HL Deb 29 January 1991 vol 525 cc629-42

8.15 p.m.

The Earl of Stockton

My Lords, I beg to move that this Bill be now read a second time. When my honourable friend Richard Holt, the Member for Langbaurgh, rose to move the Second Reading of the Bill in the other place on 15th March last year I hazard a guess that trust ports were something of an unknown quantity. In the eyes of many noble Lords they may have been a reliable late-bottled vintage, but of no more significance.

That is no longer the case. Since then both this Bill, promoted by the Tees and Hartlepool Port Authority, and the identical Bill promoted by its sister, the Clyde Port Authority, have successfully passed Second and Third Readings in another place, and the reading in this House on 8th October last. Finally, a ports Bill has been brought forward by the Government and it received its Second Reading in another place yesterday. Consequently, the characteristics of trust ports have been widely discussed over the past 12 months. I should like to touch on only one, but that one is central to the debate that has been taking place.

Trust ports are commercial undertakings directed to the generation of profit. When the major estuarial trust ports came into existence in the 1960s—the Tees and Hartlepool Port Authority being formed on 1st January 1967, exactly one year after the Clyde Port Authority—the possibility of profit was only a distant hope. In the 25 years since then the situation has altered radically.

Many of the larger trust ports are now fully profitable, not least the THPA. They have, of course, pursued systematic and long-term investment programmes in their core port activities. THPA itself is in the process of completing a three-year programme involving £30 million of capital investment, completely remodelling the docks at Hartlepool, doubling the roll-on/roll-off and lift-on/lift-off container capacity at Tees Dock, replacing and refurbishing its entire craneage throughout both docks, refurbishing the old Smith's Dock Shipyard as the Tees Offshore Base, and replacing its entire harbour radar system. It can be said with pride that the ports of Tees and Hartlepool are equipped to meet the market demands of at least the next 20 years.

However, as profitable and dynamic commercial undertakings, some ports, and in this THPA has been in the lead, have identified the need further to develop their business activities in the face of the dramatic changes which have overtaken the transport industry in recent years. Such changes include the UK's accession to the EC and the gradual development of an integrated European market, the increasing dominance of European-scale transport operators, the technical advances of unitised handling and electronic data transfer, and of course the ending of the Dock Labour Scheme in 1989.

Clearly, the constitutions of these ports, framed as they were 25 years or more ago, were not established with those further developments in mind. Having been established as a commercial organisation and developed commercially, THPA can now go no further within its existing constitution. The Government recognised that problem, and in 1988 the then Secretary of State for Transport encouraged ports like Tees and Hartlepool to deal with the constraints of their constitutions by promoting private Bills to privatise themselves. Clearly, the Government felt that the right constitution for a dynamic, commercial, profit-making undertaking was in the private sector.

THPA reflected on the Secretary of State's advice. It reviewed its plans for developing its undertaking; its plans for developing its skilled cargo handling services beyond Hartlepool and the Tees to other customers in the UK; its plans to provide its customers with a wider range of distribution services in warehousing, freight forwarding, materials handling and road haulage; and finally its plans to build on its position as a significant property landlord to establish a wide property development and investment business: all plans that allowed it to build on its strength as the premier port in the North East, and to build on the skill and assets of its existing business.

Having considered, THPA decided that its duty to develop its undertaking required it to follow the route of privatisation so clearly pointed out by the Secretary of State. It has been an arduous task, not only in parliamentary terms. Alongside its parliamentary timetable, it has set out to build its business to ensure its successful progress after privatisation. That building has taken place around the framework which the Bill now before your Lordships is expected to provide.

First and foremost, THPA is building a business dependent upon the quality of service that it provides to its customers. Six months ago it therefore adopted a total quality initiative to transform itself into a provider of services of a standard and consistency equal to the very best names in the European transport industry. It is the first port operator in the United Kingdom to take that step, which goes far beyond simple implementation of the quality standard BS5750.

Secondly, as a provider of services it recognises that the commitment of its whole staff is essential to its success. It is aware of the tremendous success which has been achieved by the National Freight Consortium since its privatisation through a staff-led consortium. A similar consortium is a key ingredient of its plans which depend upon this Bill, and it has gone to great lengths to secure the commitment of its staff to share ownership on this basis.

Thirdly, it has recruited management able to deliver the performance required for its new developments. The willingness of the managers concerned to throw in their lot with THPA reflects their confidence in the undertaking, its plans, and the parliamentary progress of this Bill.

Finally, those managers have already secured the first property and distribution projects for the privatised business to build on. For example, agreement has been reached with the borough of Stockton, from which I take my title, for THPA to invest £2 million in redeveloping an old bakery in the borough owned by the council but for which no other developer has previously emerged. That development is scheduled to proceed just as soon as the necessary powers are available through this Bill for the purpose.

I have spoken at perhaps greater length than I should have done, in order to convey to your Lordships the intimate relationship between the progress of the Bill before the House and the process of building THPA as a commercial undertaking, to be owned by a staff-led consortium, with major benefits for employment and wealth creation in the North East.

Clearly government are now promoting their own Bill, the Ports Bill, which has started proceedings in another place. As the Secretary of State made clear during its Second Reading in another place last night, its purpose is not to supersede the Bills of the Tees and Hartlepool Port Authority and the Clyde Port Authority. Its purpose is to provide an easier route to privatisation for other trust ports who now wish to follow the example of those two pioneers. THPA welcomes that Bill. Its fundamental ingredient is the same as THPA's; namely, that the successor privatised undertaking should be bound by all the duties and obligations which previously bound its predecessor authority.

An issue upon which there has been much debate is the destination of the proceeds of privatisation. In the case of the Clyde and the THPA, the legislation to settle that question has already passed through this House in the shape of the Finance Act 1990. That provides for 50 per cent. of the proceeds to be remitted to the Exchequer and 50 per cent. to be re-injected into the privatised undertaking to secure its further development. The amount of the proceeds themselves is fixed by reference to the market value of the undertaking, determined in accordance with the capital gains tax legislation and assessed by the Secretary of State for Transport. A similar 50 per cent. levy is also projected in the Ports Bill, which also contains additional provisions with regard to property gains.

No doubt this slight difference between the two levy regimes reflects the view expressed by Government at the time of the Finance Act, that the amount of proceeds to be secured for the taxpayer should reflect the initiative of the THPA and Clyde Port Authority in promoting their own Bills. Understandably the promoters endorse that view.

I have to report to your Lordships that the Bill was petitioned against in another place by four local councils and by the Transport and General Workers' union. All five petitions opposed the Bill in principle. The Bill safely passed Committee, but the promoters were asked for three undertakings, which they willingly gave.

The first undertaking was to amend the Bill to stipulate that the company incorporating the ports of Tees and Hartlepool will retain its headquarters in the County of Cleveland. The second and third undertakings given were to ensure that an employee share ownership plan would be implemented on privatisation and that employee shares had ordinary voting rights. As I have said, it is in any case fundamental to THPA's plans that the business should be acquired by a staff-led consortium to emulate the pioneering success in this regard of the National Freight Consortium.

One other point raised at Committee in another place can also now happily be met. Concern was expressed at the impact of privatisation on those large areas of the unreclaimed Tees estuary which presently have the status of sites of special scientific interest. I am pleased to say that the Secretary of State for the Environment has now ratified an agreement reached by THPA with the Nature Conservancy Council to lease those areas for a nature reserve for at least 50 years.

This is an agreement which I believe is unique in the ports industry and which was commended by the Secretary of State as an example to be followed elsewhere in resolving competition between commercial and environmental objectives. That the agreement was pioneered by the THPA speaks volumes, in my opinion, both for its public spirit, as well as its foresight.

Nevertheless, although two of the four local authorities have dropped their petitions, the other petitioners remain. Subject to the outcome of this debate, this Bill will go forward to consideration by your Lordships in Committee, which I understand is scheduled to commence some time next month. The promoters look forward to the opportunity of ensuring through that Committee that your Lordships are fully acquainted and satisfied with all aspects of this Bill.

These concerns and others will no doubt be voiced by the noble Lord, Lord Dormand of Easington, and I shall listen most attentively to the points that he will raise. The noble Lord and I were in full agreement earlier in this Parliament during the passage through your Lordships' House, of the Tees Barrage Bill which will do so much to improve the environment of the River Tees upstream of Stockton-upon-Tees. I am hopeful that I have been able to reassure him that these proposals will do as much materially to assist the economic future of the mouth of that great river.

On that basis, I commend the Tees and Hartlepool Port Authority Bill to your Lordships for its Second Reading and seek your full support for the Bill today.

Moved, That the Bill be now read a second time.—(The Earl of Stockton.)

8.28 p.m.

Lord Dormand of Easington

My Lords, I wish to oppose the Bill. There is a great deal which can be said in criticism of it but as this debate is being held during the dinner break, and a very late dinner break at that, it is necessary for me to curtail my remarks. It is of the utmost significance that Cleveland County Council and Hartlepool Borough Council are petitioning against the Bill in this House and that Stockton and Middlesbrough Councils have passed resolutions against it. The measure, therefore, does not command much support from the representatives of the people in the area.

I place on record that I am deputy chairman of Teesside Development Corporation. I do not see any obvious conflict of interest in holding that position, but the Department of the Environment has recently issued fresh guidance on the declaration of interests to members of development corporations. In the circumstances, it is perhaps advisable that I make that declaration to the House. Perhaps too I may mention that when I was a Member of another place I had a large area of Cleveland in my constituency, and I retain a deep interest in that county and an admiration for the manner in which the local authorities and others deal with their problems.

I am also concerned that a measure of this kind should be going through Parliament at a time when the Government have just published their own Bill to deal with precisely the matters contained in the Bill before us this evening. It is surely a matter of plain common sense that every person and every organisation, not least the local authorities, should be able to study the Government's thinking on an issue as important as this before allowing Bills relating to individual ports to come before both Houses. As the noble Earl said, the Government's Ports Bill got its Second Reading in another place last night. If he has had the opportunity to read the Commons Hansard today he will have seen that, not unexpectedly in my view, it came in for considerable criticism.

The first question to be asked is; why privatisation? The port is highly profitable. It has some £23 million in cash, and I understand that its assets are worth some £60 million. Its returns are of the order of 18 per cent. The former Secretary of State for Transport, Mr. Channon, when talking about the privatisation of ports said: I admit that not all ports find it appropriate". When the noble Earl was speaking he referred to some previous Secretary of State, but it was not clear that it was Mr. Channon, so I think it is legitimate that I should make that quotation. I am pleased to see that the noble Earl agrees with that.

It is said that there will be benefits from the privatisation of the THPA, but it is necessary to say— or for somebody to say, presumably the promoters— exactly what those benefits will be. With the present undeniable success of the THPA your Lordships are entitled to ask for specific clarification concerning the benefits of privatisation and to determine who are the experts and specialists who are to bring about this magical new world on the Tees and at Hartlepool.

I was greatly impressed—and I have to say I was frightened by it—by the speech made by my honourable friend in another place, Mr. Stuart Bell. He cited examples of some of the investments made by the THPA. Time does not permit me to repeat them, but on that evidence (contained in the Commons Hansard of 15th March this year at cols. 705 to 711) one wonders what calamities would occur if the powers contained in this Bill were to be extended to the people concerned.

These extended powers have little or nothing to do with the successful running of this port. The port, judged by any criteria, is already successful, and tremendous risks would be involved in pursuing the proposals made by the promoters. The point I have just made relates directly to the question of the independence of the port authority. Parliament followed the guidance—I have seen it called the "inspiration"—of the Rochdale report. It was to have an authority that would be single minded and able to devote itself wholly and completely to promote the success of the port. Anything other than that would detract from that one aim.

At present the authority has independence, freedom and its own money. If this measure becomes law, all of that will disappear and the welfare of the shareholders in the company will be supreme. It may be argued that those shareholders would be concerned about the success of the port. That may be marginally the case, but shareholders are normally, and I have to say understandably, concerned with maximising profits. This is surely the nub of the case. Any port-related benefits are already within the remit of the port authority and they can carry on as they are now doing, and doing it very successfully.

I turn to another aspect that is a matter of deep concern to me, and that is the loss of community links. I say "deep concern" because, as many of your Lordships know, I am a north easterner born and bred. I have lived in the area all my life and believe that those who live in the north eastern counties are fiercely proud of their heritage. I have seen it from many points of view during my various experiences in the region.

The present regulations require the Secretary of State to, have regard to the desirability of having members who are familiar with the area", and that those members have experience of matters, including employment, with which the port has to deal. That is a most valuable structure—indeed, I would say an essential structure—but there is nothing new about it. It is repeated in many areas of the political, economic and social life of our country, and that is proof of its value based on many years of experience.

If this Bill is enacted all of that would disappear. In recent years we have had, more than ever before in our history, the sight of shares being dispersed among millions of people. The noble Earl correctly made reference to this in his speech. The Government boast about it, even though the position is not as they say it is, many of the shares going eventually to the financial institutions. But there is no denying that there is wider share ownership.

So we come to a fundamental change. The change is from an independently controlled port, concerned only with the success and progress of that port, to that of the parent company concerned only with the interests of the shareholders. Among the other consequences, that could mean control moving completely out of the area. If control were to move out of the area it is inevitable that local issues, large and small, would not receive the attention they deserve.

I give one example, and it is of major importance to the North East. I refer to the importing of coal. Your Lordships will be aware that the wholesale closure of pits has caused devastation to the coal communities throughout the country and to the North East in particular. I find it incredible that while the closing of pits is taking place coal imports continue to increase.

I have here the answer to my recent parliamentary question, which shows what is taking place. Of course the argument is that British Coal should produce more competitively so that there would be no need to import cheaper coal. That is a simplistic argument that takes no cognisance whatever of the conditions in which foreign coal is produced. Nor does it recognise the need to ensure security of supply from our own pits —mines that can provide coal, at the present rate of extraction, for at least another 200 years. Perhaps I should add that British coal—and I am sure the Minister is aware of this—is now being produced more competitively than ever before.

If this Bill becomes law many of us have no doubt whatever that more coal will come into the Tees and into Hartlepool. Last year the THPA authorised a feasibility study by PowerGen. It would be interesting to know what has happened to that report. One thing is certain: surely the only purpose for such a study was to see how facilities for increasing coal imports could be improved.

The three-year contract between British Coal and the CEGB is due to end in about 12 or 18 months' time. That contract has sustained our coal industry, with thousands of jobs safeguarded. What happens then? More coal imported into the North East, with more north eastern pits closing, and no alternative employment available for redundant miners. It is a bleak picture indeed for one of our major industries. I said that I would give one example and that is one. Time precludes me from giving others.

The importance and spirit of the 1966 Act, on which the existence of the THPA is based, cannot be overemphasised. It intended that the authority should devote all of its actions on the port to the exclusion of everything else. It is now turning its back on that and looking at other factors which are simply not port-related. I am no legal expert. Indeed I am not legally qualified in any shape or form. But it appears to me that the proposals contained in this Bill could well be ultra vires, not least because the authority would cease to have autonomy and independence and would not be self-supporting financially. I can think of nothing more opposed to the spirit and letter of the Act than that.

I repeat for the sake of emphasis that the shareholders would be supreme and that their interest in port-related matters would only be a part, and probably a small part, of their much wider commitment to maximising profit over a much wider field. I believe I am correct in saying that there is a legal duty placed on directors to serve the interests of the shareholders to the exclusion of every other interest. For the welfare of the port to coincide with the welfare of the shareholders at every point in the context of this Bill is for me at least an impossible concept. There will inevitably be a conflict of interests.

The local authorities, the community of Teesside, the trade unions and, I suspect, many employers in the area are not only satisfied with the work and standards of the authority but are proud of its achievements. They regard the area and the port as an organic whole. It will be nothing less than a tragedy if all of that success were destroyed or diminished in any way by this ill-advised measure before us tonight.

8.42 p.m.

Lord Clinton-Davis

My Lords, I rise personally rather than in any party capacity, because this is a private Bill, to support the eloquent observations made by my noble friend Lord Dormand, who has the significant advantage of being very familiar with the port which we are debating tonight. Of course that is not to diminish the knowledge of the noble Earl, Lord Stockton.

I believe that this is an unmeritorious Bill. It is a Bill which should not proceed. It is at odds with the principles adumbrated by the former Secretary of State for Transport, Mr. Paul Channon. They are principles which are highly germane to this Bill. I believe the Bill fails those tests. I shall come to that later. I believe that the Bill is unwanted by, and potentially damaging to, local interests and community links, notwithstanding what was said earlier in support of this Bill. I believe that for no very good reason it threatens the independence of the authority. By its very nature, as my noble friend has demonstrated, the interests of shareholders and the maximisation of profits accruing to them become of paramount concern, to the potential detriment of the port and, to use the words of my noble friend, to the exclusion of all other interests". That is a potential hazard. I believe that there was a distinct lack of credible evidence, or indeed any evidence, before the House of Commons Committee as to the alleged benefits which are now proclaimed for the Bill. One has to ask the very relevant question posed by my noble friend. Why this Bill now and why the enormous expense which has gone into it? Thousands and thousands of pounds have been spent and more is to come though yesterday in another place we had the Second Reading of the Ports Bill.

I come back to the five principles laid down by the then Secretary of State. He said, first, that privatisation is not appropriate in all cases. He stated that it is only a "prima facie option". Secondly, he said that ports must study "their own circumstances". Thirdly, the objective should be to improve the industry. When we talk about that in this context we are talking about this port and not the industry as a whole. Fourthly, there must always be "proper safeguards". Fifthly, no port must "end up worse off'. I say that this Bill fails, or at least seriously runs the risk of failing, all those five tests.

Obviously, the first two points that I made, concerning privatisation not being appropriate in all cases and the circumstances of each individual port, are inter-related. Underlying all five points made by Mr. Channon is the common theme that he was speaking in the interests of the port in question. It follows that to pursue that interest it is necessary to examine the specific port in each case of legislation dealing with privatisation. Let us examine the evidence in this case. The noble Earl, Lord Stockton, conceded all this. The evidence is clear and unrebutted that this is a successful port. It has not found itself impaired—he gave no evidence of that—by legal restraints on investment policy. In that respect I do not condone all the investments that were undertaken to which my noble friend Lord Dormand alluded.

The port is profitable. It has £23 million in hand in cash balances besides other assets. It is also efficient. All that is conceded. There is no evidence of waste at all. So my noble friend rightly asks: why embark on this Bill at all? It is a capricious enterprise. The promoters have been extremely coy about a number of relevant issues. They say that wider benefits can accrue. But why did they undertake no systematic strategic study of the opportunities which are supposed to be opened up by this Bill? Why did they decline to offer a review of principles? Why has there been no authoritative forecast of profits? Why did the chairman of the authority fail or refuse to give evidence? Perhaps he might have given evidence about his aspirations and dreams. Perhaps for him they would be dreams, but they would be nightmares for others.

The truth is that this Bill has been demonstrated not to be about the interests of the port. Indeed that has been conceded in evidence by the promoters. It is short-termism at its worst. It is a reversal of the purposes created by the 1966 Act based on the widely acceptable Rochdale Report. It is about a clearly admitted desire to embark on investments which may be wholly unrelated to the port and wholly detached from cargo handling and which are directed into property development and speculation. One has to ask —it is clearly stated in the evidence—what experience has the authority revealed to justify these expeditions into these broad trading fields?

So far as one can judge, the evidence suggests that some of the authority's enterprises outside the port have been far from successful. To add insult to injury, the £23 million in reserves built up for use in the port, together with considerably greater sums which are alluded to in the evidence, are to be used in investments elsewhere. As leading counsel for the petitioners against the Bill, Mr. Charles Sparrow, QC, said: You could not put forward a scheme in the City to dispose of up to £100 million of an enterprise without a prospectus". Yet that is precisely what the promoters are seeking to do in this case.

Turning to the third principle, what improvement will accrue to this particular industry? Will it encourage further enterprise so far as the port is concerned? My noble friend has referred already to the loss of independence on the part of the authority; the loss of autonomy over financial matters and the loss of community links. As he said, the concepts of governance put forward by the noble Viscount, Lord Rochdale, are not here challenged by the promoters at all. Their main objective can be summed up in the following way. It is the establishment of an authority able without conflicts of interest to devote itself wholly to the welfare of a specific port. Yet in this case all these functions are to disappear. The authority is to become a subsidiary of the holding company, and the holding company has absolutely no legal responsibility for its subsidiary, as my noble friend said. The interests of shareholders in the holding company are to be paramount, and the interests of the port and the welfare of Teesside will be subordinated to those interests as a matter of law. I do not deny that there may be benefits, but those will accrue to the shareholders rather than to the port.

The point has been conceded on behalf of the authority by the director of the port, Mr. Hackney, who gave evidence, when he said that the group will use the funds of the core business for group interests. That extends to all the assets of the port and is not confined to the £23 million. That is as plain as a pikestaff.

My noble friend dealt with the loss of community links, and I will not develop that further, but I want to turn to the fourth principle of the former Secretary of State, and to the matter of proper safeguards. Where are they? There is no legal obligation on the holding company to continue to run the port through its subsidiary. There is no acknowledgment of the very real risk that the port could be taken over by a competing European port, maybe with the intention of running it down rather than expanding it. These are matters of profound concern to local authorities, to the people they represent and, indeed, to employees who, unlike the authority, see the port as a vital part of the tapestry of the Teesside economy.

Another point made by Mr. Channon was that no port should end up worse off. What assurances are written into the Bill about that? Virtually all the evidence has gone the other way. In terms of investment policy by the present members, who presumably are going to stay, the evidence is, according to Mr. Aldous who appeared as a witness—admittedly on behalf of the petitioners—that the authority has simply been taking a punt. That is not good news so far as further investment is concerned.

In conclusion, I ask: why take risks with a port that is efficient and which, apart from rather disastrous investments which do not go to the root of the matter, has been well managed? The Bill fails to honour one of the claims made in favour of privatisation, even if it is a claim made by way of lip-service only. Because no benefit for this scheme can be guaranteed to accrue to the port—it is, in fact, a claim made by those who believe in privatisation that there should be such benefits—there is no such strategy here. I should like to know what consultation took place with the workforce, because the noble Earl referred to that earlier.

In the debate yesterday in another place Mr. John Ward, the Member for Poole, said: "I hope I have said enough"—

Lord Brabazon of Tara

My Lords, I fear that the noble Lord may not quote directly from speeches of Members of another place.

Lord Clinton-Davis

My Lords, I learn something every moment of the day, and I am obliged to the noble Lord. In effect, Mr. John Ward was saying that so far as Poole was concerned he did not want it to fall into the hands of a commercial organisation whose sole motive would be to make a profit for its shareholders, but he thought that it would be even worse if an asset stripper got to work there: he could in a very short time ruin the work that had been accomplished over many years to protect the harbour and its surroundings. That could equally be said of this port. I believe this to be a bad Bill and I certainly do not wish it well.

8.53 p.m.

Lord Brabazon of Tara

My Lords, it may be helpful at this point if I intervene to give a brief indication of the Government's view on the Bill. The principles which underline this Bill and the parallel Bill being promoted by the Clyde Port Authority have the Government's support. Although the measure before the House is a private Bill, it is in many respects a close parallel to the provisions in the Transport Act 1981 which converted the former British Transport Docks Board into Associated British Ports Ltd. The new company to be created will be the harbour authority, with just the same responsibilities and powers as the present Tees and Hartlepool Port Authority: no more and no less.

There is, however, one important difference. Trust ports have no explicit owners. The introduction of these two Bills therefore raised the issue of who should get the proceeds from the sale of the shares when a trust port is turned into a public company. That was a matter for Parliament to decide. The Government proposed that 50 per cent. of the proceeds of the sale of shares following enactment of these Bills should go to the Exchequer. Provisions to that effect were approved by Parliament and, as noble Lords will know, are incorporated in the Finance Act 1990.

As noble Lords have said, since the introduction of this Bill and the Clyde Authority Bill, the Government have been able to bring in their own Bill to enable all trust ports to privatise themselves, as was announced in the Queen's speech. The Ports Bill was recently introduced and, as noble Lords have said, it received its Second Reading only yesterday. Therefore there is no need for me now to go into a detailed comparison of the Government's Bill with the Bill being promoted by the Tees and Hartlepool authority. Though by no means identical, they both work towards the same result: to free the ports industry from restrictions and in so doing increase its efficiency through the privatisation of individual trust ports.

It is understandable, however, that the Tees and Hartlepool authority has decided to go ahead with its Bill. If the Bill successfully completes its progress through Parliament, it will find the initiative it has shown recompensed by the lead it will have gained over other ports which will be seeking privatisation under the Government's legislation. This seems only fair, and the Government would not wish to see this Bill prevented from going forward.

As has been referred to by the noble Lords, Lord Clinton-Davis and Lord Dormand, and indeed by my noble friend, there are a number of petitions against the Bill in this House. The petitioners will have the opportunity to present their objections to the Select Committee. I submit that the Select Committee will be in a very 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. I hope, therefore, that the House will give the Bill a Second Reading to allow it to proceed in the usual way to Committee for this detailed consideration.

The Earl of Stockton

My Lords, I have listened with great interest to the speech of the noble Lord, Lord Dormand of Easington. He referred to local authority opposition. It has in fact been muted as a result of the assurances that were given by the promoters in that two of the petitioners in another place have withdrawn their petition. I should like to apologise to the noble Lord for not being specific as to the Secretary of State. It was of course Mr. Channon, as he rightly pointed out. I trust that your Lordships will forgive me for that lack of precision.

As far as small company investments are concerned, to which he referred, the small company investment portfolio operated by the authority was raised in another place by Mr. Stuart Bell, the honourable Member for Middlesbrough, at Second Reading. He raised it in a way which might be taken to have suggested some impropriety on the part of Tees and Hartlepool Port Authority. Certainly, poor management was alleged and it was suggested that the existence of the portfolio was evidence that the THPA did not require wider powers to develop its business. The chief executive of the THPA therefore dealt with this portfolio at great length in Committee in another place. The noble Lord can be assured that the same information will be provided at Committee stage in your Lordships' House. Suffice it to say that thereafter the matter was not pursued by Mr. Bell or the petitioners, and it was expressly acknowledged by the latter in Committee that the management of the THPA was first rate and the additional powers it sought were in fact required.

The control through shareholding being held on a wider basis was further raised by the noble Lords, Lord Dormand and Lord Clinton-Davis. I fail to see that the interest and support of financial institutions outside the area, in the City of London or anywhere else, is necessarily a disadvantage for any business. In fact, I put it to the noble Lord that the support given by the financial institutions to other businesses in Teesside, such as British Steel and ICI, have hardly done anything but good for the area.

The noble Lord, Lord Dormand, also raised the question of the coal import terminal. The promoters are well aware of the arguments surrounding the possibility of major additional coal imports through the Tees for power generation purposes. Indeed, the matter was raised in another place. Moreover, in the past the promoters have responded to the noble Lord on that question. I believe that they made their position clear and it has not changed since that time. Power generation and construction interests are still examining the possibilities for the Tees. Its depth of water is ideal for the purpose and several million tonnes of coal are already imported through it by British Steel at Redcar.

The THPA has made no secret of the fact that it would welcome a new coal terminal on the Tees promoted by those interests. Its existing statutory objectives include the promotion of trade through the river. It would be a gross abuse of its position if it were to veto a terminal project put forward by bona fide interests. The position does not change whether or not it is privatised. However, I can assure the noble Lord that there are no current plans to promote such a terminal.

I believe that I should also refer to the remarks made by the noble Lord, Lord Clinton-Davis. With his experience, I think that the noble Lord should accept the fact that the transport scene in Western Europe is changing rapidly and that the development of the single market increases rather than decreases the need for the keenest management and the most competitive approach towards port and transport.

Of course, I do not share the noble Lord's rooted objection to privatisation. However, I cannot let him get away with his assertion that success today automatically assumes success in the future. Many companies in the past have proved that their development has gone downhill from a high point when they have not made sufficient change or investment in the future.

I must call the noble Lord, Lord Clinton-Davis, to book for his unwarranted personal attack on the probity of the chairman of the authority. I really had hoped to hear better from him. I see that the noble Lord wishes to intervene. I am happy for him to do so.

Lord Clinton-Davis

My Lords, did the chairman actually give evidence and, further, was he exposed to cross-examination? Moreover, when did I say that one could rest on complacent management? I gave no indication of that view; indeed, I do not hold such a view.

The Earl of Stockton

My Lords, the noble Lord did not in fact say that we could rest on complacent management; he simply implied that success today automatically bred success for tomorrow and that, therefore, there was no need for change. The question of whether or not the chairman gave evidence is irrelevant. The noble Lord said that the chairman was not prepared to make clear his dreams and then, in an undertone, he referred to such dreams as being "nightmares for others". I regard that as being a serious imputation against the probity of the chairman of the authority. However, I accept the noble Lord's assurance that he did not impute that in his remarks.

As regards the control of the company, I refer the noble Lord to undertakings which have been given stating that the shareholders will be led by a staff consortium. I can give him the absolute assurance that full consultations were held with the staff and that they are involved at all stages of the process.

So far as concerns taking a punt, I prefer to say that you cannot expand and develop a business without taking risks. I accept the fact that risks have to be taken. As one who has tripled the size of his own business over the past 10 years, I have experience of such punts and I know that they can be very beneficial.

I should like to thank my noble friend the Minister for his exposition of the Government's position on this Bill and its relationship to the Ports Bill. I have great pleasure in commending the Bill to your Lordships' House.

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

Lord Cavendish of Furness

My Lords, I beg to move that the House do now adjourn during pleasure until 9.14 p.m.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 9.4 to 9.14 p.m.]