big as another—twice as long, twice as broad, twice the depth, with twice the number of holds—it will need not twice but four times the discharge capacity per hold. It will take not twice but eight times the volume of cargo; it will need not twice but eight times the waterside for turn-around and stacking. And if the rate of discharge is constant, in tons per hour per hold, then the big ship must stay not twice but four times as long in port, and may well have to pay not twice but eight times the dues. That is something which the charterer will not endure. He will seek a port to fit his needs—and this is the kind of development in port provision with which this Bill ought to be dealing.

What I am about to say is not in any sense of criticism of those who have manned and run the ports hitherto, whether the publicly owned ports, the privately owned ports or the British Transport Docks Port. But the simple fact is that, compared with other advanced industrial countries, we look almost as backward in our deep waterside harbour provision as the underdeveloped countries of Africa, of the Indian Ocean and of Latin America. Just how backward, the European figures are there to tell us. More than three-quarters of West Europe's grain comes by bulk carrier; less than one-quarter of ours does so, and one-sixth of ours is trans-shipped from the Netherlands. Scotland's first iron ore imports from Australia are going to come via the Netherlands. London's and Liverpool's cargo through-put, I think I am right in saying (and the noble Viscount. Lord Simon, I know, will correct me if I am gravely wrong), their port traffic, rose during the period 1964 to 1968 but a few per cent. The British Transport Docks Board's traffic rose 11 per cent., but the port traffic of the North Sea ports of the Common Market countries grew by 22 per cent. In 1968, Benelux, with only one-third of the manpower which we in this country enjoy, beat cur export figure, which was £6,870 million, by £500 million. It is no use trying to argue, as has been attempted, "Oh well, the West European ports have a European hinterland which we have not." We too have a European hinterland, which we are ignoring; and we have the wide world as well.

My Lords, this is the situation which this Bill should be facing. Yet such an almanac of shame still lies open to be read five years after the warning of the McKinsey consultants. They pointed out that further economies of scale were bound to force the amalgamation of British and European cargoes over the trans-ocean routes. This, my Lords, should have concentrated the mind wonderfully; for it meant, and means, either that Britain shrinks to being a feeder from and to Europe or that Britain fights back. It means either that Britain wallows in a sort of black benediction of introspective and complacent defeatism, or Britain wakes up—and wakes up to become the richest entrepot point of the West.

My Lords, behold the very beckoning of Nature. The biggest vessels now lighten ship lest they fail to make the North Sea fully laden pending—and I now quote the Netherlands Minister of Transport and Waterways, considerable dredging … on the bottom … of the English Channel … if that is economically and hydrologically jutified. Nature not only has blessed us with the deepest water of the West, but has cursed the North Sea bed with 20-feet moving sand dunes which defy prediction. These are the hazards which could again help to bring the big ships to us if we would but cater for them.

All this is what the Bill should be about. Yet the best part that I can find in it seems to have slipped in by chance. Provision of port-related industrial development, so far as I can read the Bill, is not even mentioned. When the acquistion and the development of deep-water sites comes to mind—whether we are thinking of Llanwern-Wentloog, at Newport, whether we are thinking of Hunterston or Ardmore, on the Clyde, or whether we are thinking of the Lune Flats near Heysham—what little provision for that that there is in this Bill lies buried. It lies buried in Clause 12(6)(a), with its reference to Section 11 of the Transport Act 1962, paragraph (a), which simply allows the Authority (or maybe it is the sudsidiary board) to buy land, if the Minister agrees.

Here is hardly a clarion call to port boards boldly to plan for the buccaneering interception of so much ocean trade now going to Europe as will be needed to sustain 70 million people on the 50 million acres of this island with a conversion economy. There is nothing here to inspire port boards to do more than shuffle around for a profit most readily obtained and disguised—and I take the point of the noble Lord, Lord Shepherd, in his opening speech and also the points made by my noble friends on this side—by milking the oil ports: and that in a process likely to be made easier (the noble Viscount, Lord Simon, drew attention to this) if membership of the top authority and the local boards is allowed to overlap.

The project is to seize Milford and Medway for their oil dues. Here is the velvet touch in the iron glove! Hardly the lure for the oil refineries for cheaper coastal power supplies and petrochemicals for which the Government's lavish investment grants are designed. What about the Milfords and the Medways of tomorrow? Let us take Invergordon. If the through-put of bauxite and oil should top 5 million tons a year, will this naval anchorage receive the bear's embrace? What it needs is a proper conservancy and more private enterprise. What about Ardrossan? This could be the Milford of the Clyde should it become the site of a common user oil terminal, should the Secretary of State refuse planning permission for the terminal at Portencross. If oil imports were to come to the terminal there, outwith the area now covered by the Clyde Port Authority, would Ardrossan then be sucked into the Government maw? What about Heysham? I understand Heysham is outwith the Bill if I read it correct. It lies close to the Lune Estuary, already listed for a MIDA. If private enterprise reclaims the Lune Flats and industrial development follows and that brings more than 5 million tons of traffic to Heysham Harbour, will the N.PA. swoop on Heysham like an osprey? I take the point—and I am quite certain that we shall want to pursue this on the Committee stage—made by the noble Lord, Lord Shepherd. I refer to his assurance that if the N.PA. were proposing to take over another port it would be subject to public inquiry. We shall certainly want to know what would be the terms of reference of such an inquiry when it arose.

The noble Earl, Lord Selkirk, has referred to Oceanspan. I do not ask whether the noble Lord, Lord Hughes, has read it; we know that he has read it probably half a dozen times. But has the Minister of Transport read it? Has it been studied in his Ministry? One wonders very much. Here is a lesson, with its picture of the Clyde-Forth land bridge, for the whole of Britain. Indeed, I quote Sir John Nicolson, President of the Chamber of Shipping, who said: I think that the health of Britain depends totally on generating local activity like the Oceanspan Report. To refresh the memories of those who have read it and forgotten and to instruct those who have not read it, it pictures deep-water provision on the West harbouring the mammoths as they disgorge raw material for part-processing on site; for progressive transport, through an "open-weave" sort of industrial layout until the partly-processed or fully-finished goods are ready for onward despatch, whether by coastal barges up the waterways of Eurasia or whether they are to be over sea and away. It pictures a West-East lineal port industrial pattern such as might well arise about England's midriff when the M.62 brings the Mersey and the Humber together. Will the devolution pattern that is to come from this Bill bear the stamp and the mark of lateral geography matched in effect by lateral administration? Will the Mersey and the Humber ports have some direct links with each other? Will Bristol and Southampton? Will the Clyde and the Forth?

I for one am always pleased when the noble Lord, Lord Hughes, is to reply. I am particularly pleased that he is replying to this debate after the points raised by my noble friends Lord Selkirk and Lord Rochdale on centralisation. In Scotland the Secretary of State is, other than for ports, our Minister of Transport; and there is no bending of the knee to an overlord in the Ministry of Housing and Local Government or anywhere else. Scots have found that the Ministry of Transport take a kind of parsimonious delight in the narrowest D.C.F. cost-benefit examination of development projects; so when we read the White Paper we saw (and I said so in the debate at the time) a prospect of a Scottish Ports Authority as some kind of escape. That is now whittled down to a mere chance of delegated administrative functions. We need a Scottish Ports Authority as a policy board, albeit acting within the budgetary limits of a British ports programme but with access to our own Secretary of State.

I draw the attention of noble Lords to a statement issued jointly by the Clyde Port and the Forth Port Authorities on December 29 and 30, which concludes: The Ports Authorities can see considerable advantages in a Scottish Ports Authority responsible to the Secretary of State for Scotland. The suggestion is put forward, quite bluntly, in the Oceanspan document (paragraph 3.28) that … a strong entrepreneurial Scottish Ports Authority could facilitate the integrated development of a transport system … of the kind that the Oceanspan concept demands. As Oceanspan has shown, our Scottish understanding of geography gives us a vision which the mathematical econometricians of Whitehall will never grasp. Yet without our own Scottish control, I doubt that Oceanspan will ever come about.

Why such a Bill, at such a vortex of our fortunes? I would plead again that noble Lords opposite listen to the words of the noble Viscount, Lord Rochdale—which is really to support the 1964 Act and to make the National Ports Council a stronger and more effective body insured against further and needless upheavals. This discipline of national ownership, where is its logic? How would it accomplish the national land reclamation programme which is vital for MIDAS, vital for obtaining the back-up areas that the ports of the future are going to need, vital for the programme which is recommended by Hunt yet ignored by this Bill? Look at another aspect of the public sector altogether! What about the New Towns? Would the dispersal of £700 million on the New Towns plus the prospect of another £700 million on Milton Keynes—would that have been better placed if the New Towns already in public ownership were nationalised as well?

What about the Medway? Here they have shown great initiative: they seized the LASH-ship opportunity; they soon had barges laden with steel, cars and tractor exports for the home run of the "Arcadia Forest". They are now working on their own plan for a MIDAS, Would such enterprise be enhanced by submission to this discipline of national ownership, with all its restriction of competition, with all its blurring of responsibility, with all its retarded decisions?

The truth is this. Threatened by liberty, the bureaucrats unite. Simon Fraser, Lord Lovat, cried on his way to the scaffold, "The greater the mischief, the better the sport". My Lords, "there is a lot of ruin in a nation" but self-dependent power can time defy as rocks resist the billows and the sky". Ere long—we on these Benches cannot wait—another spirit shall repair the ruin and re-make the scene.

6.10 p.m.

LORD HANKEY

My Lords, I cannot possibly compete with the eloquence of the noble Earl, Lord Lauderdale, but I must say that I thought that there was very great force in much of his reasoning, and I should like to support what he said.

I have the gravest doubts—really the gravest doubts—whether it is desirable to pass this Bill. First, I do not think it is proved that what we need is more central planning or control for our ports. I believe our real troubles stem from the chaotic labour relations which render many of our great ports so notoriously inefficient. There really is no cause for complacency about this. I do not think, from my experience as a diplomat, that I could possibly bear out what has been said about the high regard in which our ports are held; and the general re-organisation proposed in this Bill simply does not deal with the real problem. Secondly, my Lords, until these labour relations and failures of management are dealt with in accordance with the second part of the Devlin Report, I am sure it is undesirable to bring the other ports concerned under the same administrative control as London and the Mersey. I will develop these two points separately.

First, then, a good Canadian friend of mine, and a very good friend of this country, met a Dutch sea captain in Vancouver in the winter of 1968–69. The Dutchman said that he was unwilling to take his ship any longer to British ports. My Canadian friend was shocked, and asked why. "Look here", said the Dutchman, "if I go to Hamburg the turn-round is 48 hours; if I go to Rotterdam the turn-round is 36 hours; if I go to the Mersey it is 15 days, and if I go to London it is very seldom much better." That was a Dutchman in early 1969, and I do not believe that conditions are very different all the time now.

I can personally certify that Scandinavian shipowners simply will not send their ships to London or the Mersey if they can possibly avoid it. They have felt like this, to my certain knowledge, for over ten years past. They go to all sorts of ports in Britain, but they avoid London and the Mersey if they can. Our ocean shipping has, to a considerable extent, moved to Antwerp, Rotterdam and Amsterdam. As has been said in the debate, a great many cargoes thus have to be trans-shipped, and that is a burden on our imports and exports. Incidentally, this situation has effects on the big ports like London. The Surrey Commercial Docks are closing; St. Katharine's Docks have closed; virtually all the wharves in the Upper Pool of London are now out of business, having been landed with paying hundreds of dockers for whom there was no work when the port worked so badly.

That, as a matter of fact, is partly the effect of the dock labour scheme. I cannot go into that now, but your Lordships are probably aware that Mr. Cattell, the chairman of the National Modernisation Committee for the Docks, has resigned, saying that until the docks labour scheme is changed, no progress can be made. I have the greatest sympathy for men who fear redundancy and unemployment, but you cannot put the clock back. And, as Mr. Cattell said when he resigned, what is needed is a much more active policy for retraining men who are redundant and placing them out into other jobs. Redundancy ought to be regarded as a splendid opportunity to go and find a job in an industry less liable to fluctuation.

You may say, my Lords, "What else can one expect but a decline in the inner docks as ships get larger and larger?". As the noble Earl, Lord Lauderdale, said, they cannot come into inner ports miles from the sea. In itself, this argument is true, but it completely misses the point. Hamburg, Amsterdam and Antwerp are not so very near the sea, but they are very efficiently worked. The situation at Tilbury, which is much nearer the sea, has, however, been a disgrace for a long time past. The dockers have refused to work the container berths costing millions of pounds and have driven the container trade over to Antwerp and Rotterdam where it has to be trans-shipped. That dispute appears to be settled——

VISCOUNT SIMON

My Lords, I am sure that the noble Lord, Lord Hankey, does not want to mislead the House; but I think it is worth the simple statement of fact that what he has said applies to one container berth in Tilbury. The other two container berths have been operating all the time.

LORD HANKEY

My Lords, I thank the noble Viscount for that information. I was not aware of it, and I think it a very interesting and germane point. But the fact remains that great damage has been done to this country. Not only container ships have been affected. A 30,000-ton wheat ship from Australia was kept waiting for 30 days last winter, so I hear on good authority, owing to various troubles at Tilbury. The demurrage was £600 or £700 a day. So no wonder the cost of bread goes up and our poor people have to pay more.

My Lords, I do not want to be misunderstood. The good gangs in the Port of London are probably second to none. They are extremely good, though it is fair to say that they do not work shifts as is done in many Continental ports. Unfortunately, not all the gangs are good. It is not unknown, for instance, for a bad gang to refuse to unload all the cargo from a ship on a Friday afternoon, so as to extort extra rates, or overtime. The shipowner has to pay or have his ship delayed. That sort of go-slow racket is a disgraceful abuse; one has to go back to the sale of Parliamentary constituencies and commissions in the Army to find anything equivalent.

Of course, my Lords, there are undoubtedly faults on the port employers' side also. Much has been said in this debate about it, and I absolutely agree with it. But I think a start has been made, as it has been on both sides of the industry, in setting matters right. These matters certainly must be put right.

The result of all this is that trade has been diverted from London and the Mersey to the smaller ports, many of which are incomparably more efficient, and much better worked. A study of the official statistics in Annex I of the White Paper Cmnd. 3903 will show that while London has 38 per cent. of the total number of dock workers in the United Kingdom it carries only 18 per cent. of the trade. The Mersey has 22 per cent. of the workers and carries 9 per cent. of the trade. Compare this with the British Transport Docks Board, who have about 19 per cent. of the workers and carry 23 per cent. of the trade. That very different picture is continued in many of the other smaller ports.

My Lords, we must not draw too many hard conclusions from these statistics, because they tell us nothing about the nature of the goods which are being unloaded in these different ports. It is obvious that bulk cargoes require less labour and if you have a cargo which has to be manhandled it requires a great increase in manpower. All the same these statistics do show what has been happening. A little inquiry shows that the Tees ports work shifts, which London and the Mersey are too slack and retrogressive to do.

I just do not believe that while this disparity continues—I am sorry to use such hard adjectives about them, but it is necessary to be frank—it is desirable or wise to bring these other ports under the same general port Authority as London and the Mersey. There is nothing so much wrong with the smaller ports. Their efficiency has really saved our country. Nevertheless, the militants among the London and Mersey dockers have had this country by the throat for years. It was no coincidence that both these great ports were closed for between six and eight weeks immediately before devaluation occurred in the autumn of 1967. Foreigners thought that we must be crazy to allow such a situation when the pound was already shaken to its foundation.

If we pass this Bill, I foresee that the N.P.A. will be under constant pressure to introduce or permit the same restrictive practices in the smaller ports as have ruined London and the Mersey and for years past have damaged our exports. I am impressed by the warning of the noble Viscount, Lord Simon, on the probable operation of Clause 2 in practice. I think that the Government also will be under political pressure, and I say with friendly candour from these Benches that the Government and especially their supporters have unfortunately shown themselves unable to deal with this sort of thing. In spite of good intentions, they have not been effective in improving our labour relations. I submit that once we pass this Bill we cannot be sure that they will be able to prevent the smaller ports from being ruined in the same way as London and the Mersey, even though the Government's intentions are good—and for that I give them absolutely full credit.

I think that we cannot avoid this risk unless we first deal with the second part of the Devlin Report. Until we rationalise pay structures and remove the hundreds of restrictive practices and correct the other abuses, we cannot be sure, if we bring all these ports under the same employer, that the practices in one place will not operate in another. Personally, I think that in order to get a proper solution we shall also have to amend the Trade Disputes Acts. But that is another question and I do not propose to mention it further. To sum up, this Bill may well aim to do some things which will be very much needed at some future time, but I urge that we ought not to do them now. If there is a Division, I shall vote against the Bill.

6.23 p.m.

LORD COTTESLOE

My Lords, I should like to start from a point that is common ground. We all agree on the vital importance to our national economy of our ports industry, and that it is essential it should operate smoothly and efficiently. The question to which we should direct ourselves is whether this Bill will serve to promote that purpose. The declared purpose of the Bill is nationalisation, to take into national ownership the principal ports in this country, and to administer them under centralised control. It will, as we know, establish a National Ports Authority to take over 14 port organisations, all of which are already in greater or lesser degree, owned and managed by public authorities of one kind or another, and it will leave aside about 270 ports many of which are privately owned. As a measure of nationalisation, this does not seem to make much sense, even though the 14 to be taken over handle some 87 per cent. of the port traffic.

The two successive Chairmen of the National Ports Council that was established six years ago, the noble Viscount, Lord Rochdale, and Sir Arthur Kirby, have probably devoted more searching inquiries and more objective thought to the problems of our ports and their management from the national standpoint than anyone else in the country. The noble Viscount, Lord Rochdale, made it clear in the debate in your Lordships' House on the White Paper a year ago, and he has made it even clearer to-day, that he does not regard nationalisation as any solution for the problems of the industry and that the threat of it, hanging over the industry during a time of major reorganisation such as existed in the last half dozen years, has been most damaging. Sir Arthur Kirby has come to the same conclusions. These opinions are informed and highly authoritative, and in the political sense they are quite dispassionate. But the Government have chosen to disregard them.

What exactly does nationalisation mean in the context of these 14 port organisations already owned and administered, with one partial exception, by public authorities? Will it make them more efficient? That is the question. Of the 14, that one which is still a company port, the Port of Manchester, is by common consent about the most efficient of all. Does anyone really think that the interference that is proposed with that port is likely to have any effect on it, except to hamper its efficiency? The same is true of that highly competent organisation, the British Transport Docks! Board, who administer 20 harbours up and down the country both efficiently and, hitherto, profitably. Why not continue to let them do so?

Then, what about the Milford Haven Conservancy, about which the noble Lord, Lord Drumalbyn, spoke, a Conservancy which looks after a specialised port concerned virtually with a single industry, the oil industry, and operated by and for two or three of the great oil companies? That obviously falls outside the ports which the general philosophy underlying the Bill covers—if indeed it can be said to have any philosophical basis. It is included apparently only because its traffics exceed the arbitrary limit set by the Bill, and because, if the argument put forward in another place is to be believed, to except it would have resulted in a Hybrid Bill. What sort of reason is that? Does anyone seriously think that that is a good reason for doing something that is so obviously undesirable, that it would result in a Hybrid Bill? Surely it is not beyond the wit of man to devise some way round a procedural obstacle of that kind. I suppose that the most outstanding example of enterprise and efficiency among the ports of this country at the present time is Felixstowe; and this Bill, thank heaven! does not propose to interfere with that. But the shadow of nationalisation will now always hang over it. The noble Lord, Lord Shepherd, referred to the Sword of Damocles. I do not think that the sword did much good to Damocles's morale.

My Lords, our ports have in the last few years had to face very great problems indeed. A revolution in the size of bulk carriers and in the methods of cargo handling by containers and by unitised loads have produced at one and the same time the need for an enormous reduction in the number of ocean berths and the need for far deeper water at those berths. There has been consequentially a very great reduction in the requirement for dockside labour, and simultaneously the difficult process—the necessary and much overdue process—of decasualisation: great problems of redundancy, both in labour and in docks. These factors have imposed severe strains on the industry—strains from which it is just beginning to emerge; strains the scale and intensity of which can hardly be fully appreciated or understood by those who are not involved in coping with them from within the industry itself. During this same time the industry has been reorganised as an outcome of the Rochdale Report; and the shadow of the further major reorganisation embodied in this Bill has already done great harm to morale in an industry working under these severe strains, and has involved a most damaging deflection of thought and of effort. It has done great harm.

There is everything to be said for strengthening the national planning powers of the National Ports Council; for giving it teeth; for calling it, if you like, a National Ports Authority. We all agree about that. There is everything to be said for freeing it from many of the shackles of Ministerial control. It needs support rather than interference. What could be more disheartening than to explore a proposal for a major development, such as, for example, the Portbury proposal, and to give considered advice on it, only to find that the Ministry do all your work over again and turn down your conclusions?

The National Ports Council, hampered by its inhibiting lack of authority, has been subjected to a certain amount of criticism. But it has in fact, within the limitations imposed on it, done an extremely good job: a good job generally, and a particularly good job in the fields of training and research, to which the noble Viscount, Lord Rochdale, referred. Its annual Statistical Digest quickly gained for it an international reputation. Its Progress Report, published last year, is a most impressive document. There is everything to be said for strengthening the powers of the National Ports Council. But the sweeping reorganisation of the management of the boards, with a new highly centralised ownership and control, will not in my view solve any of the problems; it will only retard their solution.

I understood from what was said by the noble Lord, Lord Shepherd, that it is intended that the Authority itself, and the managing boards to be set up under this Bill, are no longer to include any user members—shipowners or merchants. Perhaps the noble Lord, Lord Hughes, when he replies, may be able to tell me that I misunderstood Lord Shepherd. I certainly hope so, for these are the people who have the greatest immediate interest in efficiency and economical cargo handling and transportation; the people who have the expertise essential for the smooth operation of the whole train of transportation through the ports of this country. I am bound to say that I think the idea that experience in other fields, but not in the special field concerned, is the best qualification for membership of a board can be overdone. It seems to be a current fashion, although I have never been able to understand why. And, of course, the other extreme, a board composed enitrely of career executives, is no better, and may be even worse. It becomes, in practice (and I am quoting an eminent authority) introverted and arrogant, and in the course of time incompetent". I hops that the Minister may be able to assure us that both of those extremes will be avoided. A sensible and balanced composition of the boards is essential if they are to function efficiently.

A nationally centralised ownership and control has always seemed to me dangerously liable to political pressures. Port traffics are like water: they tend to flow in natural channels; and the only efficient way to operate them is to smooth and strengthen those natural channels. It is true that they can be diverted to flow, as politicians might wish for political ends, through areas of high unemployment. Your Lordships may think that fanciful, but it was a proposal urged on me in all seriousness by a recent Minister of Transport (I will not say who) as a basis for port planning. Of course it could be done, just as rivers could be diverted. But it would be very expensive, very inefficient and very uneconomic. In a world of competition with other nations, competition of great severity, any such policy would be suicidal. But this is the sort of pressure that in practice is liable to be brought, and it can do great harm.

There is a great deal that could be said about this Bill in detail. There is the woolliness of the proposals about labour relations. Despite Lord Shepherd's optimism there is certainly nothing there that is likely in practice to create the new world of industrial harmony that we must all wish to see, and strive to achieve, in our great ports. There is the proposal for a National Advisory Committee to report to the Minister—a sort of watch committee appointed by the Minister to report to him on the work of a board which he himself appointed. What sort of sense does that make? But I will not go on, my Lords. In my view, this Bill, introduced at this moment of time, solves no problems, introduces great dangers and does immediate harm to the port industry of this country. As the other place has been misguided enough to approve it, I suppose that we shall not divide on the Second Reading here. If we did, I should certainly vote against the Bill.

6.37 p.m.

LORD MANCROFT

My Lords, before addressing a few remarks to your Lordships on this Bill I am in duty bound to remind the House that as a director of a shipping company I have to declare a direct interest in the Bill. Despite the unemotional and reasoned way in which the noble Lord, Lord Shepherd, introduced the Bill into your Lordships' House, I am sorry to have to tell him that I disagree fundamentally with the underlying principles and philosophy of the Bill; I am unhappy about its timing, and I am more than dubious about its chances of achieving what is claimed for it. As the noble Lord, Lord Cottesloc, has just reminded us, this is basically a nationalisation Bill, despite the fact that a large number of ports are already in public ownership. Therefore a Party political battle is inevitable: and more's the pity.

We are all familiar with the pros and cons of nationalisation. I do not propose at this hour of the evening to rehearse the case against nationalisation. I can do it in my sleep; I do not wish to do it also in your Lordships'. Never theless, it is on this basis that I fundamentally disapprove of the Bill. I must accordingly join with my noble friend Lord Drumalbyn and the noble Viscount, Lord Simon, in expressing regret about the timing of this Bill. We have been told more than once this evening that it will result in indecision. It will not only result in indecision: it has already caused, and is causing, indecision and confusion in the docks. Your Lordshps have only to read the report of the Mersey Docks and Harbour Board, published this morning, to see evidence of this.

What the ports should now be worrying about is their ability to give better service to their users, which, after all, is their prime functon; their ability to meet the intense European competition that is now increasing; their ability to meet growing competition from air freight; and the ability to cope with the immense new technical developments, described to your Lordships just now with such thunderous eloquence by my noble friend Lord Lauderdale. All these are bringing new problems to the ports. Instead of devoting his intention and energy in trying to solve them, everybody in the ports is now looking over his shoulder—and will continue to do so until after the Election, whenever that may be. Worst still, the ports handling under 5 million tons have, as we have been told, the Sword of Damocles over them. At least Damocles did not have to worry that if he worked harder he might find the Sword would fall. These ports now are going to realise that if they work less hard they are in a much safer position.

Much emphasis has been laid in the course of this debate upon labour relations. If I thought this Bill would improve the disastrous labour relations in the docks to any material degree I would vote for it; if I thought the Bill could really do away with restrictive practices and bring harmony and sanity to the docks I would swallow my pride and accept nationalisation, so important do I think this problem, so much does it overweigh all the other problems that face the docks to-day. This is our basic trouble. If we can ameliorate this and go some way to curing it, we shall be in sight of curing nearly all our ills in the docks. The noble Lord, Lord Geddes, gave the classic example of containers at Tilbury—a cross between a farce and a tragedy.

It is no good saying, "We are not the only country that has trouble in the docks. The longshore men in New York are not much better. They also have their troubles out in New Zealand and Australia, and they have their strikes, too". Those places can afford strikes, but we cannot, and that is the trouble. What chance has this Bill of improving the relations in the docks as is claimed for it? With all my heart I wish I could agree, but when I remember what happened to the Government over liner trains I cannot believe that this Bill is anything more than a smoke screen for leaving things as they are.

The noble Viscount, Lord Simon, asked some interesting questions about workers participating in management. Many people are interested in the idea of workers participating in management. Others are equally interested in the idea of workers participating in working. Whether this Bill will produce the desired effect I do not know, but I doubt it. I wonder whether it would have great effect in Liverpool to-day, where madness has broken out once again. From the papers this morning we see that there have been more speeches about a four-day week in the docks. The trouble is that far too many people in this country are already working a four-day week, but it is taking them five days to do it.

Some improvements were admittedly made in this Bill—in another place—and here we shall try, with the help of noble Lords opposite, to make some further improvements. I hope that both noble Lords opposite, who are always so agreeably helpful to us in this matter, will remember something that their colleagues in another place occasionally forgot: rearranging your prejudices is not the same as having second thoughts. This is still an enabling Bill, whatever we say about it, and it is a woefully woolly Bill too. There are still many major points to be resolved. Too many policy decisions still have to go to the Minister; too many problems of reorganisation are still left in the air, and another area of commercial activity is still too insulated artificially from competition.

I was glad to hear the noble Viscount Lord Simon—quite rightly—praising the efficiency of many of our ports. I think that we have heard too much in this debate about what is wrong with the ports, and not enough about what is right with them. May I suggest to the Government, if they are really thinking of improving our ports, to look at what is happening among our principal competitors: Rotterdam, Antwerp, Hamburg and Dunkirk. Those four get massive financial aid from their central and local governments. There the ports are regarded as a vital part of the overall economy, and not just commercial enterprises in their own right. That enables them to reduce port charges substantially, and to enjoy free dredging, docks police and other benefits. Nevertheless, I endorse the remarks of the noble Viscount, Lord Simon, that despite the virtues of those four Continental ports, there is a great deal of efficiency still to be found in our own.

I should like to develop from that a point raised in the Report of the noble Viscount, Lord Rochdale, which was published this morning. Also I should like to acknowledge the further indebtedness in which we are placed to him by this particular, massive Report which bears his name. How we can suitably acknowledge the noble Viscount's endeavours I do not know. The town of Rochdale is, I believe, some miles from the sea; perhaps we should forthwith declare Rochdale an honorary port—unnationalised, of course. I would quote from paragraph 648 of his Report. This sets out three specific recommendations with regard to ports. The second of these reads as follows: Shipping companies should be encouraged by port authorities to lease their own berths and to develop, equip and operate them as best suits their particular needs". That recommendation stems from an earlier passage in paragraph 624: We have noticed that in very successful Continental ports"— this is the point I have been making— and a few British ports, the port authority provides no more than a basic port facility. The provision of other facilities is left to individual commercial concerns including shipping companies which lease the berths where they operate. We believe that since the shipping industry is now developing very expensive specialised ships this method can have increasing advantages. That is an important new point which has arisen at an interesting stage in the Bill when it is in progress between the two Houses. I hope—and I do not expect the noble Lord, Lord Hughes, to give me an answer to this question tonight—that the Government will reconsider this matter in the light of the recommendations of the Rochdale Report.

The noble Lord, Lord Geddes, told us that we had to live with this Bill, and I suppose that is so. He added, "warts and all". We have here a measure which falls seriously short of what is required to help the shipping industry, to help the workers and to help the country. There are so many warts still left that the Bill is almost a deformity.

6.48 p.m.

LORD HUGHES

My Lords, I am grateful that the speaker who immediately preceded me was the noble Lord, Lord Mancroft, because, as usual, he introduces into our debates a note of such delightful wit that it tends to make Ministers forget the fact that he remains in substantial criticism of everything that we are doing. If we are to be criticised it is very nice to have it done in such an amusing way.

It is quite true, as Ministers always say, that this has been an interesting debate. I should like to go further than that, because from time to time during the debate we have even been able to get away from the doctrinaire views of Party politics which have tended to be introduced into discussions of this Bill. Instead, from time to time we have actually got down to discussing the merits of reorganisation, which the Government believe is the sensible way in which to modernise the present inadequate structure of the ports industry.

The noble Lord, Lord Mancroft, in the course of his remarks said something with which I was in strong agreement: that there had been a great deal of criticism made during the course of this debate of the existing system, and the operation of the existing ports. He commended the remarks of the noble Viscount, Lord Simon, who referred to the good that was taking place. I agree with that, but I would remind your Lordships that most of the criticism of the existing operations came from those who wanted to make only minor modifications. It did not come from my noble friend Lord Shepherd. Let us keep a proper sense of perspective in what we are seeking to do, and why we are seeking to do it.

Noble Lords opposite outlined their proposals for dealing with the situation. As I have said, it is just a modification of what we have. They have proposed, in effect, a strengthening of the powers of the National Ports Council. This might be one way of coping with some of the problems facing the ports industry; for example, with problems of controlling development. In the situation that we are facing, is this enough? How would it deal, for instance, with the divisions of responsibility and accountability which bedevil the industry at the present time? How would it reduce the multiplicity of employers, which still exists even after the introduction of employer licensing? How would it help to improve industrial relations in an industry traditionally troubled as this industry is? Would it be able to make a reality of the central planning which everybody agrees is needed? The Government, and I think many people in the industry, believe that these alternative proposals are simply not good enough.

The Bill proposes that initially the ports in which more than 5 million tons of cargo were handled in the prescribed period of one year should be placed under the charge of the National Ports Authority. Some questions were asked about this. The tonnage criterion marks a clear and natural dividing line between the major ports and the smaller ones. Above 5 million tons, I think the smallest port handled about 7 million tons of cargo. Below the dividing line, the biggest of the small ones handled about 2 million tons. So in setting a dividing line of 5 million tons we have not gone to the very smallest of the big ones, and we leave a tremendous margin of leeway for the smaller ones before they reach this dividing line. By concentrating on the major ports we shall give the new Authority a reasonable management task. It will be an exacting one, but they will be able to concentrate their resources on the really large ports—the ports in which nearly nine-tenths of our trade is handled and in which 95 per cent. of registered docks workers are employed.

During the speeches of the noble Lords some emphasis was placed on the desirability of ports such as Milford Haven, the Medway, Bristol and Manchester having their own port boards. Under Clauses 2 and 3 of the Bill it will be for the National Ports Authority to make proposals in their devolution schemes on this matter in the first instance. But I think I should repeat the assurances that have already been given on this. My right honourable friend the Minister will bring the views expressed in this debate to-day to the notice of the National Ports Authority, and he will certainly have these views very much in mind in considering the devolution schemes which will in due course be submitted to him. I am quite sure that the National Ports Authority will consult with representative bodies like the Chamber of Shipping and the British Shippers' Council in the course of working out their devolution schemes.

Some fears have been expressed about the way in which Clause 29 might be used in the future for making the National Ports Authority the harbour authority for many more harbours than are contemplated at present. It has been suggested that this provision will tend to increase uncertainty and to inhibit the natural development of the ports which are not under the charge of the National Ports Authority. I must repeat that there is no question at all of automatically placing a harbour under the National Ports Authority's charge if and when it reaches 5 million tons of cargo a year, or any other tonnage. Moreover, any proposal submitted by the National Ports Authority for taking over a harbour would have to be one which measured up to the requirements that its takeover by the N.P.A. would further the efficient and economical operation or development of the country's port system. Any such proposal would be open to objections, which would be heard at a public inquiry, and if the proposal were approved it would ultimately be subject to Special Parliamentary Procedure, which would mean of course that there would be a full opportunity for both Houses of Parliament to consider the proposal.

All this means that any proposal would be as rigorously examined as it would be under a Private Bill or the Harbour Reorganisation Scheme procedure. Clause 29 itself excludes "manufacturers" harbours as well as fishery harbours and marine works. I need hardly add that the National Ports Authority will already be assuming a tremendous task in taking over all the major ports of the country. They, as well as the Minister, can be expected to pay the closest attention to the very stringent criterion to which I have already referred before making any proposal under Clause 29.

In a speech with which I found myself very much in agreement, the noble Lord, Lord Geddes, referred to his proposal of having a take-over free period. I think he suggested a period of five years. We do not think that this would be a helpful proposal. It was an interesting proposal, but as soon as one puts in a period of this kind, the Government's view is that we do not lessen any doubts; we intensify them. As we get towards the end of any such period the worry becomes greater and greater—"Are we now at the end of our period, or do we start at the end of three years campaigning for another five-year period of being free from takeover?" So if the object is to remove the Sword of Damocles, which has been mentioned more than once, this is certainly not a good way of doing it.

As regards the provisions in Clause 30, for the transfer of harbours between the Railways Board, the Waterways Board and the National Ports Authority, what we are doing here is to provide flexibility for transfers within the nationalised transport family. Again, I can confirm that the Minister would consult representative bodies such as the Chamber of Shipping and the British Shippers' Council before making or confirming a scheme for the transfer of such harbours.

One of the key proposals of the Bill is that the National Ports Authority should become the principal provider for all ports services. We believe that this will promote efficiency by removing the present multiplicity of port employers. In a number of ports over the last four or five years the port authority has become increasingly involved in doing stevedoring and cargo handling work generally. But because the Government recognise there are different practices and arrangements, and particular circumstances and conditions, which should be taken fully into account before port businesses are taken over, the Bill contains objections procedures coupled with the right of inquiry or hearing which will allow full consideration to be given to an objection. The realistic approach adopted by the Government is made clear in the exemption given for wharves used purely or mainly by manufacturers for their own products or for goods which are to be used in their production process. This underlines the Government's intention that every consideration should be given to the efficiency of movement, handling and transport operation.

There will be some businesses which may expect to be excepted from vesting under the objection procedure. The Government have been very conscious that, following the settlement of such objections, these businesses may still suffer from uncertainty. The provisions now included in Clause 36 of the Bill will allow the National Ports Authority to agree with such businesses that, subject to the terms of agreement, no application will be made for a vesting order. My right honourable friend the Minister has also agreed, at the suggestion of the Chamber of Shipping, to introduce an Amendment which will make it possible for the N.P.A. to start the vesting order procedure, with the consent of the business concerned, before a harbour is placed under their charge. This also should help in reducing uncertainty. Much was said on the subject of competition.

LORD DRUMALBYN

My Lords, before the noble Lord leaves that point, I wonder whether he could answer the question that was asked by my noble friend Lord Rochdale, as to the leasing of harbours and the port businesses related to those particular harbours? It may well be that a harbour will be leased in the future and the lessees will want to run their own services. So there will have to be a procedure in the future for allowing new port businesses to be set up.

LORD HUGHES

My Lords, in the mass of papers I have here I think there is a note on that point. If the noble Lord will allow me to leave it for the moment I hope to come back to it in due course.

No subject appeared more regularly in the speeches of noble Lords than the need for effective competition, but much of what was said on this subject was the old political line of raising a number of bogies about what was going to happen and then proceeding to paint a picture of the dire consequences which would flow. But many of the things which were predicted in competition will not in fact arise from this Bill. After all, at the present time harbour authorities which are operating, and believe they are operating, efficiently, must relate the charges which they make to the costs of running a harbour. They must take into account the way this is done, and there is nothing in the Bill which says that under the new situation the pricing will be any different. Each port must operate efficiently. It must take its costs into account. The noble Viscount, Lord Simon, referred to the separate accounts that each part will show, so that we may see whether they are operating within their cost. I am quite certain that this nationalised industry will be no different from any other, in that it will have to operate in all the circumstances under a target set for it by the Government, as was set during the régime of the previous Government and which has been followed by this Administration.

LORD DRUMALBYN

My Lords, the noble Lord has made an important statement that has gone beyond anything that has been said before. He has said that the separate accounts of the port authorities and the port boards will be shown. All the Bill says is that the results of the financial activities of the separate bodies will be shown. That could be done in a totally different way, for example to comply with the Companies Act.

LORD HUGHES

My Lords, I know that the noble Lord, Lord Drumalbyn, is a stickler for finding commas in the wrong places and duplicated "ands", but I think he is going beyond what is reasonable in debate. I did not mean to imply detailed accounts in that way, and what I went on to say made it quite clear that what I was referring to was such information as to show the position of these boards—the financial information. I am not seeking to go beyond what has been said before because I do not think it is necessary to do so. Therefore, I am grateful to the noble Lord for drawing my attention to the interpretation which he immediately placed on my words, because they were certainly not intended to go beyond anything that has been said before. I want to reiterate that what has been said before should be ample for the purpose of enabling people to make up their minds whether this practice of operating within costs was being carried out.

My Lords, on the subject of competition, may I refer to the example of the Port of Manchester, where port cargo handling is already done by the port authority. Within the organisation of the N.P.A. each port board, as my noble friend Lord Shepherd made clear, will be enabled—indeed will be encouraged—to compete on the price and service with other ports, so that the concentration of port services in the hands of one port board will not mean the elimination of competition. That is what happens at the present time. If an existing port is losing business to another port it tries to find out how it can deal with the situation; and the first thing it tries to do is to make itself more efficient by trying to maintain its existing charges or to have lower charges to bring in the business. That is the sort of competition that is bound to exist with the separate port boards, whether or not they are under a single authority.

THE EARL OF SELKIRK

My Lords, do I understand the noble Lord to say that the port boards will set all charges?

LORD HUGHES

My Lords, within the general directions which they receive, yes. We come now to the question of devolution. I think it was the noble Earl, Lord Lauderdale, who spoke about a "mere chance"—that all they had was a mere chance of delegated functions. My Lords, there is nothing "chancy" about it, and there is nothing "mere" about it. What is stated in the Bill is indeed quite specific. It is a duty which is placed on the N.P.A. to delegate to the port boards, and I think I ought to read what is said in the Bill on this subject. Clause 2(2) says: Subject to subsection (3) below, there may be delegated to the port board for a harbour such of the Authority's functions as the Authority think fit.… Perhaps the noble Earl stopped reading at that point, because that is "may" and "think fit", but it goes on: and there shall be so delegated—

1. (a) any power of the Authority to carry out harbour operations at the harbour or to regulate the carrying out of harbour operations there by others; and
2. (b) such other functions of the Authority as, in their opinion, are necessary to make the board responsible (under the Authority) for the maintenance and management of the harbour and the carrying out of any works of construction, improvement or repair which may be undertaken there."

That is not just some mere chance delegation; it is the handing over within the general control of the Authority of the operation of the port, and subject to correction—and I am not a legal expert—I should have contemplated that this would cover the fixing of the charges that would be made in the operation of the port. If I am misleading noble Lords opposite I will make certain that they are informed of this when we come to the next stage, but I do not think I am giving any misleading information on this point.

THE EARL OF LAUDERDALE

My Lords, if the noble Lord will allow me, I should like to make one point. I appreciate the clarification he has been kind enough to make. But are we to take it from what he has said that at any rate there will be a single Ports Board in Scotland? Or are we to take it that the N.P.A. will consider it?

LORD HUGHES

My Lords, that is a horse of a different colour, to which I shall come a little later on in the race—or perhaps I should come straight to it now. It has been suggested, both in your Lordships' House this afternoon and elsewhere, that responsibility for Scottish harbours should be vested in a separate Scottish Ports Authority. This is a matter which has already been considered in another place. The Government do not consider that there would be any advantage for Scottish harbours to be dissociated from the other major ports of Great Britain. It is essential, if the country is to have the central planning which it is generally recognised is needed, that the Authority primarily responsible should not be divided so that separate policies might be pursued, to the disadvantage of the country as a whole.

It has also been suggested, as an alternative, that there should be a single Scottish Ports Board responsible for Scottish harbours, under the general supervision of a National Ports Authority. May I draw the attention of your Lordships to Clause 3(1)(b) of the Bill, which places on the National Ports Authority a duty to consider the desirability of having a single port board for such of their harbours as are in Scotland? Whatever decision they reach, any devolution scheme establishing a port board must be confirmed by an order made by the Minister. In the case of Scottish boards and Welsh boards the Minister has made it clear that before approving any scheme he will consult with the appropriate Secretary of State. The Minister will also consult with the Secretaries of State before approving the appointment of members of port boards for Scottish or Welsh ports.

May I here interject that the range of interests which have to be taken into consideration in appointing the membership of these boards is so wide that I think the fears expressed (I think it was by the noble Lord, Lord Cottesloe) will prove in due course to be groundless. Similarly, consultation would take place between the Minister and the appropriate Secretary of State before the appointment of any Scottish or Welsh advisory committees. I am not going to say anything more about advisory committees, notwithstanding what the noble Viscount, Lord Simon, said. I know that the general opinion is that they serve a very useful purpose. I myself once served on an advisory committee and I am not so certain this is always the case. But this is, may be, the one that works very well. Let us hope so.

Consultation on such matters is, as I think Scottish Peers know, the common practice at the present time. I cannot think of any Act where it is written in that there must be consultation, but I know that hardly a month goes by without there being consultation from some of the United Kingdom Ministries who have responsibility either on a United Kingdom or Great Britain basis; they would never dream of exercising their functions without the necessary consultation with the Scottish and Welsh Secretaries of State. I would certainly deplore any suggestion of writing anything special into this Bill, because as soon as one particularises in one direction one casts doubt about others. We might have some other Minister—not one of the present excellent ones but some future one—who said, "Unlike the Minister in the Ports Bill, I have no instruction to consult, so I am not going to do so". Nevertheless, I am quite certain that in this case the fullest measure of consultation will take place.

THE EARL OF LAUDERDALE

My Lords, can the noble Lord, give us any kind of assurance, if not this evening perhaps at the Committee stage, that the Secretary of State for Scotland, whose adroit and effective acolyte he is, will have some say in supporting claims to capital development that may reach the National Ports Council from the Scottish Ports Board, if such a Board is set up?

LORD HUGHES

My Lords, I think the noble Earl, Lord Lauderdale, knows my right honourable friend the Secretary of State well enough, from his previous contacts with him in another place, to know perfectly well that he will make certain that is the way in which the system works.

I should like to go on to the question of industrial relations. I feel that some of the things said during this debate were perhaps less than helpful in an industry which can sometimes be exceedingly touchy on these problems. I certainly have no intention of taking up any of the more provocative points made, although I must say that I liked the way in which the noble Lord, Lord Mancroft, expressed them. The National Ports Authority will inherit a very difficult and challenging task in industrial relations. Obviously, causes of dissension cannot be removed merely by passing an Act of Parliament. But what we can do, and must do, is to provide a better framework of organisation, of responsibility and accountability, in which management, working in co-operation and association with the unions, can tackle the problems where they occur: on the ship, on the quayside or in the shed—anywhere on the waterfront.

The organisation provided for in the Bill gives a new opportunity. It provides for a new look at negotiation and consultation between staff and management which will have as one of its objectives the furthering of worker participation in processes leading to the taking of management decisions. It provides, too, as noble Lords have mentioned—critically—for worker members to be appointed to port boards. These innovations will, we hope, lead to a new sense of responsibility on both sides of the industry which will help to introduce a new era of industrial relations in the docks. It is an experiment; it is something on which little has been done. We cannot guarantee in advance that it will produce any radical or immediate improvements. What is quite certain is that, given the past history of labour relations, it is almost impossible for it to result in anything worse than has happened in the past. On this basis, at least, it is something worth trying.

There was some criticism about the working of the Dock Labour Scheme, and it has been argued (I think it was the noble Viscount, Lord Rochdale, who said this) that now that dock working has been decasualised this Scheme should be ended. The noble Viscount is not alone in making that suggestion, and on the face of it it seems to be a reasonable one. But we think that is rather a bull-in-a-china-shop approach to this problem. In a situation where there are still many employers and fluctuating workloads, the Scheme does offer protection against a possible reversion to casual employment. The Bill does nothing to alter the substance of the Scheme, and we think that this is right, although we do not necessarily believe that we shall convince everybody of its rightness.

VISCOUNT ROCHDALE

My Lords, may I say that my suggestion was that the Dock Labour Board should be abolished only when the multiplicity of employers had come to an end, when there was virtually a single employer in each dock.

LORD HUGHES

My Lords, I think that is a fair point, and it may well be that if such a proposal were put forward when the National Ports Authority was firmly established, and labour relations were working well, in such a situation it might be much more acceptable to the men working in the industry than it could possibly be at the present time. I think anybody with any sense of realism knows that at this time the proposal would be regarded as being fundamentally against the interest of dock workers. It does not need to be so for them to believe it. The fact is that this is what they would believe, and what people believe is sometimes very much more important than what something in fact is.

Much has been said about the achievements of the past five years in the ports, and I do not wish to dispute this. We are not suggesting that what should be done is necessary because everything has been wrong. After all, some of the criticism made by my own political friends in these matters is that we have rescued private enterprise by taking into national ownership some of the worst failures; that we should have left them to make (if I may use a Scottish phrase) a kirk or a mill of it. But we did not. We rescued them. The day is long past when nationalisation was being regarded merely as a means of rescuing some essential but hopelessly unprofitable industry. So it is not because everything is wrong that this new set-up is being suggested; it is because we believe this is the time to do this in order to make the bad better and to make the good better, with the best advantage all round. So it is not necessary for me either to defend or deny the achievements of the years which have gone past. They are there for people to see, just as the mistakes and disasters are there for people to see.

There were two speeches which I liked particularly, not because they contained total agreement with the Bill but because both of them accepted the principle of the Bill with a number of suggestions for improvement in detail, and it was interesting that they were both from noble Lords who are closely associated with the industry, the noble Lord, Lord Geddes, and the noble Viscount, Lord Simon. Although the noble Lord, Lord Geddes, has left, I want to speak to some of the points he raised, because he asked for certain assurances which I think the House would want me to give. I echo his wish that when this measure is on the Statute Book all those concerned should strive to make it work, and I hope, therefore, that the noble Lord, Lord Drumalbyn, was not doing anything more than engaging in a preliminary canter in the Election campaign when in his speech he spoke about the Government after the General Election having to be forgiven if they threw the whole thing into a state of turmoil. I am paraphrasing his words, but they seemed to imply that after the Election there would be a Government which might be interested in reversing this procedure.

I am rather afraid that in this connection the noble Lord was doing two things. He had been reading in the Press about the possibility of an Election in June based on the present opinion polls, and was then going on to imply that if such an Election took place the result would depend on the opinion polls of perhaps about six months ago. I am afraid that there is a certain amount of wishful thinking in that. I personally am glad that it is not my responsibility to take the decision. It does not seem to me that opinion polls are necessarily the best method of judging. I much prefer the judgment of the Prime Minister in this matter, as it has proved so effective in the past.

LORD DRUMALBYN

My Lords, the noble Lord has been good enough to mention me by name, and perhaps he would allow me to say that this happens to be a particularly serious matter. I hope that the noble Lord realises that we on this side feel very strongly indeed that it would be a national mistake to make a decision on this issue and then immediately go to the country. That is what I was talking about. If the vesting date is to come a few days before the Election, then we think it would be a national mistake. I thought that we should make it clear that this is what we believe, and that in that case our hands would be totally free to do what we think fit.

LORD HUGHES

My Lords, I was not so much concerned with what the noble Lord was doing, but rather to correct the Record as to what I thought were his chances of having the opportunity to do it.

LORD STRABOLGI

Which are nil.

LORD HUGHES

Well, I am not making any predictions. After all, one has only a 50 per cent. chance of being right in these matters. The noble Lord, Lord Geddes, asked for an assurance that what the Minister said in another place really meant that the relationship between the National Ports Authority and the local port boards was intended to work in practice, so that while the central Authority would be responsible for preparing coherent plans for long-term development—I am going to emphasise something that I have really said in other words—and providing the necessary institutional framework, the port boards would be able to exercise a genuine initiative in running the ports and in carrying a proper responsibility for their task. I am glad to repeat that assurance. It will be this Government's intention to secure the proper balance of responsibility and independence between the central and the local authorities. I can also repeat the assurance given by the Minister that there is nothing to prevent shipping companies from leasing berths from the National Ports Authority. That is of particular significance in the light of one of the recommendations made in the Report of Lord Rochdale's Committee of Inquiry into Shipping. The Bill now provides also that such shipping companies will have the opportunity to reach agreements with the National Ports Authority which will give them security of tenure.

There are one or two other matters to which I must refer. It would be wrong if I were to ignore what the noble Viscount, Lord Rochdale, said, but I must confess—perhaps it is pure prejudice on my part, and, if so, I am sorry—that it seemed to me that I was listening much more to the politician than to the distinguished and successful chairman of two Committees associated with the industry. That crept out much more in the phrases that he used than in what he said. When a Minister is asked in such emotive terms as, "Will the Government come out square?", and, "Will the Government admit?", that is not purely philosophical questioning.

The noble Viscount said that in the National Ports Council he, or they (I am not certain whether he was talking individually or collectively but I think it was the Council as a whole to which he referred, although he may have been meaning his own views) were very open minded about nationalised ports. He then went on to say that they recognised that they "even had some virtue". It was not that they "had some virtue", but that they "even had some virtue". That displays a sense of political appreciation from which I am entitled strongly to dissent. Towards the end of his remarks he said that he had tried to be factual and constructive. I regret to say that in my opinion the noble Viscount was neither. The late Sir Winston Churchill must have had speeches like that of the noble Viscount in mind when he said of someone (I believe it was a civil servant of whom he spoke) that for every solution he found a problem. I should like to close by saying——

VISCOUNT ROCHDALE

My Lords, if the noble Lord would allow me, I would point out that in this context the noble Lord, Lord Shepherd, said that when the Bill became an Act he hoped that all those who are responsible would join in to make it work. I am sure that we shall. But that was not what the present Government did when they came into power. They approved the Harbours Act in 1964, but immediately they came into power they started to undermine the work of the Council.

LORD HUGHES

My Lords, once again I would quarrel not so much with what the noble Viscount says but with the language which he uses. He speaks of undermining. I do not think that that is proper. However, if the noble Viscount is expressing also his wish that if this Bill becomes an Act it should be the duty of all to try to make it work, then I think that, through this exchange, we have jointly accomplished something.

I must say that I enjoyed enormously the contribution of the noble Earl, Lord Lauderdale. If Bills were written in the noble Earl's flamboyant phrases they would be much more pleasant to read, but they would not necessarily be any more easy to understand. The noble Earl will forgive me if I wait until to-morrow to read what he said, because much of the time I was pondering the meaning of some of his words rather than the sense of his sentences. But I suspect that there is much in what he said that it would be useful for me to read and digest in due course.

I have one question which it is difficult for me to answer, not because I do not know the answer but because I do not think I can give it in the way that people would wish it to be given. It was a question of fundamental importance: whether the workers would be the employees of the port boards or whether they would be the employees of the National Ports Authority. The reason why it is difficult is that I have an answer which starts off in this way: "This is essentially a legal point. The employees in Southampton, Hull and the South Wales ports are at present employees of the British Transport Docks Board. Similarly, the employees of the National Ports Authority's ports will be for all legal purposes"—whatever that may mean—"the employees of the National Ports Authority." I do not think that that was what the noble Viscount was getting at. He was really inquiring how the people working at these places will regard themselves. I would point out that the people in London, to whom I have referred, or the workers at Southampton, do not regard themselves as the employees of some remote authority. They think of themselves as London men, or they think of themselves as Southampton men. To use the words of the Bill, "The men will be employed under the control of the appropriate port board." So far as the men are concerned their bosses will be the people on the spot, and I think that is what was wanted. However, I cannot give an answer that legally they may, or will be, the employees of the port board.

VISCOUNT SIMON

My Lords, may I ask the Government to take another look at this. I rather anticipated that the answer would be that which the noble Lord has given me, that this is really a legal nicety. But I feel that this is enormously important. In these days everybody has a contract of employment, and it is important, psychologically, that a man's contract of employment is with somebody he can go and see, and kick if he wants to.

LORD HUGHES

My Lords, I certainly will give the assurance that we will look very closely at that matter. It is my practice, after a debate of this kind, to read through what appears in Hansard, and I am quite certain that all those who are concerned with the furtherance of this Bill will do the same. I will certainly undertake to pay particular attention to the points which have been raised by those noble Lords who have a particular association with shipping and with ports. That does not mean to say that I will necessarily pay less attention to points of detail raised by others, but essentially in the speeches to which I have referred there were points of detail which must be looked at. I suspect that some of them, whether we looked at them or not, will inevitably be brought to our notice at future stages of the Bill. However, I certainly give that assurance to the noble Viscount.

My final point is on the question of centralisation. I really had not intended to reply to this question, because I thought that the noble Viscount was needlessly provocative in the way that he phrased it. He asked me to say what the position was and then told me in advance that if I said one thing it would not be satisfactory, and if I said the other thing he would not believe me. That is why I said it was difficult—not difficult for me—to satisfy the noble Viscount, because he predicted there were two possible answers and he was not going to like either of them. On the question of centralisation, I am going to attempt to persuade the noble Viscount that he is wrong. The clause requires this full delegation. I have referred to this already, but I want to close on this point. I said that on "competition" there had been a number of points raised as being the difficulties which the Bill created, when they only existed, in my opinion, in the imagination of those who raised them. On the subject of centralisation, the same position exists: that there is to be this "excessive centralisation". If only people would read the Bill as it is worded. The Bill is not emphasising centralisation in this connection, it is emphasising delegation. It is seldom that delegation is made mandatory even in part of the field; in this Bill this is being done. So even at the risk of finally throwing away any small reputation which I may still have with the noble Viscount, I must take the risk of having him believe that I am a stranger to the truth by saying that centralisation is not the Government's objective. I hope that eventually he will at least give me the credit of believing that I am not untruthful, but merely mistaken.

I think this is a first-class Bill. Obviously it is the kind of Bill of which noble Lords on the other side will think the very opposite, because we have a fundamental disagreement in approach. However, Governments ought to do the things in which they believe. The Governments which are bad are the ones that so temper their policy by attempting to dilute it with what an Opposition believes, that they finish up with something which nobody likes. I would much rather have something which we believe would work, even though noble Lords opposite dislike it intensely.

On Question, Bill read 2^a, and committed to a Committee of the whole House.