§ 8.5 p.m.
§ Lord Brabazon of Tara
My Lords, I beg to move that this Bill be now read a second time.
This is a short but important Bill which deals with three separate aspects of ports finance. I shall deal with them in turn starting with Clauses 1 and 2 which it may be convenient to consider together.
A major landmark in the history of British ports was the Rochdale committee of inquiry into the major 564 ports in 1962, under the distinguished chairmanship of my noble friend Lord Rochdale. It was a long overdue examination of Britain's ports, which resulted in important changes in the structure, development and financing of the industry. But what neither the committee nor the Government of the day could foresee was that shortly afterwards our ports began to embark on a period of transformation unprecedented in history in its scale and rapidity.
The reasons for this are, I believe, well-known. The development of bigger ships which could not use old upriver enclosed docks; the effect on trade patterns of North Sea oil and joining the EC; better inland communications, making it less essential to ship goods to or from the seaport nearest to the manufacturing site; the container revolution, which not only transformed port handling methods but resulted in rationalisation of shipping services, with fewer port calls; and the tremendous growth in roll-on/roll-off traffic, both freight and passenger.
These changes have had their impact on the physical appearance of our ports and on the numbers and skills of the people who work in them. In particular, there has been a drastic reduction in labour. At the time of Rochdale, virtually all ports of significance were in the Dock Labour Scheme and between them employed some 70,000 registered dock workers. Today, a quarter or more of our non-oil trade is handled in non-scheme ports, and the number of registered dock workers in the traditional ports is just over 12,000. This enormous reduction has been achieved mainly by voluntary severances. That of course has put a heavy cost on the ports, particularly London and Liverpool which had traditionally had the lion's share of the labour intensive break-bulk cargo and were therefore especially hard-hit by the switch to containers.
The Government therefore decided to assist the industry in two ways. We recognised the exceptional problems that London and Liverpool faced in rationalising their facilities and organisation. To help them reduce manpower and continue in business while this reduction was being completed, we promoted the Ports (Financial Assistance) Act 1981, which empowered us to make available to the two ports up to £160 million by way of grants, loans and guarantees. That figure was subsequently raised to £360 million. Much of this money was intended for severance pay for registered dock workers.
Then in 1982 we decided to help the industry as a whole to meet the cost of severing registered dock workers. The employers of registered dock workers—port authorities and some private port employers—operate a national voluntary severance scheme, administered by the National Dock Labour Board. The NDLB makes severance payments from a fund that it administers for the employers and which is paid for ultimately by a levy on the employers, although it has been substantially helped by Government loans. In 1982, we agreed to a three-year moratorium on the servicing of those outstanding loans, provided that the employers paid to the NDLB a levy of £12 million annually to meet the cost of new severances.
It had been our, and everyone's, hope that these two measures—the special aid to London and Liverpool 565 and the moratorium on servicing the debt in the national voluntary severance scheme—would have been sufficient. But I am afraid it has not. In three years, the number of registered dock workers has fallen by a further one-third (about 6,000) more than had been expected. The Port of London Authority and the Mersey Docks and Harbour Company are still not fully back on their own feet and the £360 million aid which Parliament agreed for them has been fully committed.
It is against this background of continuing and expensive rundown in manpower that we have brought forward Clauses 1 and 2. To take first Clause 1, it proposes an entirely new power to pay grants of up to £10 million to the National Dock Labour Board as a contribution towards the cost of severing registered dock workers. The clause includes provision for that amount to be increased in future years by order up to a maximum of £40 million, subject to affirmative resolution in another place.
The reason for this new power is that we are clear that the employers in the Dock Labour Scheme ports cannot both service and repay the outstanding debt in the national voluntary severance scheme and meet the full cost of future severance needs. Just how we propose to use this power I cannot at present say. The Secretaries of State for Employment and Transport are engaged in discussions with the National Association of Port Employers on appropriate arrangements for the future financing of RDW severances. There has been a succession of stop-gap measures. It is unsatisfactory to continue in that way. We are searching for a basis that will bring a greater measure of stability and equity into the arrangements. But in taking this new power we have recognised the likelihood that some special Government assistance will be necessary.
Clause 2 raises from £360 million to £500 million the ceiling on the amount of financial assistance that the Government may give to the PLA and the MDHC. That money is available, in the terms of the 1981 Act which the clause amends, for measures to reduce the manpower in their ports with a view to restoring their profitability and for carrying on their undertakings while such measures are being taken. As I have already mentioned, the existing £360 million has either been spent or is committed. Both the PLA and the MDHC have carried through massive, indeed traumatic, changes in the past few years, rationalising and concentrating their activities downriver and building up their containerised and bulk cargo traffics as their traditional break-bulk activities continue to decline. Despite the Government assistance that they have received, however, neither is yet in a position to carry on entirely unaided. So we are seeking power to continue that aid until the job is done and both ports are restored to health and independence. We shall commit only such extra money as is absolutely necessary. We hope it will be far short of the extra £140 million for which Clause 2 provides, but we have thought it only prudent to allow for various contingencies over the next few years. Not to increase the £360 million ceiling would jeopardise the restoration of the PLA and MDHC to viability and risk nullifying the heavy investment of public money that has been made in both ports.
566 I turn now to the second part of the Bill. Clauses 3 to 5 are useful reforming provisions to remove a range of unnecessary ministerial controls, mostly relating to borrowing by trust ports. These controls have grown up in a rather haphazard fashion in trust ports' local legislation going back over many decades. They take no regular pattern as between one port and another. The Government have concluded that they are no longer necessary.
The British Ports Association and those ports which are affected have welcomed the reforms. In practice, the powers of many ports are already framed so that they can borrow all they need within the basic limit specified in their local enactments without needing the Minister's consent to borrow under certain circumstances or sometimes indeed at all. The reform will put all trust ports on a similar footing, as well as removing a number of other obscure provisions relating to minor matters, such as rates of interest, loan repayment periods and so on which currently require a Minister's consent.
Placing responsibility for all these matters fully and universally on the ports themselves reflects the Government's general policy that the industry should manage its own affairs. It also follows naturally from the Government's decision, confirmed in the last public expenditure White Paper, to transfer trust ports' capital investment expenditure to the private sector from 1st April 1985. This decision, in turn, reflects the fact that most ports, including the trust ports, now obtain capital for new projects from the private sector.
I turn finally to the third part of the Bill. Clause 6 repeals Section 9 of the Harbours Act 1964 and directly consequential legislation. Under Section 9, and the control of harbour development orders that were made under it, no scheme of harbour development costing more than £3 million could go ahead without the approval of the Secretary of State for Transport. This was part of the philosophy on ports that stemmed from the Rochdale Committee's report that I mentioned earlier.
In April 1984 my right honourable friend the Secretary of State announced his intention to revoke that control as being no longer appropriate in a commercial and competitive industry. Immediate effect was given to that decision in the Control of Harbour Development (Revocation) Order 1984 made in May of last year. That order was fully debated in another place on 19th June last year. Clause 6 of this Bill completes the process by repealing the relevant primary legislation.
Repealing Section 9 is an integral element of our view that in a competitive industry the Government should not attempt to lay down where port development should and should not take place. It should be left to the ports themselves and those who use them to decide where new facilities are needed. Initiative should be rewarded, not stifled. If ports can provide the capital themselves or find commercial sponsors willing to put it up, there is no reason why they should not be free to take the risk and back their judgment. That way lies the greatest efficiency and the best prospects for our industry, our trade, and for jobs. I commend this Bill to your Lordships' House.
§ Moved, That the Bill be now read a second time.—(Lord Brabazon of Tara.)567
§ 8.15 p.m.
§ Lord Carmichael of Kelvingrove
My Lords this is a Bill on which we shall not wish to divide the House. The Bill is helpful in the first part at least as it gives us an opportunity to examine the position of our ports and the Government's policy—more the present Secretary of State's policy—towards the ports. Perhaps we can ask for some guidance on the future policy of the Government in an area which everyone agrees is of major concern to any trading nation; but to a nation such as our own, an island nation, it is absolutely vital because of the importance of trade and ports combined.
It appears to me that while we undoubtedly have an over-capacity of port facilities the Government are still happy—in fact they are anxious—to encourage yet more facilities, provided they are privately owned and privately financed. The abolition of the registered dock worker is one of the ways the Government see as being necessary to—as I am sure the Secretary of State will say—free the ports industry. As long as one had registered dockers and a demand for work at certain ports it was more difficult to privatise or expand the private ports.
In another place when the Bill was going through, the reason for the problems of the registered dock labour force was discussed fairly forcefully. One Member with great experience of the docks gave some descriptions of the casual system that pertained in the docks before the Dock Labour Scheme. I myself saw it frequently on the Clyde in Glasgow, particularly over at Govan where the men met every morning and gang bosses threw "checks" into the air for them to grab. If they were lucky enough they got a job; if they were not lucky enough they did not. There were always favourites who fairly regularly got jobs, but many went twice a day to try to get a job but could not get one because they were not favourites or were not lucky enough to catch one of the checks that were thrown in the air.
This memory takes a long time to die in a dockland area and a tight community. It is a nightmare of many dockland areas. This is why people are very anxious that there should be control and understanding and a regular system in dock work. This is one of the reasons why there is always a worry about non-scheme ports. It is a lovely way to run a dock system. You totally ignore the wishes of the people and the lives of the people. If trade is good even on a day-to-day basis you blow a whistle and you get more workers in to help unload the ship. If trade is bad you do not send for anyone. That is a very economic system in the short term but of course it causes all sorts of problems in dock areas. Many of those problems are still with us because of the attitude of the old shipowners and the stevedore companies.
Obviously we welcome the fact that those who are no longer going to be employed will be given reasonable redundancy payments. We regret, however, that the two once great ports which we are particularly dealing with in the Bill—one in London and the other in Liverpool—have fallen into such a state that the London registered dock labour force has fallen to a figure of 4,000 from a total of 25,000 only 20 years ago. In Liverpool over a longer period the 568 registered dock labour force has fallen from 15,000 to 2,000.
I congratulate the noble Lord the Minister on his introduction of this Bill. It was a much more reasonable and gentle explanation than that given by his right honourable friend the Secretary of State in another place when introducing the same Bill. I accept of course the arguments which the Minister put: that there are new methods of working ships and of working cargo which require fewer people. But it is doubted by a great many people in different areas of shipping—and I have spoken to many people in shipping over the years—whether there are sufficient skilled people within the dock industry to allow for potential growth in traffic at both London and Liverpool if the economic situation should improve—which we all hope it will.
What concerns me and a growing number of electors is the general simplistic view which the Government seem to take towards competition. The Minister himself—unusually for him—began to explore this avenue towards the end of his speech. For example, it was said in another place—and the Minister himself suggested this without naming the places—that although the expansion of Felixstowe may be financed privately, the infrastructure will soon be found to be inadequate and a cry will go up for more roads, better access and other action which will be a charge on the public purse. This is undoubtedly the case with the motorway programme. One of the priorities for the motorway programme was that the ports had to be served. The ports concerned were London, Liverpool, Hull, and Greenock in Scotland. Those were the places which the motorways had to serve; this was because the ports were there and they were a lifeline. If we kill off Liverpool and, to some extent, London, we shall soon find that we need to have a better infrastructure serving Felixstowe and—if we ever get the private money and the go-ahead—into Falmouth. It will be a massive job constructing a road system to serve those places.
I am trying to say that, taken as a whole, Great Britain Limited (or perhaps it should be Great Britain plc) cannot solve its problems by isolated, one-off bouts of competitiveness. An apparently simple solution in one area of industry can have repercussions in other areas which any Government will be forced to deal with—often at a greater cost than the benefits given by the first apparent solution.
I should like to give as an example the river that I know best; that is, the Clyde. This Bill does not deal specifically with that river except that the repercussions of the repeal of Section 9 would obviously affect the Clyde, which is one of the great ports of the world and the greatest shipbuilding river of the world. I have had meetings with colleagues, with the Scottish Chamber of Commerce, with the Scottish CBI, with trade unions and with local authorities—and I can assure the Minister that across the whole spectrum of Scottish industrial life there is great concern about what is happening to the ports of Clyde and Leith—and, to some extent, the port of Grangemouth. This is not the occasion, but perhaps we will have an opportunity some time to discuss the effects of the grid system and how it affects Scotland and some of the northern ports. It is certainly something that is causing great concern and considerable trouble.
569 One of the most disturbing aspects concerns the Clyde, which used to have something like 23 shipyards. I accept the fact that one can only bring a 27,000-tonne vessel up the Clyde and that no one will be going around the world with a 27,000-tonne vessel. Therefore it does have limitations. The Clyde as a whole is a good example of the fact that one can solve certain problems in order to make economies but one can then bring down the whole house of cards.
In the Scottish industrial press, the example is given of the problems concerning Ravenscraig steel plant. This is dependent upon supplies of iron ore and coal from Hunterston ore terminal. If Ravenscraig were taken away for some reason or another, it would affect the very large granary which is right opposite my house and which has a capacity of something like 100,000 tonnes. I believe it was suggested by the Member for Shettleston in another place that the possibility is that this granary might be used as a store for EC surplus grain. But if anything went wrong and that granary were to go, there would then be little need for the river to be dredged, which costs the Clyde Port Authority about £1½ million a year.
If the river were not dredged, there would be a saving. But if the river were not dredged, then one would find that Govan Shipbuilders, who are beginning to do rather well and become competitive, and also the Yarrow warship yard, would need to take on the job of dredging. Obviously they would need to have the river dredged or else they would go out of business. If they had to dredge the river, then the cost to those two yards together would be something in the region of £1½million per year.
I appreciate that all that is being rather parochial, but the point I am trying to make applies, I am sure, to the whole ports policy of the Government, if only I knew more about some of the other ports. I know a little about the Clyde but would not say that I am by any means an expert. Still, I know enough to say that there is fear felt not only by people like myself but also by people in Scottish shipping and industry generally. The Government's philosophy seems to be that one should make savings on individual items without considering the problems as a whole. We are all praying that the Government will ultimately change their mind and get away from the narrow accounting view which they seem to take on topics such as this. I only hope that there will be a sea change—if that is the right phrase to use in context such as this—for the sake of the future of Britain's ports.
A little planning must be accepted as a necessity in an industry as important as that with which this small Bill deals. When we reach the Committee stage, I hope that the Minister will give thought to some of the points I have made and to some of the points which his right honourable friend the Secretary of State did not deal with in Committee in another place.
§ 8.28 p.m.
§ Lord Brabazon of Tara
My Lords, I shall try to answer some of the points which the noble Lord, Lord Carmichael, has raised. First, this Bill is certainly not trying to return to the bad old days of registered dock workers. It is a question of a changing world. I believe that the noble Lord recognises that that is so. One 570 cannot make ships go up the Clyde, especially if they are too big to do so.
The pattern of trade has changed completely. Shipping now goes along the south coast, up the east coast, and off to Rotterdam. It might drop off a few containers on the way and pick up a few others on the way back. That is not part of a simplistic view which the Government hold in respect of their ports policy. The fact is that if we want, as Great Britain plc, to compete, then we have to provide facilities to which the ships will go. We must not hinder our exporters by adding to their costs by making ships go somewhere else.
I think that is all I can say on this Bill. It is an expensive Bill. We are providing a lot of extra money. As to the repeal of Section 9, in Clause 6 of the Bill, which the noble Lord mentioned, I can perhaps dispel any misapprehension that there may be in respect of the Secretary of State's control of major port investments under the Harbours Act. The repeal will not mean the abandonment of any planning control over port developments. It will not be possible for anyone who wishes to build and run a port to do so where he chooses. He will still have to obtain statutory powers by a Private Bill to carry out works in tidal waters. He may still need development planning permission for landside activities. He will still need the Secretary of State's consent under the Coast Protection Act to any work that he may carry on at or adjacent to the coastline. So other interests are still being adequately protected and there are still adequate opportunities for the local authority, the Government and Parliament to consider new proposals.
I hope I have managed if not to satisfy the noble Lord, at least to answer some of his questions. This is a short, simple and essential Bill and I ask y our Lordships to approve it.
On Question, Bill read a second time, and committed to a Committee of the Whole House.