HL Deb 08 May 1978 vol 391 cc678-84

2.51 p.m.

Lord GEORGE-BROWN

My Lords, I beg leave to ask Her Majesty's Government a Question of which I have given Private Notice. The Question is as follows—

Several noble Lords

Order

Lord MOTTISTONE

My Lords, I have one more question to ask, if I may.

The LORD PRIVY SEAL (Lord Peart)

My Lords, I think that we should proceed. I am sorry, but the noble Lord is too late.

Lord GEORGE-BROWN

My Lords, the Question is as follows:

"To ask Her Majesty's Government, in view of the serious nature of the matters affecting expenditure of public monies revealed in the chairman's report and Annual Statement of the Port of London Authority published on Friday 5th May, whether they will make an urgent statement of the Government's intentions".

Baroness STEDMAN

My Lords, I understand very well the noble Lord's concern about the situation which has been revealed by the Accounts of the Port of London Authority for 1977, and by the frank and full Report of its chairman, Mr. John Cuckney, whom my right honourable friend appointed last October.

I appreciate also the concern of the noble Lord about the implications of the situation for public funds. The chairman has reported that the reserves of the Port of London Authority are now almost exhausted, and the problem concerning public funds is the extent to which it may be necessary to call on them in the future to finance measures to maintain the viability of the Authority.

The House will be aware that the constitutional position of the Port of London Authority is a special one, defined under the Port of London Authority Act, 1968. The Statute gives the Government no executive authority over the Board. But any question of providing assistance to the Authority from public funds involves my right honourable friend in confirming the need for such assistance and determining with his colleagues the best means by which it would be provided.

Her Majesty's Government are fully aware of the industrial, social and environmental aspects of the problem. I can assure the noble Lord that my right honourable friend is in the closest touch with the chairman, and has been receiving in response to his questions the views of the Board on the courses of action which they believe should be followed. I am sure that it w ill be in accordance with the wishes of the House that I should amplify this reply to the noble Lord as soon as my right honourable friend is in a position to announce his conclusions concerning the Board's proposals.

Lord GEORGE-BROWN

My Lords, I thank the noble Baroness for being good enough to give such a full report at such inevitably short notice. I draw her attention to the fact that the chairman himself uses the word "bankrupt". He says that the Authority has nothing left; that all its cash reserves have gone in the last five years, and nothing has been done; that its cashable land bank has already been cashed, and that it has taken a £15 million borrowing. Is the noble Baroness further aware that the auditors, in passing the accounts, have said that they have been prepared on a going concern basis, the validity of which is dependent on the successful conclusion of the discussions to which she has just referred ? In the absence of that, I would ask the noble Baroness whether she would agree that this is a bankrupt Authority which is trading illegally. Has she any immediate proposals designed to put this concern into a position in which the chairman says in his report it is not—namely, to have cash with which to pay the wages and other bills being presented?

Baroness STEDMAN

My Lords, my information is that the Authority has drawn very heavily on its reserves, but that it is not, as we would term it at the moment, exactly bankrupt. The Price Waterhouse report in July 1976 made it clear then that the financial viability of the PLA was critically dependent on achieving a substantial reduction in its surplus staff and dock workers, which the PLA undertook to do. It said then that if this was done quickly the PLA could be in a sound and competitive financial position by about 1980, but it pointed out in 1976 that the financial results were particularly sensitive to manpower costs, and also to a number of other factors. Since the chairman has published his report, my Secretary of State has asked a set of specific questions. We are still awaiting the answers in detail to all those questions. When we have them, as I advised in my original Answer, I shall be happy to amplify the Statement in the light of the information we then have. At the moment, our information is not complete enough to permit this.

Lord MOWBRAY and STOURTON

My Lords, the noble Baroness has been very good in giving such full information to the noble Lord, Lord George-Brown. Nevertheless, when a concern in 1974 had a £54 million reserve and in this year it is down to £2 million, and the loss is continuing—last year the loss was £8 million—it is not exactly a flourishing concern. I am sure that the noble Baroness will accept—I think I am right—that in 1976 the PLA Board only kept the two upper docks in being on the understanding that there would be increased trade coming to these two upper docks because of better working practices. As neither of these two factors has materialised, will the Government—and I hope they will—allow Mr. Cuckney to do what he wants and close down the two upper docks? It seems to me that this is the crux of the matter.

Baroness STEDMAN

My Lords, it is slightly premature at this time for me to say what will be the Government's attitude when we have had all the replies from Mr. Cuckney and his colleagues. What we know is that Tilbury and Riverside are producing a profit, they are viable, and there is an element of considerable profitability which we think can be increased over the years. As the noble Lord has said, the problem is with the upper docks. As a result of recent conversations with my Secretary of State, the chairman of the PLA has said that he will make available to Members, on request, by the end of this week separate accounts for the upper dock with all his supporting information. They will be available for Members who want them, but at the moment I am not able to comment in more detail.

Lord BYERS

My Lords, may I ask the noble Baroness whether she would agree with the chairman of the PLA when he said that there has been a failure, despite everything that the Board has done, to understand and respond to the objective of making the PLA efficient, productive and viable? In these circumstances, with all that has gone on in the past few months, which is clear in the report, who is going to take the initiative now to try to get all the parties together to appreciate the danger of this situation?

Baroness STEDMAN

My Lords, as I said, my Secretary of State has asked a series of specific questions of the PLA chairman and his Board. When the answers to those questions are available, which we expect within a few days, it will be a matter for discussion with my Secretary of State and his colleagues as to what action and what intervention should come from the Government. But, until we have the information, we are not able to act.

Lord BYERS

My Lords, arising from that point, may I say that it is not really a matter of questions to the Board. The question really is who is going to get all the parties—the employers, the union representatives, everyone—together to solve this problem?

Baroness STEDMAN

My Lords, after we have had the discussions, and after discussions with the other Ministers concerned and after there has been a collective decision on what shall be the action, then there will be negotiations. But my Secretary of State has no executive power over the PLA. Those powers are confined to the appointment of the chairman and of the Board members. He cannot give them any directions. He can only dismiss them if they do not attend meetings, if they go bankrupt, or if there is illness or other unfitness for their jobs.

Apart from this, we have only a few minor functions under the Port of London Authority Act, such as approving land acquisition, borrowing limits, temporary borrowing, appointing auditors, and matters like that. We have asked for this information. We want to see the Port of London a viable concern, and I am sure that everybody in this House wants that. When we have this information we can act on it, and act on it quickly. We can amplify the Statement to this House, and we can set in train such negotiations as are necessary with all the interested bodies.

Lord GEORGE-BROWN

My Lords, as the £2 million which was said to be left at the end of 1977 must have gone by now, on the basis of the loss which the chairman forecast, and as there are no other monies available to them, apart from their income, at the moment, may I ask the noble Baroness to say—if she cannot answer today perhaps she will let me know shortly—how they are to receive funds to continue until the Minister has a longer-term and fuller Statement to put before us?

Baroness STEDMAN

My Lords, I should have to take advice on that and write to the noble Lord. My information is that there are no difficulties about meeting their commitments at the present time.

Lord PAGET of NORTHAMPTON

My Lords, by way of supplementary to the question asked by the noble Lord, Lord George-Brown, in regard to waiting, speaking from memory is it not an offence for a director to continue to trade beyond the point at which he can be satisfied that the obligations he undertakes can be fulfilled as and when they become due? On the basis of the chairman's own report, has that not already happened and, in the circumstances, is it not very difficult to wait?

Baroness STEDMAN

My Lords, I should not like to answer the legal implications of my noble friend's comments on that; I shall take advice about it. As I said, I understand there are no problems about them paying their way or indeed of repaying the interest on the loans they have at this time.

Lord BOSTON of FAVERSHAM

My Lords, would my noble friend agree that the threat to the upper docks is disturbing and that those docks are a very valuable asset indeed to London, providing, as they do, access for cargoes to virtually the very centre of the metropolis? Would he agree that, before any question of their closure were contemplated, let alone seriously considered, there should be the fullest, most thorough and far-reaching inquiry, preferably in public, into all the aspects, not only those to which my noble friend referred in her original Answer but also the question of the effect that such a closure would have on such means of communication as the already overcrowded roads and indeed the railways in the London and South-Eastern area?

Baroness STEDMAN

We accept that the upper docks have a part to play, my Lords, but the fact remains that at present the upper docks are not a viable part of the Port of London Authority's enterprise. As I said, the chairman of the PLA is ready to make available on request by the end of this week the separate accounts of the upper docks with all the supporting information, so that Members of this House and of the other place will be able to have all the information for themselves and then help us to make up our minds in the light of that.

Lord MORRIS

My Lords, would the Minister agree that, other than with banking companies, it is not yet illegal in this country for companies, and unfortunately for individuals as well, to trade while insolvent?

Baroness STEDMAN

That is my understanding, my Lords, but I am not a lawyer and I would rather take advice on the matter.