HL Deb 24 June 1996 vol 573 cc657-70

7.9 p.m.

The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen) rose to move, That the draft order laid before the House on 4th June be approved [22nd Report from the Joint Committee].

The noble Viscount said: My Lords, if agreed, this order will enable the Secretary of State to confirm the transfer of the assets, rights, liabilities and duties of the Ipswich Port Authority to the private sector. All property, rights and liabilities of the authority and all functions conferred or imposed on the authority by any local statutory provision will then be transferred to the successor company set up by the authority.

It may be helpful to place this order in the context of the Government's general policy for ports for over a decade and more. More than 90 per cent. of the UK's trade passes through ports, and thus they play an obvious and crucial role in the economy. Well over half the tonnage handled in UK ports is now handled by the private sector. Our policies and objectives have been increasingly to expose the ports industry to the discipline of the marketplace, and to enable ports to compete fully and fairly with each other. We have sought to encourage choice and competition, to allow transport to benefit from enterprise and the investment of private capital and to limit intervention to areas such as safety and environmental issues. Through privatisation, deregulation and removal of subsidies and grants, we have encouraged the growth of an efficient ports industry based on sound commercial practices and investment, which is the envy of many others throughout the world.

In furtherance of these objectives, the Transport Act 1981 enabled the transfer of the nationalised harbour undertakings of the British Railways Board and the British Transport Docks Board to the private sector in 1981 and of Sealink in 1984. The abolition of the Dock Labour scheme in 1989 enabled many ports to modernise their working practices and to take advantage of up-to-date cargo handling technology. These actions released competitive forces which had been dormant for years and led to great improvements in productivity. Other ports, including trust ports, had to respond to the new competition to become more competitive. By the end of the 1980s some trust port authorities had come to see that their position could best, indeed perhaps only, be developed by moving into the private sector, and at the beginning of this decade Tees and Hartlepool, and Forth, started to pursue the lengthy and expensive Private Bill process required for this transfer. It proved difficult and the Government, by way of an alternative, introduced a Ports Bill. The Ports Act 1991, as it became, is an enabling measure, providing a simpler and quicker mechanism than the Private Bill procedure for trust ports to privatise themselves. It also permits the Secretary of State to compel the larger trust ports to privatise.

The procedure in both types of privatisation is similar. A scheme is drawn up for the transfer of a trust port's undertaking to a Companies Act company formed by the vendor port authority. The scheme must be confirmed by order. In the case of compulsory privatisations, parliamentary approval is needed for the transfer order. The subsequent sale of such a company into the private sector, which requires the consent of the Secretary of State, completes the privatisation process.

So far six ports have used the voluntary privatisation procedure in the Act: in 1992 Tees & Hartlepool, Clyde, Forth, Medway and Tilbury, and in 1995 Dundee. All the 1992 privatisations have been a success and I am confident that that of Dundee will prove to be another. The post-privatisation increase in valuation of two of the ports, Forth and Tilbury, is one clear indication of the improvement in operating ability following privatisation. It also demonstrates investor confidence in the profitability of private sector ports. Tonnage handled at Forth rose from just over 23 million tonnes in 1992 to 44 million tonnes in 1994. The Government's intention in seeking the compulsory privatisation of the Port of Ipswich is to create the opportunity for that port also to benefit from such improvements.

The powers of compulsion in Section 10 of the Act enable the Secretary of State to consult the board of any trust port with an annual turnover of over £5.6 million to ascertain its views on privatisation. My right honourable friend, the former Secretary of State, consulted the Ipswich Port Authority last June. The authority was given three months to respond with its views. Following its submission, the Secretary of State wrote to the chairman on 7th November to direct the authority to form a successor company and to prepare a transfer scheme to enable the authority to transfer all its property, rights, liabilities and functions. The Ipswich Port Authority met the requirement within the Secretary of State's timetable, and subsequently published the statutorily-required notice inviting representations to the transfer scheme and articles and memorandum of association of the successor company. Only one representation was in fact received and this related to matters which are appropriate for consideration during the working up of the sale documentation. The scheme submitted closely followed the model provided by my department and the few technical amendments now incorporated in the scheme, appearing as a schedule to the order, have been agreed with the Ipswich Port Authority.

The Port of Ipswich is one of the oldest in the country. Dating back to Roman times, its first charter was granted in 1199. The port has long served local traders and has a long history. The port has been continuously developed, with major works taking place during the 1830s and again in the 1920s. Throughout the years the emphasis has been on agricultural and, more recently, on oil products. In the 1970s the port also developed the ability to handle ro-ro and container traffic and had its most successful year ever in 1994. More recently, intense competition from the Channel Tunnel and other ports, notably Tilbury, and the ease whereby the non-local customer base is able to switch ports, have removed a substantial proportion of Ipswich's trade, in particular the ro-ro and container traffic. By contrast, national trade through our ports has risen from 495 million tonnes in 1991 to 538 million tonnes in 1994. To help counter the decline at Ipswich, the management of the port has moved ahead with plans to redevelop the port and has already found new trade to balance the loss of trade to Tilbury.

The board of the authority originally represented to us that privatisation was not in the best interests of the port, but I now understand that subject to parliamentary approval, it will proceed with privatisation expeditiously as the best way to remove uncertainty about the future of the port and increase the confidence of potential customers. The sale of the port, most probably by a trade sale, will be undertaken by the Ipswich Port Authority and its advisers. The Secretary of State will have to approve the choice of purchaser and completion is expected in early spring 1997, if this order is accepted by the House. I commend the order to the House.

Moved, That the draft order laid before the House on 4th June be approved [22nd Report from the Joint Committee].—(Viscount Goschen.)

7.15 p.m.

Lord Carmichael of Kelvingrove

My Lords, I thank the Minister for that very full explanation. His information seems to be more up-to-date when he says that the people of Ipswich have changed their minds. All the information I have is that the Ipswich Society in particular is looking more to the community as a whole than just the port itself, although it is very conscious of the fact that the port is a very important part of the community. The society has provided very interesting and crucial information to both Houses.

I got the impression that it was a very proud and a very civically organised and oriented society. It has gone to great trouble to inform both Houses of its concern, fears and worries for the future of the port and also—and this is very important—for the town.

I understand that the borough council and its predecessors have run the ancient port since about 1200. I am interested in the deeper research that the Minister has been able to undertake saying that the port goes back to Roman times: I go back only to 1200. The port has been sustained and developed over the past almost 800 years by the industry, energy and money provided largely by local effort. If the letter sent by the Ipswich Society to the Secretary of State for Transport is accurate, and I have no reason to doubt its contents, then the privatisation of the port without compensation to the local economy is unforgivable.

The town has plans for new economic development dependent on the use of the port area and in particular as regards the Victorian wet dock of which it is particularly proud. In its day it was the largest in existence. I am told that if these assets are removed from local democratic control and, once the port is privatised, are privately developed for the profit of a few, who may have no interest in Ipswich and who may in fact belong to another part of the world, it will be an ungrateful blow to the people referred to in the new political jargon as "Middle England".

I had intended to paraphrase parts of the letter from the Ipswich Society, but it is so well put that I find it difficult to improve on it. It states that the new company that is to take over does not seem to be required to, continue the activities of the port of Ipswich, but rather to be allowed to do so, if it so chooses. Article 2, moreover, indicates that the registered office of the company can be situated anywhere in England and Wales, rather than in Ipswich: as is currently and has hitherto always been the case. Article 3, section AM, furthermore, permits the company to amalgamate with any other person and to procure the company to be registered … anywhere in the world. The potential remoteness of the company from Ipswich carries with it an implied threat of minimal interest in Ipswich". I am sure that the Minister will appreciate that the whole being of a proud little place like Ipswich is tied up with its port. The area would not appreciate it if the port was owned by a company in the Bahamas which had no interest in its core business.

The society, as a local body carrying out its legitimate responsibilities to its members, states that it, is equally concerned over the lack of any requirement in the Memorandum of Association for Ipswich Port Ltd to continue with the progress already made, in association with the Ipswich Borough Council and others, towards projects for the redevelopment of the older parts of the port for non-maritime functions such as housing, leisure, recreational, educational and other activities and for associated services, including transport facilities. Agreements on these prospects are vital to the successful rehabilitation of a large area of south-central Ipswich". Local people feel that they may lose something into which they have put a great deal of energy and thought. They realise that the port, even with all its vitality, has limitations in the modern world and that it does not need as much space as was perhaps once required. That is why local people and bodies have sought to extend housing and recreational facilities in the area.

The Ipswich Society also states: The port of Ipswich has had an essentially local character in terms of ownership, management and financing over many centuries (since the first public quay was built in 1308) and a close and intimate relationship with the governance of the Borough over an equally long period. We would thus have expected the Memorandum of Association of Ipswich Port Ltd to specify that representatives of Ipswich be members of the board of the company (through the Borough Council and/or the Chamber of Commerce)". There may be time to consider that. I think that such a company would be wise to get the local people on its side. The society continues: We would also have expected that provision be made for a port Consultative Committee, consisting of representatives of local interests on all matters relating to the use of the port, its land holdings and its associated facilities". There is absolutely no evidence of any enthusiasm among the people of Ipswich for this privatisation. Indeed, a survey conducted by one of the area's two MPs, Mr. Cann, indicates the reverse. Overwhelming opposition was displayed against any notion that the Government should receive the proceeds. Again, there was overwhelming support in favour of an obligation being imposed on any purchaser to continue its use as a port. It is also a question of compensation for the town of Ipswich, not only for the land, but also for the developments on which so much energy has been spent over the centuries, all of which was internally sourced or came from profits from the port.

I hope that the Minister will think about the damage that could be done. Places such as the Clyde have enormous hinterland developments, but its port is an enormously important part of a small place such as Ipswich. It is a question of chalk and cheese. The Minister quoted the example of the Clyde which has, indeed, been successful although to some extent the traffic has declined for technical reasons. Ipswich is a different matter altogether. It is a small town that is dependent on the port almost for its very existence. It should therefore be given more support.

I believe that this is an order too far and that the Government will pay for it electorally in the area around Ipswich. There is already one Labour MP there and I should not be surprised if, because of this matter alone, after the election we have two Labour MPs there. This will then have been a costly privatisation of a port that could have continued its development in a part of England that badly needs it.

7.25 p.m.

Lord Avebury

My Lords, the Minister was somewhat disingenuous in his preamble to his description of the order. He tried to imply that what was done in respect of British Rail harbours and what has been done so far in the voluntary privatisation of six ports was on a par with the order we are considering. In the case of the British Rail harbours, the state was perfectly entitled to denationalise them, as has happened with other assets. In the case of the private ports, their future was for them to decide. However, this is the first time that your Lordships have had to consider a scheme for compulsorily transferring a port into the private sector against the wishes of the local inhabitants and against the original wishes of the Ipswich Port Authority.

Moreover, we are considering an order which was published on 5th June. Very little opportunity has been given to anyone to express an opinion. The sale of the port is a most important matter for the whole region as well as for the town of Ipswich, yet it is to go through without any pretence at consultation or even explanation. The Department of Transport has not bothered to hold any local meetings to explain the proposals, and the correspondence between the department and the Ipswich Port Authority is, I understand, classified material.

As the noble Lord, Lord Carmichael, said, Ipswich Borough Council is not to appoint any members of the new authority although it does appoint one of the trustees of the Ipswich Port Authority. I understand, however, that he is not allowed to speak on these issues and has made no public comment. So much for open government.

We have heard something of the history of the port. There is a dispute only about whether King John granted the original charter to the borough in 1199 or 1200. However, the fact is that the port has been going for a long time. Indeed, there has been trade there since even earlier when the port of Ipswich was used by the Angles for transporting goods between their original territory across the North Sea and their new lands in England.

Down through the centuries, the local people owned their port and invested in it. In 1842 they constructed what was then the largest wet dock in the world. As the Minister acknowledged, they poured substantial investment into the port in both the 1830s and the 1920s. The port has made a huge contribution to the prosperity of the town and the region. By 1992 it was still handling 5 million tonnes of cargo a year.

However, trade at the port has recently fallen—to an average of one ship per working day, according to the East Anglian Daily Times. Today's paper, which lists the arrivals for the week, gives three at Ipswich, compared with over 100 at Harwich and 200 at Felixstowe. As the Minister explained, that is because P&O North Sea Ferries withdrew last year, cutting the port's revenue by some £4.9 million or 38 per cent. of the total for the year. That was followed by the departure of Geest North Sea Lines and Bell North Sea Lines, which have concentrated their operations at Tilbury. The decisions of these operators may or may not have been influenced by the looming threat of privatisation, but what is clear is that the acquisition of new business to replace the losses was made far more difficult as a result of the uncertainty created by the threat of privatisation. Trade fell from £13 million in 1994 to £9.5 million in 1995. It has been estimated that in the current year the figure has fallen to £6.5 million, although I understand that trade has begun to pick up recently through the efforts of the port authority.

No doubt the port authority has done its best to keep the business going, even though the passing of this order will bring its existence to an end. The order provides for all the property and functions of the authority to be handed over to Ipswich Port Limited, which has been formed as a result of directions by the Secretary of State under Section 10(2) and (3) of the 1991 Act, as the preamble to the order recites.

One might imagine that the authority would have been demotivated by having to organise its own euthanasia, having first protested against it but finally succumbing to what was inevitable. Worse still, the exercise is budgeted to cost £887,000. Only the most irrational Tory doctrinaire can believe that such a diversion of money and management effort—pointless expenditure for completely non-productive purposes—can do any good for either Ipswich or the country as a whole. One negative result for the city has been the abandonment of negotiations which have been taking place between the authority and the borough council for an exchange of land between the two bodies. The borough was to acquire land around the wet dock for an important cultural initiative—the Centre for the English Story—which it was hoped would attract millennium funding and become a tourist spot for visitors from all round the world. Even if the new owners are sympathetic to the scheme, the millennium boat has been missed. That is the only way in which the project could have been made financially viable.

As the noble Lord, Lord Carmichael, has already observed, the transfer scheme has been opposed all along by the Ipswich Society. When it canvassed the views of its members, 108 replies were received all but one of which supported the proposition that the society should persuade Parliament to reject the order. The society tried to persuade the local newspaper, the Evening Star, to test public opinion more widely by conducting an opinion poll, but the paper did not respond. Dr. Peter Odell, chairman of the society, wrote to the Secretary of State on 5th April to make representations against the scheme and the provisions of the memorandum of association of the company to be established by this order. He referred to a previous letter of 16th August 1995 in which the society had argued for postponement of the compulsory privatisation, reaffirmed the views then expressed and added further points dealing with the memorandum.

I briefly summarise these points. Activities in Ipswich are not the prime objectives of the company, nor is the company even obliged to continue to operate the port. The registered office can be anywhere in England and Wales and the company is empowered to merge with another company and thus to become registered abroad. The company may demolish any building and sell off any of the land and buildings in the port. There are 30 permitted activities in which the company may engage, only one of which concerns the port itself. There is no obligation to continue to work with Ipswich Borough Council and others for the redevelopment of the older parts of the port for non-maritime activities, such as housing, leisure, recreational, educational and associated facilities such as transport. The board does not have to include a single director from Ipswich, let alone any person who is representative of local interests; nor is there any consultative committee through which these interests may be raised with the company.

One would have thought that, even if there had been no statutory right to make representations, the Secretary of State would have had the courtesy to answer a letter of this kind. When a person writes in response to a public invitation issued in accordance with a legal requirement it is quite intolerable that he should receive no answer right up to the day when the order is supposed to be approved. Surely, the House is entitled to demand that a full reply be given and that adequate time be provided for its consideration by the society, and for any further representations that it may wish to formulate in the light of the Secretary of State's response, before the order is passed.

Given the way that this process operates, we have to approve the order without having the faintest idea of who the future owners will be. Ipswich Port is to be sold off under provisions which are not even in the order. They are to be sold under tender procedure. It is for the Secretary of State to decide in his absolute discretion which of the tenders to accept. The bidders could offer to meet some of the concerns expressed, and theoretically a higher bid without concessions might be rejected in favour of a lower bid which was accompanied by promises of local co-operation and consultation. But no such assurances could be made legally binding on the new company.

The proceeds of this sale go to the Secretary of State. To disguise the fact that he is taking something that does not belong to him, the Act provides that the purchaser has to pay double the real consideration for the sale. The Secretary of State then charges a 50 per cent. levy on the sale and the other 50 per cent. is handed back to the purchaser. This is the kind of deal that one would expect from shady traders in Walworth Road market. If someone takes an asset away from me without permission or compensation I call it theft. Perhaps there is a different kind of moral principle at work when the state confiscates and sells for its own benefit assets that have been an integral and important part of a city for 800 years. Accountants may say that the town is not the owner and so nothing has been taken from it. But it was the borough which created the port and sustained it by investment and mutual co-operation over the years.

My party is against the compulsory privatisation of ports. Our Federal Conference passed a resolution in March 1991 opposing this feature of the Ports Bill and calling for legislation to take account of the wishes of local communities as well as environmental considerations. This order rides roughshod over the wishes of the people of Ipswich. There has been no pretence of finding out their views. Not only does it fail to make any provision to safeguard the local environment; it gives carte blanche to the future owners to do whatever they can get away with under planning laws.

As recently as October 1994 your Lordships reaffirmed that this House had an unfettered right to vote on delegated legislation. This particular order is so uniquely objectionable that I propose to test the feeling of the House this evening.

7.38 p.m.

Viscount Goschen

My Lords, I am grateful to noble Lords who have contributed to the debate. The noble Lord, Lord Carmichael, took us through a number of the provisions and some of the history of the port. He made clear the view of the Labour Party as to this provision, as indeed the noble Lord, Lord Avebury, made clear his view. However, since he spoke as a Back Bencher I am not sure whether or not he expressed the official view of the Liberal Party. Since there is a considerable amount of nodding on the Front Bench of the Liberal Party I presume that the noble Lord was performing a dual role. Of course, I fully accept that.

A good deal of anxiety has been expressed in the House this evening. I believe that a number of points have not been fully considered. Parliament has passed the Ports Act 1991. Therefore, all accusations of theft and so forth are quite unfounded. The noble Lord, Lord Avebury, charged me with being disingenuous to the House. In no way is that true. The other points not fully taken on board by the noble Lord, Lord Carmichael, and not recognised at all by the noble Lord, Lord Avebury, concerned the protection and the fact that the successor company would inherit not only the assets but also the statutory obligations of the port. To all intents and purposes, that point was totally ignored by the noble Lord, Lord Avebury, in his peroration. I firmly believe that this order, should it receive the approval of the House, will provide a number of benefits to Ipswich.

The noble Lord, Lord Carmichael, objected to the fact that no compensation was to be offered to the people of Ipswich. I see no reason why any compensation should be paid to the people of Ipswich. Compensation is to cover losses, as it were. The assets owned by the trust port belong to the trust port itself. As it is a trust, by definition it has no legal owners. So the assets do not belong to the people of Ipswich; they belong to the trust port. We are taking the trust port into the private sector. We believe firmly that that will produce full benefits.

Another accusation made by the noble Lord, Lord Avebury, which was wrong was that there was no consultation. There was consultation. We followed to the letter what was laid down by the Act which Parliament approved some five years ago. The Act allowed six weeks for views to be expressed, and only two were received.

The noble Lord's accusation that we did not consult properly was wrong. We did consult properly. Both of the representations were considered fully.

Lord Clinton-Davis

My Lords, will the Minister say from whom the representations came, and whether they were representative of a number, perhaps even a large number, of people?

Viscount Goschen

My Lords, I shall have to give the noble Lord precise details of those representations at a later date so as to ensure that I do not make any error when conveying the details to him.

The important point is that with many other privatisations and statutory processes we have received many, many representations. In this case only two were received. I shall inform noble Lords whether they were by way of being a multiple response.

Lord Avebury

My Lords, if the Minister received only two representations, why does he have such difficulty in answering the question?

Viscount Goschen

My Lords, before the Liberal Benches dissolve entirely into mirth on this point, we have a consultation process. Responses are invited. They are submitted. They are then considered. It would not be appropriate to answer them individually. That has never been the process with consultations. Responses are sent into a consultation exercise. Full consideration is then given to them. In the middle of a consultation, it would be wholly inappropriate to treat each representation as an individual piece of correspondence, to reply to them and then to have an ongoing debate.

Before the noble Lord, Lord Harris of Greenwich, rises to his feet, that is the process that we take forward with consultation exercises. My department has many of them under way at the moment. That is the way we shall continue to run consultation exercises. I dare say that that was even the way they were run when the noble Lord was in government. If I am wrong, I am sure that he will correct me.

Lord Harris of Greenwich

My Lords, I am most grateful to the Minister for giving way. When I was in government, which is now a substantial number of years ago, we had one habit in the Home Office. That was to reply to letters. Apparently the noble Lord's department does not consider it necessary to do that. That seems a little odd.

Viscount Goschen

My Lords, we could test the system. The noble Lord could write to me and see whether he receives a response. It is my practice to respond to correspondence that I receive. The noble Lord is splitting hairs. We had a public consultation process. Some public consultations involve many thousands of responses, in which case it would not be appropriate for the Minister to sit down in the middle of it and answer every one, in order to obtain further representations. That is not how the process works.

I am sure that we can find out what happened with consultation exercises when the noble Lord was in government if records go back that far.

I was demonstrating, I trust, the effects of the order. It will enable the management fully to develop the port's potential and to respond to the commercial environment. We have had a good debate about some of the issues. The issues that have been debated have wholly ignored that this country's port industry has become a huge commercial success. It has become efficient in the face of its history of inefficiency. That is not the case now. Our industry has a great deal of which to be proud.

We believe that this order will provide access to share capital as well as loan capital, which was not historically available. We believe that it makes the port more attractive to companies which might wish to go forward in joint ventures—another point ignored by the noble Lord, Lord Avebury. It also enables the management more easily to develop land surplus to its requirements. It will make for easier diversification of the port's activities.

The management of the Ipswich Port Authority has now accepted that uncertainty would be bad for the port and that privatisation would help to resolve that uncertainty. The noble Lord, Lord Avebury, might like to be aware that a press statement that was released on 21st June by Mr. Alan Howell, the chief executive of the port, states that the authority has been informed that Parliament will consider the confirmation of the order which will effectively start the sale of the Ipswich port. It states: In considering its position the port has recognised that the overriding requirement is that the situation should be resolved". The noble Lord appears to be ignoring that too. The chief executive continues: The effect of uncertainty on the port's business must be quickly eliminated. This is widely recognised by both management and employees". The chief executive goes on to say: Whilst opposing the principle of compulsory privatisation"— something about which I have spoken— Ipswich Port Authority acknowledges that the sharp fall in the port's trade since the summer of 1995 means that a further period of uncertainty will be detrimental to the future of the port and must be avoided". The important quotation comes later, where the document states: Now that the Government has taken the decision to move ahead with the privatisation, the Port Authority has accepted this decision and does not intend to reopen the debate". It is the clear and primary objective of the Ipswich Port Authority to ensure that Ipswich Port not only remains as a port but grows as a port. That is an interesting point for the House to take into consideration. The issues surrounding the assets and the port's obligations are important. I would not say that they were misrepresented, but perhaps that they were misunderstood by the noble Lord, Lord Avebury. He is painting a disaster scenario while ignoring those ports that have already privatised. Yes, they have privatised voluntarily, but after that the port is in the private sector. It is in the same position as Ipswich in that it has obligations imposed by various local Acts. It operates within that. It does not just close down, asset strip and forget all about it.

The noble Lord paints a scenario that does not exist and will not exist. He ignores the fact that this country's ports industry has moved considerably into the private sector. The disaster scenario that he painted of a port just closing down and ignoring its customers has failed to happen. Those ports which have moved into the private sector have been successful and are now working much more closely and much more fully with their customers to the benefit of those customers, to the region as a whole and to the economy of the country by operating as efficiently as possible.

One harkens back to the bad old days of the dock labour scheme when this country had an incredibly inefficient ports industry. Now that labour relations have changed considerably with the abolition of the dock labour scheme, the ports can now take full advantage—

Lord Avebury

My Lords—

Viscount Goschen

My Lords, the noble Lord made a long intervention. I am attempting to answer all his points as fully as I can for the benefit of Parliament and all those in the House today.

Lord Avebury

My Lords, I did not mention the dock labour scheme.

Viscount Goschen

My Lords, the noble Lord should have done so because the dock labour scheme was one of the major considerations in releasing the ports industry of this country to take full advantage of the new efficiencies.

Earl Russell

My Lords, earlier today the Government opposed a Motion by the noble Lord, Lord McIntosh of Haringey, that we should not complete the Asylum and Immigration Bill tonight. Is it the Minister's wish to indicate his covert support for that Motion?

Viscount Goschen

My Lords, I am here to listen carefully to the provisions of the Asylum and Immigration Bill. I shall listen to many noble Lords, including the noble Earl, Lord Russell, who occasionally speaks at some length on many important issues.

This is an important issue. The noble Lord, Lord Avebury, indicated his intention to vote against secondary legislation, which is not the normal practice of the House. I know that the noble Earl, Lord Russell, is an expert on whether or not to vote against secondary legislation. He has raised the issue on a number of occasions with regard to social security legislation. Nonetheless, this is an important issue; we are considering a major plank of privatisation. The noble Lord, Lord Avebury, indicated his desire to vote against it. I am merely trying to give the House the fullest possible explanation of the provisions of the order so that the House can make its own decision.

Lord Carmichael of Kelvingrove

My Lords, I have listened to the noble Viscount. I do not believe that he has convinced a great number of people in this House. However, we accept the convention, although in this case not with enthusiasm. The enabling legislation was strongly opposed in the other place, but in this House we have a convention not to vote against secondary legislation.

Viscount Goschen

My Lords, I am extremely glad to have the noble Lord's clarification of the Official Opposition's position on the principle of voting against secondary legislation. That is extremely helpful, not only for the wider issue but also in respect of tonight's deliberations. Nonetheless, the noble Lord, Lord Avebury, spoke strongly against the order. I believe that he has fundamentally misunderstood a number of its provisions.

The central point is how existing customers will be protected. All successor companies are required to take on a former trust port authority's statutory obligations after privatisation. As a general rule, port authorities have an obligation to be open to all customers for the loading and unloading of goods and for the embarking and landing of passengers. Port charges are subject to an appeal process. Therefore, I do not believe that the noble Lord, Lord Avebury, needs to be concerned about that matter.

The noble Lord raised the issue of surplus land, operational land and the disposal of surplus land. The company which will own Ipswich Port Authority, although in the private sector, will nonetheless be a statutory harbour authority. It may not close the port or dispose of operational land without the consent of Parliament. It will inherit by means of the transfer scheme not only the assets and liabilities of the port but also the legal duties, including observing the right to use the port. Dues and charges must be reasonable.

Any gain on land disposed of during the first 10 years after privatisation by way of sale or long lease is subject to a clawback levy payable to government. Disposals in the first five years are subject to a 25 per cent. clawback. In the sixth and seventh years they are subject to a 20 per cent. clawback. In the eighth, ninth and tenth years they are subject to a 10 per cent. clawback.

The noble Lord was also concerned about the way in which the levy works. I do not see that as a problem. The noble Lord accused me and the Government of acting like second-hand car traders. I forget his actual words but they were something of that nature. That is not the case. The way in which the sale process is due to work was enshrined within the Ports Act 1991. It is very clear. Parliament voted on it and it was approved by Parliament, so there is no underhand nature. The Government are not suddenly turning up with a brand new scheme. The fact is that it was agreed by Parliament. The way the levy works is that 50 per cent. goes back and 50 per cent. is received by government. There is nothing underhand. The scheme has been approved by Parliament.

I have spoken at some length in order to explain the provisions of the order—

Lord Avebury

Hear! Hear!

Viscount Goschen

Much to the annoyance of the noble Lord, Lord Avebury. However, I hope he will realise that I do so in order to explain fully to him that his fears are groundless. Consultation did take place and the Government have acted within the provisions of the 1991 Act. There is nothing to worry about. Privatisation has been of great benefit to the ports already privatised. I understand there was some original uncertainty. But the Ipswich Port Authority has agreed that privatisation going forward with this order is the best course. I hope that with that explanation the House will approve the order. I commend it to your Lordships.

7.56 p.m.

On Question, Whether the Motion shall be agreed to?

Their Lordships divided: Contents, 72; Not-Contents, 16.

Division No. 3
CONTENTS
Attlee, E. Kingsland, L.
Balfour, E. Kintore, E.
Belhaven and Stenton, L. Lane of Horsell, L.
Blaker, L. Lawrence, L.
Blatch, B. Leigh, L.
Boardman, L. Lucas, L.
Brabazon of Tara, L. Lucas of Chilworth, L.
Bridgeman, V. McColl of Dulwich, L.
Broadbridge, L. McConnell, L.
Brougham and Vaux, L. Mackay of Ardbrecknish, L.
Burnham, L. Marlesford, L.
Carnegy of Lour, B. Miller of Hendon, B.
Carnock, L. Monk Bretton, L.
Chalker of Wallasey, B. Mountevans, L.
Chesham, L. Napier and Ettrick, L.
Clark of Kempston, L. O'Cathain, B.
Courtown, E. Pearson of Rannoch, L. [Teller.]
Cranborne, V. [Lord Privy Seal.] Rankeillour, L.
Crickhowell, L. Rawlings, B.
Darcy (de Knayth), B. Reay, L.
Dean of Harptree, L. Rennell, L.
Denton of Wakefield, B. Renton, L.
Elis-Thomas, L. Renwick, L.
Flather, B. Seccombe, B.
Gardner of Parkes, B. Shaw of Northstead, L.
Goschen, V. Skelmersdale, L.
Greenway, L. Strathclyde, L.
Hacking, L. Teviot, L.
Harding of Petherton, L. Trumpington, B. [Teller.]
Hardwicke, E. Ullswater, V.
Henley, L. Wade of Chorlton, L.
Hesketh, L. Wakeham, L.
Hogg, B. Westbury, L.
Howe, E. Wharton, B.
Inglewood, L. Wynford, L.
Kimball, L. Young, B.
NOT-CONTENTS
Avebury, L. [Teller.] Rochester, L.
Beaumont of Whitley, L. Russell, E.
Geraint, L. Seear, B.
Hamwee, B. Thomas of Walliswood B [Teller.]
Harris of Greenwich, L. Thurso, V.
McNair, L. Wallace of Saltaire, L.
McNally, L. Williams of Crosby, B.
Ogmore, L. Winchilsea and Nottingham, E.

Resolved in the affirmative, and Motion agreed to accordingly.

The Earl of Courtown

My Lords, I beg to move that the House do now adjourn during pleasure until 8.10 p.m.

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

[The Sitting was suspended from 8.4 to 8.10 p.m.]