HL Deb 25 June 1986 vol 477 cc377-407

9.31 p.m.

Lord Shackleton rose to ask Her Majesty's Government whether they have now considered proposals, including those put forward by Trinity House, for achieving the aims of the Green Paper on Marine Pilotage without the need for complicated and early legislation.

The noble Lord said: My Lords, I am rather grateful to the noble Earl, Lord Caithness, who is due to reply, for suggesting that it would be useful to discuss this whole question. I never know whether or not I should declare an interest as an honorary elder brother of Trinity House. I emphasise the word "honorary". It is a great honour to be an elder brother of this splendid institution. Perhaps I may preface my remarks by saying that I have been for a number of years an honorary elder brother. I have sailed with the active elder brothers in their ship visiting lights. One cannot fail when one gets to know them to be impressed by the high professional quality of the active elder brothers.

The fact that it is an ancient institution and has existed for 400 years is not a reason for tearing it up and altering it; any more than it is a reason for getting rid of the army, which has also existed for quite a long while. Trinity House, although somewhat conservative in its approach, has been at great pains to modernise its attitude. It has revolutionised the lights system. There have been enormous savings there. It is very ready to give any help it can to the Government.

The most astonishing thing (to which I shall refer again at a later stage) was the total failure of the Government to consult Trinity House. That I cannot simply believe. Until the noble Earl, Lord Caithness, got under the wire just in time and had a consultation with Trinity House last week—and I give him credit for that—there was no consultation of a kind that was applied, for instance, in the case of the ports. In fact the day the Green Paper was published it was welcomed simultaneously by the ports. Trinity House had not seen it and did not know what was in it.

I am very glad that the noble Lord, Lord Strathcona, will be speaking later in the debate. He is very active as president of the pilots' organisation and will be in a strong position to state their views. It is important not just to assume that the opinion of either the shipowners, with their not very good record of industrial relations, or the ports, with their not very good record of industrial relations, is better than that of those who actually carry out the pilotage of this country, those very skilled and professional men, the pilots.

I give what I hope is a brief account of what is a complicated issued. I first remind the House that in December the Secretary of State published a Green Paper entitled Marine Pilotage. It is rather difficult to get hold of because with the economies of the present Government it is out of print, but the Printed Paper Office managed to get some copies. In the Green Paper the Secretary of State says that it has to be a prime objective of Government to minimise the cost of pilotage, and thereby the cost of seaborne trade, in order to help create and maintain jobs throughout the United Kingdom. With that we all agree.

The Government propose to achieve this by two distinct lines of approach. The first intends legislation to rationalise the system—a move which on the whole is welcomed by Trinity House—if it gives the ports the authority to decide on their own pilotage needs. The second line of approach, however, intends that the ports, having decided upon their individual pilotage needs, should then actually take upon themselves the responsibility of carrying them through, as a pilotage authority, because that is supposed to help minimise the cost. The reasons why this should minimise the cost are not apparent to anyone I know other than on the assertions of those who have allowed their costs to rise out of all recognition.

The report published earlier this year by the Department of Transport on liner, shipping and freight rates states that the most significant factors—and we touched on this in a recent debate on lights—affecting the cost differential between Britain and Continental ports are, first, state funding (we are unique in not having a proper degree of state funding) and operating efficiency. I may say that the cost of lights comes to about only one-seventh of the additional cost but, again, in other countries it would be subsidised. However, I will not go further because the noble Earl, Lord Caithness, knows all about that. Having regard to the question of operating efficiency, how can the ports hope to provide a cheaper service? I could quote figures—but figures can always be argued about—showing that dock charges have increased in one typical UK port by over 110 per cent. since 1979.

There appear to be several reasons why pilotage costs will increase if each port is to be charged as acting as an individual pilotage authority. Here I come to technical questions which I will skip in order to save time, but the significant point is that many small but important ports will have to spend money on new administrative structures to tackle the technical, nautical, financial, legal and operational problems that have been so effectively dealt with centrally by Trinity House pilotage authority and its pilots for so many years.

Where, in all this, are the costs to be minimised? I ask whether the Government or anyone in your Lordships' House can say how costs will be minimised. Trinity House administrative overheads have been kept to 5 per cent. in the past three years and I have an auditor's letter which can prove that. For many ports the income from so small a percentage would buy only a few hours of legal advice. In at least one port that decided to run its own pilotage service some seven years ago the administrative charges have increased to 9 per cent. against the original 4 per cent. charged by Trinity House. I have many other figures.

Is not the Secretary of State, in his proposals to disband pilotage authorities like Trinity House, or the role of the pilotage authority, forgetting the small ports and designing sweeping changes solely in the face of pressure? By all means change the pilotage law—-it needs changing—but why has not Trinity House been consulted on this? That is most extraordinary.

I notice that the television lights in the House are going out. This means the absence of television coverage so we can now talk much more freely. I hope I can continue to read my notes.

By all means have the ports say what they want for their best safety and commercial interests. The potential could be developed still further by changes in the Trinity House Pilotage Board. But the problem goes back to the Letch Committee in which payment for pilots was negotiated by the ports or the shipowners in which, again, Trinity House had no part at all. Since the Letch Agreement has been scrapped, costs in some areas have been dropped.

Much more than simple financial considerations is involved in all this, predominant though they are. There is the whole question of safety, first, in regard to dangers of grounding of vessels carrying oil or other hazardous or noxious cargoes. This cannot be overestimated. Proper standards of pilotage need to be maintained, as has happened under the authority of Trinity House. This sets the standard to which those ports that now do their own pilotage are able to aspire.

There is, furthermore, the problem of the estuary ports. In this respect the Thames area is the most important, and comes under Trinity House pilotage. There is a very good industrial relations record in Trinity House. It has not had the sort of strikes that others have had, nor has it been brought to a standstill as a result.

The pilots themselves are concerned for their future. Their productivity and earnings can obviously be queried. We accept that there is room for great improvement. The shipowner expects the best possible advice from the pilot, and is entitled to do so. It seems to me folly to weaken the most experienced body in the country, indeed, in the world, when it comes to pilotage, in the shape of Trinity House.

Trinity House provides a pool of boats that it has developed despite the failure of government—and I do not know whether it was this Government, the previous government or even the government of which I was a member, as it was some while ago. Governments are apt to fail in this area, and I do not pin this on the noble Earl, Lord Caithness, only.

We are waiting for a satisfactory code of practice and draft pilot boat construction, survey and certification regulations. Meanwhile, Trinity House has continued to develop the high speed pilot launch and now provides a pool that is available to those ports which may have only one pilot boat. Trinity House has now accepted that the cost associated with these new boats is such that some kind of pooling is necessary.

How will harbour authorities cope with this? It is shown that the need exists for amendments to pilotage law. Better than anybody else, Trinity House knows where this has to be done. It is clearly sensible. Provided that the national interest is preserved on safety and environmental grants, individual ports should be able to say what they need in terms of pilotage. It is not shown that individual ports desire themselves to operate the pilotage service that they need. Even if this were so, why should they be able to do it better? Trinity House is willing to manage pilotage to suit a port's wishes.

The Green Paper refers to the fact that Trinity House can be asked to operate in this way on a voluntary basis. Even so, there is some doubt about the ability to sustain an institution like Trinity House, dependent as it is on individual decisions of a kind that are properly within the concern of the port while they may not have the capacity to take the decision.

I hope that the Government, and particularly the noble Lord, the Earl of Caithness, who has shown a great deal of interest and a constructive intelligence in this matter such as we have not always found in previous Ministers, will listen to the arguments.

It is not just because one admires Trinity House as an ancient and splendid institution; it is a superbly professional body. I think that for a government which is a conservative government—or perhaps it is not—this is an area of activity that is well worth conserving. I hope that when the noble Earl comes to reply he will be able to give some attention to the speeches that will be given this evening, particularly those coming from the noble Lord, Lord Strathcona, and my noble friend Lord Wilson. We have all been deeply concerned with the subject, to which, if I may say so, we do bring some knowledge.

9.45 p.m.

Lord Swinfen

My Lords, I am not a pilot, I do not own any ships, and I have never run a port. Indeed, I do not expect that I should be allowed anywhere near one on the running side, but only accepted as a passenger. I have no real axe to grind. However, I was asked to take an interest in this matter by a friend of mine who is a pilot, and the more I have read about it the more complicated it seems to become.

My noble friend on the Front Bench is a chartered surveyor like myself, and we are ill-equipped to deal with matters of the sea because neither of us is a hydrographic surveyor. I should be very interested if the noble Earl could tell me what are the qualifications of his advisers. Does he have any pilots advising him? Does he have anyone advising him who has run a ship? Does he have any ships' masters or anyone who has anything to do with running ports advising him? These are all important people, from whom the best advice that can be obtained should be obtained. I have no complaints about his present advisers—I am sure that they are admirable men and women—but I want to make certain that his advisers have the knowledge to give him the best advice.

I have noticed in reading the background material that the shipowners and the pilots' associations—not just Trinity House, because Trinity House does not control all the pilots—and the port authorities are all fighting their own corners. They do not seem to be willing to come together and talk. Will my noble friend convene a conference of the interested parties in order to get them round a table and to go through all the problems thoroughly, threshing them out? I am sure that both he and they will find that they have far more in common than they suspect.

It will perhaps take several days, maybe a week at first, to iron out various matters, but then may I suggest that the conference does what I believe the EC Council of Ministers does when it is near to an answer? The delegates sit there and continue to talk until they have settled the matter. Otherwise, this problem will drag on. I think that my noble friend himself would probably make an admirable chairman of such a conference, but if the powers that be will not agree to let him spend time dealing with this important matter perhaps he can find someone else who will do the job, not quite as well but adequately.

The limits of port authorities in some instances are rather small. The limit of the London port authority does not cover the existing London pilotage district, which has several port authorities within its area. When everything is threshed out and we arrive at an answer, what will be the position of pilotage in the whole of the existing pilotage district? Will there be pilots available? The most dangerous areas in the Thames are outside the port authority areas.

My noble friend probably knows that the so-called supertankers draw 14 metres, or thereabouts. They need to reach their London berths about an hour before high water. In order to get to the berths at that time they need to pass the sunk pilot station at the mouth of the Thames at low water. I have a chart with me which I shall gladly give to my noble friend if he wants it, but the figures mentioned on that chart, in comparison to the 14 metres depth of the supertanker, are 12 metres, 13 metres and 14 metres.

It may well be that captains of British ships are sailing through those waters regularly and know them, and know how to find their way through at the very beginning of the flood, which they need to do to get up to their berths in time. But when we have no pilotage there, what will be the position of a foreign captain who has never been there before and yet knows he still has to get up to London at high water in order to get his ship into berth?

There will be an awful waste of time if the ship is hanging around, blocking the movement of other tankers in and out. That will be paid for by the shipowners. There may even be a loss of money to the port authorities. Can my noble friend please tell the House what will happen to those areas which, as I see it, will not be covered under the proposals in the Green Paper? There could be the most terrific environmental problems. I believe that my noble friend has been on an exercise to see how his department deals with oil spillages at sea, so he will be aware of the problem.

There is another point on which I should like clarification, because I am not sure whether I am correct. I understand that certain ships can be granted pilotage exemption certificates. I believe that those certificates are granted to the ship rather than to the master or the mate. What is the position if neither master nor mate is available? That ship, as I read it, still has an exemption certificate and could be brought in by a complete stranger who has never been there before. The consequences could be disastrous.

Can my noble friend confirm whether it is the ship or whether it is the master or the mate who is granted the certificate? If it is the ship, I think that it is a matter that needs to be changed, and probably changed urgently. It is a good opportunity to do so when dealing with pilotage reforms. If it is the master, he should be mentioned; he could bring in smaller ships at other times if the firm that he worked for moved him from one ship to another. I believe that masters are not infrequently moved from one ship to another, depending on the requirements of the firm.

9.53 p.m.

Lord Walston

My Lords, I think that all of us would agree at least with the opening words of the second paragraph of this consultative document, in which, as your Lordships will know, it is stated: Pilots have a long and honourable tradition. Our modern pilotage service is second to none in the skills deployed and the preparedness of pilots to meet and serve the ships using our ports". It is worth stressing that point because it may be felt by some that the consultative document is critical of pilots and is anti-pilot. That, I am sure the noble Earl will confirm, is in no way the case. The sentence that I have just quoted makes that abundantly clear.

In paragraph 2.4 the document goes on to say: For at least 12 years there has been a general recognition that the system has not been working satisfactorily". That is also true. So far as possible we should look at this matter with open minds and without attempting to defend one side or the other—if indeed there are sides—or one particular system or another.

The noble Lord, Lord Shackleton, reminded us that Trinity House has existed for centuries. He said that that is no reason for getting rid of it any more than it is a reason for getting rid of the army, which has existed for even more centuries. But the army, over the centuries of its existence, has changed considerably. Anyone who listened to your Lordships' debate earlier today, had they been officers in or concerned with the army even 50 years ago, and certainly 100 or 150 years ago, would have been flabbergasted by the matters being talked about, because our armed forces have changed considerably with the times.

The fact that Trinity House, for which I and all your Lordships have an enormous admiration, has existed for centuries is no reason for saying that what it has done in the past must inevitably be right and must not be changed. We must look carefully, clearly and in a completely unbiased way at the problem as it is today to see what can be done to improve the situation, which by general consent is unsatisfactory.

Lord Shackleton

My Lords, I do not know anyone who has suggested that Trinity House should exist because it has existed for 400 years. I certainly did not. I said that, like the army, it had modernised itself.

Lord Walston

My Lords, I am sorry. I must have misunderstood my noble friend. The suggestion made by the noble Lord, Lord Swinfen, is one which deserves great consideration. There must be discussions among all the interested parties. This document, produced getting on for two years ago, invites comments and proposals to be sent in no later than 15th February 1985. If it is true that the department did not consult Trinity House until the last few days, that surely is a grave error, both tactically and from the practical point of view. I hope that the more recent discussions which have been going on with Trinity House will be pursued urgently.

The primary object of pilots is of course to ensure the safe passage of vessels, and safety for other vessels and users of the harbour, and to prevent any obstruction occurring in the harbour or any damage due to the spillage of dangerous or noxious cargoes. The safety record is undoubtedly good. I think that we can say it is satisfactory, but the cost is higher than it should be.

It is hard, as the noble Lord, Lord Shackleton, pointed out, to compare like with like when making comparisons with other countries. I shall give a few figures. I understand that the charges for larger vessels in continental ports are comparable to those in the United Kingdom. There are significant differences for smaller vessels. For instance, a vessel of 12,000 tonnes coming into London has to pay £2,500 in pilotage fees; coming into Southampton it has to pay £1,100 and into Rotterdam, £800. That is a significant difference, which must have some effect on shipowners when they choose which port to make for.

When you get down to coastal vessels of 1,500 tonnes or less, London is still enormously expensive at £1,180, while at Avonmouth the pilotage fee is £580; Rotterdam, £300; and at Le Havre, £260. Those are pretty significant differences.

Lord Mountevans

My Lords, I am grateful to the noble Lord for giving way. Would he agree that the figures that he has read out reflect the fact that in this country we have too many ports?

Lord Walston

My Lords, I would not have said that that was the reason. I am not an expert in these matters. I cannot say precisely or with any authority what the main reasons are. I would suggest to the noble Lord that one reason at least is not that we have too many ports but that we have too many pilots. We have, roughly speaking, 1,200 pilots at present. The estimates that I have received—they may be disputed but they are, I think, fairly reliable—suggest that there are about 250 to 400 surplus pilots. In other words, there are 30 per cent. more pilots than are needed to carry out the job. That is, I think, prima facie a reason for taking a new, honest and clear look at the problem to see how it can be overcome.

It seems to me only logical that the authority responsible for the proper running of the port, which includes, of course, the safety of the port, should be responsible for pilots and should, wherever possible, employ them direct. Apart from a good many other advantages, there should be and could be very considerable savings in overheads, especially in the larger ports. It is possible to effect economies, for instance, by using existing harbour masters' boats and vessels for pilotage purposes when not fully employed in their other activities.

There can also be savings by reason of the fact that pilots cannot have absolutely regular work the whole time. In a pretty large port, there are many other jobs in which they could be of extreme value to the harbour master and the port manager if they were directly employed by the harbour authority. There would be the advantage to the pilots that they would have available to them a ladder of promotion enabling them, if they so wished, to climb to better-paid and more responsible jobs than those they are doing at present.

Those arguments apply primarily to the larger ports. Out of the 94 pilotage districts in the country, 58 ports employ five pilots or fewer. In other words, they are, by any standard, small ports. Some are so small that the harbour master is a licensed pilot, and when not engaged in harbour master duties he takes on the responsibilities of pilotage. Of the 58 small ports, Trinity House runs the pilotage in 35, while 23 manage their pilotage in other ways. Some have independent pilotage authorities. Some have pilotage committees that are responsible to local authorities, often the local council, and so on. They are organised in a whole variety of different ways.

There is no reason that I can see why the small and the not so small ports should not make full use of Trinity House, its undoubted expertise, its experience and its knowledge and its provison of vessels if that appears the cheapest way of operating. In other words, if they consider it is wise for them to do so, it surely must be right that they should call on Trinity House. I am satisfied that all those who are using Trinity House at the moment would continue to do so, and possibly others might move over to it if they considered it worth their while. The government proposals allow for this but they also place responsibility for the proper administration of ports, including safety at ports, where it must belong—with the port authorities.

For those reasons I think that the general proposals outlined in this consultative document are on the right tack, but there must be further consultation. Undoubtedly there must be very close consultation with Trinity House, whose co-operation and goodwill in this matter are absolutely essential. However, at the end of the day I think the lines which are outlined in this consultative document are the ones which should be followed.

10.7 p.m.

Lord Greenway

My Lords, we are very much indebted to the noble Lord, Lord Shackleton, for giving us an opportunity this evening to discuss not only the Green Paper on pilotage but also pilotage in general. If my memory serves me correctly, we were denied the chance to discuss pilotage in the Merchant Shipping Bill 1979 because it went through this House "on the nod" right at the end of the Session, just before the general election. The opportunity to talk about pilotage therefore is doubly welcome.

The noble Lord has already outlined the general facts. I hope your Lordships will forgive me if I go over some of the ground which has already been covered. I would endorse the remarks made by the noble Lord, Lord Shackleton, about Trinity House. I, too, in my capacity as a photographer, have travelled widely with Trinity House at sea. I can confirm the excellence with which they carry out the tasks they have to perform.

We are unfortunately faced with a declining industry when it comes to shipping. Intense subsidised competition from abroad has made the situation even more difficult. Shipowners have for some time been badgering the Government to help them. I think that here we are in a position where the Government have finally found a way to do something for shipowners by helping to reduce the cost of pilotage. The Green Paper goes about this by proposing that the responsibility for the provision of pilotage be devolved from the department to the individual port authorities. At the same time pilotage will be rationalised. I do not think anybody disagrees with that; it will be necessary.

Arriving at their decision in the Green Paper, the Government, as the noble Lord, Lord Shackleton, has said, did not consult either the UK pilotage association or Trinity House, which seems to me a very strange way of going about such things. The ports obviously were consulted, as we have heard. How else would the Government have reached the idea that costs could indeed be reduced, without some prompting from the port authorities? Certainly there is no explanation in the Green Paper as to how costs will be reduced.

To simplify the situation, pilotage at the moment is self-managed at local levels at no additional cost to the port. However, the number of ports large enough to take on the management of pilotage services is small in relation to those who stand to have this operational responsibility imposed upon them. I feel that some of these ports do not have the slightest idea of what extra work and costs they undoubtedly will have to incur. For a start, they will have to employ pilots. They will have to provide some kind of administration to cover their workings. In spite of what the noble Lord, Lord Walston, has just said about launches, pilots require a rather specialised launch if they are to be boarding ships some way out at sea. There may well therefore be the need to provide new pilot launches.

The port will probably need extra insurance cover to cover pilotage operations, not to mention the many and varied legal problems relating to the potential civil liability of the harbour authority through offering a pilotage service. I hope that the noble Lord, Lord Strathcona, is going to enlarge on the legal side of things. It is involved and complicated, and I do not intend to go into it myself at this moment.

May I reinforce Lord Shackleton's question to the Government as to how they are going to make sure that the cost of pilotage will be reduced? What in fact is going to happen? One way, as I see it, is for ports to hide some of the pilotage costs in their general harbour dues, which will no doubt increase, thus making the ports less competitive. I do not have to remind your Lordships that running a port today is a competitive business.

Another way would be to reduce the extent and quality of the service provided, either by physically reducing the pilotage boundaries or by granting exemption to more ships, or even by replacing pilots with a shore-based information service using VHF radio. By doing the latter they would not only reduce costs, but would also rather conveniently reduce the risk of liability arising from a navigational accident, it being much harder to show the causative involvement of persons on shore than would be the case if a pilot was aboard the ship.

That brings me on from costs to the subject of safety, which has already been touched upon. There can be no doubt that the influence of a properly qualified pilot aboard improves both the safety and efficiency of any ship operation. By cutting corners to save costs a port would automatically be reducing the safety margin as well.

Imagine a small coaster operating with a pilotage exemption in the narrow confines of a port, or river, going out of control for some reason, or making a peculiar manoeuvre and running into, say, a gas tanker or a chemical tanker that is being properly navigated by a qualified pilot. There is no way that the pilot can avoid a situation like that. The results do not bear thinking about. But there has already been such an occurrence—I am happy to say not with a gas carrier or a tanker—with a passenger ferry off the entrance to the new waterway at Rotterdam, where a coaster made a surprise manoeuvre and there was a collision and the ferry was holed. So these accidents can, and do, happen.

Let me give another example. Only last night I was talking to the brother of one of your Lordships who is a sea pilot. Sea pilots get only a passing mention in the Green Paper. They are not going to be affected as such by the proposed legislation and they will continue to be operated by Trinity House and other bodies. They are concerned, as are the other pilots, about the safety aspect of the proposed legislation.

I should like to relate one particular incident that happened to this pilot only recently. He was taking a Panamanian tanker around Europe. The tanker was crewed by Koreans, only the master could speak a smattering of English, and none of the crew had been to European waters before. They did not even know where the ports were.

In the course of this European circuit the tanker was coming down from Sullom Voe in the Shetlands to Coryton in the Thames estuary, with a cargo of 110,000 tonnes of oil. The pilot wanted to look at the North Sea chart. The chart that was produced was dated 1st July 1928. The pilot was naturally appalled at this and he asked how they happened to come by this chart. The reply was, "We got it cheap from a scrap yard". That is only one instance, and I have heard several others from pilots recently. These sort of ships are around. Luckily in this instance there was a pilot aboard, but it gives the lie to the much-vaunted effectiveness of the EC inspection system.

The noble Lord, Lord Swinfen, alluded to the Minister's trip today to witness an exercise off Dover with a collision situation and a potential oil spillage. I have no doubt that it was all a great success, and it is comforting to know that such contingency plans exist, but surely in such a case prevention through properly organised pilotage is much better than cure.

I come back to the Thames estuary, which has been mentioned, and the estuarial problem. Provision is made in the Green Paper for harbour authorities to delegate the running of pilotage services to Trinity House or to some other agents in this respect. The proposals also allow for groups of harbour authorities, whose harbours share a common approach area (such as London, Southampton, the Mersey, the Humber and the Clyde) to organise a pilotage service collectively to cover the area, although there is nothing in the proposals to require this. A harbour authority would have complete discretion to pull back its boundaries so as not to overlap the other port's boundaries.

I mentioned earlier that running a port is a very competitive business. Indeed, the reason for the greatly increased number of small ports has generally been the inefficiency of the larger ports. I can foresee tremendous difficulties in reaching agreement on this matter. Either way we are back to a local area administrative body, much the same as exists today; so what is new?

On the estuarial problem I think that the Government have to think it out extremely carefully, and there ought to be a requirement for estuarial ports to operate a pilotage authority through one body; otherwise I can see ourselves getting into all sorts of problems.

I have spoken long enough and the hour is late. I shall sum up. Are the Government not being a little too hasty in effectively washing their hands of pilotage by handing over responsibility to the ports and in so doing angering the pilots who have already been forced into joining the Transport and General Workers' Union by the uncertainty of it all, and creating at the same time the possibility of environmentally unacceptable hazards? Safety of navigation should, in my opinion, be a Government responsibility with some sort of overall control, be it under a Trinity House board, beefed up by independent government nominees, as has been the case most successfully with the Lighthouse Board, or perhaps some newly formed independent quango that has authority for overseeing compulsory pilotage rather than just having an advisory capacity.

Everyone agrees that there are anomalies, but these can be rectified without major legislation; in particular, the question of pilot costs, to which the noble Lord, Lord Walston, alluded. I think it is not right that the smaller ships should, in effect, be subsidising the larger ships. I think it should be the other way round, if anything. I have seen the proposed legislation described as leading to the total decimation of pilotage as we know it round our coasts. Above all, pilots do not want to become employees of the ports. They are proud of the quality of service they offer, and any move in that direction would seriously affect their morale. For instance, they would not be able to give independent advice any more to a master because they would have an authority looking over their shoulders.

One final word: let us not forget, before contemplating sweeping legislation of this sort, that pilotage costs amount to about 1 per cent. of a large ship's running costs, and slightly more for a small ship, and that UK shipowners provide only about one seventh of the earnings of UK ports. Any savings in pilotage costs, if indeed they do come, will benefit competing foreign ships just as much. Tragically, as we all know, our merchant fleet is continuing to decline, and it would indeed be ironic and I think tragic if by the time the proposed new legislation comes into force those shipowners who are pushing so hard for it at the moment had all but disappeared and the whole thing had been for nought.

10.20 p.m.

Lord Kennet

My Lords, I think that on the whole I agree with the approach of the noble Lord, Lord Greenway, to this matter. The field is confused, like many long-standing British arrangements, with lots of holes in it. I propose to ignore the small print, if I may.

Government departments have a great tradition of coping with the small print once they get the principles right. I want to concentrate on the principles. We have all said how old Trinity House is and what a splendid institution it is; but let us go further back. One has to be historical in a debate of this sort.

Once upon a time, there were no pilotage arrange-ments at all. Ships then either did not have pilots and depended on the chance fact of whether or not their masters knew the way in; or the pilots they had might be honest or they might not. British sea lore abounds in stories of crooked pilots, wrecker pilots, murderer pilots, drunk pilots, thieving pilots. The time came in the 16th and 17th centuries when seafarers realised that this was not good enough and, with a great effort, the country got together a national system and called it Trinity House. It needs to be carefully looked at to see whether it is a good idea to get rid of that national system or whether to do so might risk our falling back into a modern version of the situation which existed before it was there, a kind of computerised jungle of cutting legal corners.

Pilotage is there for safety. It is there for the safety of the ship piloted and other ships and the crews of all ships involved; for the safety of the beaches from pollution and of the townsfolk from fire; and all the other things. We are talking about the right way to handle safety. I believe that competition between commercial enterprises in charging for safety is a dangerous course to take. The noble Lord, Lord Walston, has given us the figures which show that the ports compete with their pilotage charges. We know it and it is a great source of worry to us. It must be a very real element in the choice of a shipper in deciding which port to send his cargo to. This brings in the question of compulsory pilotage. There are ports which have compulsory pilotage and ports which do not. There are bits of ports where pilotage is compulsory and bits where they are not; and, of course, if this all goes to port control the variations are going to increase.

I was very much impressed to read in the briefing that we got from all the contending interests that masters—some masters, at any rate—favour compulsory pilotage and want to see an extension of it in order to prevent penny-pinching owners from telling them they must not take a pilot. Of course, British sea lore is also full of the character of the penny-pinching shipowner. We know all about him from the 16th century and 17th century onwards and we can go back before then to Roman literature to find stories about him. He will be there if circumstances allow him to emerge once more in the modern age.

I think we have to be careful not to permit the creation of regional marketplaces in safety; for this is what it is going to be if a freight-holder says, "I want this cargo to go to Southeastern England." Then he or somebody will look up all the ports and see what the rates are and see whether pilotage is compulsory. He will tell his master what to do, without perhaps too much regard as to the master's own capabilities and that will head straight towards a decrease in safety, which it is the duty of governments to provide in one way or another. My principle here would be this. Do not hand safety and pollution control to competing commercial concerns.

We see the same thing at the moment in the water industry, where there is or was—I hope was—the zany proposal in the water privatisation Bill to allow the new private companies that are to be set up to administer their own safety and pollution controls. As so often these days, the picture at the end of the line is that of abolishing the Government themselves and allowing everything to be settled by commercial interests, in forgetfulness of the fact that once upon a time indeed we did not have a government and it became very necessary to set one up. And great benefits flowed from the habit of having a government.

I would say that a para-state organisation like Trinity House is in a rather analogous situation to the Government. Let us not see just another bit of the dismantling of state or pseudo-state institutions on doctrinaire grounds. I hope the Government will get hold of the principle that safety is not for sale and not to be gambled with. If they cannot manage a European regulation about this—and 1 dare say that might indeed be difficult in the present state of European consciousness in these matters—let them not lightly throw away the perfectly good national one which they already have.

10.26 p.m.

Lord Wilson of Rievaulx

My Lords, as an elder brother of Trinity House of some 18 years' standing—although nothing like the period served by my noble friend as an elder brother—I find it difficult to understand how pilotage affairs have been allowed to deteriorate to such an extent that a Green Paper became necessary, and why, in preparing it, the Minister's predecessors and their officials did not see fit to consult Trinity House as the pilotage authority responsible for half the pilotage in this country and with experience going back literally for several centuries. When I was a Minister, officials used to take pride in presenting unbiased facts on which proper judgments could be made; but in this case it is clear that, while the ports and the shipping industry were very properly consulted, no one saw fit to confirm the facts with the principal pilotage authority, Trinity House.

If at any time a port has been dissatisfied with any aspect of its pilotage service, it has always been able to voice that dissatisfaction through the local Sub-Commissioners of Pilotage, among whom it has always had representation. If it could not obtain satisfaction through that body, it could always appeal to the Minister under the provisions of the Pilotage Act 1913 or, more latterly, to the Pilotage Commission.

The root cause of all the present problems about which the shipowners have joined with the ports in seeking re-organisation has been the agreements those very same shipowners made direct with the pilots in the years following the so-called Letch Agreement of 1957, to the total exclusion, and ignoring the advice, of the pilotage authorities. Now it is clear that the pilots have been much better at negotiation than the shipowners: hence the latter's chagrin.

Until the shipowners repudiated the Letch Agreement in August last year, something clearly needed to be done; but I am surprised that it is this Government, under their present leadership, who not only seek to curtail private enterprise in pilotage but who dream up the "sledgehammer of the Green Paper", as somebody called it, to crack what is after all a very small nut—so small, in fact, that since the shipowners took themselves out of the arena of pilots' pay and conditions Trinity House has already been able to make considerable savings (indeed, up to 15 per cent. in one port alone). Why are the Government not giving them the chance to show what else they can now achieve?

All Members of the House will know that Trinity House goes back a very long way in our history. It is one of the oldest of our English corporations, founded by, I think, King Henry VIII in 1514, and its responsibility covers England and Wales; the Channel, of course; and I think it still has responsibility for Gibraltar. It acts, and has acted, as nautical assessors in this House, in the Admiralty Division of the High Court and in the Court of Session in Scotland, as well as in the other houses established under ancient charters covering Hull, Newcastle and Leith.

Because of its centuries of care, its constant insistence on modernisation and the lead it has given for centuries virtually all over the workd—to developing nations as well—it has earned and deserves the full backing of Parliament, and, above all. the power to carry out its many duties, particularly in the creation of one of Britain's greatest achievements—the power to give a lead to the world in saving life at sea.

10.31 p.m.

Lord Strathcona and Mount Royal

My Lords, we have to be grateful to the noble Lord, Lord Shackleton, for giving us a very clear introduction to a subject which I personally find gets more and more complicated the more I go into it. We are particularly grateful to him for flushing out his colleague, an ex-Prime Minister and an ex-Board of Trade Minister, who gave us a particularly robust performance.

I have to declare an interest—it is an honorary interest, I hasten to add—in that I succeeded Mr. Callaghan as chairman of the UK Pilots Association. So I think I can say that this is a fairly cross-party affair. Obviously I am not going to attempt to speak for the UK Pilots Association, and even if I were the last thing I should wish to do is to defend any restrictive practices which it might be alleged they exploit. I happen to think that they do not. Further-more, there is no evidence that I have seen which demonstrates that they do. But I believe that there are quite a number of people, who should know better, who labour under that kind of illusion.

Pilots have agreed for a long time—and it has been said several times already this evening—that reorganisation is needed. They have done their best to co-operate to help reorganisation, even when such things as the admission of EC pilots have clearly not been in their own direct interests. Clearly they have attempted to mitigate any damage to their employment that there might be, but they have attempted to co-operate wholeheartedly. Here again they too, I think, felt offended, if not outraged, that the Government were so plain silly as not to consult with another authoritative body before they produced the Green Paper. However, that point has been made often enough.

I think it was the noble Lord, Lord Greenway, who pointed out that the origin of the muddle we have got ourselves into is the legislation which went through on the very last day of the Labour Government in 1979, in spite of grave misgivings expressed at the time by a number of organisations and, most particularly, Trinity House. Many of our troubles stem from that ill-discussed piece of legislation having gone through on the nod. In particular, a toothless Pilotage Commission was created and, so far as I can make out, almost all the advice that they have tendered to the Government has been consistently rejected by successive Ministers. But we do not want to exaggerate the need for reorganisation. The fundamental foundations of our pilotage system remain extremely sound and they have been and can be adapted to changing circumstances.

We have thrown a few brickbats at the Government and I am going to throw a few more in the next few minutes; but I must congratulate our new Minister in this House. He has made great efforts to redress the seven years of neglect of his predecessors since the 1979 Act was passed.

Everybody agrees that the underlying principle in the Green Paper of devolving authority to the ports is both attractive and logical and it receives widespread support; and of course it is consistent with the declared aims of this Government to decentralise decision making, even if some of the metropolitan counties might say that they have rather funny ways of showing it at times. They believe in giving the freest possible rein to market forces. The trouble begins with the detailed applications of the principles. I believe that the Government would have quickly discovered the kind of problems that were going to arise had they consulted more with the responsible authorities before they produced the Green Paper, but that is water under the bridge. I suspect, however, that the Government and ports may be in that dangerous situation of not realising how little they know. That is the beginning of knowledge in a complicated subject of this sort.

I believe that the Green Paper proposals are in danger of throwing out the baby with the bath water in the pursuit of the chimera of lower costs. I fear that the General Council of British Shipping which, as has already been said, speaks for only one-seventh of those using the ports, may have led the Government astray. I hope that it is seeing already and will see in the future the error of its ways.

As the noble Lord, Lord Kennet, was saying, looking back at history pilotage originated as a freelance service which was valued by shipmasters. One of the main criteria has always been immediate on-call availability which has been considered essential, particularly in cases of compulsory pilotage. Pilots are specialised, skilled people offering up-to-date practical knowledge of the seabed, the tidal conditions the traffic movements and the communications. They are skilled tug handlers and they are experts in berthing problems. In this way they contribute not only to the peace of mind of the shipmaster but they contribute, as has been said several times this evening, to public safety and to the safety of navigation of other vessels and to the keeping open of the confined waters around our ports. The knowledge that there is a pilot on board another vessel is a great comfort to other professionals. The services of pilots become particularly important when the going gets tough. This is especially appreciated by the master of a necessarily cost-effective thinly manned ship which may be arriving in difficult areas of navigation after a tiresome—literally tiresome— passage in periods of high winds and poor visibility. So there is an element of insurance in making available a pilotage system, and that inevitably means that you must pay for something that you do not necessarily use all the time.

The provision of adequate coverage inevitably adds to expense. This is emphasised by the fluctuating nature of the demand for pilotage services. I have been told that in Felixstowe, for example, the number of ship movements can fluctuate between five ships to 25 ships in one day. There has to be pilotage cover for the 25-ship situation.

In moving on to the question of costs, it seems to me useful to examine just how much pilotage contributes to the overall cost of bringing a ship into port. I hope that the Minister can give us some guidance on this because there are a great many figures kicking around. I was given an interesting statistic recently. It was suggested that a large container ship costs 55,000 dollars a day to operate. That is about £1,500 an hour. The pilotage for a berthing was quoted at £250. I calculate that to be about 10 minutes' worth of the daily operating cost. So if the pilot saves that ship 10 minutes he has more than earned his fee. On the other side of the coin, if that ship is kept waiting a grave penalty is incurred.

Admittedly, that is possibly an extreme case of a very large veseel, but I have also seen a Canadian study which suggests that pilotage costs account for 0.1 per cent. of port costs overall. I am not suggesting that savings are not worth seeking, and I am certainly going to support anything which helps the competitive position of our British ports; but it seems to me that we should be wary of a relentless and unreasoning pursuit of hypothetical and unproven cost savings at the expense of efficiency, safety and the disruption of the working lives of dedicated professionals.

As has been said, the Green Paper suggests that a major objective is cost saving; but it is up to the protagonists of the Green Paper proposals to demonstrate in detail just where they think such savings are to be made. It may be that the Minister hopes to reduce his own departmental costs. Perhaps he could start by telling us what those departmental costs are at the moment so that we can consider the validity of those arguments. Certainly those to whom I have spoken have suggested that most of the proposals are likely to increase rather than decrease costs.

Mention has already been made of the Trinity House fear that there will be a loss of flexibility in the deployment of both men and materials which will push up costs if coverage is going to be maintained in smaller divided areas. The same applies to insurance which can be spread by a larger organisation over a wider base. I may have the opportunity in a moment to mention the point made by the noble Lord, Lord Greenway, on the added responsibility that ports will be taking on if they become directly responsible for pilotage in new areas and the insurance costs of that, which I suggest are likely to be considerable.

In spite of what the ports say, I think that most of us believe—and I think that the noble Lord, Lord Kennet, was suggesting this—that a competitive regime will make co-operation more difficult rather than easier. I have heard it said that there is no way in which Dundee will provide Perth with pilots if it is taking away business.

That leads me to the question of the employment status of pilots. This has been a long-running bone of contention since the publication of the Green Paper, and it is a matter of great pride to the pilots, who believe that it is both efficient and cost-effective. It seems ironic that we should be seriously discussing the question of moving pilots from a self-employed basis to an employed basis just when the Dutch, who are no mean seamen, are proposing to put their pilots into the private sector.

The direct employment of pilots, I understand, has been tried at Sullom Voe. I think that the Minister said to me that he thought it was a great success. I hope that, since he said that, he has heard from the pilots, because that is not the message that I have been receiving.

Surely nobody would dispute that, other things being equal, the direct employment of a labour force must increase salary costs by a substantial proportion in terms of national insurance and other adminis-trative overheads; so where are the cost savings on the pilots' side to be made? Are the pilots going to earn less? I do not think that they would be very enthusi-astic if they were told that. Nor do I think that their average earnings, which I believe are of the order of £13,000 a year, are an outrageous overpayment for skilled, dedicated men taking on a high degree of responsibility. Are we going to increase their productivity by extending their working hours? Some districts—the Humber is one—are currently considerably undermanned, and pilots are putting in very long hours.

Furthermore, one has to bear in mind that, because no pilots have been recruited since 1979 owing to the uncertainties, the pilots are not a young workforce any more. It may be that productivity can be increased by improving the ratio of waiting time to actual time spent during and at pilotage. I should have thought that it is likely to be more difficult if one has a multiplicity of small ports than if one has a larger area over which one can deploy the workforce effectively.

Here again, it will be found that the small ports inevitably will have a higher administrative overhead to support the pilots if they run a separate organisation, with all that that implies. Clearly one could reduce the cost by reducing one's willingness to cover peak demand. That would be a very radical departure, and furthermore I suggest that it would offer a dangerous possibility of adding to the cost by keeping ships waiting. The question of employment status is tied up with the matter of numbers. I fear that the noble Lord, Lord Walston, has been misled somewhere along the line.

But before we come to the specific question of how many surplus pilots there may or may not be, I should like to deal with the question of self-employed status, which the pilots have always contended is heavily circumscribed by the question of proper numbers of pilots as laid down in the regulations. It is a complicated question which I do not think is worth expanding on tonight, but with the greatest of sorrow I have to tell the Minister that the pilots have a cynical view of his ministry, and I believe that they have good reason for it.

When we were discussing compensation for loss of office the Government spent a large sum of money on commissioning the expensive Montagu report, which again made some rather wild assumptions about the number of surplus pilots that there might be. When those negotiations were taking place the Government were adamant that there was no way that they would contribute a penny in compensation for loss of jobs by self-employed people. One comment made about that by the pilots was: "It's a funny old thing, but they do not say that to the farmers, though there are more farmers than there are pilots, because they are just as self-employed as we are. But then, there are more of them and they are all thought to be Government supporters".

So the 1,300 pilots concerned felt that they were an oppressed minority. However, more recently they said: "Okay, if we are going to be self-employed, let us have the benefits of the tax status of the self-employed". What happened? A Member in another place received a letter from no less a person than the Prime Minister herself in which she referred to the pilots as a profession which, has few of the characteristics of self-employment". One can see from where these two incompatible statements come. If one looks at the brief that has been issued in the last two or three days by the ports themselves, it will be found that on page 3 they speak of, very generous terms for self-employed persons", and on page 8 they make precisely the same point as the Prime Minister made in her letter when writing to the Member of Parliament. In other words, they put the two contradictions in the same document. Does one wonder that the pilots, who have always been proud of their independent status, have felt constrained to go off and join the Transport and General Workers' Union?

There is also the question of the Government having said that compensation for early retirement has been settled. From talking to the pilots I am not so certain that this matter is settled. Certainly the pilots were very reluctant to accept the proposals that were made, and they feel that it is unjust that they should have to accept the possibility of compulsory early retirement when this means handing in their licence, which to them is their main document which secures them employment. I should be very interested to learn from the Minister whether his understanding is that this is a possibility which is now accepted.

If we again consider the present situation, it seems to be wholly consistent with what the Government are seeking in so many areas; it is simply no ship, no pilot, no money. Payment by results, we used to call it, and a very satisfactory and fair system one would have thought it was, too. As somebody has said, the regime which surrounds the employment of pilots would be envied by many an industrialist.

We have talked about numbers, and there is no doubt that, if there was a change in the compulsory regime, as is postulated in the Green Paper, the numbers of pilots required would probably be substantially reduced. But I have never seen any comprehensive demonstration that there is this great number of surplus pilots. I do not dispute that there is a surplus in the Clyde and in the Mersey, but there is a shortage in the Humber and in London. If we could just get the regime tidied up, there is considerable hope that a number of those pilots could be redeployed. At present, the uncertainty is holding up any possibility of pilots being transferred from one district to another. This is another penalty of the delay.

The General Council of British Shipping is probably more responsible for that unhappy situation than the Government. Its baleful influence has held up all progress over a long period of years. My experience of the British Ports Authority recently has been that it is not very much more helpful. I am not sure whether it is unaware of the problems which are about to be landed on its plate or whether it feels that if it waits long enough all the pilots will be unemployed and it can then take them on on whatever terms it pleases to impose on them. I hope that the position is not as cynical as that. Both the GCBS and the British Ports Authority declined to come recently to a conference arranged by the British Maritime League. I can only think that the reason they did not come was that I had been asked to chair the conference.

The Green Paper mentioned in a permissive way the problem of ports in estuaries, which has already been touched on by a number of noble Lords. I am afraid that I have already chattered on unduly long. But we have to consider what is to happen in the 14 ports in the London area, stretching from Felixstowe down to Folkestone. Are we to have 14 pilotage authorities? How are they to co-operate? If they do, shall we not end up with something similar to the existing pilotage committees? How are they to relate with the conservancy authorities, the quay owners, the harbour authorities and all the other people involved? It seems to me that we shall circle back to very much the same situation as we have at present. Do not let us run away with the idea that this is a small problem. Something like two-thirds of all the pilots work in ports which are part of estuaries.

The noble Lord, Lord Greenway, referred to the legal question. That is addressed in a large paper from the College of Maritime Studies in Warsash. It puts together the proposal for the direct employment of pilots with the direct responsibility of ports for pilotage. At the end it suggests that the implications are such that, Harbour authorities will clearly be deterred from providing pilotage services in any area outside their harbour limits". We have already touched on safety. It seems odd to legislate in great detail as to who should command a ship at sea and then apparently abandon all control once the ship comes into a pilotage area. There is no question of who should exercise compulsion; we are giving up any control over the qualifications of the pilot. If it were asked, I cannot believe that the CAA would be happy about that in its medium.

Furthermore, the commercial pressures have already been referred to by the noble Lord, Lord Kennet, and others. Surely we need some kind of oversight as to what will happen to ships carrying dangerous cargoes; for example, liquid natural gas carriers. We should remember the tanker at Bantry Bay. We do not even know what is inside a container on a container ship.

If we do not have a central pilotage authority, could we not have some kind of appeal to the Health and Safety Executive, or could safety not be made a role for Trinity House which has such an excellent record in such matters?

Similarly, what about pilots' qualifications? Will they be left to a free for all? Will that not make it very much more difficult to transfer pilots from one area to another? Will pilots' confidence not be eroded if they do not know about the competence and training of a pilot on another ship?

Clearly small ports would need standards different from those of large ones. Are we to abandon all standards? I should have thought that the ports would want some body to run their examinations and set their standards. They have a body already. What is the point of doing away with it and creating a new one?

Whenever we examine these questions, we are driven back to some kind of national pilotage body. One at least exists in the shape of the Pilotage Commission. Surely that should be made the authoritative body with power. That would take the onus off the Minister, which presumably is what he wants. That would greatly simplify the many appeals which are constantly being made under the present procedure.

The other body, as its vociferous proponents have mentioned this evening, is Trinity House. If one had a blank sheet of paper I doubt whether one would create Trinity House, any more than one would create the Royal National Lifeboat Institution. It would be even more dangerous to suggest that we should give up the RNLI than it is to attack Trinity House. They both do fine work. Trinity House is there and willing to work. It seems crazy not to put it to work even if we have to ginger it up a little in the process because we believe that it has been there too long without someone changing it. The noble Lords, Lord Shackleton and Lord Walston, discussed that point earlier.

Finally, I shall return to a point made by the noble Lord, Lord Swinfen. I believe that there has been a lamentable lack of multilateral discussion with all the bodies concerned. I think that is the reason for many of our problems. It is no use the department talking to all those organisations one at a time. It is no use having submissions in response to the Green Paper. It is no use those bodies talking to one another. A collective discussion is needed.

The Minister must knock some heads together. He has come in as an energetic young man and I sincerely hope that he will go in for a major head-knocking operation before he produces his White Paper. Like the noble Lord, Lord Swinfen, I think that he may be agreeably surprised to discover how much agreement there is among the various bodies concerned, and I wish him the best of luck.

11.5 p.m.

Lord Underhill

My Lords, we have had the advantage of hearing views based on great experience, not least from my two noble friends who are elder brethren of Trinity House. I hope that they will not be too disappointed at the comments that I am going to make. 1 cannot claim to be experienced in this matter, but I have been helped by the Government's Green Paper and also by the report of the Transport Committee of another place, to which no one has referred, and the Government's response to that report. I have also read the two briefs kindly prepared by the British Ports Association and by Trinity House for the debate.

Noble Lords have indicated the varying views of different bodies. I wish to indicate a possible conflict of views on certain points. Quite rightly, tribute has been paid to Trinity House for the high standard of skills it displays and the preparedness of our pilotage service. I was intending to ask what use will be made, if there is to be legislation, of Trinity House and its vast expertise? I was therefore absolutely shocked and amazed to hear my noble friend Lord Shackleton suggest that Trinity House had not been consulted in the compilation of the Government's Green Paper, particularly as I see that the Government's response to Commons recommendation Number 10 states that the Government will continue to have discussions with Trinity House on how its considerable expertise could be usefully engaged in the new regime. I hope that the reference to continued discussions is a correct statement in the light of what my noble friend Lord Shackleton has said about there having been no discussions before the Green Paper was issued.

The Green Paper suggests that the organisation of pilotage is cumbersome, complicated and has remained virtually unchanged since the Pilotage Act 1913. We have the view of Trinity House, as expressed by my noble friend, that the need exists for amendment to pilotage law but that no one knows the problems better and what should be done than Trinity House. The British Ports Association says that the pilotage service is obliged to rely on outdated and anachronistic legislation. The general view of the report of the Commons committee is that reorganisation is necessary. The committee recommended that a review of the existing rules and practices should be undertaken as a matter of urgency. There seems to be general agreement on the need for change of some kind.

The basic argument is whether the present arrange-ment of pilotage districts, each responsible to a pilotage authority, with the districts and their composition set out by orders approved by Parliament, should continue or be replaced by an arrangement whereby responsibility for pilotage is placed on harbour authorities. The Commons committee and the ports association agree with that change of responsibility. But the view of Trinity House, set out in section 6 of its briefing note, after referring to the Letch Committee of 1957 and the establishment of the Pilotage Commission in 1979, concludes: Why risk a third failure now with such an important national service? Leave well alone for another five years and then make a sensible decision based on proven facts, not muddled half truths". On the other hand, the British Ports Association, in the final paragraph of its comments on the Trinity House proposals, recognises that Trinity House has had many years' experience as a pilotage authority but states that changes are clearly needed and that pilotage is fully within the competence of harbour authorities to administer.

The British Ports Association claim that bringing the pilotage service under the management control of harbour authorities will be a flexible system and will lead to considerable improvements in the adminis-tration of the pilotage services without any corresponding diminution of safety standards. The noble Lord, Lord Strathcona, has put the view of the United Kingdom Pilots Association. I note that their memorandum stated in paragraph 9: Every independent or fully representative objective and in-depth study of pilotage between 1836 and 1984 has come to broadly the same conclusions, that is, the desirability of a central authority and the necessity of qualified compulsory pilotage regimes". It also expressed dissatisfaction (in fact, strong opposition) to the Government's proposals as leading to, fragmentation of administration …and the possible introduction of non-compulsory regimes". The view of the Opposition is that it would not necessarily oppose a transfer to harbour authorities, but we would want to see very carefully exactly what proposals are put into the Bill and exactly how the matters are to be worked out. We would also want to see how far the expertise of Trinity House would be used in any change of legislation.

There appears to be a general consensus that there is an excess in the number of pilots, and suggestions that in many cases there is low productivity. This, as the noble Lord, Lord Strathcona, said, opens up the question of the status of pilots' employment. Trinity House argue that a 1965 ancillary agreement laid down hours of duty per annum per pilot, and in effect ended the self-employment classification. The British Ports Association regard pilots as being quasi self-employed but licensed.

This opens up the important question to which the noble Lord, Lord Strathcona, devoted a fair amount of attention. If the number of pilots is to be reduced, what will be the basis of compensation? The Government's consultative document says it is clear that the reduced proper numbers of pilots would depend on implementation of a scheme to compensate redundant pilots on acceptable terms. As recently as 23rd May a departmental press notice said that there was an obligation to ensure that the pilots are fairly treated.

In 1982 the Pilotage Commission recommended the Secretary of State to promote a scheme for costs to be borne equally by the Government, shipowners, and the pilots. The Commons committee proposed that the Government should share in compensation costs. Unfortunately, the Government's Green Paper asserts that the Government held—and still maintain—that there is no justification for any public funds being used in this way. The Government consider that pilotage should be treated as one of the range of ancillary services provided for vessels using a port.

Again on 23 rd May this year the Secretary of State announced agreement in principle on a compensation scheme which had been reached between the British Pilots Association and the Ports Association, but that the General Council of British Shipping had not been prepared to agree with these proposals. But the Secretary of State has accepted the proposals, even though the General Council of British Shipping will not participate in them. I think that is deeply regrettable, and one would like to see a fair compensation scheme freely accepted by everyone and in which the Government would play their part. If the Government are going to introduce legislation to curtail the number of pilots because of the facts of the situation, then it seems that the Government should be prepared to participate in a compensation scheme.

The Government made clear as recently as 23rd May that legislation to transfer pilotage to harbour authorities will be introduced as soon as possible. The noble Lord, Lord Strathcona, made reference to this. If we are to have legislation, it would seem that the future and the position of the Pilotage Commission must also be determined in that legislation. It is also clear in the light of the various reports that legislation must clarify another important question; that is, as to whether there should be particular shipping areas, or classification of ships and cargoes, for which compulsory pilotage will be required. I have grave doubt whether this is a matter that could be left for the sole decision of the harbour authority, as is proposed by the Government.

It is also doubtful whether a harbour authority should have the power to issue pilotage certificates. While we can see the need for the reduction in the number of pilots, there must be a sound compensation scheme. We should like to see one agreed by all parties, but there are these other important questions which must be considered if legislation is to be introduced.

11.16 p.m.

The Parliamentary Under-Secretary of State, Department of Transport (The Earl of Caithness)

My Lords, I, too, am grateful to the noble Lord, Lord Shackleton, with his great knowledge of the subject, for giving us the opportunity to discuss pilotage this evening. May I correct him on one point, when he said that I had just got under the wire by seeing Trinity House on Friday. I had a specific pilotage meeting with them in February of this year and I have met them on numerous other occasions, as has my honourable friend Mr. Mitchell, now Minister for Transport. There has been ongoing consultation with them.

I agree with my noble friend Lord Strathcona and Mount Royal that this is a complicated subject, and one on which we could spend many hours. It is also a subject which has been a source of controversy within the marine world for many years, and one on which strong and often conflicting views are held.

But one point on which I believe that almost all those involved in pilotage are agreed is that the administration and statutory structure of pilotage is in need of reform. The shipowners, the ports, the pilotage authorities, including Trinity House who operate 40 out of the 93 authorities, many of the pilots themselves, the Pilotage Commission and the Government are all generally agreed that the adminis-trative structure of pilotage based on the Pilotage Act 1913 needs reform. This was backed by the findings of the Select Committee on Transport in the other place last year.

The difficulty, the same difficulty that has thwarted any successful reform in the past, is reaching agreement on what the reform should be. The noble Lord, Lord Wilson of Rievaulx, said that it was a small nut. But, my Lords, what a tough nut. It is almost uncrackable, as has been proved in the past, and perhaps it needs that sledgehammer to which he referred.

I shall not dwell on the reasons for reform: the breakdown of the policy established by the Steering Committee on Pilotage and the Advisory Committee on Pilotage, on which there was enormous consultation—and particularly the Advisory Committee on Pilotage, which was sponsored to a large extent by Trinity House—and which eventually led to the Green Paper. The Green Paper was intended as the basis for consultation, and therefore there was no consultation before it was published because that would have defeated its purpose. The consultation had been on the two committees, ACOP and SCOP, before, and therefore we came out with our thoughts which were for the basis of further discussion.

There was then the disappointment when my honourable friend Mr. Mitchell (when he was the Minister responsible for shipping) was unable, after much work, to finalise a voluntary compensation package. There was the inability of parties to agree on the simplest of pilotage orders. As your Lordships know, we hope to bring forward legislation at the earliest opportunity to simplify the present system and make it more workable, and not wreck it. The noble Lord, Lord Shackleton, hopes that this can be done without primary legislation, as do the noble Lords, Lord Kennet and Lord Greenway.

I accept that, in theory, much could be done by using the mechanisms provided in the present Act, for changes in pilotage orders and by-laws. Some of the present restrictive practices could even be removed without modifying by-laws and orders. History has shown that in practice the prospects of securing rationalisation on the scale that is needed, and with the degree of urgency that is now called for, are negligible. Under the present system responsibility for pilotage falls on committees made up from the interested parties, principally the pilots, shipowners and ports, and attempts to secure agreement on proposals which would significantly improve local pilotage arrange-ments have, over the last few years, proved largely abortive.

When proposals are put forward, they are subject to objection procedures, of which full opportunity is taken by anyone who sees his interests as even marginally affected. In the case of pilotage orders, unresolved objections mean that the order can take effect only after it has been subjected to special parliamentary procedure. Your Lordships will not be surprised that in these circumstances the pace of reform has been slow, if not imperceptible. As one small illustration of this, may I quote from the London Pilotage District the case of the Gravesend demarcation rule, under which a vessel travelling up or down the Thames has to change pilots at that point. While this may have made sense when most ships were travelling long distances up the river, for a long time now most of the large vessels passing this point have been travelling to or from Tilbury Docks, just across the river. Nonetheless, ships still have to change pilots at Gravesend. In 1981 Trinity House brought forward a pilotage order to change the rule, but it was withdrawn following objections. Recently, another attempt to obtain the necessary order has been made by Trinity House, but I understand that three objections have been received from the pilots. I think this well illustrates the difficulty of carrying through even the most obvious improvements in productivity under the present legislation.

I think many would agree that the publication of our Green Paper, with the prospect it holds out of reforming legislation, has itself had the effect of eliciting a number of serious proposals for reform within the present legislation which would not otherwise have been thought about. The sea pilots of the London Pilotage District, one of the districts for which Trinity House is responsible, have given wide circulation to a pamphlet proposing major reforms, with substantial reductions in the number of pilots, which they say would be self-financing. They accept that the management of pilotage in the London district would be more effective if the main interested parties were not represented on the Pilotage Committee. They have accordingly offered to withdraw from it and this would have the effect of removing the right of shipowners to be represented on the committee. This would all be subject to the strengthening of professional management within Trinity House and an upgrading of management systems.

It could be argued as a result: why do we need legislation if arrangements like this can be made? The London district has a particular advantage in that a special fund has been built up for the compensation of surplus pilots. But the use of this fund requires the making of new by-laws to which other parties would be able to object if they thought the terms too generous. They would be able to object also to aspects of the proposed reform with which they disagreed or which they thought did not go far enough. Regrettably the history of the last few years discourages any confidence that the pilots' proposals would have any real prospect of success. Under the present legislation the pilots could decide at any time to change their minds and exercise again their statutory right to representation on the Pilotage Committee, which would have the effect of restoring the shipowners' right to representation.

I should be the first to argue against new pilotage legislation if I believed that the present system could be made to work and to respond to changing needs and changing patterns of trade. But the stalemates of the last few years have convinced me that it cannot and that there is no alternative to new legislation if we are to avoid further stagnation of the whole system of pilotage, which would be unhealthy for everyone.

One of our principal aims is of course to ensure that the cost of pilotage is no greater than is necessary to meet the demands of safety. I stress the word "safety" as that has been raised by many noble Lords. It has been suggested that, far from reducing costs, our proposals to make the harbour authorities responsible will actually lead to an increase. I really see no reason why administrative costs should go up. Adminis-tration should be a good deal simpler when we have removed the complicated procedures of the present legislation, and there should be economies to be made from carrying out the work alongside the adminis-trative work which already falls to harbour authorities for their other functions. This point was mentioned by the noble Lord, Lord Walston.

It is also argued that our proposals mean that, in the short term, there will be very heavy costs arising from the redundancy not only of the pilots themselves but of those at present employed in the pilotage service, and some alarming figures have been quoted. But these figures assume that all employees will be made redundant. However, many of them, particularly those in the boat services, are engaged in work which will still be necessary when pilotage is the responsibility of the harbour authorities. Harbour authorities continue to employ a high proportion of them. Of course, some jobs may disappear, but I do not believe that the numbers or the cost will be as great as some critics have suggested.

There are also arguments that the employment of pilots will inevitably be more expensive than the present system of self-employment. If that is indeed so, I shall be surprised if harbour authorities go down that road rather than seek agreement on some form of self-employment which our proposals will leave it open for them to do. Let me make it perfectly clear: our proposals allow for ports to employ pilots, contract with self-employed pilots, or employ an agent such as Trinity House who can either employ pilots or contract with self-employed persons. In my discussion with the interested parties I see a useful role on an agency basis for bodies such as Trinity House who with their wide experience and unshackled from the present restrictions should be able to provide a competitive and competent service.

However, if a port wishes to employ pilots, the reality is that it is perfectly possible to reconcile their patterns of working with employed status and to ensure that methods of working are efficient and cost-effective. It is already done in this country and many other countries. My noble friend Lord Strathcona brought to my attention the question of Sullom Voe. I shall be looking into this matter when I visit Sullom Voe in August, provided the House is not sitting then. Looking at the lamentably low productivity achieved in many pilotage districts at present—only two acts of pilotage per pilot each week in some cases—it defies belief that improvements cannot be made.

Far from increasing costs, we believe that our proposals will reduce them, chiefly the opportunity they provide for reductions in pilot numbers, which will be made possible to some extent by improving productivity, and also by a fresh look being taken at compulsory pilotage requirements. These points are in addition to the possible economies in administration which I have already mentioned.

Lord Shackleton

My Lords, may I interrupt the noble Earl, since I have no right of reply? Has he any figures of any kind to back up his assertions? Have any estimates been made?

The Earl of Caithness

My Lords, I shall be coming on to some figures. As I mentioned earlier, this is such an interesting and complicated subject that we could bandy figures all evening. If I do not cover the specific points the noble Lord requires, I shall write to him further on this matter. This will be of major importance to our shipping industry, as the noble Lord, Lord Greenway, mentioned in his excellent speech.

I should like to spend a few moments on these important points. The great experience and expertise in pilotage which Trinity House has built up over a period of very many years is recognised beyond this country. I think we would all regard it as a waste of a valuable asset if Trinity House's know-how and experience were to find no place in the future arrange-ments for pilotage and were to be dissipated. However, I do not believe that it would be right to use legislation to compel the harbour authorities to use Trinity House as their agents. I would urge the harbour authorities seriously to consider whether they can provide a pilotage service themselves more economically than Trinity House is able to do. I am sure that many will find that they are unlikely to be able to do so.

Trinity House and some of the pilots have also argued that pilots generally should remain self-employed. That word itself raises emotions, as was indicated by my noble friend Lord Strathcona and the noble Lord, Lord Underhill. I do not believe that it would be sensible for the proposed legislation to prevent the ports from employing pilots if that is what they wish. Also, I do not believe that a general system of self-employment would be acceptable to the pilots unless it was accompanied by a number of the statutory features which have contributed to the present stalemate in the reform of pilotage. The pilots would expect somethiing similar to the present system of appeals on pilotage charges and the same kind of security of employment that they have at present. But these are two of the very features which have contributed to the present deadlock.

If self-employed pilots have security of employment the other side of the coin is that, as at present, there is no means of reducing pilot numbers if demand reduces further. Another special compensation scheme might then one day have to be devised. Surely we must try to learn from the difficulties in which pilotage now find itself, and seek to avoid creating the same problems again in the future.

Fears have been expressed that, as a result of the harbour authorities' assessment of the pilotage needs of vessels using their ports, some areas at present subject to compulsory pilotage will no longer be so. I believe that this is a question which should properly be left to the harbour authorities to judge, and I do not believe we should shackle their judgment by requiring them to accept given boundaries which in some cases enclose vast areas of sea, and which often date back to the days of sail, where a harbour authority does not believe that compulsion over the whole of a present pilotage district can be justified, it will be open to them nonetheless to provide pilotage on a non-compulsory basis for those masters who wish to have this assistance. I hope that answers one of the points put by my noble friend Lord Swinfen.

Finally, may I say that I am surprised that it is sometimes suggested that pilotage is not sufficiently important, in terms of the value of trade, to warrant the efforts we are making to reorganise it. That is certainly not the view of the shipping industry, who have for some time placed pilotage near the top of their list of priorities for reform. Pilotage charges vary from port to port and depending on the size of ship. I wonder whether my noble friend Lord Strathcona and Mount Royal has seen a survey carried out by the British Ports Association at a number of UK ports in 1982, which showed that for different types of ship at the larger end of the spectrum, pilotage charges amounted on average to between 5 per cent. and 24 per cent. of total port charges, excluding stevedoring. For smaller ships the costs are proportionately higher. Trinity House presented evidence to the Transport Select Committee in another place, which showed that at the ports of Shoreham and Par, pilotage charges ranged from 5 per cent. to 30 per cent. of ports costs, this time including stevedoring. If stevedoring is excluded the proportion will obviously be higher. These are averages and the cost can be even more significant. I have recently had quoted a case of a ship using a major British port, which had to pay pilotage charges which were some 30 per cent. more than the harbour dues and twice as much as the charge for towage. Even if such cases are regarded as exceptional, pilotage bills certainly matter not only in terms of the competitiveness of our ports and shipping industries, but also because of the extra costs they represent on our imports and exports. Any unnecessary costs on our imports and exports mean jobs lost in British industry.

Before I close, may I briefly answer some specific points that were raised by noble Lords? The first was raised by my noble friend Lord Swinfen, who asked about my advisers in the department. They may not be master mariners, but they are in constant touch with the marine world, with the pilots themselves, with shipowners, with ports and with Trinity House. Indeed I have seen all the parties who are interested in pilotage and I hope to have the opportunity before long of meeting them all again. As the noble Lord, Lord Shackleton, reminded the House, I saw Trinity House on Friday last week.

My noble friends Lord Swinfen and Lord Strathcona suggested that we should convene a conference and bash heads together, with representa-tives of the ports, the pilots and Trinity House, to discuss the problems we have been considering tonight. Discussions are already taking place between representatives of the ports and pilots as to how they will adapt to the new arrangements; but I am very ready to use my best endeavours to encourage the ports and Trinity House to consider together the implications of what we are proposing. If there is agreement that such a meeting would be worthwhile, I will gladly be there to chair it and use the good offices of my department. I can say that I am pleasantly surprised at the degree of unanimity between all those involved; and indeed my noble friend Lord Strathcona said it was there if I dug deep enough. My Lords, I am digging deep enough.

My noble friend Lord Swinfen asked me about exemption certificates and whether they applied to the ship or to the master. The answer can be both. At present a qualified master or mate can be granted a pilotage certificate, which is in his name and allows him to bring in his ship without a pilot.

But there are also exemptions for vessels, and this takes me to a point made by the noble Lord, Lord Greenway. Under Trinity House by-laws, in the London district all vessels under 3,500 tonnes trading in the home trades are exempt from pilotage, regardless of the skill or knowledge of the master. This is a feature of the present system. It will be for the harbour authorities to decide whether it is a sensible arrangement for the future.

The noble Lord, Lord Greenway, told the House of the imaginary collision in an exercise which I witnessed today which was well outside the compulsory pilotage area. It was right in the middle of the Channel. Therefore, I believe that this was more a navigational problem than a pilotage one, though pilotage comes into it.

Lord Greenway

My Lords, I quite realise that point. But the sort of ship I was referring to can easily come into the outer approaches to the Port of London without a pilot, possibly under the new, proposed arrangements. Therefore, the danger would be much closer inshore than the exercise which took place today.

The Earl of Caithness

My Lords, the danger exists at present, because if a ship calls at Shoreham, it can go up the inshore traffic zone, even though it is a large tanker, and proceed beyond the Thames estuary and out the other side without having to take a pilot. So these are points that have to be looked at again. I agree with the noble Lord, but under the new proposals it is for the harbour authorities to be the bodies to look at them.

Lord Shackleton

My Lords, can the noble Earl tell us which harbour authority in the Thames area will do this?

The Earl of Caithness

My Lords, it will be a number of harbour authorities around the Thames estuary. But we hope—and I am about to make a comment on estuaries—that they will, in most circumstances, act in a unified fashion. This is important as there are special conditions that apply to estuaries. If I may refer specifically to the Thames estuary, the indications that we have had are that satisfactory arrangements can be reached. Nonethe-less, in case they prove to be difficult either at the start of the new regime or later, we propose that my right honourable friend the Secretary of State should be able to call for a scheme for the estuary, and he should have the power to direct any changes in the proposed scheme that he considers necessary. This, we believe, will be an adequate safeguard so that safety is maintained.

My noble friend Lord Strathcona and Mount Royal asked about the cost to government of the adminis- tration of marine pilotage. At present some eight staff in the department spend more than half of their time dealing with pilotage at an estimated annual cost, including support services, of about £122.000 per annum. In addition, the annual cost of the Pilotage Commission is estimated at about £325,000 per annum, which has to be met by the industry.

My noble friend drew the attention of the House to the Dutch pilotage reforms. May I suggest to him, with his considerable experience in these fields, that it is very difficult to compare like with like when you are dealing with continental systems. I understand that the Dutch authorities will continue to set the level of remuneration for pilots, even though they are going to be classed as self-employed. So it will not be an identical system to ours, and a direct analogy cannot therefore be drawn.

Finally, perhaps I may correct my noble friend, who is normally 100 per cent. right. I think he said that there was a shortage of pilots in London. I believe it has already been suggested by the London sea pilots that their number should be reduced by about one-third over the next few years. So I believe that there is an excess of pilots in the London area. I apologise if I have not covered all the points—

Lord Swinfen

My Lords, I believe I am right in saying that over the next 10 years the number of London pilots will be reduced by some 60 per cent. through natural wastage, their having reached the age limit. Surely this means that they will need to recruit in order to keep up their numbers, even to the lower figure that my noble friend suggested was the right one.

The Earl of Caithness

My Lords, that is exactly one of the problems of the present system. The age structure in the London district is wrong. It is imbalanced. It is exactly the odd situation that the present laws provide for. In a district of the importance of London where new blood and new young pilots are needed the present system blocks the exit of old pilots who wish to take early retirement or leave the service. We hope that our new proposals will solve exactly these types of problems. If I have not covered any noble Lord's point, I shall read the Official Report with care as soon as it is printed and write to the noble Lord.

There is something of a mystique about pilotage. I have the greatest respect for the skills and responsibility of the pilot, and the fact that he not only has to but actually does work in all weathers and at any time of day or night. But there is no reason for this mystique to extend to the organisation and adminis-tration of pilotage. The problems of pilotage were new to me until recently. I have made a conscious effort to meet all the parties involved and I have listened to their views with great care. I share their concern for an improved system of pilotage and am convinced that it is right that pilotage services should become one of the navigational services for which harbour authorities are responsible. I was interested to come across a quote from the 1911 departmental committee on pilotage as follows: It is in our opinion not only in the interests of shipowners and pilots, but in the interests of the commercial community and the public generally that the law should be simplified and its adminis-tration made effective". That sums up very well our objectives today, and we hope to bring forward before very long proposals for your Lordships to consider.