Associated British Ports (No. 2) Bill

HL Deb 26 February 1990 vol 516 cc567-86

6.45 p.m.

Lord Geddes

My Lords, I beg to move that the Bill be now read a second time.

This Bill is promoted by Associated British Ports, Britain's largest port authority. The preamble to the Bill explains that under the Transport Act 1981 the former British Transport Docks Board, a nationalised undertaking, was privatised and became Associated British Ports, known collectively as ABP for short, whose holding company, Associated British Ports Holdings, ABPH, was successfully floated on to the stock market in 1983 with many of its employees becoming shareholders. Since 1983 the turnover and profitability of the group, including ABP, have increased significantly. It has achieved the highest growth in share price and market valuation of all the previously state owned enterprises now in the private sector. Investment in the proposed developments sought in this Bill will not involve any recourse to public funds.

While ABP is wholly in the private sector, it must also be remembered that it remains a statutory harbour undertaking, with a duty under Section 9 of the Transport Act 1981 to provide port facilities to such extent as it may think expedient. It is in keeping with Parliament's wishes, as enacted in that Act, that Associated British Ports has promoted the Bill. The Bill seeks to develop and improve facilities at three of its ports; at Immingham on Humberside, at King's Lynn in Norfolk and at Port Talbot in South Wales.

I shall now turn to the provisions of the Bill. Part I is formal and is in well precedented terms. It deals with definitions, and it incorporates, with modifications to suit local conditions, provisions found in Public Acts which are usually applied by Private Acts. Part II seeks to empower ABP compulsorily to acquire land or rights in land for the purpose of constructing the proposed works mentioned in Part III of the Bill. Part III contains one of the most fundamental objectives of the Bill. Associated British Ports wishes to construct port facilities which are needed to cater for larger, and hence more cost-effective vessels, which are becoming more common and for which ABP must make provision if it, and indeed the United Kingdom, are to remain competitive. Because the proposed works are to be constructed in tidal waters, Parliament's consent is needed.

Clause 8 sets out the proposed works. Works Nos. 1,2 and 3 are intended to create a new facility for dry bulk cargo in the River Humber near Immingham. Work No. 1 comprises a jetty and a jetty head; Work No. 2 comprises a secondary jetty designed to give additional access to the jetty head. Work No. 3 consists of a reclamation landwards to the jetty head to provide additional back-up land. The port of Immingham is one of the busiest and most successful in the country, currently handling about 35 million tonnes of traffic annually. This volume of traffic leads to congestion in the enclosed dock system and many of the cargos could be more efficiently handled at the proposed jetty. Without the constraint of lock gates, larger ships could be employed to carry the dry bulk cargo presently handled in the enclosed dock, thus relieving the congestion. It would also result in more space in the enclosed dock for those cargos which can only be handled suitably in such a dock. At the same time, it will mean the provision of considerable bulk facilities in the River Humber for larger vessels. This new facility would also mean that expensive transhipment at continental ports would no longer be necessary, as larger vessels could sail from foreign destinations direct to the new jetty terminal in the Humber.

Work No. 4 consists of a proposed quay intended to provide berths for vessels in the River Great Ouse at King's Lynn. King's Lynn, although small, is a very busy port handling primarily grain and other agricultural exports as well as timber and steel imports. The new berths will enable larger ships to call at the port as at present all the available facilities for cargo handling are located in the enclosed docks and the size of vessel is limited by the entrance lock.

The remaining clauses in this part of the Bill, Clauses 9 to 14, contain matters ancillary to the main works. Clause 9 deals with dredging in the Rivers Humber and Great Ouse. Clauses 10 to 13 in effect bring the proposed works within the undertaking of ABP for such matters as the application of by-laws and the powers of marine officials to give directions aimed at ensuring the safety of shipping. Clause 14 is a standard provision found in APB's Private Acts and incorporates, without the need to set them out in full, provisions which may be summed up as regulating the conduct of APB in carrying out and maintaining the works set out in the Bill.

Clause 15 sets out various definitions relating to Port Talbot and Clause 16 extends the geographical limits of the harbour. Port Talbot tidal harbour is a specialised facility which was constructed to allow the British Steel Corporation to bring in essential raw materials at a suitable deep water harbour, convenienty placed for the steelworks at Margam and Llanwern. The intention is to deepen and lengthen the dredged channel forming the approach to the tidal harbour, so that BSC may use larger vessels. It is planned that, with the improved channel, Port Talbot will be able to handle vessels carrying up to 150,000 tonnes of cargo instead of the present limit of 100,000 tonnes. That will obviously benefit the British Steel Corporation significantly.

Part V of the Bill contains a standard protective provision for the Crown. Part VI contains Clause 18 which places a time limit of 10 years on the deemed planning permissions enjoyed by works authorised by Act of Parliament; and Clause 19 which requires ABP to pay all expenses of the promotion of the Bill and to pay them out of revenue. These clauses are standard provisions.

Having described the contents of the Bill, albeit in a very truncated form, I suggest that it is relevant to give a brief summary of the Bill's progress since it was deposited in Parliament on 27th November 1987. Petitions were deposited against the Bill which sought to defeat it on the grounds that the proposed works at Immingham would enable foreign coal to be imported to the detriment of the coal industry in this country. Not all of those petitions were settled. The Bill was therefore ordered to be examined by a Select Committee in another place. The Bill did not reach that Committee stage until the autumn of 1988.

The Select Committee in another place spent several months in considering the Bill together with another Bill, which was not promoted by ABP, concerning port facilities in the Humber. The result of the committee's deliberations was that the ABP (No. 2) Bill was allowed to proceed without amendment, although the committee asked for and received an undertaking from ABP that once the new facilities at Immingham were in place, ABP would provide another place and the Government with detailed information about steam coal imports.

The Select Committee also produced a special report in which it expressed its concern about the possible impact on the British coal mining industry if there were to be substantial coal imports. However, the committee accepted that this was a matter which would have to be decided by government and Parliament as part of a general energy policy, and that the ABP (No. 2) Bill should not be amended or rejected as a means of protecting the British coal mining industry. The Bill finally achieved its Third Reading in another place on 10th January of this year.

Ten petitions against the Bill have been deposited in your Lordships' House by what I loosely refer to as the "coal lobby", including the British Coal Corporation and the mining unions. In general, those petitions seek to defeat the Bill. ABP's position on these petitions, which are similar to those rejected in another place, is that they are totally unacceptable because they would represent discrimination in favour of a particular group and against the interests of other potential customers. Such discrimination would, in ABP's view, be totally contrary both to the letter and to the spirit of the legislation under which ABP conducts its business as the United Kingdom's largest ports authority.

At this stage perhaps I may say how much I, and I am sure, all Members of the House, look forward to the maiden speech of my noble friend Lord Rockley which will I am sure, demonstrate the considerable breadth of his knowledge on both investment and trade.

Regarding the case for the Bill, I do not think that I can do better at this stage than to quote from the decisions of the Select Committee of another place: The Committee first considered those parts of the Bill which relate to the promoters' ports at King's Lynn and Port Talbot. We noted that none of the petitioners presented any evidence in opposition to these provisions, and that it appears to be generally agreed that the provisions are uncontentious and beneficial. We therefore unanimously resolved, That so much of the Preamble as relates to the construction of works and the extension of jurisdiction at the promoters' docks at King's Lynn in Norfolk, and to the extension of the limits of the promoters' harbour, and its approaches, at Port Talbot in West Glamorgan, is agreed to". So far as concerned Immingham, the Select Committee agreed with counsel for the promoters when he said: Had it not been for the 'coal issue', the principle of the ABP Bill would almost certainly not have been contested". The committee went on to find that the request by the promoters to extend the facilities at Immingham was, in itself, a reasonable one. In particular, it would enable Immingham to compete specifically with Amsterdam, Rotterdam and Antwerp. The issue, therefore, is whether Parliament should allow the British coal industry to stop a private enterprise company from investing in the expansion of its business in order to preserve British Coal's monopoly in the supply of coal to the electricity generating industry. I do not believe that it should do so.

Britain needs the best and most efficient ports industry that we can create, so that British exporters and importers can enjoy the most efficient transport of their goods in the interests of the country as a whole. The proposals in the Associated British Ports (No. 2) Bill will benefit Associated British Ports but, more significantly, it will also bring substantial benefits to the United Kingdom as a whole. For those reasons I ask your Lordships to give the Bill a Second Reading so that it may be considered in further detail in Committee.

Moved, That the Bill be now read a second time.—(Lord Geddes.)

6.57 p.m.

Lord Dormand of Easington

My Lords, I am completely opposed to the Bill because of the effect it will have on the British coal industry and, as a result, on the national economy. Nothing that the noble Lord, Lord Geddes, said allays any of the fears that I have in this respect, although I must pay tribute to the fact that he referred to the Select Committee. He gave one or two quotations from the report and I hope that your Lordships will bear with me if I put forward, later in my speech, other quotations from the same committee which I think have even greater strength.

During its passage through another place, supporters of the Bill said that the measure was not simply concerned with the import of coal. In its literal sense that is probably true. However, there is no doubting the fact that much more coal than any other material will be brought in. Parliament is not a school debating society: it is an institution which has the experience and expertise to know what is likely to happen in any particular situation. Anyone in this debate who disputes that coal imports will increase by vast amounts is politically naive, to put it at its mildest.

Three assessments of the effect of the Bill which I have read estimate that imports of coal through the Humber terminal would be from 10 million tonnes to 11 million tonnes by the mid-1990s. That level of imports would close either 12 or 13 pits with something like 8,000 to 10,000 miners losing their jobs. The North-East coalfield where I have lived for most of my life, would be drastically affected. I am not concerned with what might be referred to as a parochial issue; I am concerned with the whole of our country's coal industry.

The seriously flawed argument used by supporters of the Bill is that if other countries produce coal more efficiently, we should be allowed to take advantage of that fact, as the noble Lord stated. That is probably why our dogma-ridden Prime Minister took the time to vote for the Bill in another place.

The weakness of the argument is that most of the foreign coal which is now imported is produced by cheap labour in Colombia or South Africa, or it is heavily subsidised. Some of it is mixed, for example in Rotterdam and Ghent, and it is impossible to ascertain the source and cost of production. This country should consider the nature of the sources of coal. Do we wish indirectly to support the use of child labour in mines in Colombia, the apartheid system in South Africa and the regime in China which has not regretted in any way the slaughter on Tiananmen Square? Some of us feel very strongly about such matters. It is to the shame of the Government that such matters have not been recognised by them in allowing imports that are sponsored by such régimes.

Such unfair competition must be set against two aspects of the production of British coal. Firstly, there has been a great increase in the efficiency of the industry since 1985. Given similar circumstances, I do not think that there is a more efficient coal industry in the world. Secondly, this improvement has been brought about by a huge loss of jobs, which in turn has devastated scores of mining communities. I speak from direct experience. I remind your Lordships of the multiplier effect in the coal industry, which all economists agree is a factor of two.

If pits continue to close and if imports of the kind that I have mentioned continue to increase—and they will if this and similar Bills go through Parliament—the point will arrive when the exporters of coal to this country will be able to increase prices simply because our own industry will be unable to provide the required amount of coal. That is a real danger. If that is the case, one important factor must be remembered. Once a pit has closed, it cannot be re-opened. It is not like a factory or similar building. Once it is closed, that is the end of it. There is no going back.

I should have thought that the Government's biggest embarrassment among their many present embarrassments is the massive balance of payments deficit of £20 billion. They frequently refer to the ways in which they have made our coal industry so efficient. So why should they add to the balance of payments problem by encouraging an increase in the deficit? The Coal Communities Campaign states that at £39 to £43 per tonne in 1995 the throughtput of ABP's terminal would directly add £400 million to Britain's trade deficit.

Given the efficiency of our coal industry, I believe that there is an overwhelming argument to be taken into consideration when dealing with the issue before us. That is the importance of the security of supply, having regard to the fact that according to the geologists we have 200 to 300 years of coal deposits at the present rate of extraction. There can be few countries which do not envy our luck at having such reserves.

No one on this side of the House is arguing for continuing with a heavily subsidised coal industry to ensure a virtually permanent supply of coal. We are arguing for security of supply at the cheapest price, given the circumstances prevalent in our country.

Over the years miners have made huge sacrifices, not least the loss of 100,000 jobs in the last five years. That is a factor which must be taken into consideration. The miners will play their part in securing the supply of coal to meet the country's needs provided that the competition that they have to face is fair and just. That is an important proviso.

I wonder how much importance promoters of the Bill place on the problems caused by transport of coal from port to destination. Those of your Lordships who have not had the experience of meeting aggrieved people who live in the line of transport may ponder Shakespeare's words, if I am permitted to change them slightly, Hell hath not fury like a woman whose house is passed by 50 coal lorries every day". That experience of mine in another place is seared into my soul.

A great deal of hypocrisy is associated with the Bill, not least the pretence that the Government are neutral on the matter. No Minister has voted against it, although a number of Tory Back-Benchers, very much to their credit, have done so.

The Tory-dominated Private Bill Committee in another place had considerable doubts about the Bill. The noble Lord, Lord Geddes, did not mention that it took the casting vote of the chairman to ensure the progress of the Bill. The words of the committee were clear and unequivocal: We agreed that the issues raised before us were sufficiently important that they justified making this special report to the House, to draw the attention of the House and the Government to what we believe would be the potentially disastrous effects of large-scale coal imports". The next sentence is printed in heavy type: In our view it is the Government's duty to take whatever steps are necessary in the overall national interest to protect the indigenous coal-mining industry". The committee went so far as to say: The decisions on energy and trade policy we have been invited to take are, in our opinion, national decisions which are the ultimate responsibility of the national government". The word "national" is used twice in one sentence. It is an indication that the committee believed that a committee of that kind is entirely inappropriate for such a measure.

The Bill may well end up on the statute book. If so, it will be yet one more example of private profit being placed above the need to ensure the national good.

Lord Rockley

My Lords, I am grateful for this first opportunity to speak in your Lordships' House. It is with considerable diffidence that I stand before your Lordships this evening to speak to a Bill which, for all of its unassuming name, has vital connotations for the future economic strength of our country.

I must declare an interest in that I am a director of Kleinwort Benson which has acted as merchant banker to Associated British Ports Holdings since it was first floated on The Stock Exchange. I was personally involved in the initial offering of shares to the somewhat sceptical British public. It has been heartening for me to watch the progress of that company since that time, and hence its ability to invest now in port expansion projects.

I wish to address only one relatively basic point this evening. It is a truism, but nevertheless a truth, that Great Britain has lived by trade. Despite the growth of the great economies of this world in the United States, Germany and Japan, Britain is still a major international trading nation. It is important that we remain so and it is hoped improve. Historically, our exports and imports have been moved by sea. This remains substantially the case today and it will do so even after the Channel Tunnel is completed.

To maintain our position in international trade, we must have really efficient and up-to-date port facilities. A great deal has been done in recent years in this respect, as is witnessed by the successful development and growth of ports such as Felixstowe and Dover. However, they are basically container ports or ferry ports and much of our trade cannot be carried by container. This trade needs the best facilities as well.

In these types of trade, essential raw materials for our manufacturing industry, we are faced with competition from the great European ports: Antwerp, Hamburg and Rotterdam. With the single market in 1992 we can only expect that the competition from that area will increase. By way of example, the publication the Economist last autumn carried an advertisement which appeared to be aimed at the British market. The tenor of that advertisement is encapsulated in the first paragraph of the text: Distribute via Rotterdam, it may offer you important savings on your logistical costs compared with shipping directly via the nearest port. It offers you Europe's most sophisticated cargo handling and distribution network and it puts you in control again". The unfortunate and uncomfortable fact is that in the past British ports have lost out to their continental rivals for much of the trade that is destined for or originates from the UK. Many of our exports have been trans-shipped in continental ports because the UK lacks the very large deep water facilities which are essential to handle the deep draft bulk carriers. For example, the UK accounts for some two-thirds of the business of the largest animal feed handling company in Rotterdam. Ores and fertilisers come into the country via continental ports. Grain exports have to be trans-shipped. Varying circumstances will affect many aspects and quotations of cost, but in the simplest version of a single voyage rate Lloyd's Shipping Economist last month quoted a factor of four to five times as the relative costs of freight charges between a 25,000-tonne vessel and 120,000-tonne vessel. This factor decreased with the increased capacity.

Arithmetically this could produce savings in sea freight of up to £15 a tonne. I should not like to be precise on that figure, but whatever the amount the trend of costs in the ability of larger vessels to discharge directly at UK ports is clear. In order to obtain the full cost savings, however, substantial amounts of money will have to be spent on developing bigger and better ports. That is why I believe that the proposals now brought before your Lordships' House are so important and welcome. The economies of scale are enormous and our industry must be able to compete with its rivals on the best possible terms.

We have heard a certain amount over recent years about the decline of British manufacturing and its relatively lower position in the world—lower than has applied in the past. It is not for me this evening to opine on the extent of the erosion of that competitiveness or its causes. But properly directed investment in the future must be the key. It will be investment not only in the manufacturing industries themselves but investment in the industries that support manufacturing. We have a continuing battle to improve our balance of payments. Our trading efficiency has a major part to play in this battle and it would be foolish not to assume that competition can only increase. Our industry deserves port facilities that can compete with the best.

7.15 p.m.

Lord Jenkin of Roding

My Lords, it is a great privilege to be the Member of your Lordships' House who is able to offer the House's congratulations to the noble Lord, Lord Rockley, on a remarkable and extremely well-informed maiden speech. I saw that the noble Lord succeeded his distinguished father some 14 years ago and I reflected what a pity it was that we have had to wait so long to have the benefit of his advice and wisdom. He has chosen to speak on a Private Bill, but I am sure that having heard him all of your Lordships will recognise that he spoke with immense authority. As another Member who will wish to support the Second Reading of the Bill, I found the arguments that the noble Lord advanced extremely convincing. I shall go so far as to say that they will enable me to be somewhat briefer than I would otherwise have been. We look forward to hearing him speak again and hope that we shall not have to wait another 14 years for that.

The main argument against the Bill I find strange. It is not that it is a strange argument, because one is always familiar with the arguments of those who feel threatened and who are looking for protection. But the argument which has been advanced with such force and for so long in another place appears in this Bill—a Bill to promote the improvement of our ports, promoted by a private sector company when it and its predecessors have existed over many years to provide the nation with port facilities. I find that strange however eloquently put. The noble Lord, Lord Dormand, spoke with great feeling and experience of the problems of the coal industry but I find that argument out of place in a Bill which is intended to improve the ports.

Some years ago I took part in the proceedings in another place on the Bill to nationalise the iron and steel industry. The Minister then was the noble Lord, Lord Marsh, to whom I mentioned this matter earlier today. One of the arguments—and it was a difficult argument to resist—that was adopted by those promoting the nationalisation of the industry was that in private sector hands the industry had simply failed to invest sufficiently to remain competitive. It had become unable to compete with its overseas rivals. One of the areas in which it was accused of having failed to invest was port facilities because, it was said, the importation of iron ore into this country had to be undertaken in such small ships that it was impossible to make steel economically and competitively with that high cost raw material base.

These are arguments from 25 years ago. I well remember that it proved quite impossible to rebut that argument. It was perfectly clear that the iron ore imports into this country were coming in in ships a fraction of the size of those which were going into the ports of our competitors. Therefore when the noble Lord, Lord Rockley, quoted the figures for a cost differential of shipping as between a 25,000-tonne ship and a 100,000-tonne or 120,000-tonne ship, I listened. I simply heard the echoes of the arguments we heard 25 years ago in relation to the steel industry. This is an argument with which one is very familiar. As an island race depending on trade, we must be able to conduct our imports and exports in the most economic way possible.

That means an ability to accommodate the largest deep water ships. For many years investment in the port industry was inevitably constrained because of the exigencies of public finance. However, that no longer applies. Associated British Ports is in the private sector. As we have heard from the noble Lord, Lord Geddes, it has prospered remarkably and is now in a position, from its own resources, to invest substantial sums in improving facilities and improving infrastructure—if I may use that word. How often do we hear accusations from the other side of the House that this country has neglected spending on its infrastructure? Lo! and behold we have a Bill which will produce substantial new investment in some of the most important infrastructure in this country and yet we find that it is opposed by the other side of the House.

The noble Lord, Lord Dormand, shakes his head, but I listened to his speech very carefully and I wrote down many of the things that he said. He gave me the impression that he was opposing the Bill, or at any rate the part of it which related to Immingham. He is opposing the improvement of the infrastructure of that major Humber port. The noble Lord made it abundantly clear that he was opposing that in order to protect the coal industry. A private Bill of this kind should not be concerned with airing that kind of question. As the Select Committee in another place made clear, there is a perfectly sustainable argument about what the balance of home production of coal and of imports should be. I have always argued that that balance should also include reference to exports of coal. We used to be a major coal exporting country and we could be again. However, as the noble Lord, Lord Geddes, made clear, that is a matter for energy policy.

I find it a strange phenomenon that we are being invited to reject a major part of this infrastructure Bill at the behest of an industry which feels that it is in need of some protection. I have questioned the promoters on this matter, but it is perfectly clear that the importation of coal is most emphatically not the primary purpose of the development of the new deep water port at Immingham.

Some years ago I visited all the Humber ports. I visited Hull, Grimsby and Immingham, and I was impressed with the need for substantial investment if those ports were to compete with ports such as Rotterdam.

Some investment has been made in those ports but much more is needed. It is perfectly clear that those ports will serve a wide variety of purposes regarding both imports and exports. In doing so, they will improve the competitiveness of industry and of our ports. Therefore, it is quite wrong to assume that this measure is aimed at coal imports. However, it would be unrealistic to imagine that there will be no such imports. Nevertheless, those imports will constitute nothing like the volume feared by the noble Lord, Lord Dormand, as British Coal, faced with the competition that imports might offer, will succeed in reducing its prices to the electricity generators so giving the public, both domestic and industrial consumers, the prospect of cheaper electricity than they might otherwise have obtained. The coal will still be mined. The National Coal Board is now sinking some major new pits which will provide economic coal. That is what should happen. However, to stifle the expansion and improvement of a major port like Immingham in order to prevent that happening is the worst kind of luddism. I hope that your Lordships' House will have none of it.

I end by recounting a personal impression. A year or two ago my wife and I took a trip on a container ship. We travelled from Purfleet to Helsinki. After crossing the North Sea, we visited the Europort at Rotterdam. As we sailed up the estuary and went past mile after mile of the huge and immensely impressive port facilities that Rotterdam now commands, I was struck and somewhat overwhelmed by the feeling that something had been created there which was going to make life difficult and was already making life difficult for us. As the noble Lord, Lord Rockley, said, we must compete with that. Associated British Ports is now prepared to take the major steps and make the major investments to ensure that we have a chance to do that. It cannot be right that goods going to and from this country to the rest of the world should have to cross the North Sea in one ship and be transferred in the case of imports into smaller ships to cross over to this country. That is the practice that this Bill intends to reduce, and it is hoped avoid.

While one can certainly understand and sympathise with the fears of the coal communities who see the prospects of competition looming, I hope your Lordships will feel that the argument has to be for improved infrastructure, competition, cheaper electricity and not for the bolstering up of an established industry which is perfectly capable of competing with the huge sums of investment that have been put into it in recent years. I support the Bill.

7.26 p.m.

Lord Greenway

My Lords, speaking as I do between two former distinguished and highly knowledgeable Secretaries of State I shall keep my remarks in favour of the Bill as short as possible. I need not comment on the new facilities sought by the Bill at King's Lynn and Port Talbot which appear to me both logical and beneficial extensions. Nor do I question ABP's need for a deep water bulk facility at Immingham. There is at the moment some evidence of an upturn in shipping. That, coupled with an increasing need for the replacement of ageing tonnage worldwide, could well see a return to the larger kind of bulk ships which have not been quite so in vogue recently. Already we can see that happening in the container business where much larger ships are being ordered.

If we are to compete effectively with the large Continental ports such as Amsterdam, Rotterdam, Hamburg and Antwerp we must have suitable facilities to accommodate the larger vessels. Competition is stiff as we have heard from the noble Lord, Lord Rockley, in his excellent maiden speech. I visited these Continental ports quite recently. It seems to me crazy to have to spend extra money in trans-shipment when those larger ships could be brought to our own ports.

What I am not happy about in the Bill is the attitude of the coal industry. I urge the Select Committee which is to examine the Bill not to be bludgeoned by coal's monopolistic muscle, but to look most carefully at the possible future implications for the whole of our port industry if the principle in dispute were to be allowed to become a precedent. As the noble Lord, Lord Geddes, said, our ports have been freed from the shackles of nationalisation and more recently from the dock labour scheme. There is a renewed sense of optimism in our ports. Productivity is increasing all the time and new records are being set. That position at the moment is fairly fragile. We have an unenviable reputation to live down abroad regarding our ports. Action such as that sought by the coal industry in this instance is needed by the port industry like a hole in the head.

7.29 p.m.

Lord Crickhowell

My Lords, I start by declaring an interest as a director of Associated British Ports Holdings. Soon after I became a director of that company and soon after the introduction of this Bill—that seems a long time ago now—I paid my first visit to Immingham. At that time I found the existing locked port heavily congested. One of the reasons that influenced the directors in introducing this Bill was the need to get cargo out of that port and into the bulk handling facility where it was more appropriately handled. That left the locked facility for cargo which was more suited for handling there.

Since then we have seen the abolition of the dock labour scheme. It is true that as a consequence the volume of cargo shipped through that facility at Immingham has substantially increased. To that extent the pressure is less than it was. However, the need for a competitive port that can stand against the great continental ports remains. That case has already been put very effectively by those who have spoken in the debate.

The case urged strongly by the noble Lord, Lord Dormand of Easington—and I fully understand his reasons for doing so with such feeling—would have been argued more appropriately during the passage of the Bill which was debated in Committee in this House earlier this evening. The noble Lord referred to the comments of the Select Committee that national decisions should be taken by the national government and that these were national decisions and were not decisions which it was appropriate should be taken by a committee on a Private Bill. I agree entirely with that view. A Private Bill is not the appropriate instrument for deciding on the future of the coal industry. That should properly be dealt with by national legislation on the coal industry or other energy industries.

The noble Lord, Lord Dormand, also argued on the basis of the balance of payments. Our balance of payments will not be helped by uncompetitive ports. That point was brought out superbly in the eloquent and persuasive maiden speech of my noble friend Lord Rockley. There is very little that I can add to what he said.

As was pointed out by the noble Lord, Lord Greenway, we are being asked by those who oppose the Bill to support the British coal industry in an attempt to bludgeon the British ports industry, and a whole range of other industries, in order to protect its own interests. As we have heard, among the cargoes that will be shipped via Immingham are grain, animal feeds, fertilisers and raw materials for the British steel industry.

There is a certain irony in the fact that we should be debating the Bill in the face of a petition from British Coal. I well remember when I was Secretary of State for Wales the passionate arguments that were put to me by the British Steel Corporation, then chaired by the present chairman of British Coal, for the ability to import cheap coal and raw materials into the largest possible ports. He was absolutely right then and I understand why he argues the case for British Coal now. The British Steel Corporation is a supporter of the Bill, as are many other industries, for the reasons that we have heard.

There is a matter of fundamental principle at stake. Whatever the arguments for the protection of a particular industry, it cannot be right that one industry should be protected by imposing serious handicaps on another industry which provides a basic service to a whole range of other British industries and helps to provide part of the essential infrastructure referred to by my noble friend Lord Jenkin of Roding. It cannot be right that one industry should thereby handicap a whole string of other British industries in their efforts to be competitive. It is because there is that fundamental question of principle, and because the company of which I am privileged to be a director is determined to have increasingly efficient and competitive ports, that I ask the House to support the Bill.

7.35 p.m.

The Chairman of Committees (Lord Aberdare)

My Lords, I hope that your Lordships will forgive me if I say a few words at this stage. I have listened with great interest to the debate. It would be quite wrong for me to express any views about the merits of the Bill. However, perhaps I may remind your Lordships, as I have on many previous occasions, that the Second Reading of a Private Bill, in contrast to that of a Public Bill, does not affirm the principle of the Bill. It merely gives approval for the Bill to go to a Select Committee for consideration both of the details of the Bill and the principle behind it.

Having said that, I should add that it is true that the House has the power to reject a Bill at Second Reading. However, that power has been exercised very seldom and only in the most exceptional circumstances. So far as I am aware the last example was in 1937 when the North Devon Water Bill was rejected. On that occasion the Motion for rejection stood in the name of the grandfather of the noble Lord, Lord Rockley. I should like to add my congratulations to the noble Lord on his admirable maiden speech.

7.36 p.m.

Lord Underhill

My Lords, perhaps I may add my congratulations to the noble Lord, Lord Rockley, on his maiden speech. I am sure he will not take it amiss if I say that I hope that he will speak on many future occasions on matters on which I agree with him completely.

We have heard the history of the Bill. It was in the other place for two years and three months. Details of its passage were given. However, one very important detail of its passage was omitted; namely, that the Third Reading in another place was given on 30th January by a very small majority of 23. It is no good Members saying that few Members were present. Four hundred and forty-one Members of Parliament took part in that vote, yet it was carried by only 23 votes. That is an indication of the amount of concern about the Bill.

I should like to avoid repeating much of what my noble friend Lord Dormand said in his impressive speech. He mentioned a number of facts which I hope will be taken into consideration. In speaking against the Bill it is not my intention, or that of my noble friend, to vote against the Bill. I hope that the debate will put down markers for the Select Committee to which the noble Lord, Lord Aberdare, referred. I regard that as the purpose of the debate.

As we have heard from the noble Lord, Lord Geddes, who explained the Bill very clearly, there are no objections to the projects at King's Lynn and Port Talbot. It is unfortunate that ABP linked those projects with what was obviously going to be a controversial development on the Humber at Immingham. Some will argue that that development will provide local employment. However, there is a very substantial argument, which was advanced very clearly by my noble friend Lord Dormand, that it could also lead to the collapse of entire mining communities.

The noble Lord, Lord Jenkin of Roding, referred to modern day Luddism, but the collapse of the coal industry means just that. We know the cost of endeavouring to resuscitate a mining community. I have no personal interest in the matter. I am not a member of the ports authority nor am I sponsored by a miners' union. My closest connection with a mining community is through my daughter who lives in Nottinghamshire. She knows what would happen to mining communities in Nottinghamshire if excessive imports of coal were permitted through Immingham.

Concern has been expressed that the 30 million tonnes of new capacity could be used for coal imports. ABP asserts—we have heard this argued tonight—that the Bill is not concerned with coal imports. It argues that it is up to the electricity and coal industries to work out between themselves whether coal should be imported.

During debates in the other place, reference was made to a statement to the Select Committee on Energy by Mr. Malcolm Edwards, the marketing director of British Coal, who said that the major purpose for the port development was the importation of coal. We know that coal contracts have been negotiated between British Coal and Power Gen, but those are for a period of only three years. In effect, they could be interim arrangements until the new terminal is ready, assuming that the Bill is given approval.

Sir Robert Haslam, chairman of British Coal, agreed with the greater part of the Coalfields Communities' report. That organisation is a body of communities associated with the coal industry. It has inter-party support from parties other than the mineworkers union and the Labour movement. He added that, if British Coal was not allowed to negotiate coal contracts with the CEGB prior to privatisation and was thrown out to rely on market forces, there could be a free-for-all. He made that statement in 1988 when the Bill first started its proceedings in the other place.

Lord Marshall, chairman of the CEGB, told the Select Committee on Energy that 99 per cent, of CEGB coal requirements could be met by British Coal, but that protection for British Coal might be required. It has been argued that protection is wrong. I hope that noble Lords have listened to what my noble friend Lord Dormand said. He was arguing about unfair competition and cheap coal coming in through cheap labour in other countries. We have not heard any arguments about that today from other noble Lords.

Reference was made in the other place to a statement which appeared in 1988 in the Financial Times. It stated: Much British deep-mined coal can compete well with imports in 1990 … by 1995 any saving by an all-out import policy in 1990"— the article was written in 1988— would have disappeared and the electricity supply industry would be paying millions of pounds more for imported coal than by buying British. There is a severe risk that many deep mines which could compete with imported coal in 1995 will be closed by 1990 if the Government encourage an early free-for-all on imports". I listened to the greater part of the Second Reading debate on the Coal Industry Bill on 9th February. I heard virtually all the arguments put forward. In his opening speech, the noble Viscount, Lord Ullswater, said that there would be a coal privatisation Bill in the next Parliament. He went on to say: It could not realistically be brought forward in the current Parliament".—[Official Report, 9/2/90; col. 1037.] We have there a definite statement made in this House that a coal privatisation Bill will be introduced in the next Parliament.

The noble Viscount also paid tribute to the management for the tremendous surge of an increase of over 75 per cent, in productivity since 1985. Management did a good job; but, as my noble friends Lord Dormand and Lord Mason said in the previous debate on the coal industry, men achieved that. It was men who did that. Obviously, management planned and helped the development, but it was men who created that 75 per cent, increase in productivity. Those men are concerned that, unless we look after their interests in the development at Immingham, we shall find the whole mining communities in some areas wiped out. It is no good saying that we should be greatly concerned with the effect at Immingham on our £20 billion balance of payments deficit. This will add to it. I gather from debates in the other place that what was just a few years ago a surplus on our energy imports and exports has reached a deficit, if we take energy as a whole.

An amendment was proposed in the Private Bill Committee in the other place to the effect that no coal should be imported through the new facility. That amendment was opposed by ABP. Unfortunately, the Minister will take the attitude that the Government are neutral. We may not therefore hear the argument as to why ABP opposed the amendment. If it is interested mainly in other commodities and other bulk imports, why did it resist a proposal that there should be no increase in new, additional coal imports through Immingham? If it is prepared to accept the imports through Immingham, irrespective of whether it is unfair competition or of whether it is a case of coal being supplied through cheap labour, ABP has much to answer for.

I am surprised at the references made in some speeches tonight which suggest bludgeoning by British Coal interests. Judging by tonight's speeches, I should have thought that the bludgeoning was coming from the other direction because the only people who have spoken in support of the coal communities have been my noble friend and myself. As we have heard, the chairman of the committee said that he used his casting vote on an amendment to alert the Government if the port was used for heavy coal importation. It was unfortunate that the amendment was carried only on the chairman's casting vote. I should have thought that the whole committee would have thought that measure to be desirable.

We have heard reference to the two conditions laid down by the Commons Private Bill Committee. I must repeat those. The first condition was that the promoters should publicise, by placing information in the Commons Library, the amount of coal imported quarterly through that new development. Obviously, the committee was concerned, otherwise it would not have laid down that condition. The second condition was that the fact should be brought to the Government's attention that, if coal was imported in the massive quantities suggested by the petitioners, it could have a serious adverse effect on the British coal industry.

There must therefore have been some effective contributions put to the Private Bill Committee in the other place to make it lay down that second important condition. The chairman described those conditions as binding. During the Third Reading debate in the other place, it was stressed that the Commons Private Bill Committee had taken an unusual step in drawing attention to its concern about the energy implications in the Bill of possible importation of foreign coal. I am certain that noble Lords who have come from the other place will realise that that is an unusual step for such a committee to take. Yet it thought it was vital that it should make that declaration on that occasion. Whatever else is done about the Bill, those two conditions should be written into the Bill. I hope that the Select Committee will take a long look at that matter.

On Third Reading in the other place the Minister was asked whether the Government had considered the two conditions from the Private Bill Committee. The Minister, Mr. Portillo, replied: It is not clear what effect the Bill would have on any aspect of Government policy. My hon. Friend also referred to the special report that he wishes the Government to consider. I am sure that my right hon. Friend the Secretary of State for Energy will wish to bear it closely in mind".—[Official Report, Commons, 10/1/90; col. 1007.] The Minister concluded that the matter was one that the House of Lords would have the opportunity to consider. That is what we want your Lordships to do tonight. We want to emphasise the points to the Select Committee. In a Written Answer of 30th October 1989 Mr. Portillo said: It is not for the Government to make a formal response to the special report but for the House to take it into account on Third Reading". The House nearly took it into account on Third Reading on a very substantial vote. A Government with a majority of over 100 must realise that there is something very important going on when, with 441 Members voting, there is a majority of only 23. If I had been the Minister concerned, I should have wanted to know how it came about that such a small majority was obtained.

It is significant that when one looks at the speeches at Third Reading in the other place, and at the voting lists, one sees that the number of Conservative Members of Parliament from Nottinghamshire and from an area of 50 or so miles radius from Immingham voted against the Third Reading of the Bill. It was not from a Luddite attitude but because they appreciated what it would do to their communities if cheap coal were imported in large quantities.

I hope that the Select Committee to which this Bill will go will not be bludgeoned by the port authorities. I hope that it will listen very carefully to the petitions presented to it and will take into account what has been said in the other place and in our debate tonight. It should bear in mind that we are not arguing against competition. I also know a little about Rotterdam. I go to Holland every Easter and I have seen the great masses of containers. One does not export coal by container; coal is exported and imported by way of the special terminals which the development at Immingham is to undertake.

I hope that the Select Committee will listen very carefully to what has been said and bear in mind the two conditions laid down by the special committee in the other place to see whether possibly they can be worked into the Bill by amendments.

7.52 p.m.

Viscount Davidson

My Lords, all I can do at this stage is to restate very briefly the Government's view on this Bill. But first I wish to add my congratulations to those already given to my noble friend Lord Rockley on his excellent maiden speech.

The Government have considered the content of this Private Bill and have no objection in principle to the proposals in it. It is the Government's basic policy that Associated British Ports, like other port authorities, should be free to compete on price and service. If Associated British Ports thinks that it can make a commercial success of its proposed new facilities at King's Lynn and South Killingholme, there is no government policy objections to its trying to do so. It is for Associated British Ports to persuade Parliament that the powers that it seeks are justified. The Bill has been scrutinised in detail by an Opposed Bill Committee in another place which allowed the Bill to proceed unamended, subject to a binding undertaking agreed to by the promoters.

As my noble friend Lord Geddes said, there are 10 petitioners against the Bill in your Lordships' House and they will have an opportunity to present their objections to the Select Committee. The committee will be in a much better position than we are tonight to examine in detail the issues involved and it will have the added advantage of hearing expert evidence.

In the circumstances I hope that the House will give the Bill a Second Reading so that it can be allowed to proceed in the usual way to the Select Committee for detailed examination.

Lord Geddes

My Lords, I am most grateful to all noble Lords who have spoken in this short debate this afternoon and in particular to my noble friend Lord Rockley, who made a quite exceptional maiden speech. I am grateful to him for having chosen the opportunity presented by this Private Bill to make his maiden speech. I hope that we shall hear from him frequently in the House in future. I hope that noble Lords will forgive me if I do not do the normal expert job that the Front Bench on either side of this House does when summing up a Bill. It is something outwith my previous knowledge, and I hope that I may be forgiven if I do not cover all the points that have been raised.

There have been some very interesting points—and, needless to say, ones with which I totally agree—made from this side of the House and the noble Lord, Lord Greenway, all concentrating, if I may put it this way, on the principle of objecting to a Private Bill aimed at expanding port facilities. It is objected to in favour of one particular industry and, let us not mince words, for the protection of that industry. I agree most strongly with what has been said by my noble friends and by the noble Lord, Lord Greenway; namely, that this is not the right place to voice such an objection. That does not at all mean that such objection or concern is or is not valid. That is not the point under discussion this evening. The point is whether this is the right place in which to voice such an objection. I contend most strongly—I hope that the Select Committee will support this view—that a Private Bill aimed at the expansion of the ports is not the correct place to bring in protection of the coal industry.

If I may say so very briefly at this late hour, specifically the noble Lord, Lord Dormand, in what I thought was a very impressive speech—the fact that I did not agree with it is neither here nor there; the speech and its contents I found very interesting to listen to—said (and I hope I wrote down the words correctly): Much more coal than any other material will be brought in". Shortly after that statement he said: 10 million to 11 million tonnes per annum by the mid-1990s". On that last point, to the best of my knowledge he upped the figure of the National Union of Mineworkers which had quoted some 7 million tonnes by around 30 per cent, to 40 per cent. It is remarkable how these figures grow. However, I return to what I think is the more fundamental point when he said: Much more coal than any other material will be brought in". No port operator in the world knows what will be brought in or indeed taken out from the port. His job is to produce the facilities at the port to encourage customers to come in and go out. What is carried into or out of that port is not within his jurisdiction. Naturally, he hopes that more of anything is best because that is what the port is there for.

I can give the noble Lord, Lord Dormand, and the House the projections put out by the Associated British Ports for the year 1993, which at that stage was deemed to be the first full year of operation of the port. At that stage coal imports were forecast to be fractionally under 9 per cent, of total imports and coal exports were forecast to be slightly over 7 per cent, of total exports. So slightly under 9 per cent, of all imports would be coal and slightly over 7 per cent, of all exports would be coal and not, Much more coal than any other material". That is if, indeed, those forecasts are correct. They were submitted to the Select Committee of another place. My noble friend Lord Rockley and other noble Lords spoke of competition from the great Continental European ports. Since the noble Lord, Lord Dormand, quoted from the special report, I also shall quote from it. The Select Committee of another place said: we were agreed that Associated British Ports is a reputable company with a proven track-record of operating port facilities. Immingham already has a successful and well-managed port and we consider that in itself the request by the promoters to extend their facilities there was a reasonable one. In particular, this would help the Port of Immingham compete with the continental ports of Amsterdam, Rotterdam and Antwerp. It would enable much larger ships to berth at Immingham and enable cargoes to be brought there direct instead of having to be broken up at an intermediate stage of their transit". That leads me to a most interesting argument which I heard from both the noble Lords, Lord Dormand and Lord Underhill, regarding the balance of payments. I had to listen very hard to be sure that I was hearing correctly. It is an argument that could be turned on its head. By creating a larger port, by definition one is encouraging more cargoes into and out of that port directly rather than indirectly. That in itself will reduce costs and encourage British manufacture and, it is to be hoped, British exports.

It is interesting to consider the 1993 forecast figures from ABP. I was doing so just now, if he will forgive me, during the winding up speech of the noble Lord, Lord Underhill. If one compares the 1993 forecast figures with the 1988 figures, imports are forecast to rise 26 per cent, over that period, but exports by 32 per cent. By definition, my experience in the shipping industry is that in this country exports have a significantly higher value than imports. I suggest to your Lordships that that alone would encourage an improvement in the balance of payments position, and not a retrograde step.

However, it is not my task to occupy any more of your Lordships' time. It has been said that we are an island nation; we are indeed. We live by trade, perforce. We must have the facilities at least equal to, if not better than, our competitors in order to survive as a trading nation.

As I said at the start of the debate, the proposals in the Bill will benefit this country enormously. Our ports already fall behind those of our nearest European neighbours in size and, as a consequence, efficiency. Surely we must grasp this opportunity to bring some of them up to standard. In my submission, it is imperative that ABP is given the chance to continue to build on its excellent past and its present conspicuous success. I commend the Bill to your Lordships and ask the House to give it a Second Reading.

On Question, Bill read a second time, and committed to a Select Committee.

House adjourned at two minutes past eight o'clock.