§ 3.4 p.m.
§ Lord WYNNE-JONES
My Lords, I beg to present this Bill for Second Reading. The British Transport Docks (Felixstowe) Bill was introduced into the other place, I think, in January and passed in May. So it comes before your Lordships' House, and I have been asked to present it to your Lordships. Your Lordships may be a little surprised that I am presenting it. Indeed I was surprised when I was asked whether I would be prepared to present it. The only reason I could see for choosing me was that I had some time ago asked your Lordships to 165 consider a Bill called the Endangered Species Bill for the preservation of endangered species. I suppose that an agreement reached between two parties may be regarded as an endangered species if it is subjected to certain types of action. So I come before you as an innocent in these matters who hopes to persuade your Lordships that this is a Bill which is worth considering, as indeed obviously it must be, having passed through the other place.
I must admit to your Lordships that I have not had the advantage of a campaign manager. I have not been able to entertain any of you in order to present the points of view. So that I am somewhat handicapped. But I must say that my wife gave me a very good lunch, and my young grandson from America was over in order to enjoy this lunch, so I am feeling in a happy mood in presenting this Bill to your Lordships' House.
The Bill arose because in the summer of last year the company, the Felixstowe Dock and Railway Company, found itself in some difficulty. This company had done an excellent job. The company was taken over about 15 years ago, and under the energetic leadership of the chairman of the company it proceeded to take a dock which, I believe, was not quite derelict but was certainly a very small and undeveloped dock, and build it up into what is now undoubtedly a first-class dock. No one who knows anything about it or has read anything about it would for a moment contest that the Felixstowe Dock and Railway Company have done an extremely good job. During the whole of that period they made a good profit.
But they were in some difficulty. So far as I can understand, they had borrowed £4 million from the Government, they had debentures of, I believe, about £3 million and they had a very substantial overdraft, running into millions, at the bank. They wanted to expand further, quite naturally, and the atmosphere was not good for them to carry out this expansion. Therefore, they began to make inquiries in order to find out whether they could get some other body with the competence to do the job to take over the company. The British Transport Docks Board was approached, and they, after discussions which I think took place over a period of two or three months, came to an agreement. The agreement 166 was that a certain monetary offer was to be made for the shares by the British Transport Docks Board, and that there would be, furthermore, a definite undertaking on the part of the British Transport Docks Board to keep the company as a separate entity within the British Transport Docks Board. All this was agreed.
The British Transport Docks Board was set up in 1962 by the Transport Act of that year. This Transport Act, which I have with me here, was a Transport Act promoted by the Conservative Government of the day, and it created the British Transport Docks Board. I understand—and indeed in reading the Act it is fairly clear—that there were a certain number of docks which were to he transferred to the British Transport Docks Board—I think 19; perhaps I am not absolutely accurate in the number but it was of that order. These were to be run by the British Transport Docks Board. There were also a number of docks which should he attached to British Railways, and indeed they were, and these are the ones which are concerned directly with traffic between the railway and ferries, and there are a number of them in the country. There were certain other docks which are inland docks, not seaports at all, and these were transferred to the British Waterways Board.
There was not just one uniform pattern but there were three separate ways in which the problem was dealt with, and dealt with, I may remind you, by a Conservative Government. The Act was passed by a Conservative Government. Therefore, the British Transport Docks Board is the creature of the Conservative Government of that day. Because of this, when they wished to purchase the Felixstowe Dock they could not do it by the ordinary simple commercial method. They had to promote a Private Bill, and it is that Private Bill which we are considering now. It was agreed by the Felixstowe Board that they would support the Bill, and that they would give the British Transport Docks Board every help in seeing the Bill through Parliament. So far as I can understand, so long as they still existed they have stuck to that promise of theirs and have given all their help.
The Bill, I believe, was actually presented to Parliament in January, and the Bill, 167 when it was presented to Parliament, looked as though it would go through all right. But just about this time, long after the agreement had been reached, the European Ferries came along and made a separate offer to the directors of the Felixstowe Board. I suppose that if one were dealing with ordinary property one would use a word like "gazumping", but this is not quite appropriate in this case. They were told by the Board that the Board could not possibly accept their offer because they had already accepted another offer, and that the other offer, furthermore, had been put to the shareholders at a meeting of shareholders, which I think was held in London, and that this meeting had accepted the offer from the British Transport Docks Board.
The European Ferries then decided to appeal to the shareholders directly, although the directors of the Felixstowe Board had turned them down. They did this, and I think some time late in February they got a majority of the shareholders to accept the new offer. But of course this in no way upset the agreement which had originally been reached and on the strength of which the Bill was being presented to Parliament.
Since that time a mass of propaganda has been put out. I am sure that your Lordships have been subjected to a great deal of it, and have read a great deal of what is going on. But when one starts looking at this carefully one finds that this propaganda, as with a great deal of propaganda, is based upon partial truths, upon half truths, upon fantasies, upon lies, and upon damn lies. There was, for example, a big advertisement only yesterday in the Press—a whole page, which is not an inexpensive operation. This stated that the Bill, if enacted, willnationalise Britain's most successful port which was built up by free enterprise.In the first place this is not a nationalisation Act; it is a straight commercial deal between a Board and a company. It is a successful port; whether it is the most successful port is arguable. It was built up by free enterprise; no one could question that. Then point No. 2 said that it wouldcreate a virtual State monopoly of East Coast ports.That just is not true at all, because one 168 has the ports at Teesside, one has the ports at Tyneside, and these are not unimportant ports, so that it does not create a monopoly. Then it says that it wouldreduce competition and drive business to Continental ports.That is what I call fantasy. There is not a whit of evidence for that at all, and it is a highly improbable statement. Then one has statement No. 4 that it wouldact against the wishes of Felixstowe's workforce, shareholders, directors and port users.If one looks at this one finds that the directors of the Felixstowe Board were sacked, and the present directors are, European Ferries, so it is a little odd to say that the directors of Felixstowe are in support of this. Of course they are, because they are the stooges of European Ferries. They were put in by them.
One sees then the shareholders. Well, the shareholders first of all accepted one offer. Then they were given another offer—which, incidentally, was not a monetary offer but was an offer of shares in European Ferries, which have since fallen in value so the offer is not worth as much as when the shareholders accepted it and it is very doubtful what they would do now. So far as the workforce is concerned, I do not know where this information comes from. I can only say that I have taken the trouble to get in touch with the workforce. I have been on to the union concerned, which is the Transport and General Workers' Union. I have been on to them centrally. I have been on to them at Felixstowe itself. Furthermore, a friend of mine, who has a contact through a councillor at Felixstowe, has made informal inquiries, and there is no doubt at all, whatever anyone chooses to say, that the Felixstowe workforce declared themselves neutral last December, and have continued to declare themselves neutral up until this morning, because the information that got was obtained in the docks this morning and I heard it at 12 o'clock today. Therefore, if someone comes along and says he has evidence that the workforce is opposed to this Bill, I can only say that the evidence that he has is not supported by anyone concerned with the union at Felixstowe.
If there is such a person I should like that person to come forward. I 169 have never come across such a person. One has to realise, therefore, that all this propaganda represents the old story of suppressio Teri suggestio falsi. All the way through we are being pushed and it is being suggested to us that things have happened, may happen and will happen for which there is no clear evidence at all.
One might ask why a company like the Felixstowe Dock and Harbour Board, to which the chairman was passionately devoted—andto private enterprise—should have gone to the British Transport Docks Board and asked them to take it over. When one looks at the matter carefully one sees that there is a reason for this. In the first place, as I said, they were short of money in the sense that they could not carry out the developments which in their opinion were essential without having access to more money; they had already borrowed so much that they could not get more. But the second point which it is very important to realise is that this was no amateur board which was prepared simply to make money without worrying about it. They were devoted to the Felixstowe Dock and they wanted to be sure that it would continue to be run effectively. They therefore turned to the body which in their opinion had the expertise, knowledge, skill and background of success to make it worth while.
When one reads all the propaganda one would think that the British Transport Docks Board had none of those qualities; one would think they were an incompetent group of people who did not know how to run docks and who had no money. In fact, it was suggested in the advertisement from which I quoted that it would be a charge on national funds. That is not true because the British Transport Docks Board have the money to do the whole development themselves. We really are living in a world of fantasy if we pay attention to that sort of thing.
I looked a little at what the British Transport Docks Board do—and remember that they own docks all over the country and of a variety of size. They own Southampton Dock but they also own a mass of small docks which are put together as the small docks section of their work. They cope with all these and, when one looks at their figures, does one find that they are incompetent and make a loss, 170 or does one find that they have been running successfully?
Having looked at the figures, I find, so far as the tonnage of the docks in this country is concerned—a fairly good measure of how they are operating—that the British Transport Docks Board have approximately 25 per cent. of the tonnage of the country. The Port of London Authority, which is a big authority but which is quite different from the British Transport Docks Board, has 15 per cent.; local authority docks—and there are docks, such as the Bristol Dock, which are run by local authorities—have about 15 per cent.; public trusts (about 9 docks come under public trusts) take about 30 per cent.; and the private companies, of which Felixstowe is one, and a successful one, take about 12 per cent. of the tonnage of the country.
If one looks at growth over the last few years, one finds that so far as the growth of traffic is concerned in terms of the unit load, from 1971 to 1974 Felixstowe expanded by 93 per cent., which is a story of success; they did extremely well and they are to be congratulated. The British Transport Docks Board expanded by 105 per cent. over the same period. Is that failure? If one is success, is the other failure? The arguments that have been used are too silly for anything because they ignore the facts, and I have tried to get at the facts. I take another example to show how the British Transport Docks Board have in the last few years made a substantial improvement in their position. From 1970 to 1975 the percentage of port traffic carried by British Transport docks increased from 20 per cent. to nearly 25 per cent. of the total traffic of the country. Is that a picture of failure? That is not surprising, when one begins to look at it, because it is a well organised body, as I found out; it runs as a central financial body but the major docks have their own boards of directors, their own control and run their own job. It is one of the guarantees in the Bill that Felixstowe will be treated in exactly that way and will be allowed to go ahead developing under its own directorate.
When one examines a little further the operation of the British Transport Docks Board one finds that they are not just a body who have taken financial control of 171 a number of docks but that they also have the only research facility in the country, apart from the central facility at Wallingford. Do European Ferries have a research facility? Where would they do their research? And if noble Lords ask what sort of research I am referring to, my answer is that one cannot today run a dock without having the facility for research examination of the hydraulic and hydrodynamic side in order to see what is happening. The British Transport Docks Board are spending about £100,000 a year, directly on their own, on this facility, but they also hire it out to anybody else who wants it and, furthermore, they spend about £250,000 on both research and development.
The reason is now clear why the Felixstowe Board turned to the British Transport Docks Board. They turned to the best people to run it and, because they were the best people to run it—although they did not themselves welcome public enterprise—they felt that it was better in the interest of their dock to have it absorbed into the British Transport Docks Board. We should be mad if we flew in the face of the experience of such people as the directors of the Felixstowe Dock and Railway Company. They knew what they were about. They handed it over to the British Transport Docks Board because they reckoned that they got a good deal and a proper guarantee for the future. I do not want to go into all sorts of legal arguments. Your Lordships know that I am completely innocent of any legal guile and I would not for a moment attempt to argue with anyone on legal matters, so I have kept to what I am competent to deal with—that is, the straight reason in terms of technology as to why this should have been done. I beg to move.
§ Moved, that the Bill be now read 2a—(Lord Wynne-Jones.)
§ 3.31 p.m.
The Earl of GOWRIE
My Lords, too often, in my view, when we debate economic affairs here does the discussion run along rather abstract lines, remote from the nuts and bolts of daily life and the way in which we in this country earn our living. I believe that today will be an important day in the history of this House 172 because we are being given a rare chance to debate a practical, immediate and living instance of the kind of dangers to which; British industry and enterprise are exposed.
What is happening in Felixstowe is a test case of what is happening to our economy; or, rather, of what has happened to bring us to our present troubles. Because this is a Private Bill, in this House alone we are to be given an immediate and practical opportunity to do something about Felixstowe and, by inference, therefore, to do something about our national situation. This makes today's initiating debate one of the two or three most important of the last decade. I believe that the list of speakers bears witness to that importance. We have more than a theoretical or temporary responsibility to get the story of this Bill clear and to get it right and to make sure that, for the Felixstowe Docks themselves if not for the particular Bill, there may be a chance of a happy ending.
The story is a fascinating one. It is straight out of one of the novels of C. P. Snow—or perhaps I should say here the noble Lord, Lord Snow—with a dash of The Brothers added. So far as I know, it has no sex in it, but it has pretty well everything else—power struggles, takeover bids, court actions, debates in Parliament on stage and procedural battles off stage. It has a cast of dons, dockers and Ministers, as well as of entrepreneurs on both sides of the nationalised/free enterprise industrial divide. It is an especially exciting story because we do not yet know the outcome. Indeed, as I said, your Lordships are part of the story and may well determine its ending.
Like all exciting stories, it has moral urgency as well. The noble Lord, Lord Wynne-Jones, and I disagree about the moral or, rather, we draw different conclusions from it. In spite of the clarity with which the noble Lord presented the case of the Bill's proponents, I hope your Lordships will forgive me if I again go over the events underlying the Bill in order to show that differences of emphasis are in fact differences of aim. To summarise the plot so far, as the noble Lord, Lord Wynne-Jones, told us, the story begins with a remarkable, perhaps a great, man, Mr. Gordon Parker, the former chairman of the Felixstowe Dock and Railway Company. Shortly after the 173 war, Mr. Parker, who was by profession an exporter of East Anglian grain, became impatient with the service he was getting from the docklands in his region. So he bought a small, silted-up dock which was in decline at Felixstowe. In classic entrepreneurial fashion, he chanced his arm and risked his neck and, to cut short a long story of ingenuity, farsightedness, good public relations and hard work, he turned this virtually defunct single dock into what is arguably the most competitive and successful port in Great Britain.
I shall not slow up the narrative with figures except to say that within five years the Felixstowe Dock and Railway Company (which I shall hereafter refer to as "Felixstowe") was handling nearly half a million tons of cargo a year and had become a public company. Ten years or so later—that is to say, today—the port handles nearly 5 million tons and the volume of shipping traffic has more than doubled. Because of the efficiency of Felixstowe and, above all, because of its excellent and exceptional industrial relations, manufacturing firms sited only a few miles from the Liverpool, the London or the Southampton Docks, have found it worth while to incur the extra haulage costs involved in taking their export wares to Felixstowe.
I need hardly emphasise the effect that this has had on employment in East Anglia and on the public and private sectors of industry in the hinterland of so successful and fast growing an operation. One of those sectors—and I do not quite know whether to call it public or private—happens to be an estate belonging to Trinity College, Cambridge. Trinity qualifies for status as a charity but the college is surely one of our greatest educational institutions—certainly, in the scientific field, our very greatest. The growth of Felixstowe has helped it considerably. I understand that 16 per cent. of its entire revenue derives from its interest in the area. But even a poor and envious Balliol man like myself can appreciate that richer colleges are required to make disposition for poorer ones. Thus the considerable interest which Trinity has in the continued growth and prosperity of Felixstowe is shared by Cambridge University as a whole. I am delighted to see from the list that my noble friend Lord Butler of Saffron 174 Walden has joined our debate this afternoon.
One does not need to be a very sophisticated economist to recognise that growth brings problems as well as triumphs to a public company. Likewise, planning blight—if I may use that phrase as being more neutral than the contentious phrase "threat of nationalisation"—damns the flow of investment cash on which an orderly expansion depends. When the last Wilson Government took office, the existing economic crisis (for which I do not blame them) as well as the political commitment to the nationalising or public ownership of docks (for which I do blame them) created cash flow problems for Felixstowe. In this way, it was little different from many other successful companies in this country. Felixstowe's record, however, and the confidence which the company's port user association continued to extend to it, ensured that there was no real crisis. But cherished plans for expansion were, as the noble Lord, Lord Wynne-Jones, has told us, certainly at risk, with all that that involved for the local workforce and community.
Accordingly, when the British Transport Docks Board, the Promoters of the present Bill, sought to acquire Felixstowe, Mr. Gordon Parker agreed. It can be shown that he did not exactly welcome such interest from his biggest single competitor but he certainly agreed that he and his Board of Directors would recommend a sale. I should be quite happy to concede to the noble Lord, Lord Wynne-Jones, though I believe that my noble friend Lord Colville of Culross, who knows much more than I about company law, is less happy, that, had the proposed transaction been conducted under normal City take-over panel or company rules, Felixstowe might very well now be in public ownership. Fortunately or unfortunately, depending on one's point of view, the British Transport Docks Board is constituted under the Transport Acts of 1962 and 1968. This means that it has powers only to run its existing 19 ports. To acquire a further port, it needs, as a public body, additional powers conferred upon it. Because a Private Bill is a Bill of limited application, to avoid the recently familiar problems of hybridity, the British Transport Docks Board needs a Private Bill to complete the deal.
175 Here I should perhaps explain to those of your Lordships who are as woefully unfamiliar with Parliamentary procedure as I can be on occasion, that a Private Bill is not the same thing as a Private Member's Bill. It is the vehicle by which an outside interest or individual propels his interest through Parliament. In short, the matter cannot be pursued in Parliament at the behest of Government or individual Member alone. We can see from that, therefore, that the Government could not do it, though we shall be left in no doubt when the noble Baroness, Lady Birk, comes to speak, that the Government are behind the Bill. For myself, I detest the way in which a public and political endeavour such as nationalisation attempts to pass into law by the private road. However, I do not blame the Promoters of the Bill for this. They, unlike the Government, had no alternative.
In the ordinary way, therefore, we should now be debating a Private Bill straightforwardly designed to transfer ownership of Felixstowe to British Transport Docks Board. We on this side of the House would no doubt have been saddened by such a Bill, but in the face of cash shortage we might have had to acquiesce in one. I take the point which the noble Lord made when he said that the British Transport Docks Board, an admirable body in itself, was set up by a Conservative Government. It was set up exactly to deal with hard cases, sore cases, cases quite unlike Felixstowe. As we have heard from the noble Lord, Felixstowe is no ordinary port. It is not in the relative and sad and commonplace decline of most British ports, and when the news of the British Transport Docks Board's deal with the company leaked out at, I believe, a Labour Party conference, the chief user of the port, which was European Ferries with another remarkable and dedicated manager Mr. Keith Wickenden as its chairman, made a better offer for the shares of the company. This was to the great annoyance of BTDB who felt that they had already dealt and were halted only by what they hoped would be a Parliamentary formality over the Bill. To their annoyance the offer was overwhelmingly accepted by the board and shareholders of the Felixstowe Dock and Railway Company. Thus European Ferries now owns Felixstowe, 176 or in formal terms it owns 97 per cent. of the shares.
The Promoters of the Bill feel that the Bill should go forward—that is to say, go into law—fundamentally on two grounds. The first is the ground of principle, and this is where the Government and the Promoters of the Bill profess to be as one, though I must say that for my part I find it hard to believe——
§ Lord GEORGE-BROWN
My Lords, I am sorry to interrupt the noble Earl and I am to intervene in this debate myself later—very much later, I gather. The noble Earl has told us about the reactions of the previous board and the present board. Is he informed that the labour force, the dockers themselves—members of the Transport and General Workers' Union—are 80 per cent. against this Bill proceeding?
The Earl of GOWRIE
My Lords, the noble Lord is pinching my peroration from me. We shall be coming to that point later. I was saying that the Government accept the principle that the present and future wellbeing of Felixstowe would be best served by transferring it from European Ferries, the new owners, to the British Transport Docks Board.
The second argument is over an event, over what actually happened; namely, that the deal between Felixstowe and the Docks Board was, morally speaking, closed. I shall deal with the second issue first because it seems to me to be so patently absurd that I can get it over with quickly. The short answer surely is that you cannot have things both ways. You cannot, as the Promoters of the Bill claim, maintain that you are proceeding along ordinary commercial lines, along the lines of a "freely-negotiated commercial agreement", to quote the words used by the Minister in another place, and then turn round and complain that the laws which bind you as a public body enable an equally legitimate commercial interest to make an equally legitimate counter-bid. If you are claiming this, it is simply your bad luck if the shareholders accept the higher offer.
This is not the first time, nor presumably will it be the last, that a takeover agreed by the Board of the respective concerns leads to a counter-bid which proves more 177 successful. Having then made claims for your competitive and commercial character, you are not in my view in the best moral position to run to Nanny in the shape of Parliament to protect you from your failure. At Second Reading in another place the Minister for Transport said—and I am allowed to quote him—that,European Ferries was perfectly entitled to make the counter-bid that it has madeeven while he regretted the setback to the original merger agreement because—and again I am quoting his words—this merger would fit in very well with our general plans for reorganisation of the ports industry."—[Official Report, Commons, 24/3/76; col. 508.]My Lords, indeed it would. But would it fit in so well with the continued prosperity of Felixstowe itself, a prosperity underwritten by European Ferries as owners, by the workforce and the local community, and by the interest in such prosperity shared by the nation as a whole at a time of national economic crisis and widespread demands to cut back on public spending?
We therefore, in my contention, come back to the central issue: can a private company, with a proven interest in the prosperity and expansion of a port—which was itself created by just such an interest on the part of a user—run the port at least as well as a public body? And I mean a public body which, for all its brave talk about competition, is effectively seeking to acquire its major competitor; and which for all its brave talk about profitability, is backed by public money and artificially low rates of interest. Even with this money it still cannot compare in profit record with the new owners of the port. I said earlier, "run the port at least as well", because it seems to me that the onus is on the British Transport Docks Board to show that they, and not the new owners of the port, are the better qualified. The onus is on them to submit their record of dock management as against the record of European Ferries; as against the known wishes of the Port Users' Association, who themselves, after all, are competitors of European Ferries; as against the wishes of a great charitable interest in the form of Trinity College; and as against what is known to be the wishes of the dockers themselves. The noble Lord, Lord 178 Wynne-Jones, drew doubt on this, though obviously his noble friend the noble Lord, Lord George-Brown, does not agree with him. But this seems to me to be one of the reasons why this Bill should go to a Select Committee so that we can thrash out what are the wishes of the dockers themselves in this issue. I have no doubt myself as to what they are.
It is, as I said, because I believe that the onus is on the Docks Board to do this, that I also think it right that we in this House should refer the Bill to a Select Committee. It will not have escaped the attention of the House that under Private Bill procedure to refuse to give the Bill a Second Reading would in effect kill it dead—and I must say that that is a tempting proposition. I have no hesitation in saying that this is what many people in Felixstowe would like and this is what the present company would like. But we believe on balance that the case for retention of this thriving concern in private hands is so overwhelming that it must be heard. It must not be obscured by the kind of Party political brouhaha which our refusal to give a Bill—passed by the House of Commons—a Second Reading would surely raise. That, in my view, would be playing into the Government's hands on this issue.
For let us make no mistake—this is only nominally a Private Bill. It is backdoor nationalisation with a vengeance. It is no more and no less than a wily attempt to take Felixstowe out of the private sector and force it into the public sector against the known wishes of the management, against the known wishes of the shareholders, against the known wishes of the rival port users, against the known wishes of the local community, and, above all, against the known wishes of the dockers themselves. This attempt is wily because the Government have not the guts to undertake an out and out unhybrid nationalisation of British docklands. They know only too well the odium that would bring down upon their heads. The Government hope that this measure will pass relatively unnoticed; a little local difficulty as it were, unconnected with the wider national interest.
It is up to your Lordships to make enough protest about the measure and to scrutinise it with sufficient care to ensure that the issue will not lie down and go to 179 sleep. To substitute a row about the Bill for a row about the political balance of the two Houses—a balance which is not the fault of your Lordships' House—would be to send a smokescreen over as crucial an issue as we have had to deal with in a decade.
I want to close with a brief word about the instruction which I have appended to the Bill, assuming that it is granted a Second Reading and proceeds to Select Committee. In case your Lordships do not happen to have Standing Orders handy, I shall, with your leave, read out the Instruction. It says:In the event of the Bill being read a Second Time "—I am to moveThat it be an instruction to the Committee to whom it is committed that they shall satisfy themselves that the passing of the Bill would not lead to an undesirable reduction in the competitive position of the port of Felixstowe which would be contrary to the public interest.We on this side of the House simply do not believe that the British Transport Docks Board, by acquiring its major and most successful competitor, would be in a position to continue to reinforce the kind of competition which has driven traffic from other British Transport Docks Board ports to Felixstowe itself. This, in a nutshell, is what has happened, and what has made Felixstowe a success story. Nor do I believe that the British Transport Docks Board could do other than develop Felixstowe within the strategy for its other ports. That might be good for the other ports, but in no way could it be said to be in the best interests of Felixstowe.
When I visited the port only yesterday, the drive, the energy and the activity was positively un-English; or rather, it was like a glimpse into our great commercial past and a signal of hope for our commercial future. A senior shop steward, emphasing the indifference of most of his men to the political implications of the Felixstowe affair, said that all were aware that 25 new men were taken on last week alone, and "Who can beat that?"were his words. We in Parliament, of course, must also attend to the more than local, to the wider issues of principle and practice raised; and if the Committee feel that their remit and my instruction, if your Lordships adopt it, is too narrowly confined to Felixstowe itself, then I want 180 to make it perfectly clear that we shall return to the broad issues on Third Reading.
The record of Felixstowe and the record of European Ferries show that where there is verve, imagination and tenacity, where, above all, there is success, British enterprise and British industrial relations can be as good as any in the Western World. At a time when we are ourselves in the virtually outright ownership of our creditors, this kind of example is too important to neglect. In the words of our best writer, if we wish to be "the lords and owners of our faces "once again, this is the kind of example we must follow. I respectfully suggest that our job in this House is to make a start.
§ 3.52 p.m.
§ Baroness SEEAR
My Lords, if one thing is plain about this situation it is that, while some of the facts are agreed, many of them are very much in dispute. The facts that are agreed between both sides of the House include the undoubted events which took place last November, when it was agreed by the existing board of directors at Felixstowe that they should accept transfer to the British Transport Docks Board. There is no question that that took place. There is also no question that subsequently, when European Ferries came forward, the opportunity to acquire the European Ferries shares in anticipation that European Ferries, instead of the British Transport Docks Board, would in fact take over Felixstowe, was accepted by the great majority of the shareholders. It is also a fact that, while this Private Bill was going through the House of Commons, an Amendment was included which, it is contested, was a material Amendment. That matter is, I understand, now before the courts, and the outcome before the courts must have some effect upon the ultimate outcome of this whole issue.
The matters which are in dispute I shall come to later. Given that the facts which I have stated are beyond dispute, it might well be argued—and I am sure it will be argued in your Lordships' House —that an agreement, once entered into, between Felixstowe and the British Transport Docks Board, should be honoured; that this was an agreement, and an agreement should go forward; 181 and that it was perhaps unfortunate that European Ferries did not come forward first but they did not, and this undertaking entered into with the British Transport Docks Board having taken place it should he honoured. But, my Lords, surely it is not as simple as that. It is not just a question that, the agreement having been entered into, there should under no circumstances be any going back on it. In the first place, this transfer requires a Private Bill. This presumably means that there are other interests to be considered besides the immediate interests of Felixstowe and the British Transport Docks Board. It means that Parliament has the opportunity to look at what is going forward, and to express a view. There would be no point in having this procedure if the whole matter was open and shut once the Felixstowe company had agreed to go forward with the British Transport Docks Board.
Moreover, the British Transport Docks Board, if other evidence comes forward, is not required to press its claim legalistically, even if legalistically it were entirely entitled so to do. It is not a case between two parties to a business transaction where one party is going suffer great hardship if the initial under taking is changed for good reason which can be shown. I would argue that what this all turns on is whether or not it can be shown to be in the public interest that Felixstowe should go to the British Transport Docks Board, or whether it should go in the direction of being taken over by European Ferries. There are other considerations, and in our view those considerations should be paramount.
It is here, of course, that we come into the area of conflict of opinion and, indeed, conflict of evidence. Some of us who, like the noble Lord, Lord Wynne-Jones, have had the opportunity to look into the matter (though not, no doubt, certainly not in my case, with the same degree of concentration as that which the noble Lord has given to it) have come up with an opinion very different from the opinion given to us by the noble Lord, Lord Wynne-Jones, based on facts, no doubt selected facts. All facts are selected facts. The facts that the noble Lord, Lord Wynne-Jones, was given were selec-ted facts, and not the whole truth and nothing but the truth. But certainly the facts which were given to us present a 182 very different picture from that which was given to us by the noble Lord, Lord Wynne-Jones.
Some of us — and this is well known, of course — were approached by the Felixstowe company and were, I think, not seduced by the tasty niblets with which they presented us last week, when they gave us their side of the story. What certainly came out from the account given by the Felixstowe company was that the shareholders undoubtedly were in favour of the European Ferries' offer; that the dock-users — and this, surely, is of very great importance — were in favour of the European Ferries' approach; and that (and this, of course, is a matter which is in direct conflict with the evidence presented to us by the noble Lord, Lord Wynne-Jones), while the labour force had initially said that it would work under either of the new prospective owners, two shop stewards, both members of the Transport and General Workers' Union, spoke last week very strongly indeed in favour of European Ferries and maintained that it was highly in the interests of Felixstowe and of the people who work in it, that the docks should not go to the British Transport Docks Board but should go to European Ferries. This is in direct conflict with what we have been told by the noble Lord, Lord Wynne-Jones. I have only the evidence which was presented to us; he has the evidence which was presented to him. I am not suggesting that he is trying to mislead the House, and I am sure he is not going to suggest that I am trying to mislead the House. All I can say is that this evidence is in conflict.
§ Lord WYNNE-JONES
My Lords, I thank the noble Baroness for allowing me to intervene. I wish to say only this. Of course I would not say that she is trying to mislead the House, but between 11 and 12 o'clock this morning I was informed by Mr. Partridge, who is the Dock Officer at Felixstowe of the Transport and General Workers' Union, that there was no question but that the dockers still stuck to their view that they should be neutral in the matter.
§ Baroness SEEAR
My Lords, I can only say that I was informed by two working shop stewards in the docks that they were in favour of European Ferries. The only 183 thing that this proves is that we do not know accurately what the position of the labour force is — and it is a matter of very considerable importance that we should know once we agree, as your Lordships will agree, that it is perfectly proper and right that this matter should be reopened. I think there is no question about the dock users; there is no question about the shareholders; but there is, it seems, some controversy as to the attitude of the labour force. I think it is of some interest in passing that one of the matters which had upset those shop stewards whom we saw was that they had had no prior information about the possibility of Felixstowe going to the British Transport Docks Board, whereas the European Ferries said wisely that they were not prepared to consider going ahead with any take-over unless they understood that the labour force was behind it.
Again this may be false information, but this is what we were told and what was confirmed by the shop stewards. It is, I think, rather extraordinary, in the light of all that we have heard and said in connection not least with the Employment Protection Bill, that the possibility of the transfer to the British Transport Docks Board could have gone forward with such ignorance on the part of the labour force who, they say—and the noble Lord, Lord Wynne-Jones,mentioned this—first learned about it through a leak at the Labour Party Conference. This is a matter of controversy but it is a matter of very great importance which needs to be explored more fully before a Private Bill of this kind should go forward.
Then, on the side of Felixstowe, it is common agreement between us that Felixstowe has been a highly successful dock. Its growth rate is very high indeed. The noble Lord, Lord Wynne-Jones, said that the growth rate of the competing docks under the British Transport Docks Board was every bit as good and even, in percentage terms, better. This is not the information I have. The information I have is that the growth rate of Felixstowe is considerably more favourable than the growth rate at Humber and Southampton which come under the British Transport Docks Board. This can only be a matter of fact which can be sorted out, but the evidence so far is conflicting and it needs to be looked at 184 again. The success of Felixstowe whether it compares favourably or otherwise with the British Transport Docks Board ports is beyond question.
One element of that success has been its great skill and speed—and speed is very important—in introducing modern technology. It may or may not be the case, as the noble Lord, Lord Wynne-Jones, pointed out, that Felixstowe has research establishments of its own. In fact, it is certain it has not. But as the noble Lord, Lord Wynne-Jones, knows very well, every unit does not need to have its own research establishment; a good management is capable of taking advantage of other people's research and of buying research facilities elsewhere. Whether it had research facilities available to it or not, it was quick to take advantage of new technical developments and the introduction of containerisation, that most difficult of changes to bring about in all other docks, went through at Felixstowe with a minimum of trouble. This is surely a great credit and speaks highly not only of the efficiency and forward-looking attitude of the Felixstowe management but of their skill in handling their labour relations.
My Lords, it is on the excellence of Felixstowe's labour relations that their claim to remain a small, self-contained, self-governing unit, in part, stands. The noble Lord, Lord Wynne-Jones, said that the British Transport Docks Board was a very competent management and that labour relations in their areas were good. I can only quote to him a Press release of April 1976, not from a private enterprise concern but from the chairman of the British Waterways Board in which the chairman, Sir Frank Price, said:I am extremely concerned that a group of men at Hull docks which comes under the British Transport Docks Board acting in an unofficial capacity have been allowed for a long time to jeopardise the livelihood of men employed by my Board who belong to the same trade union.It goes on:I have regularly and consistently pointed out that unless in such a situation management grasps the nettle and by effective control ensures the smooth conduct of the legitimate business, the inevitable would follow. Obviously this group of men have been allowed to feel strong enough to ignore directions by management and advice by their trade union. In this view I am supported by officials of the Transport and General Workers' Union. I am alarmed that these men should have been allowed by default to wield such crude power and to dictate what traffic should or should 185 not be allowed to use Hull docks. Furthermore, it is now widely reported that the British Transport Docks Board, their employers, have rented to the men a warehouse constructed with taxpayers' money.Whether that last point is true or not I do not know but the significant point in that Null situation is that the British Transport Docks Board is the ultimate employer and so far from being able to handle labour relations smoothly, in that particular instance, at any rate, its labour relations are at a nadir. Those are strong arguments at least for looking again, for reopening the issue.
I would make a plea for leaving Felixstowe in the private sector as a small private sector dock on other grounds. The Government confirm again and again their belief in a mixed economy. There are many ways of mixing the economy, as the Government themselves have stated. It has been for some time now the policy of the Labour Party that one way of mixing the economy is for the Government to buy a particular company in the private sector so that there should be competition between the public and private sectors in a given industry. Why not on this occasion recognise that the mixing of the economy can work the other way round?— and that where you have what is largely a public sector industry in the docks world, there is much to be said, surely, for keeping one or two private enterprise docks, so mixing the economy in the docks industry with the larger sector in public control, as is the case, but with some private enterprise docks. Is this not the kind of mixed economy that the Government themselves have favoured? Is this not an outstanding opportunity to practise that kind of mixed economy policy?
My Lords, the case being as confused and as important as it is, we on these Benches would strongly urge that this Bill should not go through as it stands but we would support on this occasion the initiative from the Conservative Front Bench saying that it should go to a Committee so that these much disputed facts of very great importance in a matter of very great importance should be threshed out in much greater detail than has so far been possible.
§ 4.9 p.m.
§ The PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk)
My Lords, I think it may be helpful if I intervened at this stage to indicate the Government's view of this Bill. I see from the long list of speakers this afternoon that the noble Lord, Lord Brain, is making his maiden speech and I am sure we are all awaiting to hear with interest what he has to say. I fear that he seems to have jumped into a hornets' nest over this one. The noble Earl, Lord Gowrie, to whom I always listen with interest, saddened me on this occasion, because, although I am very devoted to the theatre and have a great sense of the dramatic, I feel that when he talked about the national situation and the national economy and of this being one of the most important debates that could take place he was rather pushing things a bit far.
As my noble friend Lord Wynne-Jones made clear in his opening speech, this is a Private Bill promoted by the British Transport Docks Board to confirm a commercial agreement between the Docks Board and the Felixstowe Dock and Railway Company. The implication that the noble Earl made, that there was a grabbing Docks Board ready to pick up and twist the neck of Felixstowe, is absolutely untrue. Felixstowe port, as my noble friend pointed out, had been extremely successful but had got into certain managerial difficulties. It was an amicable, freely-arranged agreement. I cannot see anything the matter with that; nor do I see that that is contrary to anyone's ideas of a mixed economy, as the noble Baroness, Lady Seear, appeared to think that it was.
The agreement was for the Docks Board to acquire control of the Felixstowe Company and the port of Felixstowe by acquiring all the shares of the company at a price of 150p per share. It was freely negotiated between the two parties, and was formally approved by a majority of the Felixstowe shareholders last November. There is no pressure over that. Taking this into public ownership in this way is entirely different from the interpretation used in the perjorative manner of the use of the word "nationalisation"by the noble Earl.
The essential purpose of the Bill before us is, as I have said, simply to confirm that agreement. In the ordinary way an acquisition agreement of this kind between two companies would not of course, need Parliamentary approval. But the Docks 187 Board, being a public body, operate under the special provisions of the Transport Act 1962; therefore they were compelled to promote this Private Bill before completing their purchase. I emphasise this point, because it is only the delay imposed by the Docks Board having to obtain this Bill which has enabled European Ferries to intervene and to strive strenuously to disrupt the agreement between the Docks Board and the Felixstowe Company. All the arguments of the noble Earl, and any of the other speakers who follow him, cannot alter those basic facts.
The Earl of GOWRIE
My Lords, I am grateful to the noble Baroness for giving way. I think she has misrepresented me. Is she not aware that I quoted the Minister in another place when he said that European Ferries were perfectly entitled to make their bid, just as, in my view, the British Transport Docks Board were?
§ Baroness BIRK
My Lords, as happened to the noble Earl when he was speaking, I was coming to that point in a moment. In November, after the majority of the Felixstowe shareholders had approved the Docks Board's offer, the Bill was introduced into Parliament. At that point European Ferries still remained dormant. Then in February of this year European Ferries intervened to put in their counter-offer. I do not of course deny their right to put in a counter-bid and my honourable friend the Minister of Transport also took the same view (although the timing was surprisingly timely); and I cannot criticise the majority of the Felixstowe shareholders who decided to accept the European Ferries offer. But the sequence of events makes it crystal clear that European Ferries went into this with their eyes wide open: that they knew that the Felixstowe Company they were acquiring had entered already into a firm agreement with the Docks Board. I know of course that European Ferries are now attempting to challenge the validity of that agreement in the courts, and it would be inappropriate as well as beyond my competence to comment on the legal arguments. But, as a matter of straightforward commercial practice, European Ferries must have known they had to take on the agreements 188 and undertakings of the Felixstowe Company if they acquired the company. The noble Earl quoted the Shakespeare sonnet; I should like to quote to him the last line of it:Lilies that fester smell far worse than weeds".I strongly urge the House that the greatest respect ought to be paid to a freely-negotiated commercial agreement. I am sure noble Lords opposite must agree with this basic ethical element of free enterprise, although so far we have seen revealed a rather regrettable dichotomy. After all, they are surely its most fervent supporters and defenders. Therefore we should be very hesitant to reject this Bill primarily at the instance of a Petitioner who could benefit by breaching the agreement. If European Ferries have a case against the agreement, then it can only be a legal case, and this is for them to make in the courts. So far as Parliament is concerned, it is our duty to look with considerable suspicion at attempts by interested parties to undermine the agreement. We must take the agreement as the foundation of the Bill, and then go on to consider whether the results the agreement is intended to achieve are in the public interest.
The central question here is whether it is in the public interest that the British Transport Docks Board should acquire the port of Felixstowe, as provided for in their Bill and in their initial agreement with the former owners of the Felixstowe company; or whether, on the other hand, European Ferries should be left with the control they have recently acquired. It is of course, as the noble Earl pointed out, the Government's general policy that the commercial ports of the country should be brought into public ownership; and in this context it obviously makes sense that Felixstowe should be acquired by the Docks Board now rather than be left in private hands for a year or two before then being taken into public ownership. But we arc not debating nationalisation today and I would not wish to make this the main argument for supporting the Bill. It would he wrong if this debate, which is on a specific issue, were turned into a wide-ranging debate on nationalisation. I am sure that there will be plenty of other opportunities for that.
The Government's support for the Bill rests primarily on our belief that the 189 Docks Board would in practice be the better body to control and operate the port of Felixstowe. Here I emphasise the long experience and success of the Docks Board in running their other ports. At present the Docks Board own 19 of the ports of the country—incidentally, this does not constitute a grave and vast monopoly—including Southampton, the South Wales ports, Hull, Lowestoft and Kings Lynn. These ports handle some 24 per cent. of the total sea-borne trade of the country—a proportion which has steadily risen in recent years, but again it by no means constitutes a monopoly.
A great deal has been made of a senior shop steward. I think two were referred to by the noble Baroness, Lady Seear. It reminds me of the legendary trade unionist who is usually brought out in order to illustrate a point which the Tories want to make about trade unions. On other occasions, the views and attitudes of shop stewards are usually heavily frowned upon and criticised. Here they have been carefully nurtured along. Some extraordinary figures have been thrown around by the noble Lord, Lord George-Brown. I suggest that we are very careful not to rely too much on hearsay in this area. If as I hope it will, this Bill gets its Second Reading, this will be sorted out in the Select Committee.
The Board themselves have great financial strength. I must point this out because this is germane to the Bill before us today. For several years they have had regular surpluses, and been able to finance all their capital development from internal resources—which is in itself a healthy recommendation. In particular, they have sufficient reserves to enable them to acquire Felixstowe at the agreed price of £ 5¼ million without borrowing to do so—which is again a sound commercial base. They will have both the financial strength and skill to make further developments at Felixstowe for profitable investment as opportunities arise.
Further, the Board have very skilled and experienced management, and highly creditable labour relations. They have handled the rapid development and changes in the operation of ports over the past decade with great success. All this adds up to our belief that the Docks Board are well qualified to own and operate Felixstowe in the best possible way. 190 European Ferries, by comparison, are much more of an unknown quantity. It is true, of course, that they have been a very successful shipping company, and that they have had some limited experience of operating ports with their two ports in Northern Ireland and Scotland. It may be that they would do equally well at Felixstowe. But in view of the agreement and of the record of the Docks Board, I do not think this is sufficient in itself to shake what has already been agreed and also the record, which is known and which I have now expounded, of the Docks Board.
Turning now to the question of competition and the Instruction which the noble Earl, Lord Gowrie, has tabled, of course it is true that the acquisition of Felixstowe by the Docks Board will give them a somewhat larger share of the ports industry of the country and, in a purely numerical and superficial sense, this could no doubt be said to reduce competition in the ports industry. I do not believe, however, that there is really any danger of the Docks Board acquiring a monopoly position. Felixstowe itself will of course continue to have keen and thriving competition from Ipswich, Harwich and Parkeston Quay nearby, and further afield from London, the Medway, and Dover to the South, and from the Tees and the Tyne to the North. Incidentally, all of these are already publicly-owned ports, but this does not dampen their competitive spirit in the least. There is no reason at all to think that the Docks Board would, or could, operate as a monopoly vis-à-vis other ports. Moreover, as the Docks Board Chairman, Sir Humphrey Browne, has emphasised, it is the policy of the Docks Board to encourage as much competition as possible between the individual ports under their care, within an overall framework laid down at the centre. I can quite understand the mirth of noble Lords opposite. If one says that there is no competition or that there should be within a publicly-owned industry, they howl. If one says that there is competition, they then laugh because they do not like to hear something which may be to their disadvantage.
Some of the Petitioners and opponents of the Bill also argue, in a somewhat contrary sense, that the Docks Board may restrict the development of Felixstowe to prevent it competing so vigorously 191 with its other ports. On this, I would remind the House that the Docks Board have given repeated assurances that they have every intention of building on the success of Felixstowe and developing its operations in the future. It only makes sense for them to do so, in any case. They formally incorporated these assurances in their original agreement with the Felixstowe Company, and they will be made binding by the operation of Clause 6(2) of the Bill which was amended in another place to strengthen it on this very point. In short, I do not believe there is any substance in the fears of the Petitioners on this point. And, for this reason, I would regard Lord Gowrie's Instruction as unnecessary. However, the Government would not oppose the Instruction if the House feels that it should be made.
The noble Earl, Lord Gowrie, referred to the concern of Trinity College over their investment. The noble Lord, Lord Butler of Saffron Walden, will no doubt refer to that when he speaks. I fully appreciate their concern that their investment in the port should be safeguarded, but the Select Committee will go into this very fully when they hear the Trinity Petition. This certainly should not prevent anyone from giving the Bill a Second Reading.
In conclusion, may I sum up the Government's reasons for supporting the Bill. First and foremost, it is based on a freely negotiated commercial agreement, which ought to be upheld. Secondly, the agreement will secure the future development and prosperity of the port of Felixstowe in the most satisfactory way. Thirdly, it accords with our general objectives for the port's industry. Important points are raised in the Petitions which the Select Committee will need to examine, and will no doubt do so; but nothing that has so far been said or agreed on their behalf would justify us in the extreme step of rejecting at Second Reading a Private Bill that has passed through another place. I was very pleased to hear that the noble Earl had taken that view. I hope that view, which he expressed so cogently, will be taken by other noble Lords and that the House will give the Bill a Second Reading.
§ 4.25 p.m.
§ Lord BRAIN
My Lords, I seek your indulgence for my maiden speech. I realised when I put my name down to speak that this was a controversial Bill. I hope I shall not get stung on stepping into this hornets' nest, and shall hope to avoid controversial matters. I should like to make four points which I hope will be considered during later stages of this Bill. I know East Anglia well and have lived there for a number of years. I have been most impressed by the expansion of the Ipswich and South Suffolk area, which has developed along with the development of Felixstowe. There is a tremendous infrastructure developing with the port—warehousing, export administration and insurance. I hope this will continue to develop whoever takes over the port management and I also hope that the Committee, if the Bill goes to a Committee, will consider this point seriously in assessing the case for both sides.
The port has expanded successfully and we have already heard comments about the excellent labour relations. The labour force clearly identify themselves with the success of the port: they are not just dockers, but say they are "Felixstowe dockers". On this basis we should give serious consideration to their case. They are used to working closely with management and, indeed, not so long ago a convener of shop stewards was appointed to the board of the company. Admittedly, he resigned his post with the union after that, but that is a sign of the good labour relations which have existed in the past and will, I hope, continue in the future. They are used to settling their disputes, discussing and negotiating at the quayside, in the warehouse and, at most, a mile away from the water. I hope that, whoever takes on the management of the port, it w ill continue to be done there and not at a head office miles away from the water. I do not believe this to be a controversial point and hope it will not be taken as such.
As a result of these excellent labour relations, costs are low. We have heard questions as to whether or not charges will go up. I hope they will not go up, because dock charges are a factor in the cost of our exports and of our imports, and low dock charges are an advantage in both areas. I trust that, whoever takes over the management, the port will remain competitive and charge economic rates 193 that are both profitable and also bring in plenty of business.
Another factor in favour of the port of Felixstowe—it may be said, perhaps, that it is the envy of other ports—is the speed at which they can turn round ships. This, again, reduces the costs. I believe they hold the record for turning round a particular container ship and certainly also for a particular car transporter. This is a worldwide record and not just within a particular set of docks. It is to be encouraged, no matter who takes over.
The port is well placed for Holland and Belgium. It has the shortest sea route and is therefore in a good position to provide all facilities, facilities for containers, which then go to Rotterdam for transhipment or to some further Continental point—roll-on, roll-off facilities which are backed up by excellent roads to the South Midlands and other areas of the United Kingdom. We have already heard that these transport facilities have enabled exporters to send goods through Felixstowe from Liverpool and Cardiff. Of course, one must not neglect the fact that through European Ferries, who were a user long before they became involved in the management of the port, there is a very fine passenger service car ferry from Felixstowe to the Continent.
All these aspects make a thriving port. I want to see this port continue to thrive under good management—whoever manages it—and I hope that commercially and industrially, as well as in the field of labour relations, this House will consider all the matters that come before it either now or in a Select Committee, and then, as has already been said, weigh the evidence in the balance and come to a just decision.
§ 4.30 p.m.
§ Lord BUTLER of SAFFRON WALDEN
My Lords, it is my honour and pleasure to congratulate the noble Lord, Lord Brain, on his maiden speech. It had the merit of being short—which is one of the most remarkable merits of speeches in your Lordships' House—it had the merit of being clear, and it had the merit for a maiden speech of being non-controversial. I am sure we look forward to hearing him on many future occasions, now that he has taken the plunge.
194 Those of your Lordships who are acquainted with the Latin tongue, and who may also be versed in Saxon, will know that "felix"and "stow"put together mean "the happy place", and indeed it is a very happy place at present. It is partly for that reason that I am speaking today, and partly because I hope, whatever the result of all our talks may be, that Felixstowe will remain, as the noble Lord, Lord Brain, suggested, a happy place in future. Many of the arguments that I shall bring forward in a short speech will have been used already by the noble Earl, Lord Gowrie, and others. But as there is a very substantial connection between the port of Felixstowe and Trinity College, and as we have put in a Petition, I think it only right that I should make some points in connection with this matter.
Over 40 years ago, we bought an agricultural estate along the border of Harwich harbour. In the last 10 years, about 300 acres of it on the fringe of the port have been used for, or preparatory work has been done for, port-related purposes, in order to back up the outstanding development of the port of which noble Lords have already heard. On those 300 acres, we have spent a substantial amount of our own money. This one college spent £1 million in providing approach roads, roundabouts, underpasses, road lighting, sewage works, drains and every kind of service. Then we invited substantial investors to come in and lease blocks of this land from us and develop it. This they have done by developing huge warehouses which are worth going to look at, because they represent the nearest approach to the development of the most remarkable port in the world, Rotterdam, on the other side of the water. One and a half million square feet of first-class warehousing has been established, with offices, cold stores, special arrangements for lorry drivers and a hotel for them when they arrive and leave. The local authority deserve a word of thanks, because an excellent development plan was dealt with and approved after very swift and thorough public examination.
The long-term ground rents from these developments—and this is where Trinity's interest comes in—provide about one-sixth of the total endowment income of the College. What do we use it on? We use it—I think I can say this without contra 195 diction from any noble Lord—on the most up-to-date scientific college in the world. We have not only been at the head of the university examination lists over the last few years, despite our size; we have won 20 Nobel Prizes in the scientific field, compared with the 21 won by France—that is, one college compared with a whole country—and a total of 17 for Belgium, Holland and Italy combined. We support 120 Fellows; we support our research team and 200 students assisting them, and we also support 800 others.
In addition, we have agreed in the last month or two to support a scheme for spreading our money to less well-endowed colleges. This is a university scheme and it will cost Trinity, being the most well-off college, a great deal of money. So that any money we get will be thoroughly redistributed to the other colleges, including, I may say, the not so well-off college of the Chairman of the British Transport Docks Board. So I hope he will be gratified if our prosperity continues. We help to found new colleges, including Darwin, we have partly founded Wolfson College, we have recently established the Cambridge Science Park and we support a variety of other good causes as a charity.
What I want to make quite clear to your Lordships is that there is no question of personal or private gain. The whole of this money is spent on research development and education. I may tell your Lordships that our highest salaries are less than half those of ordinary Cabinet Ministers, while the lowest salaries are much smaller and less than Ministers of State receive. So we are not doing this for our own private gain. We are doing it for the benefit of science and development.
I now come to Trinity and politics. Just because we have taken a part in this matter, owing to our very great interest and because we prefer European Ferries to the British Transport Docks Board, Trinity has been accused of being political. I am advised by my own council to say that we are not taking a political stand on this matter. We agree with the Minister that we are not going to have a debate—at least, I am not going to have a debate—about nationalisation. This is a debate about who owns the port, one body of people or another.
196 We believe that the best future owner is European Ferries; the Government believe that the best future owner is the Docks Board. We believe for a variety of reasons, that the Docks Board is not the best owner. One reason is that we believe it has quite enough to do with its 19 other ports. I have no doubt that the chairman and the managing director, whom I have met, are efficient; I also have no doubt that the Board does its job efficiently, but I do not think we want to add any more ports. I think it has quite enough, thank you very much. Nineteen ports will be sufficient for the Board to run, and we should far prefer to have a single port owner, and that is one of the main arguments which I put forward on behalf of my friends and myself. We would take exactly the same view on this Bill if it were a private company attempting to wrest control from European Ferries.
Our reasons for opposing the Bill are as follows. First, there is the attitude of the port users who, I may say, are a singularly distinguished lot. Some of the biggest American container systems are already operating at Felixstowe, and there is a large and responsible body of over 80 shipping companies, agents and the like. They, for their own reasons, overwhelmingly oppose the British Transport Docks Board. Without the good will and support of the port users, we think that Felixstowe will go downhill and all the installations which we have built, or which we have invited others to build—which is the important point—will diminish in value. I shall not go into details as to why the port users oppose the Bill, because that can be done in Select Committee. But in a nutshell I believe that their reasons are: the prospect of higher charges, less good service, more red tape, less consultation and, above all—and here I disgragree with the noble Lord, Lord Wynne-Jones, who introduced the Bill with such clarity—we believe that labour relations will be better if the port is left in its present hands.
I now come to the attitude of the port employees. I do not have the eloquence of the noble Lord, Lord George-Brown—and I am sorry he is worried about the fact that he has been put low down on the list of speakers, but I shall certainly be here to listen to him—and all I can say is that our evidence does not agree with what the noble Lord, Lord Wynne-Jones, believes is the view of the port employees. 197 We believe that many of the port employees have spoken out strongly for the preservation of the free enterprise ownership of Felixstowe, and against the British Transport Docks Board. I must say, in the light of the numerous and well-documented labour troubles under the British Transport Docks Board—to which reference was made by the noble Baroness, Lady Seear, sitting on the Liberal Benches—that we are very worried about the change of ownership.
Next we come to what I call the single-mindedness principle. Felixstowe has been built up by a dynamic, one port owner, whose skill, energy and resources have been concentrated single-mindedly on this one port. For European Ferries, the present owners, Felixstowe, is their one English port, and their one port with an important Continental and deep sea trade. The Board, on the other hand, have a family of 19 ports, 17 in England. We believe that if Felixstowe is transferred to the Board there will be fierce competition which will, in the end, undoubtedly result in Felixstowe not having so successful a time. As a lifelong Conservative I believe in competition. If, therefore, the ports changed hands at this time, I believe that this would lead to a reduction in competition among British ports.
I am authorised to say that if the Bill goes through all its stages, after what I hope will be the most searching examination by the Select Committee, we would be perfectly ready to work with the Board. We are not trying to play politics. We do not agree, however, that the Board are the best master. We have maintained friendly relations with the Board and, as I have said, they have a good record, but we believe that the intervention by European Ferries made a distinct difference to the whole problem.
The noble Baroness who spoke for the Government said a great deal about the original contract. That is true, but since the Bill was introduced into the Commons the European Ferries bid, which is infinitely better than the Board's bid, has come along. That is why we are taking a slightly different line in the Lords from that which we took in the Commons. When the Bill was introduced in the Commons, European Ferries were not in the picture. Now they are very much in the picture. We think very well of them 198 and want to support them, and that is why we have put down a Petition against the Bill.
European Ferries now hold 97 per cent. of the ordinary shares, and the port is absolutely booming under their control. As the noble Lord, Lord Brain, has remarked, the fast turn-round for which Felixstowe is specially noted is remarkable. Virtually everybody who is closely related with European Ferries—the users, the employees—worships European Ferries and wants to get on with them. Users and employees have been fully consulted by European Ferries at every stage of their intervention, and as a bid has been made by European Ferries, we think that it would be a great disadvantage now if a change were made and the port went over to the Board.
To my mind, the outstanding feature of the situation is that all those parties who are intimately concerned with the future of the port of Felixstowe—the users, the employers, Trinity, the major investors—are united against the British Transport Docks Board and in favour of the present owners. Provided that the port remains in the hands of the present owners, the tremendous spirit of co-operation engendered by the united resistance to this unwanted takeover will continue. Therefore I strongly support those who are criticising this Bill and hope that in the Select Committee the full case of all who object will be fairly and squarely put.
§ 4.44 p.m.
§ Lord GOODMAN
My Lords, at the outset may I compliment the noble Lord, Lord Brain, who made his maiden speech in such modest and engaging terms and who displayed one attribute that so far has been lacking. This was his convincing knowledge, which seems to me to be missing in today's debate. In this matter I speak only for myself. The most persuasive argument that I have heard from the golden tongue of the noble Lord, Lord Butler of Saffron Walden, is that this Bill may do some damage to the finances and resources of Trinity College, Cambridge. It would be horrible to contemplate any such possibility. Speaking as a poor relation—at least as an impending poor relation—I was drooling with envy as I heard of the revenues that were coming in from the dock, and certainly the most cogent and persuasive 199 reason for throwing out this Bill would be any likely damage that might be done to those revenues.
It seems to me that this afternoon's debate has turned into a piece of shadow boxing. I spent yesterday afternoon at Lords, rather unprofitably, watching some rather drab cricket with very few runs being scored. I have spent this afternoon here, even more unprofitably, with almost no runs scored, because when the noble Earl, Lord Gowrie, finally came to the point where he said that he was not going to divide the House, on the somewhat specious ground that the case was so evident and obvious that we needed no Division, I could not really believe my ears. If Parliamentary time is to be expended in establishing the obvious, I think that we would all be better to spend the afternoon at Lords, even if there were to be a repetition of the defensive play of yesterday.
I arrived here with one simple view. Important matters are involved in this debate, but with great respect and with all due modesty I am not sure that they have been touched on. The advice I give myself—I would not presume to give anyone else advice—is totally to ignore any fact that has been presented by anybody on either side of the House this afternoon unless it can be established from the documentation.
We were told by the noble Lord who introduced the debate in very simple, clear and persuasive terms, that he was satisfied, from an inquiry made this morning, that the labour force were on his side. This was subsequently amended—I think rather significantly—to a statement that the labour force were neutral, whatever that might mean. We were told by the noble Earl, Lord Gowrie, without any evidence of any kind being provided, that he was absolutely satisfied that the labour force were on his side; and we were told by the noble Baroness who spoke from the Liberal Benches that she was equally convinced that the labour force were on her side.
I do not know on what side the labour force are, and I am not very sure how relevant that is. What I am quite sure about, without any disrespect to any of the speakers concerned and without any 200 suggestion that they would deliberately mislead or confuse the House—they have confused the House inadvertently—is that a high degree of confusion enters into this matter when, in the absence of evidence, we arc told about three quite different propositions. I venture to think that I would reach a conclusion only on the facts in the documents, which speak for themselves.
It seems to me that a simple moral issue is involved. I should not presume to say whether these docks would be better run by the British Transport Docks Board or by European Ferries. As an expert on docks, I would come very low indeed on anyone's list, and I venture to think that the noble Lord who introduced the matter would probably be not the first person to be sent for if a question of a technical nature arose relating to the rebuilding of docks. I know the noble Earl, Lord Gowrie, to be an extremely well informed person in relation to literature, culture and matters of that kind, but again I would doubt his qualifications to speak with authority in relation to docks. And I venture to think that despite her outstanding public and domestic virtues, the noble Baroness who spoke from the Liberal Benches would not be sought after with avidity by anyone wanting to build a dock. Hence I greatly doubt the qualifications of anybody to adjudicate on the merits of this matter and, without wishing to offend anybody, I certainly would not be influenced by any of the speeches I have heard here this afternoon.
What influences me is that an agreement was reached at arm's length in circumstances in which, notwithstanding what the noble Lord, Lord Butler of Saffron Walden, has said, had the parties been commercial companies I do not think there would have been any argument but that that agreement should be implemented. The agreement was signed and ratified and remained subject only to Parliamentary confirmation which, in all the circumstances, should readily have been forthcoming, for a reason which has not yet been urged upon your Lordships. That is the situation as I see it in simple, moral terms.
The noble Lord who introduced the matter spoke reproachfully of lobbying. May I say that I have been lobbied very vigorously by both sides. Some very 201 agreeable gentlemen from the British Transport Docks Board side came to breakfast with me, and I was most impressed. The chairman of the Board gave every appearance of being quite indistinguishable from the chairman of any public company on the Stock Exchange Register. He appeared to me to be a gentleman of commercial distinction who could well run a company under ordinary private financial auspices. Their set of accounts and report bears the closest possible resemblance to the well prepared documents put out by public companies quoted on the Stock Exchange and might easily qualify for the Financial Times prize for the best presented accounts. Their negotiations were conducted by an eminent firm of merchant bankers. Everything that would commend itself perhaps more to the Opposition side of the House than even the Government side of the House is to be found in their dealings.
This gentleman attended and he persuaded me that on simple moral grounds it would be wrong not to approbate this transaction. For the moment I remain persuaded, but the whole question seems to be irrelevant because nobody is going to divide the House. It is apparently going to a Committee; it will be discussed in some detail. The Government are not, very properly, resisting the Committee and if the Committee can make head or tail of what the Instruction means they will have an Instruction to assist them. And at the end of the day someone will no doubt arrive at some conclusion on the matter which we could have arrived at without the necessity for a protracted debate this afternoon.
But I would urge that if one is considering this from the point of view of the established facts, the established facts are these: that nobody competed against this bid at a time when it was relevant and for quite a long time afterwards. If you are measuring the efficiency of the parties concerned, it is not irrelevant to say, "Were not the Docks Board much more efficient in this matter than their opponents who came on to the scene so very late? "That does not seem to me to be much evidence of efficiency. So if you are looking for that, there is some evidence as to which is the more efficient from the document itself.
Then we have the question that on two separate occasions the eligibility of the 202 Docks Board to run this dock was confirmed by the previous owners on two separate occasions: once when they entered into the agreement and as a term of the agreement they said that they would support the Docks Board in seeking the passage of this Bill. That was the first occasion, and, on the second occasion when the bid was made, they again said, "We will continue to support the Docks Board in relation to this matter".
It has been conceded by everyone—and this is another fact which emerges from the documents and not from anything we have been told this afternoon—that the previous owners of the Docks Board were immense authorities, absolute dabs at running docks; that nobody would know better than they knew how docks should be run. We must also assume (I think rightly) that they are people of integrity. They have twice said that in their view these docks will be properly run by the British Transport Docks Board, and there seems to be no reason why we should impugn that view at all. It seems to me to be a highly relevant view of the matter. Now someone has arrived after the agreement has been entered into, when it has been confirmed by both parties, when it creates and imposes obligations on the part of the Docks Board that are already in existence. This is a binding agreement. To tell us that we should not pass the Bill because, belatedly, someone else has come on to the scene, seems to me to be a not very moral proposition. If we are concerned with morality it seems to me that the morality of this situation calls for a ratification of this agreement.
§ Lord GEORGE-BROWN
My Lords, if my noble friend will allow me to intervene, once again we hear that he has been lobbied by two different boards of directors. There is a third party in this: the people who work there. They were against it in the first place, they are against it now, for reasons which they think good and proper. Did my noble friend—
§ Several noble Lords: Oh!
§ Lord GEORGE-BROWN
I do not need guidance, my Lords. Did my noble friend at any point think it moral to ask the third party—the workers—what their view about this was?
§ Lord GOODMAN
I will not do so, my Lords, out of mercy; but I could occupy a great deal of your Lordships' time by providing my view as to the relevance of an opinion sought from workers in the circumstances in which we try to obtain these opinions under present day conditions.
If I may divert for a moment, I attended an immense meeting the other day in the East End of London which was designed to procure the notion of what public opinion was on the dockyard scheme that was being introduced. It was a very entertaining meeting. A large number of people spoke. But when I left I knew no more than when I arrived about the general consensus of opinion. I venture to think that people who believe that you can synthesise opinion by asking a few people and arrive at a valid conclusion, are labouring under an enormous misapprehension as to what is the truth in these matters.
Having said that, we come back to the question, and we know that the present aspirant purchasers and the previous owners both approve of this transaction. We know that it was carried out without intervention up to the time when the document had been signed and twice approved by the people concerned—by the directors. This we know, and I venture to state again, that in my view the morality of this transaction is on the side of approbating the transaction. That is my personal view, which may well not be shared by others; but it remains my belief that there are more important considerations even perhaps than the efficiency of this dock in relation to good faith and honourable dealings in public affairs.
I wish to conclude by saying something which sounds a little pompous and a little portentous, but it needs to be said. We are, I hope, going to live in a society under a mixed economy. This is the sort of society that I believe in, and that I believe most people in this House would believe in. I do not think we want a Communist society, and we have to forsake the notion 204 of a society in which totally free enterprise can proceed unchecked. If we are to have a society in which there is a partnership between two entities, then those two entities must be able to rely on each other for honourable treatment. It is very important that a nationalised industry should not feel that it is at a disadvantage in relation to another industry, and vice versa. Both should have the same fair treatment.
I am no friend of nationalisation. I believe that almost without exception things are better run privately by people who have a profit motive, who have a concern which does not arise from being an employee of the State. I believe this passionately in relation to private medicine. I believe it in relation to a great many things. But there are areas of national business and concern which must be the subject of nationalisation. If we introduce the sort of consideration which has been urged this afternoon, that every time a nationalised industry makes some move to do something which is within the ordinary pattern of commercial activity we should leap to seek to defeat it on the specious cry that nationalisation is a danger, I think we shall have achieved the very worst position for ourselves in relation to the sort of society that we seek after.
We are seeking a society in which we can live in partnership between nationalised and non-nationalised entities. We are hoping for a society in which there can be a great area of non-nationalised entities; in which people, and particularly the young people, can feel that they may set off in life without the obligation to serve the State. This is what I hope for and what I believe most of the Members of this House will hope for; and I believe that we shall advance that cause by firmly rejecting the suggestion that we ought, whenever there is an opportunity, to defeat some plan or aspiration of a nationalised industry, however dubious may be the morality behind that transaction.
On that note I would urge upon your Lordships that, if we are to have no Division on the Second Reading, we should give the Bill a Second Reading; but let us bear in mind that in this matter the considerations of morality and of policy outweigh very much the considerations of whether or not we shall have a better, a worse, a slightly better, or a slightly 205 worse, Docks Board. That is a matter on which I have grave doubts as to whether we can decide, but there is no House anywhere in the world that can decide the moral issue with greater authority or greater certainty than this House of Parliament.
§ 4.59 p.m.
§ Lord DRUMALBYN
My Lords, I am sure the whole House will greatly welcome the intervention of the noble Lord, Lord Goodman, and we are always ready in this House to consider moral issues. But the much narrower point we have to deal with here—and this seems to be the main issue—is whether this House is prepared to give permission for the British Transport Docks Board to take over control of the Felixstowe Harbour and Docks Company.
The noble Lord said that there was an agreement reached by two parties. But it was a conditional agreement, and both knew that the agreement was conditional on the approval of each House of Parliament. That approval is not normally, and ought not to be, given automatically. The duty of Parliament is to take a much wider view; and on the point of whether or not we are going to debate nationalisation, is it not better in this case to put it in this way, that we are continually being faced with the practical problem of where the line is to be drawn between the public and the private sector?
In this case, we are considering whether it is better for the Board to take over this port, given its experience in other ports, its research facilities, and all the rest, or whether it is better for the port to remain independent—and independence is the issue here— if only as an independent body against whose performance the British Transport Docks Board and all their component parts can test their own performance.
There is a main issue, to which I will come back later, but there is also a procedural one that I would like to ask about; that is, the question whether the Bill has already been altered materially in a manner not acceptable to one of the parties to the conditional agreement. If so, the party concerned is entitled to exercise the option conferred by paragraph 5(2) of the conditional agreement 206 to withdraw at any time before the Bill is reported by the Select Committee of this House; in theory, it could withdraw now if it thought so. It seems that an alteration has been made, and the question then is whether that is a material alteration or not. What may appear to be material to one party may not be material to the other. The House needs guidance, if I may ask for it now, as to who decides whether the alteration is material or not. Is this a matter that the Select Committee could and should decide? My noble friend Lord Colville of Culross wags his head, if that is the right phrase, and I hope that he will give the answer. I am not speaking as an expert, but this is something into which it is necessary that the House should probe, something the House should know about before reaching a decision.
If this is a matter for the Select Committee to decide, there is a powerful argument for it to consider the matter before considering anything else. If the Select Committee decides the alteration is material, the aggrieved party should have the right forthwith to withdraw and the Bill plainly falls. There is nothing for the Select Committee to examine in that case. If the Select Committee does not so decide, it is plainly for them to continue with their work and to report to the House. The House can then consider the issue on the merits of the Bill.
My Lords, that does not prevent the House considering the merits now, and that is what it has been doing. But unlike the noble Lord, Lord Goodman, I found the debate fascinating. The rapidity of scoring of runs on both sides has been commendable. However, that would not prevent the House from issuing an Instruction to the Select Committee after the Bill has been given a Second Reading in accordance with the usual practice of the House. The practice is usual but not invariable. Nevertheless, it seems particularly desirable in this case for the Bill to go to a Select Committee. I do not think there has been one single speaker so far who has not thought so. That would enable the Select Committee to consider the question of material alteration which is not a matter on which this House could very conveniently reach a conclusion at this stage.
Looking at the Instruction, I should like to make one or two observations. The 207 Felixstowe Dock and Railway Company, as my noble friend Lord Gowrie pointed out in a most notable speech, is a remarkably successful enterprise. Here we are giving the facts. The facts can be substantiated. The cargo it handles is continuing to increase at a time when the cargo handled by the ports controlled by the British Transport Docks Board taken as a whole has declined. The excellent management of the company, its excellent employee relationships without doubt have contributed to this progress, in marked contrast, as has been observed already, to the relations at some at least of the ports of the British Transport Docks Board, and that again is a fact.
Reference has been made to charges. This again can be substantiated. The charges are comparatively low. We are entitled to ask whether this will continue if the company is acquired by the British Transport Docks Board. In this connection, it would be as well to refer to paragraph 2(a) of the conditional agreement which gives an undertaking by the British Transport Docks Board, a covenant and an undertaking, thatThey will not seek to direct the existing traffic from the port of Felixstowe to their other ports, it being understood that all the Board's ports will continue to compete for business, subject to the Board's overall financial policies and objectives;".It has been suggested that it is the policy of the British Transport Docks Board that all their deep sea traffic (or most of it at any rate) should go to Southampton. At the present time, the United States Lines, the American Export Lines, and other fairly large vessels are using Felixstowe. Will that continue? Does this undertaking cover that matter?
Next, we come to the question of the port users. I would merely say that port user relations with the company have been particularly well fostered and well developed, both at home and abroad. The port users petitioned against the Bill in another place, and are still strongly opposed to acquisition by the British Transport Docks Board. They are by no means committed to continuing to use Felixstowe. It takes two parties to decide on the success of an enterprise, and on whether the facilities offered are sufficient or not. They are not committed to continuing to use Felixstowe should the company pass into the hands of the 208 British Transport Docks Board. I am told there are new prospective users who have been in negotiation with the company, but again, they are not committed to carrying on negotiations with the company if it is controlled by the British Transport Docks Board.
What, then, is the value of the assurance that the British Transport Docks Board are prepared to give? In sub-paragraph (d) the Board expressed the intentionto promote the interests of the Company's port operations and their further developmentand then come the qualifying words:on the basis of opportunity;".What does that mean? It can mean that the Board are not committed to spend any money on the development of Felixstowe except in relation to a priority which the Board themselves determine, and Felixstowe might come quite low on that priority. In any case, the intention of the British Transport Docks Board may be frustrated by Government intervention through directions given by the Secretary of State. So for these two reasons it is very difficult to rely on the assurance absolutely of the Board, however good their intentions.
But, far more important, it is for enterprises to create their own opportunities. Felixstowe has shown itself able to do this, and until the company and the market was thoroughly disheartened by the prospective policies of the present Government, the company was able to raise money to enable it to go on developing. In his splendid maiden speech my noble friend Lord Brain pointed to the fall in handling cargo, particularly the container cargo. The very special experience that it has gained from the start in handling container cargo has put Felixstowe in such a good position. It all started without much experience, showing that experience in the initial stages is by no means essential. The company has built up a lot of experience, and has proved to be remarkably successful.
My Lords, my noble friend Lord Butler of Saffron Walden has spoken of the position of Trinity College, Cambridge. Assurances were sought in another place as to what would happen to the college should the company pass into the hands of the British Transport Docks Board. So far 209 as I can see, the only assurance the college has obtained in the course of the proceedings is that neither the Secretary of State for the Environment nor the Minister of Transport has any intention of giving directions to the British Transport Docks Board which could possibly affect Felixstowe. No undertaking, so far as I know, has been given that either of them would withhold his consent to an application from the Board to acquire the land in question.
Secondly, may I repeat what has been said already, that the prosperity of the town of Felixstowe and the surrounding area, and the level of employment there, are very much bound up with the port. The area has benefited greatly, as the noble Lord, Lord Brain, said, from the success of the port in recent years and has participated in its development. Will it continue to do so in the future? No assurances have been given in that regard.
My Lords, the story of the port is a vindication of the best in private enterprise, a vindication of the right to differ from the accepted wisdom and the recognised experts and get on with the job. It is a success story. A generally accepted prescription for action in any enterprise, whether in trade or in war, is "reinforce success". It is for these reasons that I would strongly support my noble friend's Motion to allow the Bill to go to the Select Committee for a most careful examination, and thereafter to come back to this House for fuller consideration on merits.
§ 5.12 p.m.
§ Lord STOW HILL
My Lords, may I begin my remarks by saying how very helpful I found the maiden speech to which we listened recently from Lord Brain. It told me, in such a very discreet and charming way, such a lot about Felixstowe which seemed to me to be directly relevant to the real question which I think we have to ask ourselves. It seems to me that the real question one has to ask oneself in this debate can be put quite shortly. Leaving out of account those matters which should not determine our judgment, the matter for judgment, surely, is this: we are dealing with a question of public interest. Would the public interest be better served if this most important port of Felixstowe were 210 conducted under the terms of the scheduled agreement by the Board, or would it be better served if it were conducted by the company European Ferries?
The decision which is arrived at is one which is not going to be temporary, pro tem in its application. It deals, after all, with a most important source of out natural wealth. It will presumably be operative for years perhaps decades, and I should have thought it was of critical importance that that particular matter of judgment should be answered in the right sense by us in this debate.
May I come back to that in a moment, but before I do so advert to something the noble Lord, Lord Drumalbyn, referred to in the course of his speech. He referred to the proceedings which are being brought under Article 5 of the scheduled agreement, and he put the question to the House as to who had to decide whether or not the change brought about by the Amendment in another place was fundamental within the meaning of Article 5. What happened, apparently, was that an interim injunction was asked for but refused; the case was marked for an early trial, and is to come on on the 12th July.
The answer that I would respectfully offer to the question put by the noble Lord is this: clearly it must be for the court to decide, when those proceedings are heard and when the plea is put forward for an injunction, whether or not an injunction should be granted because the change was or was not, within the meaning of Article 5, a fundamental change. The pendency of those proceedings, and the possibility—I have been told rather an unlikely possibility—that the injunction may be granted, is no reason at all why a Second Reading should not be given to the Bill at present before your Lordships' House, as it would seem that at the moment it is the intention of the House that it will be given.
Having said that, may I indicate what, personally speaking, in trying to form my judgment, I would discard as not really of great importance in answer to the major question which I put. It does not seem to me that it is relevant that European Ferries made their offer at a late stage. The noble Lord, Lord Goodman, felt that that was a matter which was of importance; it affected the general morality of the whole situation. 211 I would venture to differ from him. They are perfectly entitled to make the offer. They make it in the knowledge that the Bill may be given a Second Reading or it may not. They take that risk. They run the risk of some loss. That is entirely a matter for them, and it seems to me that that is a circumstance which should not really influence one.
§ Lord GOODMAN
My Lords, I hesitate to interrupt, but I should like to make it clear that I am not in any way criticising the making of the offer. They were perfectly entitled, of course, to make the offer. There is nothing in the least disreputable in their doing so. What I was saying was that it is for us to consider whether in those circumstances morality requires that we endorse an established transaction.
§ Lord STOW HILL
My Lords, I am grateful for that explanation, and I quite understand what the noble Lord says. I have made my point, and I do not think it would help to come back to it. What is perfectly clear? It is perfectly clear that we have three parties before the House the Board, the company and European Ferries. All of them have shown themselves highly efficient. My noble friend Lord Wynne-Jones indicated a number of reasons why the Board could be congratulated, I should have thought, on its performance since it was set up by the Act of 1962. The volume of traffic which it handled increased from 20 to 25 per cent. between 1970 and 1975.
I have seen the figures of its earnings on capital employed. They are very satisfactory; they increased year by year, and I will not trouble the House by going into those figures. It last received a Government subvention in 1972. It is financially in a position fully to implement the transaction which we are considering. It operates at 29 ports. I should have thought its reputation was universally accepted as a highly efficient board, and I should have thought for that purpose it was irrelevant to consider whether this is part of the public sector or the private sector. All of us in this House believe in a mixed economy. This is one of the smaller public sectors we are considering. I say at once that my conclusion is that the House should 212 not only give the Bill a Second Reading but, I would greatly hope, that the result of the proceedings will be that in the future Felixstowe is managed by the Board.
The second undoubted fact is that the Board which managed the Felixstowe Company was a highly effective and efficient board and is to be congratulated. Unfortunately, it arrived at a situation in which it felt doubtful as to whether it could continue, and had to look elsewhere for support or for future development. The European Ferries company obviously is a most efficient company also. It is go-ahead. It is said against the European Ferries company, so I have read, that it would operate under the disadvantages of a one-port user. As against that, it points to its success at Larne harbour. It is very difficult for a person like me to evaluate an argument of that kind. Indeed, I think it is difficult for a person like me, with very little experience of port management, to intervene in a debate of this kind. When I was at the Bar I was engaged as counsel in very long proceedings relating to dock charges at Hull, and certainly one piece of wisdom I acquired there, which I hope I can turn and will endeavour to turn to use in this debate, was this; the chairman of the tribunal before whom I appeared let me know discreetly that in his opinion my speeches and my cross-examination had been much too long. That will enable me, I hope, to bring my remarks to a fairly speedy conclusion.
Faced, therefore, with the question, do you think the public interest over the coming years would be served better if the Board operates Felixstowe or if European Ferries operate Felixstowe? I answer that question by saying that it would he better if the Board did it. The Board has the experience. It has shown that it is highly capable. It has the resources. It is limited in its approach by Clause 2 of the scheduled agreement. It is not allowed under the scheduled agreement, as has been pointed out, simply to uproot the whole series of arrangements which have been made in building up Felixstowe port by the company. It has to operate it within the scope of Clause 2. I know that the noble Lord, Lord Drumalbyn, felt some uncertainty as to exactly how it would all work out, and I agree with him that there are ambiguities about it. However, broadly speaking, it 213 is a fact that the intention of Clause 2 of the scheduled agreement is that the port should, in a broad sense, continue to he run as a separate statutory company on the broad lines that the existing management have developed so very successully. The reference, it seems to me, to diverted traffic rather supports that, but I agree that there is room for ambiguity as to the precise effect of that clause.
Therefore, one has this question: would the Board, with its wide resources and its long experience of running docks, gained by the operation of 29 big docks, be more likely to conduct Felixstowe successfully in the public interest over the coming years, or would this very excellent shipping company, European Ferries—it is a shipping company without that special expertise or knowledge, albeit an excellent shipping company—be likely to run the docks more in the public interest and more effectively than the Board? I can only say that in my opinion, forming the best judgment I can, I would answer that question unhesitatingly by saying that I would sooner, in the circumstances which I have outlined, that the Board ran the docks rather than that European Ferries did. I hope that the outcome of the proceedings will be that in the coming years it is the Board which operates Felixstowe docks.
§ 5.23 p.m.
§ Lord BELSTEAD
My Lords, as an East Anglian, the noble Lord, Lord Brain, whose maiden speech I very much enjoyed, will know that it is a surprising fact that if you sail down the Suffolk coast, after you leave Lowestoft you will look in vain for a safe harbour. Southwold, the historic port of Dunwich, the old harbour which used to lie at the mouth of the River Alde, the River Deben— all of them have either silted up or disappeared, or else they are guarded by very dangerous river entrances, and none of them is available to general commercial traffic. But then at last you come to Harwich harbour. But even there, although Harwich lies to the South, along the northern shore shallow water and vast stretches of mud have, over the centuries, protected that shore from commercial development. Although Felixstowe dock was established in 1887 along that shore, and provided a safe harbour through two World Wars, after 1945, as has been said, the dock began to silt up again and it was to this that Mr. Gordon Parker came in 1951.
214 Any of your Lordships who go to the site today can see the place where the original dock was, and what is called the old dock office, a building of about a dozen rooms. I am told that the administrative demands of the Felixstowe Dock and Railway Company were such in 1951 that Mr. Parker's administrative staff needed just half of that building. Today it is common ground between all your Lordships that Felixstowe is a large and a developing port. The container handling, the modern facilities and machinery, the general level of cargo going through the port, are all agreed, and the spirit which created all of this virtually from nothing continues to this day. It is I believe the fact that since 1951 there has never been a strike at Felixstowe which has been called clearly on the volition of the people who work there. Those are some of the achievements of the port over the last 25 years, and it is of course due to the endeavour of everyone who works there.
It is important to realise that the port of Felixstowe has not existed historically. Access by water has always been difficult, and one of the outstanding jobs at the moment is going to be further dredging. Access by land was absolutely appalling until a few years ago by the existing roads. It is clear from the four Petitions which have been presented, and from the speeches which have been made by the local Members of Parliament in another place who have seen Felixstowe develop, that there is a widely held feeling that this Bill could destroy what has been built up with so much imagination and effort.
In assessing the morality of the point which the noble Lord, Lord Goodman, made that Parliament should endorse a transaction which has been entered into, I thought it was a pity, and I put it no higher than that, that the noble Baroness, Lady Birk, from the Government Front Bench did not at least put a little gloss on her words that it had been last year an amicable, freely arranged agreement. The fact of the matter is that it was when the assertion had been made that this was a willing buyer, willing seller, situation that Mr. Gordon Parker wrote to the Member of Parliament who represents the area, Mr. Stainton, the letter which my honorable friend quoted during the Third Reading debate in another place. It was a letter which made it absolutely clear that it was Government policies, including the policy 215 of nationalisation, which made it virtually impossible for Felixstowe to raise further money when it needed to do so last year.
But let me turn away from that and ask the one question which I should like to ask, which is what is the need for this Bill. On 23rd March on the Second Reading of another Private Bill, the Anglian Water Authority Bill, the Lord Chairman of Committees, who is going to he speaking later on in this debate said at column 625: "The Select Committee will have to consider the need which the Promoters will wish to establish for the provisions of the Bill in the context of the objections which will be raised against it by the Petitioners".
The noble Lord, Lord Stow Hill, very much followed that advice in talking about the public interest.
The fact is that those who are responsible for the Felixstowe Dock and Railway Company, who use it, who provide much of the land, the services, and the finance, believe that there is no need for this Bill. Indeed, they fear that their fundamental interests are going to be threatened by the Bill because they see the single-minded purpose which literally created Felixstowe being lost amidst the cross-currents of the competing interests of the 19 ports which are within the control of the British Transport Docks Board. I refer, of course, to the port users, to Trinity College, to the Felixstowe Dock and Railway Company, and to European Ferries.
It has not been suggested in your Lordships' debate this afternoon, but it was suggested in another place, that in some way European Ferries is not a suitable organisation to run this port. I do not believe that that assertion bears even a moments scrutiny. In 1973 European Ferries acquired the Northern Ireland port of Larne. If I may use an agricultural illustration, when your Lordships recall that it costs £4 a ton more on average to buy a ton of wheat in Belfast than it does across the water in Liverpool, and that in some parts of Northern Ireland the differential is greater, I am sure your Lordships will immediately take the point that the minimum of delay and expense is most necessary in bringing cargoes into and out of Northern Ireland. 216 With unemployment running at up to 25 per cent. in parts of Northern Ireland, of course job promotion is an absolute priority over there.
My contention is that European Ferries have shown that they are able to do their bit to meet those particular national needs. Port charges at Larne are lower than those at Felixstowe, which in turn are lower than those at Southampton, to give that as an example. During the last two years, cargo and passenger traffic have increased through Larne and the workforce there shows a healthy 40 per cent. increase. It strikes me that Mr. Wickenden and his company have brought to Larne exactly those qualities of energy, imagination and the ability to get on with other people which Mr. Parker brought to Felixstowe 25 years ago. It is significant that the port users at Felixstowe want one of their number to run the port, and that in essence is what they want. The port users have received an undertaking, which has not been mentioned today, from European Ferries that there will be no discrimination with regard to European Ferries' own undertakings, and this is precisely the same undertaking which has been given to British Rail at Larne, and one finds there that Sealink, the Scottish arm of British Rail and a subsidiary of P. & 0., are going in and out of Larne Harbour with absolute freedom.
It is worth saying that the port users of Felixstowe do not fear competition but, locked into the British Transport Docks Board, they know that whether the Board likes it or not, they would be competitors for resources which are becoming less and less available as financial stringency becomes tighter and tighter in this country. The port users weigh the effect of being one among 20 claimants for scarce resources against the direct access which they enjoy at the moment with the Felixstowe management and they find the scales weighted heavily against the case for this Bill.
There is very little that I can add to what my noble friend Lord Butler of Saffron Walden said on behalf of Trinity College, but it is fair to underline the substantial capital outlay which the College has shouldered and the wide educational benefits which the College is offering, totally outside its own immediate educational responsibilities, from its Felixstowe 217 income. Finance raised from industry and commerce is no new feature of the development of universities in this country and at a time when higher education is absolutely crying out for additional resources, long may this remain the case! But here again, when we look at Trinity and the way in which my noble friend put the case, in such a balanced way, we find no confidence in the Bill. Surely we should ask ourselves whether the judgment of those who have been involved in this port since its modern development began should not be heeded very seriously.
I confess that I am at a loss to understand who really is in favour of the Bill, except for the Promoters, of course. What are the benefits which the Promoters genuinely believe that they will bring to Felixstowe, remembering always that the Promoters must establish the need for their own Bill? Is it seriously argued that Felixstowe's commercial prospects would be improved by the Board's control? This of course is the nub of the argument for my noble friend's Instruction and it is the basis of the anxieties of the petitioners. If it is asserted that there is no basis at all for this anxiety, I would draw the attention of your Lordships to the view, expressed very early on in the proceedings in Committee in another place, that the Board was ready to keep in operation those of its ports which ran into difficulties provided they showed what was called a working profit.
I accept absolutely that that is a humane and sensible approach for a Board which has the wide responsibilities of the BTDB, but it can scarcely imbue Felixstowe with much confidence to hear that one of the needs for the Bill relies on the case for the Felixstowe Dock and Railway Company to share the problems of the 19 other ports within the BTDB's control. Is the Board really seeking to argue that its commercial performance is of such a nature that it should be imposed for the good of Felixstowe? Again, in Committee in another place it was given in evidence that over the last year Southampton's port charges had increased by approximately 40 per cent. at a time when the port charges of Felixstowe had been confined to a 15 per cent. increase, and that Southampton's charges had increased six times in the previous 21 months and were in general far higher than Felixstowe's.
218 I would ask the noble Lord, Lord Wynne-Jones, who will reply, a simple and straightforward question: would it be the policy of the Board in the future, if this Bill becomes law, to encourage Felixstowe to maintain its differential of charges, if it is able to do so? That is a perfectly straight question which I put to the noble Lord and on the answer depends to some extent the strength of the case for my noble friend's Instruction. Is it really the Board arguing that there is need for the Bill because the people working at Felixstowe demand it? My understanding is that the noble Lord has not in fact been to talk personally to those who are working at Felixstowe. May I say, as somebody who has done so, that it is clear that the Transport and General Workers' Union—the noble Lord, Lord George Brown, will be speaking with very much more experience and knowledge of this issue than I have—have made it clear that what they want is to be allowed to get on and work the port, whoever manages it.
We are a hard-headed lot in Suffolk and it may not surprise Lord Wynne-Jones to hear that he would find if he went to talk to the people who work there a reluctance to believe that the Board would really be laying out in future scarce resources to develop Felixstowe in order to create further competition for Southampton and Immingham. If the noble Lord went to talk to the people working at the port he would find out one other thing as well. He would find doubts expressed as to whether communications between the unions and management would continue to be on the same purely local basis which has worked so well so far. It is not unreasonable to suppose that all who work at Felixstowe look with doubt at the disruptions which have occurred this year at Hull and Southampton and, whatever the reasons may be for those disruptions, those at Felixstowe hope in their hearts that they will be able to retain their independence.
The noble Lord, Lord Goodman, warned during his speech of reaching a decision against the Bill because of a dislike on this side of the House of nationalisation. With respect to the noble Lord, who is not in his place at the moment, I have not heard a great deal of debate on this particular issue this afternoon. However, the argument has been 219 put forward in another place that the Government's intention to nationalise the ports should be a decisive factor in favour of the Bill. I find that contention quite extraordinary. Surely, Government policy must be the subject of public legislation, and that a public Bill which has still not seen the light of day is a conclusive argument for private legislation would appear to me to be a contradiction in terms and not conducive to deciding on the merits of this Bill.
My Lords, I end by mentioning three relevant factors. First, compulsory purchase. Must this be brought into the Port of Felixstowe when the alternative is already there with no necessity for CPO? Will the Board continue to develop the Port so that proper use is made of the massive investment which has been put into the local infrastructure in recent years? The road between Ipswich and Felixstowe has been made dual, what is known as the spur road to the dock has been completed, and the relief road, bringing so much traffic from the Midlands to around Ipswich, has reached the public inquiry stage. Will there be a need for these investments under the Board's policies for the port? What are those policies to be?
After listening to my noble friend's speech I am more certain than ever that Clause 2 of the Agreement is so heavily qualified that, with the best of intentions, the Agreement is virtually worthless. Why cannot an Amendment be inserted into Clause 2 adding the words, "on a commercial basis "? The Member of Parliament for the area, Mr. Stainton, pressed the Board hard on this point before the Bill came to your Lordships' House, and received the reply from the Board that that would be impracticable because the Agreement had been sealed by both parties. Yet, Clause 6(2) has subsequently been inserted into the Bill in another place and that has a direct bearing upon the Agreement. If my noble friend's Instruction is passed, I very much hope that the Select Committee will consider the proposal for a reasonable Amendment along these lines to what I consider are totally open-ended undertakings.
At Felixstowe, there is a warning for the future of all of us. If you go there, 220 you see huge crates standing on the dock. These are parts for the Chrysler contract for Iran, but the crates do not travel all the way to Iran by sea. They go across the North Sea to the Baltic. There, they are unshipped and they go by train to be delivered in Iran because, commercially, that is the best way for them to be transported. But Felixstowe is making its vital contribution to our trade because it is a port to which people want increasingly to come and through which they want to trade. In the national interest, that position must be not simply maintained but developed. For that reason alone, I support the Instruction which is before the House today.
§ 5.44 p.m.
§ Lord MERRIVALE
My Lords, the chairman of the British Transport Docks Board in the 1975 Report and Accounts of the Board, says in his statement:The negotiations between the directors of the Felixstowe Dock and Railway Company and the Docks Board were carried out entirely on a willing buyer/willing seller basis.I think it interesting to recall that at the extraordinary meeting of the ordinary stockholders of the company on 21st November 1975, there were 871 votes in favour of the resolution for accepting the Board's offer but that there were 434 votes against the offer. However, the Board said that, in terms of the paid up share capital of the company represented by the votes at the meeting, the majority was 87.95 per cent. However they are viewed, circumstances arc totally different today for, since 17th March last one company, European Ferries Limited, controls the Dock Company with a 97 per cent. holding and that company is certainly not a willing seller—I believe, with considerable justification. If one considers the record of the port of Felixstowe over the years, it has been one of developing success under private ownership.
In fact, Sir Eric Millbourn, a past vice-chairman of the National Ports Council, last year wrote about Mr. Gordon Parker, who has been referred to on a number of occasions this afternoon when, in 1951, he took over the chairmanship of a company which owned, as the noble Earl, Lord Gowrie put it, a small, silted up dock basin with negligible trade and no apparent potential. He wrote:…in the intervening time it has reached its present state, providing employment, directly and 221 indirectly, for thousands of men is solely due to his energy, drive and inspiration. Those who have assisted arc the first to admit that it was his enthusiasm which linked their efforts.At this stage perhaps I may take up this question of a linking of efforts. It brings me to industrial relations. Through hard work, co-operation and communication between men and management, the economic performance of Felixstowe dock has developed year by year, as has already been mentioned. As one senior shop steward, Mr. Paddy Ahern, said last week,We are one big happy family. We have a spotless record of labour relations.The Secretary of the Felixstowe branch of the TGWU, Mr. Geordie Landles, also said last week:There is no trouble in Felixstowe—no strife—we are a family community.Another important aspect is that, should a problem arise, it can be dealt with on the spot between the union and the managerial elements and without reference to a distant head office.
I believe that these excellent labour relations are high-lighted by the fact that mechanisation has been very effectively introduced with the full support of the workers and after discussions with them. I believe, too, that the port has earned the reputation of a pace-setter in the industry by being the first to introduce the most modern methods of cargo handling. On the other hand, what do we see in some of the docks which are owned by the British Transport Docks Board? For instance, Hull is an interesting example. I should therefore like to quote an extract from a Press release of 14th April 1976 by Sir Frank Price, chairman of the British Waterways Board. He said:I am extremely concerned that a group of men at Hull Docks, acting in an unofficial capacity, have been allowed for such a long time to jeopardise the livelihood of men employed by my Board who belong to the same trade union. The British Waterways Board's endeavours to introduce modern techniques in inland water transport which would enable exporters, including the British Steel Corporation, to be more competitive have been sabotaged by this group of workers.As the BTDB say in last year's report:During the year, the Board's ports were generally free from serious "—and I emphasise that word—industrial disputes; the major exception was at Southampton…there were also stoppages at Newport which were particularly unfortunate in 222 view of the efforts being made to attract additional business to the port.Let us now consider and compare the economic performance of one or two BTDB docks and the port of Felixstowe. Newport has declined constantly since 1971 in inward and outward traffic. It had 5,995,000 tonnes handled in that year and only 2,402,000 tonnes in 1975. While Southampton decreased the tonnage handled in 1971 of 29,930,000 tonnes to 26,410,000 tonnes, Felixstowe increased the amount of cargo handled from 2,388,655 tonnes to 4,225,587 tonnes in 1975—a constant rise. As for Hull, there was only a very slight increase in the years 1972, 1973 and 1974 compared to the figure for 1971. On the other hand, there was a decrease of over 1 million tonnes between 1974 and 1975. Therefore, it would seem that good labour relations are highly important.
Now I turn to charges, which is a matter of considerable interest to users. I shall compare like with like as in the example I am to give they were sister ships which were involved, calling at Southampton and Felixstowe. To call at the former port, Southampton, with a 100 per cent. payload costs 162 per cent. more than at the latter port, Felixstowe. But with a more realistic 50 per cent. pay load, it costs 180 per cent. more at Southampton. There has been reference earlier to the policy of the BTDB in relation to Felixstowe. I understand that first of all they wish to build on the existing success of the port—I stress the words "existing success". But if one turns to page 34 of the BTDB's 1975 report, regarding traffic statistics for cargo from 1971 to 1975 at the 19 various ports they own, I think the overall record would tend to show that Felixstowe's development and expansion would be slowed down in the future.
Regarding competition, even if Mr. Stuart, general manager of the BTDB, did say during the Committee stage in another place that the Docks Board encourage competition between their ports—and I understand that the chairman made the same remark, according, I think, to the noble Baroness, Lady Birk—I cannot help but wonder if this will really apply should they acquire Felixstowe, for this would give them a virtual monopoly, I am not saying over the whole country, but along the East Coast.
223 Finally, there are the users, and I think that it is an interesting fact that the chairman of the Felixstowe Port Users' Association, a Mr. Paul Jinks, representing all users' interests—whether exporters from this country or operators abroad—is totally in favour of the port remaining under progressive private ownership. The effectiveness of the port culminating in Felixstowe guaranteeing to unload cargo vessels swiftly and efficiently, combined with low charges, may be responsible for this attitude of the users. In conclusion, my Lords, as I think my noble friend Lord Belstead hinted, for some of the reasons I have given, I feel this Bill to be undesirable and unnecessary.
§ 5.53 p.m.
§ Lord GEORGE-BROWN
Fellow Peers, having spent so much of my life batting at number two for the Government Party in difficult times, I can only start by expressing my gratitude to the six of my fellow Peers who put their names down to speak after me, because otherwise quite clearly the Government Party had decided that I should be second substitute and should never leave the substitute's Bench. We have had before us a succession of lawyers, academics, capitalists and those who administer the finances of the academic institutions. I am the only one batting, as I say, second substitute—number 13—who needs to declare an interest, and I do so immediately. This is it, which I am holding in my hand. It is a little red card which says that I am a fully paid up member of the Transport and General Workers' Union to which belong all those who work in Felixstowe docks. One of the things which make me realise that I was indeed right to exchange the batting place of number two in the Labour Party for the place of second substitute is how little regard the Government Party now have for the views of those who work in an industry, when the views of those people do not happen to fit in with the views of those who run the Ministries and their bureaucrats who support them.
I have told the noble Lord, Lord Goodman, what I now intend to say, and he said, "By all means "; and he added, "my affection for you will not be diminished thereby". I hold in the most extraordinary degree, and have utter 224 repellant fascination for, the contempt which he showed when I intervened about the view of the workers. He said that he had been to a meeting in the East End to find out what the people there thought, and when he came away he did not know any more about what those people thought than when he went there. But I was not talking about going to a mass meeting in the East End, although I must say that, given my background and training, I could have found out what people there felt had I gone to the East End. The problem of the noble Lord, Lord Goodman, is adapting to the East End. But I am talking about something else; I am talking about a group of organised workers, in a reputable trade union, who happen to disagree with their leaders, their national leaders; who happen to disagree with the man in the cloth cap; and 80 per cent. of those workers in the yard at Felixstowe are against it——
§ Baroness BIRK: Where does the noble Lord get that from?
§ Lord GEORGE-BROWN
From them—and unlike the noble Baroness I am one of them; that makes a lot of difference. And not only are—
§ Baroness BIRK
My Lords, would the noble Lord give way? The noble Lord says that he is one of them, but I do not think that he is one of the dock workers at Felixstowe. It does not do any good in a debate of this kind to use figures like that which the noble Lord has not yet substantiated. My affection for the noble Lord, like the affection of the noble Lord, Lord Goodman, will not diminish, but I cannot really accept some of the things he says, including what he says about the attitude of the Government. He is really talking absolute nonsense.
§ Lord GEORGE-BROWN
My Lords, there is a quotation from Alice in Wonderland that matches that; whatever the noble Baroness wishes not to believe is of course absolute nonsense. I repeat that I happen to hold that union card. I happen to be one of them. I happen to have been authorised by them to say what I am now saying. I happen to have been authorised by the chief shop steward to say what I am now saying. I also happen to have been authorised to 225 say that the shop stewards' committee, by a lesser majority—but by 60 to 40— is also against the takeover.
Other nationalisation measures, other measures, have been justified by this Government on no better basis than that the trade unions wanted them, even when I would have opposed the trade unions for wanting them. This is a case where the trade union does not want what is proposed, and the only thing the Government can say is that the national leaders want it. I met the shop stewards yesterday. Let the noble Baroness not take part behind that Alice in Wonderland approach. I am speaking on what I know and on what I am authorised to say.
Now, who wants it, in the case of the unions? It is the leaders of the Transport and General Workers' Union; the man who now tells the Government what their policy should be and who gets Ministers to withdraw when they have gone ahead of him. And why? Why are the dockers of Felixstowe, members of the Transport and General Workers' Union, at odds with the leaders of the Transport and General Workers' Union? It is for the same reason that other people in the Transport and General Workers' Union are at odds with their leaders, and for the same reason that the General and Municipal Workers and the non-dock workers in the Transport and General Workers' Union are against the Dock Work Regulation Bill. It is because what they are trying to do is to take work away from Felixstowe. As has been said, at Felixstowe it is cheaper and the turnround of ships is quicker. Foreign ships prefer to queue up outside Felixstowe rather than go to Hull, to Immingham. to Southampton or to London, simply because the costs are lower and the turnround is much quicker.
The British Transport Docks Board's interest is not in Felixstowe. It is to get the facilities in the other ports, which are expensive and under-used, used at the expense of Felixstowe. This is why my fellow members of the Transport and General Workers' Union at Felixstowe, who built up the efficiency of that port, are at odds with their leaders. Listening to some of the speakers on the other side of the House who have taken the same view as myself one would get the impression that the workers do not really have much to do with it. From Lord Goodman one 226 gets the impression that they had nothing to do with it. In fact, it is my fellows who have everything to do with it; and they have produced a situation where we have, if not the most, certainly one of the most efficient ports in this country; but because it is so efficient, of course, there are facilities unused in Hull, in Immingham, in Southampton and in London. I ask my fellow Peers really to believe, to understand and to accept that the certain consequence of this Bill will be to make Felixstowe less used and, may be, the others a little hit more used; and each one, therefore, will still be showing a loss.
It also happens to be true that my fellows, members of my union, earn a good deal of money, more money, in Felixstowe than similar workers elsewhere. That is their prize for productivity. But is that not what the Labour Party was supposed to be about? Is that not what we keep preaching to people: gain in productivity performance and you will share in the results? So what is to happen to them if this Bill ends up in anything like the form in which it is now? What will happen to them is that, for having done all that, their earnings will be reduced. But the earnings of others will not be increased. Others who should he redundant will be kept on the roll and they themselves will be kept on the roll and paid for doing less or nothing at all. As an unrepentant Socialist but no longer a Party hack, I say to the Government Benches that what they are doing has nothing whatever to do with what we established the Labour Movement for; and when I hear professors and others giggling at me, for heaven's sake let us understand! It may be that I am one of the last members, one of the ageing members, who not only worked as a manual worker but organised manual workers and organised dockers, and who knows what the job is about. My fellows in Felixstowe are entitled to be taken into account.
I do not argue the syndicalist case, although I have heard it argued from those Benches. I have heard it argued that what the miners say should determine what we do with the coal mines. I have heard the syndicalist argument. I do not myself take it, but what I do say as a long-time trade union official and as a member of my union for 45 years is that my fellows' view should be taken into account, and it is not being so taken into 227 account in Felixstowe. They could not be, in any democratic society, more heavily opposed than they are; and, though I cannot pretend to have heard everybody who has spoken today I have heard much of most speeches, no case has been put up which really knocks their case down.
Perhaps the noble Baroness will forgive me for ending with a quotation from a man I think she liked when he was alive, from a man I know she knew and a man whom all the IPC Peers knew, many of whom certainly used to like him—my great friend the late Herbert Morrison. I well remember Herbert Morrison laying down the doctrine in 1945, and I well remember some of the IPC Peers now with us helping to write the document. It was, "The nationalisers must prove their case". That was the doctrine of modern social democracy, although I do not think we had invented that term then—the modern Labour Party. "Let the nationalisers prove their case". "We accept that,"we said in 1945. Let the nationalisers prove their case over Felixstowe. There is no case unless, just because you have something that is working badly and unevenly in 19 other ports, you must now make it work badly and unevenly in this port. As has been said again and again, everybody to do with this port is content with it. Taking it into the British Transport Docks Board cannot do it any good. It cannot do the other 19 ports any good; it can only make sure that 19 are less bad and the 20th is less good than it now is. I myself would rather move to defeat the Bill, but in this modern age of Tory timidity such excesses are no longer committed. I only hope that when this Bill returns from Committee it will be in a different form.
§ 6.9 p.m.
§ Lord HAYTER
My Lords, I always find after listening to the noble Lord, Lord George-Brown, that my head is nodding and that I agree with every word he has said. I do in this case, because his main point was that the views of his friends should be taken into account, and that, I think, is the burden of my speech. Perhaps I should explain to your Lordships that I am the chairman of a little Neddy which is called International Freight Movement, and because of that, and 228 because little Neddies are always tripartite, we know that we can make no move of any consequence unless we have the Government, the industry and the unions behind us in relation to our work. The work in which we are engaged, of course, has a lot to do with the ports, the airports, the railways and the roads, and with the reorganisation of some of these ports and airports.
The remit of my "little Neddy" is simple; it is to find the best economic national answer to the questions which we have to consider. So I just want to hear both sides. What I have not heard is both sides in this debate today. I think that a Party, like a person, can protest too much. There have been interim injunctions, there have been instructions to the Committee, there have been telegrams to all of us—a very professional job has been done on the public relations side. There has been a great deal of repetition from the people on the other side of the European Ferries supporters. One person after another has said the same thing because they have had the same briefing from the same people; but there have been inconsistencies in their remarks.
At ore moment Felixstowe is a poor, small, efficient company. At the next moment it is an undesirable major competitor. I am quoting the words from the other side. The noble Lord, Lord Butler, said that the Board was already too big because it has 19 ports under its control; but as a humble member of Trinity College, I remember that Trinity itself is the largest college in either Oxford or Cambridge. Size itself is not important if the organisation is good—as it is at Trinity and as I think it is and will continue to be at the British Transport Docks Board. Facts have been presented. Have your Lordships noticed that when a person says, "As a matter of fact…", it usually is not true?
The two things that stand out, which will he agreed and, in fact, have been agreed from side to side, is that this Bill went through all its stages in the other place, was considered in Committee and has come here. I am not prepared—and I do not think any of your Lordships are prepared—to accept what has been said in another place without having the opportunity to look at it; so that I want to have it in Committee and see what we feel about the details of it.
229 The second point which is incontrovertible is that in ordinary commerce the deal would have gone through a long time ago. It is the peculiar position of the Docks Board which renders this Bill so necessary. Like the noble Lord, Lord Goodman, I do not like the late intervention that was made. The third point which I can I quote from the document that your Lordships have in front of you, is that the British Transport Docks Board want to present their case in Committee and to answer the many questions in your Lordships' minds. I should imagine that they will not object in any way if the reservations are made in the Motion that is going to be put to the House after this Second Reading has been decided.
I find it interesting to ask myself: what does the European Ferries Board fear? What do the unions fear? What does Trinity College fear? What do the users fear? Why should there be all these efforts to try to stop the normal processes of this House? I believe that they fear the conclusions of the Committee's Report may be—and may be they are right. I feel that the British Transport Docks Board is the right owner of Felixstowe; but I am prepared to wait and see. I hope that this Second Reading will go through and that it will be sent to a Committee in due course.
§ 6.14 p.m.
§ Lord BARNBY
My Lords, whatever may be the examination of principles and the discussions on collateral problems, the overriding issue is nationalisation. In spite of the persuasive and fluent manner in which the noble Lord, Lord Wynne-Jones, presented his case for this Bill to the House, I am unchanged in my belief that the majority of this House is against the principle of nationalisation. For myself, I wish to intervene to record unqualified opposition to the Bill. It is because I have had good knowledge of this port for some time, that I could not deny myself the opportunity of intervening however briefly; because I believe it is a port which is doing a great job, which is making a great contribution to the marine effort and that any attempt to nationalise it is sheer folly. The progress of this port, developed in a very short time, has been already explained by other speakers. Indeed, anybody inter 230 vening at this point in the debate has very little else to say for the ground has been so well covered; but because this has been built up in such a short time, largely by the imagination and determination of one man whom I happen to have known for a long time, I have been in past years to the port, know it well and have been impressed with the rapid development and, more particularly, in the early days of the container traffic which, as I have said, made a contribution to the national picture.
We have had available a wealth of figures, a good presentation of both angles; but more particularly have I been impressed by the speeches of my noble friends Lord Drumalbyn and Lord Gowrie because they have in my mind given convincing reasons to accord with what I, myself, think are the facts. But there are two historic facts. One is that this port has been built up by private enterprise and the other thing is that a contribution to its success has been the surprisingly good industrial relations between management and workers. This has come about by the workers having been recruited largely locally—that is an agricultural area. They have been free from any of the restrictive, traditional methods in the older ports. They have been actuated by loyalty and local enthusiasm so that they have been able to bring about and make possible this continuous development of the port. This it is which seems to me would be the greatest folly to try to interrupt.
Of course, to argue that the relations under the big organisations like the British Transport Docks Board would be just as good, is nonsense. Consider the absurd suggestions that have been made that stations five miles or more inland should be included in dock labour! Again, you see the restrictive practices, in spite of what anybody says, in ports like Hull and Liverpool where the biggest grain silos in Europe have been empty for two years because of difficult industrial relations. This would not have happened at Felixstowe. These restrictive practices in the ports are bringing about some monumental losses to the nation. It is because I pray that this will not be repeated in Felixstowe that I record my disagreement with this Bill and my support for the sense of my noble friend Lord Gowrie in recommending its presentation to a 231 Committee and that the Committee will take into full consideration the points so strongly raised by so many other speakers today and particularly that of the public interest. I again repeat my disagreement with the Bill.
§ 6.20 p.m.
§ Lord HANKEY
My Lords, I should like to start by joining those who have congratulated the noble Lord, Lord Brain, on an excellent speech: short and to the point, and very well structured. I hope we will hear him often in your Lordships' House. I should like to say why I am interested in this subject, because I do not come from Felixstowe and do not know East Anglia very well. I am very much interested in the development of the British economy, which has been going down for years. One of the reasons I am sure is the inefficiencies of our ports. I am sorry to use these words, but I am afraid it really is the case.
It is very important that in this debate we should take account of national considerations in examining this particularly efficient port. Why have these small ports developed so much?—because the British Transport Board Ports have also developed as well as Felixstowe. It is a sad story. The reason is that the inefficiencies of London and the Mersey Ports have been so colossal that the ships tend to go to the other ports. This has brought this tremendous increase. It has been very bad for our country.
The conditions in our big ports have become notorious all over the world. I say this because I travel a good deal and I am always hearing complaints on the subject. For instance, I met a British ship's captain who said he would not bring his ship to our larger ports any longer if he could help it. When I asked him why, he said, "Consider the turnround. The turn-round you get in Hamburg is 48 hours; in Rotterdam it is 36 hours. In London it is two weeks and on the Mersey usually more". At that rate, we cannot hope to compete with foreign ports. A friend of mine heard the same story from a Canadian ship's captain six months earlier, and I have been in touch with Scandinavian ship-owners. They are usually too polite to make a direct complaint, but when you 232 get to know them they tell you about this very sadly, because they are good friends of this country. This is a state of affairs that ought to have been dealt with many years ago. Is it not typical of our country, Parliament, Government and political Parties at the present time that here we are talking about taking over an efficient port and nobody has done anything to correct the gross abuses in the others? It is almost incredible that here, which is our country in a major economic crisis, we are doing something which is completely irrelevent and probably more harmful than otherwise.
I mentioned London. I do not think this situation applies to Tilbury. Tilbury is now a very efficient container port, and I hope that the loading of the containers will not be limited by any artificial constraints so that this has to be done within five miles of the port. That is where a good deal of the trouble has happened. Let us face it, there are widespread thefts in our larger ports. You may say, how can I make these unsubstantiated allegations? I am dealing with facts; I am only interested in facts. A good diplomat w ill tell you that nothing is more devastating than the truth.
I met a man who exports buses to America and he used to send them through Southampton, one of the British Transport Board ports. At Southampton they will not receive goods after 4 o'clock in the afternoon. I have confirmed this to make sure the story is true. The result is that the driver, if he is delayed, has to stay in a hotel or put up somewhere and has all the bother of going along to the docks the next day. The real trouble is that there seems to be no adequate guarding of the vehicles and goods when they are taken over by the port. The port accepts responsibility but, in practice, the tools, spare parts—and, on one occasion, all the seats—were stolen from my friend's bus. He experienced this time after time until he became fed up. Now he has his buses driven to Dover (he exports regularly) and they go across the Channel on the ferry. They are then driven all the way to Antwerp from where they are shipped. At Antwerp vehicles, or any other goods, are received at any time, day or night, and they are kept under guard. There are never any losses and everything goes very well. It is more expensive for my friend, but he says 233 there are fewer complaints from his clients. Although insurance covers the losses, my friend says he does better business this way. That does not lead me to think that the British Transport Docks Board are as 100 per cent. efficient as we have been told. I am sure they do their best; I am sure those at the head of the Board are extremely good. I am sure they suffer from ridiculous trade union regulations in the ports and suffer the effects of this harmful legislation which your Lordships have been made to pass. But, my Lords, there it is. That is the situation that we have to face today.
I am not only talking about Southampton. I have a friend who imports shoes. He used to bring the shoes into the Port of London but he found the consignment was never ready on the day that he sent his lorry to collect it. The driver either had to stay somewhere or drive miles back to the Midlands. The next day generally a consignment was ready but always one third had been taken. This is very annoying. I raised this matter with my friends in the insurance business. I said, "This must be a nuisance for you too. Why do you not make a row if nobody else has the guts to do so? "But the insurance industry says that it does not pay them to do it and the port authorities are afraid of strikes. The policy of the insurance industry is that it is better to pay out good claims and get bigger premiums.
This is a burden on British trade; both imports and exports are affected, and we pay unneccessary money on these counts. This is a big disadvantage to us. This is why trade is moving to the little ports. But Parliament has done nothing about it; the trade unions do not care and have done nothing about it at all. I am positively certain Mr. Jack Jones does not like this. I am sure the T and GWU, who are a wonderful union, would do their best to control it if they could. They do not have the same degree of control over these things that American and Swedish Unions have. What control they used to have has been taken away because you and I, my Lords, through the public funds, pay out money for the strikers when they go on strike and they are no longer dependent on their unions for strike money. The result is that the unions have not got control of the situation. Therefore this goes on 234 affecting our national trade situation and we have done nothing about it.
This situation is bad for the motor car trade. I can give you many examples where people complain that motor cars arrive abroad with parts missing. A short time ago we had some Dutch boys camping in our garden. They were nice young people playing in a tennis tournament. They were feeding with us one night and they said "We are very sorry our parents cannot buy British cars any more". I said to them that that seemed a bit odd, and asked them why. They said, "Because the cars arrive with parts missing". I said that no doubt they were replaced, and they replied, "Yes, but you have to wait two or three months for the parts to arrive, and it is very annoying". I asked where the parts were stolen, whether it was on the ship and so on. They said the parts were stolen from the port of London. They said, "Everybody tells us the same". Thus one group of our workers take action which damages other workers.
Here is another example. At Hull there has been an unofficial strike for 18 months, "blacking "certain transport belonging to the British Waterways Board. One group of workers again are damaging another. Surely somebody ought to bring order into the chaos from which we suffer. But Hull is another British Transport Docks Board port, and it does not lead me to think that they are quite in control of the situation. I am very interested in labour relations. I have studied them extensively in many countries, and what strikes me about Felixstowe is that they have very good labour relations there with their workers. They have an excellent system. The workers seem to get consulted and they feel they are on to a good thing. I entirely agree with what was said by the noble Lord, Lord George-Brown: my information is the same. The workers in Felixstowe get really good pay in return for hard work and high productivity. This is what happens in Sweden and it is jolly good. Bring them under the general umbrella of the British Transport Docks Board and all the other workers in all the other ports will be at them to see if they cannot whittle down their efficiency and productivity and get them paid the same. There will be a great deal of unpleasantness and jealousy about it.
235 I personally believe that we should do very well to leave well alone. There is an old French saying: le mieux, c'est l'ennemi du bien. In other words, the best is very often the enemy of the good. I think we ought to leave well alone. The fact that Felixstowe is a good port means we should stick to it and see if we cannot emulate it elsewhere. What we should be doing is to see how we might reform some of the disgraceful abuses in our other ports, instead of bringing a Feally good port under another general hat. I hope the Select Committee will look at the whole question on the broadest basis and take into consideration the national concerns which underlie this, and that Felixstowe will, in the end, remain with European Ferries.
§ Viscount MASSEREENE and FERRARD
My Lords, before the noble Lord sits down, I should like to support what he said. I was once a director of a trans-shipping company for a few years. It was in the area of the London Docks, but we tried to avoid using London docks. It was apparent at London Docks, with regard to the meat trade—though we were chiefly carrying grain ourselves—and certainly we were informed that at those docks the dockers expected to take 10 per cent., I think the figure was, of all carcases coming into London Docks as their perks. Speaking from memory of a period of some five or six years ago, I understand that two or three of the dockers were brought before the courts and then the rest of the dockers came out on strike—because these dockers who had been stealing carcases were convicted. The whole position is hopeless.
§ Lord SHEPHERD
My Lords, is the noble Viscount making an intervention on the basis of "before the noble Lord sits down "? It is the custom in your Lordships' House to use this device in order to elucidate something which a noble Lord has previously said. I hope that the noble Viscount spoke with the intention of putting a question, because we do get into difficulties in your Lordships' House if this device is used as a means of getting ahead of those who are on the batting list.
§ Viscount MASSEREENE and FERRARD
My Lords, I did not wish to 236 put a question. I merely wished to support the noble Lord, Lord Hankey.
§ Lord HANKEY
My Lords, I willingly accept this as having been said before I sit down. I have much more information on this subject, but I do not want to lengthen my speech. Therefore I shall not add to what I have said. I have a great deal more ammunition for future occasions.
§ 6.34 p.m.
§ Lord RENWICK
My Lords, it appears that this Private Bill will not bring any lasting benefit to any of the parties concerned or to the employees. It will bring no benefit, immediate or lasting, to our country. It takes advantage of the fact that the Felixstowe Dock and Railway Company was incorporated by a special Act of Parliament and is therefore exempt from the operation of the provisions of the Companies Act 1948. This Act, and subsequent ones, were designed specifically among other things to prevent the total acquisition of a company without the approval of nine-tenths of the shareholders.
Here we have a situation where the British Transport Docks Board, answerable directly to Her Majesty's Government, are acting outside the spirit of the Companies Act. Moreover, this is a measure which, by its timing, took advantage of an economic recession at a time when the mere threat of nationalisation hampered the availability of investment funds from other sources. It is also a measure which has been superseded by events. No longer do the company support the acquisition; no longer can the British Transport Docks Board justify the acquisition; and, most important of all, no longer can the country afford it. For Felixstowe is efficient, thriving and profitable. When I visited it recently with the noble Lord, Lord Brain—whom I should like to congratulate on his maiden speech and to say, incidentally, that I hope your Lordships will forgive me if there are certain similarities between our two speeches, though in fact I think that my own speech will be even shorter than his—I found nothing there, and nor, I believe, did he, to make me think that the company was in need of a rescue operation.
I found instead the true spirit of free enterprise. The whole workforce were combining to provide as quick, efficient 237 and competitive a service as is available anywhere in this country to importers, exporters and shippers alike. It was in fact the shop stewards who showed us round "their "docks, pointing out with pride the new extensions to their quays, the new cranes and the equipment which handles containers and helps Felixstowe to cope with all the increasing trade it attracts. It was union men who were boasting of the speed with which they could load cars for export and, as the noble Lord, Lord Brain, said, boasting also that Felixstowe held the world's speed record for turning round a 1,200 container ship. They were proud that Felixstowe, in spite of its geographical position—as far as any port in this country from a major manufacturing area—was attracting for export goods manufactured within a few miles of a major competing publicly-owned port. It is this co-operation between management and unions, and their joint recognition that higher profits are to the advantage of the whole team, that makes Felixstowe competitive not only with the other docks of this country but also with the great modern ports on the mainland of Europe.
This means, as some speakers have already said, that they are helping to reverse the trend, prevalent for many years, of goods bound for Britain being unloaded at Rotterdam or elsewhere in Europe, where the shipper can be confident of few delays. Felixstowe now attracts goods from America which are bound for Europe, and it is justly proud of that fact. Exporters from this country use Felixstowe to avoid financial penalties for late delivery especially to the Middle East. I met an exporter recently who threatened to transfer his manufacturing capacity to France if Felixstowe was nationalised. He employs here at the moment about 400 people.
No wonder the British Transport Docks Board wish to acquire Felixstowe! But, in spite of their assurances that the company should continue as a statutory company operating under its own board, and other assurances related to the future development of port operations, do we really believe that Felixstowe, if nationalised, can maintain the reputation it has built up over the last ten years? The present management do not think so, nor do the Port Users' Association or the shop stewards to whom I talked. Their combined fight to oppose this 238 nationalisation, strongly supported by Trinity College, Cambridge, as we have heard from my noble friend Lord Butler, will, I hope, be an example to all other companies who seem destined to face this same threat of nationalisation. I ask that we somehow allow Felixstowe to continue to grow under free enterprise, to be an example of what all other docks in this country could become, given the right management and the right incentives. For that reason, I support the Instruction of my noble friend Lord Gowrie.
§ 6.40 p.m.
The Countess of LOUDOUN
My Lords, I shall be very brief. I spent some time yesterday going around Tilbury Docks—a most enjoyable and informative few hours. I was amazed at the extent of the changes that have occurred there over the last few years due to containerisation, which has of course brought its own problems. It seems to me, with awareness of these problems, and plans for the future already under consideration, that the all-round prospects for these docks are definitely getting brighter, and I believe that that applies to other ports, too. But I think that the Port of London Authority as well as the British Transport Docks Board, already have enough problems to deal with at Tilbury and the other ports under their control, without taking over Felixstowe Docks which are being run extremely efficiently at the moment, and which have a unique record in industrial relations.
I realise that it was rather unfortunate that European Ferries should have come into the picture at such a late date, but not too late, I hope. Competition is good for any business, as it keeps everyone on his toes. I ask your Lordships to take British Caledonian Airways as an example of this. The present uncertainty about the future of Felixstowe must be resolved one way or the other, because it is damaging to all concerned. But perhaps, as the whole matter has aroused such controversy, it would be better to send it to a Select Committee where all the points both for and against could be considered in detail.
§ 6.42 p.m.
§ The EARL of LINDSEY and ABINGDON
My Lords, coming nineteenth in the list of speakers does not leave me with 239 very much more to do than repeat what has already been so aptly put by other noble Lords from all sides of the House. As an infrequent speaker in your Lordships' House, I should just like to say that I have no direct or vested interest in European Ferries, or in what was the Felixstowe Dock and Railway Company. My original reason for wishing to speak in this Second Reading debate was to support my friendship for the son of Gordon Parker, who was responsible for the development of Felixstowe Docks from the early 1950s to what they are today—one of the most efficient and progressive ports not only in the United Kingdom, but in the world.
However, I have since had an opportunity of meeting all the main representatives of those interests most directly concerned with Felixstowe Docks; namely, the chairman of European Ferries, the senior shop steward of the Felixstowe Docks Section of the Transport and General Workers' Union and the Secretary of the Felixstowe Branch of the Transport and General Workers' Union. In addition, I also had the opportunity of meeting the Senior Bursar of Trinity College, Cambridge, and the chairman of the Felixstowe Port Users' Association. I can only repeat what some noble Lords have said before me, that without reservation they are in favour of the present arrangements by which European Ferries would be allowed to continue to run the docks to their best ability, and in the interests of the community as a whole.
Without going over the statistical ground which has already been covered, there are one or two points which I should like to raise which may be of interest to your Lordships. Though I listened to most of the opening speeches, I do not recall there having been mentioned the fact that when the British Transport Docks Board made their original offer it had not been through the Office of Fair Trading, whereas the offer of European Ferries has been, though it came some time after. Another point of interest is the fact that half the capital raised by the British Transport Docks Board for their port developments at Southampton and elsewhere attracted an interest rate of only 3.61 per cent., whereas the Felixstowe Dock and Railway Company would have had to borrow money at commercial rates 240 prevailing at the time, which were in the region of 13 to 16 per cent.
I support the line taken by my noble friend Lord Gowrie from the Front Bench, and agree with his suggestion that this matter should be sent to a Select Committee in order to thresh out this whole issue in greater detail than can be done on the Floor of this House. I should like to be able to comment on the speech of the noble Lord, Lord Goodman, regarding the moral issue, by which I suspect he really means the legal issue, but I shall await the reply of the Lord Chairman and my noble friend Lord Colville from the Front Bench.
§ 6.47 p.m.
§ The CHAIRMAN of COMMITTEES (The Earl of Listowel)
My Lords, I need hardly remind your Lordships that I have the peculiar disability that I am unable to express any opinion at all about the merits of this Bill, which in any case, as I think your Lordships will agree, have been exhaustively and very ably canvassed by noble Lords on both sides of the House during the course of this debate. But it may be possible for me to help your Lordships with advice about some procedural aspects of the Motions which the House has been discussing, and I shall certainly try to do so to the best of my ability.
I shall deal first, if I may, with the Instruction. The Instruction standing in the name of the noble Earl, Lord Gowrie, focuses attention on a question which occurs in the Petition of European Ferries Limited and the Atlantic Steam Navigation Company Limited; namely, the competitive position of the port of Felixstowe, should the Bill be passed by your Lordships on Second Reading. This aspect of the Bill will therefore fall to be considered by the Select Committee if your Lordships give the Bill a Second Reading, and I can therefore see no procedural objection at all to the House agreeing to this Instruction. In that event, the normal procedure would be for the Select Committee to make a Special Report to the House.
Another important question which has been raised, although I am not aware—certainly, not during the time that I was in the Chamber—that it was raised by your Lordships in the course of the debate 241 this afternoon, is whether the House should postpone further consideration of the Bill until the litigation now proceeding has been concluded. This litigation may give rise to important and difficult questions of constitutional propriety, and if my advice were asked I would say that this is a matter that would best be left to the Select Committee when it meets, as it will have the advantage of hearing the question argued by counsel on behalf of the parties.
I should now like to say a few final words about procedure on Second Reading and in Select Committees of the House on Private Bills. As the House will know, it is very rare indeed—though not, of course, unconstitutional, because undoubtedly this is a power which the House can exercise—for a Private Bill to he rejected on Second Reading. I am told by my expert advisers that the last occasion when this happened was in I937 on the North Devon Water Bill. So that for nearly 40 years no Private Bill has been rejected by your Lordships on Second Reading.
I think that the reason for this is that it has always been recognised that a Select Committee, which has the benefit of hearing argument by counsel representing the parties and hearing evidence from witnesses, is in a better position to consider the provisions of the Bill than the House can be, because the views of the opposing parties and witnesses cannot be heard in this Chamber. I think that conflicting evidence such as your Lordships have listened to from a number of speakers in the debate this afternoon can be sorted out more satisfactorily by a Select Committee. However, I would not want to leave any misunderstanding in the minds of your Lordships about the strictly limited scope of the consideration of an opposed Private Bill by a Select Committee.
A Select Committee of the House on a Private Bill is a quasi judicial body, if I may use this rather abstruse but fairly clear term, and can consider only the matters brought before it in the Bill so far as they are relevent to the Petititions against it and any Instruction passed and agreed to by the House. Without the authority of the House it cannot hear evidence other than that tendered by the parties. It is therefore unable to consider matters of 242 public policy or morality which are outside the Petitions—matters such as those that the noble Earl, Lord Gowrie, and the noble Lord, Lord Goodman, referred to in their speeches. Matters of this kind can be decided only on the Floor of the House. It would be unfair to the Committee to expect it to do more than this, and it would also be unfair to the House if it was thought that such matters were within the scope of a Select Committee. I think that is all the advice that I am in a position to give to your Lordships.
§ 6.52 p.m.
Viscount COLVILLE of CULROSS
My Lords, had he been in his place I do not suppose that the noble Lord, Lord Goodman, would have considered that I was very much of an authority, either, on matters concerning docks, but perhaps I can speak with some authority about this debate since I have heard all of it and will try to pull together some of the threads. I begin with an advantage that I share, although for not nearly so long, with my noble friend Lord Belstead and also with the noble Lord, Lord Brain, whose maiden speech I, too, enjoyed so much. That is the advantage of living now in East Anglia.
Nobody who lives in East Anglia is unaware of the Felixstowe Dock. It is a corner of the County of Suffolk which is immensely prosperous and which has attracted to it, because of the success of the dock, a large number of other activities and employments. It is a most prosperous, bustling and active place. As my noble friend Lord Belstead said, there are consequent results further afield. I am fairly sure that if it had not been for the dock at Felixstowe, the A45 road from the Midlands would not have been improved along much of its length because it would not have passed the cost benefit tests of the Ministry of Transport and the Department of the Environment. Therefore at least one of the by-products is that Bury St. Edmunds now has a by-pass and the lorries no longer have to go through the narrow, ancient and historic streets of that town.
I suppose it is only a coincidence, but if I am right in thinking that the port of Lowestoft is in the hands of the British Transport Docks Board, that North-East corner of Suffolk is not prosperous. I am not suggesting that this is the fault 243 of the British Transport Docks Board, but it is an interesting contrast when one finds that many people there are looking for jobs and that there are long standing complaints about a lack of activity and commercial drive. Even now, when North Sea Gas has a part to play in the prosperity of the rest of the country, it still does not seem to have done the trick at Yarmouth or at Lowestoft. So we are all very well aware of the contrast that I have just ventured to make. It is that background—the prosperity of an important part of the country—that we ought to look at again briefly in this debate.
I agree with my noble friend Lord Gowrie that two main issues have run through the whole of this debate: the first, the matter of morals, or the right morality—so much stressed by the noble Lord, Lord Goodman—the second, what is in the best interests of Felixstowe, so much stressed by the noble Lord, Lord Stow Hill. I should like to say a word in turn about those two main issues.
I quite agree with the noble Baroness, Lady Birk, that it was only the fact that the Bill was needed in order to ratify the agreement that enabled European Ferries to come along with a new takeover bid and acquire the shareholding that they now own. But I am not sure that I follow necessarily the deduction from that which some noble Lords have sought to draw. We cannot, after all, pretend that this was a normal commercial contract, which seemed to be what underlay the speech of the noble Lord, Lord Goodman. After all, neither the British Transport Docks Board nor the company itself are ordinary commercial 'companies. The latter is a statutory company with statutory limitations on what it can do. The British Transport Docks Board, most importantly, are a creature of recent Acts of Parliament and equally have been given limited powers by Parliament. Therefore it seems to me that we go rather beyond what would happen in a normal commercial case. As a result of these statutory situations, we are not dealing with an ordinary company takeover.
It seems to me also that the issues are therefore allowed to be discussed debate such as this. This is not only my view. 244 It is the view of the Promoters of the Bill. It is expedient that the powers, duties and obligations of the Board with respect to harbours owned or managed by them should be extended to include the like powers, duties and obligations with respect to the port of Felixstowe. That is the third paragraph of the Preamble to the Bill that we are discussing. A moral issue, perhaps, there is, and this I would concede in the way that the history of this double takeover bid has been brought out, and I think that in the statement of the Promoters of this Bill the noble Earl, the Chairman of Committees, will find a question raising this point. Probably, therefore, it will be a matter for the Select Committee to look at. Certainly it will be within their powers to consider that question.
I am bound to say that even now I do not find altogether clear what is the strict comparison with an ordinary commercial transaction, whether that is really relevant, and, if it is not, what the proper parallel should be. But it is perfectly plain that under the Bill there is no complete adherence in the minds of either the Promoters or the Petitioners to the ordinary Companies Act takeover bid. After all, there is a clause in the agreement itself made between these two parties which envisages that Parliament might make some alterations to the Bill. Indeed, that is one of the subject matters of the court action to which my noble friend Lord Drumalbyn referred.
Perhaps I could say in parenthesis at this stage that I very much hope that the Select Committee will not postpone their consideration of the Bill until the court has reached a decision. My reading of the pleadings in the case discloses extremely difficult points of law that arise under the EEC legislation, and I can easily imagine that the case could go not only to the higher courts here but also to the court in Brussels. The danger of that will be that the agreement will run out, because in any event it lasts only until I6th November of this year. So I would endorse the view that the Select Committee should get on with this, regardless of litigation, although the results will be a little bizarre if, in the end, the plaintiffs win their case before the courts, only to find that it is too late. That is the kind of thing that is built into this Bill. It is recognised by both sides that Parliament might have a say.
245 I very much agree with the sentiments of the noble Baroness, Lady Seear, that we in this House and in another place should not act simply as a rubber stamp for some bargain that has been made between two parties, one of whom at least confesses that they have not the power to make that bargain unless Parliament gives it to them. I believe that that is the answer to the noble Lord, Lord Wynne-Jones, who dealt with this matter in his opening speech. Parliament has to give them the power to deal with it and they have to argue their way through Parliament. It is at that point, therefore, that I can most conveniently come to the other point raised by the noble and learned Lord, Lord Stow Hill, about what is in the best interest of Felixstowe, because that is what everybody has really been talking about.
We have heard from a great number of noble Lords, many of whom I think have actually been to see the port installations and talk to all the people who work there, in every sort of capacity. The Board has a number of remarkable attributes: my noble friend Lord Merrivale mentioned some statistical details; the noble Lord Lord George-Brown, mentioned the actual triumphs and successes of the work force, and there have been countless other examples of how satisfactory and successful an organisation—and a combined organisation—this has been.
The noble Baroness said that what we have to do—what the Select Committee, as I anticipate it, will have to do—is to look at the agreement which is (I agree with her) the centre of the Bill to see whether that agreement is in the public interest. I support that reading of it. I do not think we can altogether minimise the broader aspect of it mentioned by my noble friend Lord Gowrie, the question of nationalisation, because whether or not one likes to use the word this will be the taking over of a private company and putting it into the public sector, and I understand that to be nationalisation.
But let us look at it from the point of view put forward by the noble Baroness herself: is it in the public interest that the National Board should take over this dock? I do not think that at this stage in I976 we can afford to doctrinate about this, and that is why I wish to minimise any differences that I have with the noble 246 Baroness on this matter. I do not think I care whether or not the Board and its take-over fits into the Government's nationalisation picture and the policy in some Bill that they may or may not have produced. That does not seem to me to be what we ought to be talking about today. What we need to be talking about is the very question raised by the Instruction, the question of competitiveness, and certainly as the noble Earl said it is raised by three of the Petitions, or at any rate two of them, so that would be a matter for the Select Committee to look at.
If I may just add one gloss on this, not only the competitiveness but the level of service, because one can compete on a low and inefficient scale, each competitor being as bad as the other: what seems to me to underlie so many of the speeches that have been made in this House this afternoon are the high standards that are being offered to the public, to the users and to all the markets of the world, to the ship-owners, by Felixstowe. It is the maintenance and indeed the further improvement of those levels of service and standards that I hope the Committee will look at. Not merely will it be competitive with something else which is rather indifferent—if there is such a thing—but it will be able under this new management to enhance and excel its past record.
I believe that in order to deal with that—and that was the point raised by my noble friend Lord Butler of Saffron Walden—they will need to take into account most of the other important factual arguments that have been put forward this afternoon, or indeed, the matters of opinion. They will certainly need to look at the figures mentioned by the noble Lord, Lord Wynne-Jones, about the throughput and the increase in productivity. They certainly ought to look at the point made by my noble friend Lord Lindsey and Abingdon as to the level of interest paid on some of the borrowings by the British Transport Docks Board. It is all very well for the noble Baroness to say that they have been making a surplus: so they have, but as I understand it, they have not been paying commercial rates of interest on a good deal of that money. I think that will need to be examined, and all the figures have been very conveniently set out in the speech made by my honourable friend 247 the Member for Sudbury and Woodbridge on the Third Reading in another place. They will certainly need to look at the whole question of the agreement and the entrenched provisions in Clause 2 of the agreement which is appended to the Bill. This was a point mentioned by my noble friend Lord Drumalbyn, and he was right to do so because there is a great difficulty about this.
Although I entirely respect the motives and the sincerity of the two +parties who sought to build in certain guarantees which would he endorsed by this Bill if it became an Act of Parliament, the problems are two-fold. First, the one mentioned by my noble friend Lord Belstead; that is, the degree of openendedness. The second one is that the agreement deals only with an undertaking between the two parties to the agreement; that is, between the Board and the Felixstowe Company. When the Felixstowe Company becomes a wholly-owned subsidiary of the Board, I want to know who will enforce the undertakings. It seems to me that there will he no outside person to police these at all, and if we are not very careful they will be merely a piece of paper which will not be worth the words that are written upon it or the paper itself. So that is another thing which I suspect the Select Committee will have to look at, because competitiveness may easily not be bolstered up by these arrangements, however sincere they may have been.
Perhaps the two final matters which will be of the greatest advantage and which will arise out of the Select Committee, are these. First, they will undoubtedly be able to deal with a matter which I think the noble Lord, Lord George-Brown, would welcome; that is, the effect of this take-over on the workforce. In many a case of a commercial take-over under the Companies Acts I have heard it said that insufficient account is sometimes taken of the effect on the workforce. I believe that in the case of this take-over we have an admirable opportunity to see what the effect will be on the workforce and whether it will be to their advantage. To that extent, the Parliamentary system may be of great advantage over the one that is more normal under the commercial code. Incidentally, for all I know it may be able to look at some of the malpractices 248 in other docks as well which were mentioned by the noble Lord, Lord Hankey.
Above all, my Lords, the advantage that we shall have when this Bill comes back, if it does—and I think it will, but there is a Petition and a general Objection against the preamble—from the Instruction to the Select Committee, is, as the noble Earl the Lord Chairman of Committees has just said, that we shall get a special report from it which I hope will deal with all these matters. If we can prevail upon those of your Lordships who sit on this Committee to make it a thoroughgoing, full, well-reasoned and well documented report, then it will be of the greatest benefit to all of us who have to think about this again. I therefore very much hope that there will be no further dispute and that it will go straight to the Select Committee with this Instruction, and that they will be in some way assisted by the debate we have had this afternoon.
§ 7.9 p.m.
§ Lord WYNNE-JONES
My Lords, the speech made by the noble Viscount relieves me of a great deal of responsibility because he has made it clear, as others have done, that the House is in agreement that the matter should go to a Select Committee. I should just like to make one or two observations. First, it would be wrong of me not to congratulate the noble Lord, Lord Brain, on his maiden speech. Others have done this, but I feel that for someone to intervene on such a potentially controversial occasion, and to do it so well and so delicately and with such brevity and such lucidity, means that we shall look forward to future speeches from him. With regard to the rest, I could make one or two remarks, but in view of the lateness of the hour I think it is far preferable that we should end in a general feeling of, perhaps, nostalgia for a pleasing debate.
§ On Question, Bill read 2a, and committed to a Select Committee.
The EARL of GOWRIE
My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it be an instruction to the Committee to whom it is committed that they shall satisfy themselves that the passing of the Bill would not lead to an 249 undesirable reduction in the competitive position of the port of Felixstowe which would be contrary to the public interest.—( The Earl of Gowrie.)
§ On Question, Motion agreed to.