HL Deb 14 January 2004 vol 657 cc654-72

8.28 p.m.

Lord Geddes rose to ask Her Majesty's Government what steps they are taking to redistribute light dues in an equitable manner across all users.

The noble Lord said: My Lords, I am delighted to see the quality of noble Lords lining up to speak on this issue. May I also say how delighted I am that the Minister has chosen this subject this evening with which to open his account in your Lordships' House? The only problem, if I might say so, is that, by convention and custom of the House, we are unable to intervene in his winding-up speech. I assure him that on other occasions we will be so entitled, but this evening he will have a clear run.

For the record, let me outline what this arcane system of light dues—this tax—actually is and why I feel so strongly that reform is long overdue. Light dues are an historic tax on shipping users in UK ports. Vessels are assessed for light dues on their size and frequency of call. Shipping companies who operate from and to UK ports facilitating UK trade and contributing substantially to inward investment, and direct and indirect UK employment, have long campaigned against light dues. Their issue is that they should not have to pay for a service which they do not have to pay for at other European ports. Such shipping lines, of course, have the option of using other ports on the Continent as their primary European port of call. If the continuation of this tax makes our ports uncompetitive, that would clearly be very damaging to the UK economy.

As a result of long and concentrated action by such companies, the Department for Transport commissioned an economic review into the tax in May 2002. I sincerely hope that the Minister will be able to give us a progress report on that review and some reassurance about its outcome.

Manifestly, all ships have to pay for the costs of visiting a port. Those costs cover a range of services, including pilotage, port costs, towage, mooring costs, and so forth. However, what distinguishes UK ports is that the additional light dues cost of up to £ 16, 000 per port call is charged on each merchant vessel. That does not happen elsewhere in the world.

UK ports have made great strides over recent years in order to improve efficiency and introduce modern operating methods. Yet that enormous effort made by both port workers and management alike is being undermined by a government tax that threatens the competitiveness of our ports compared with those on the Continent. Other noble Lords may well enlarge on the statistics; I should like to give one. Like for like, Southampton is 25 per cent more expensive than Rotterdam.

Your Lordships will appreciate that the ports industry is increasingly competitive. It is vital for the UK economy that our ports can compete on equal terms with our European rivals. The Government maintain that charges should be fair and equitable and that the user should pay. I do not dispute that. Yet light dues are neither fair nor equitable. Many who need the services of navigational aids by and large do not pay for them. But those that may well not need them, do pay. That is perverse. If, because of this additional tax, shipping lines decide to use alternative ports on the Continent—I have already mentioned Rotterdam—and tranship goods to the UK, who will that benefit—the UK economy or our European competitors? Surely the answer is clear.

In opposition, Labour promised the abolition of light dues in its 1993 policy paper Full Steam Ahead, which cited the, commercial disadvantages to British port operations and shipowners", caused by this tax. But have the Government honoured that promise? No, as of yet they have not, but as always we live in hope.

The latest indictment of light dues came in Chapter 9 of the House of Commons Transport Select Committee Ports Report of 13 November 2003, which condemned light dues with these words: The UK has historically employed a system of light dues to cover the cost of navigation aids. Such a system is inconsistent with other European countries and distorts competition. The Government should reconsider the entire concept of light dues". That was a Labour Party promulgation.

Of course, this was not the first time that the tax had been condemned by a Select Committee. As recently as 1834—yes, 1834—a highly regarded Select Committee called for the abolition of this tax. So this tax has been considered outdated and unfair for 170 years.

My Question relates to the redistribution of light dues in an equitable manner. Let me give three examples of inequitability—I am assured that such a word exists. First, in 2001–02, users of English and Welsh ports paid £62.5 million in light dues against expenditure by Trinity House of £30.2 million. In Scotland, the comparable figures were £8.5 million income against £24.2 million spent by the Northern Lights Board. In Ireland, north and south combined, income from light dues was £3.8 million against £16.2 million spent by the Commissioners of Irish Lights. Why the geographical disparity?

My second example is that successive UK governments have laboured for years in renegotiation with the Republic of Ireland over the historic anomaly which means that the UK taxpayer subsidises Irish navigational aids from UK light dues to the tune of £5 million per year. Can the Minister enlighten the House on what progress has been made in removing this unwarranted subsidy?

Finally, in the same year, 2001–02, total income from light dues levied at UK and Irish ports totalled £74.8 million against expenditure of £70.6 million. What happened to the £4.2 million excess? Where did it go? Presumably in increasing the already enormous £64 million General Lighthouse Fund. In that respect I rely on paragraph 2.20 of the DTLR consultation document Light Dues Review. While half of that £64 million reserve is allocated to cover pension liabilities—and quite rightly so—the remaining £32 million seems to be being held to "clear wrecks"— a cost the risk of which has for decades been covered by insurance policies. Is this not a classic case of duplication?

As I have said, the May 2002 review of light dues needs to be brought to a conclusion. In his reply today, I sincerely hope that the Minister will be able to give the UK ports and shipping industries some comfort. In particular, can he tell the House when the Department for Transport will bring this matter to a conclusion? And will he please give us some assurance that this outdated and unfair tax will be abolished once and for all?

8.38 p.m.

Lord Berkeley

My Lords, I am grateful to the noble Lord, Lord Geddes, for introducing the debate. As he said, the subject has been around for a very long time and it is appropriate that we should now discuss it again.

I declare an interest as president of the UK Marine Pilots Association, which does not want either to gain or to lose by this. But the subject has a relevance to it, as I shall explain later.

I should like to talk about redistribution, the subject of the Question. In addition to being involved with a large amount of shipping, I sail. The navigational aids around our coast are extremely good and are essential for the safe navigation of big ships, little ships and many other vessels. I would have no objection in principle to contributing some money to the maintenance of lighthouses, but there would be a severe difficulty in getting off the ground the registration scheme that surely would be necessary.

I am thinking here of some of those lovely boats that one sees in mud berths around the country. Do they ever move? If they do move, it would not be like purchasing a vehicle excise duty and knowing which roads constitute highways and which roads do not. The question of when a waterway becomes the sea and therefore covered by such a scheme would become extremely complicated.

Given the amount of money, about £70 million as the noble Lord, Lord Geddes, said, that is involved in the provision of these lighthouses around this country and Ireland, which I shall come on to, I suspect that setting up and enforcing a registration scheme for small boats would probably cost almost as much money as it would raise, if not more. I am not sure that that is an option that is worth pursing, but perhaps the Government have a different view.

My second point about redistribution, again raised by the noble Lord, Lord Geddes, is the Irish question. It must be about 85 years since the Republic of Ireland came into being and we have been subsidising its lighthouses ever since. I was in Ireland last summer and I did not think the lighthouses were very good, so they probably reflect the fact that the Republic of Ireland only spends £5 million a year of our money on them. But what are we doing still keeping the Republic of Ireland's lighthouses alight? Surely the answer is to threaten the Republic of Ireland, with enough time so that it can get its own resources available, and say, "We shall switch you off on 1 January next year". Then we shall see what happens. It is ridiculous that it has been going on for 85 years or so. After all, the Republic of Ireland is independent of the UK, as we rightly keep being reminded. Why should we be maintaining its lighthouses? It is quite incredible.

The noble Lord, Lord Geddes, referred to the Select Committee and its report. I shall refer to the table on page 49. It shows the various charges made for big ships going into ports. It goes through pilotage, towage. linesman, port dues, light dues and total. What we see from it is that the charge for light dues is higher than the charge for port dues. Light dues are 34.9 per cent of the total and port dues are 29 per cent. It is extraordinary. The port dues are there because port facilities, such as dredging and quays, are provided for the benefit of the ships. To have the port dues less than the light dues is quite extraordinary. It confirms the comments made by the noble Lord, Lord Geddes, that this is a major contribution to why ports in this country have a real struggle to remain competitive.

It is a shame that the port services directive, which was going through the European system, has probably stopped now. The differences in the way ports are owned in the UK and in much of Europe and in the way people pay for the capital costs, dredging and other services, mean that we are already at a severe disadvantage. Having to pay the light dues on top of that is very serious. It is seriously anti-competitive. I share the concern of the noble Lord, Lord Geddes, that more than 10 years ago my party committed itself to getting rid of light dues, saying that they were a commercial disadvantage to British port operators and ship owners. Ministers in the past few years have done a great deal in some ways to help British shipping, but they have not done much in this context. It is about time they did.

The Select Committee in another place produced a very good report. As the noble Lord, Lord Geddes, has said, it would be nice to know when the Department for Transport's own report will come out. When the Select Committee says that, The Government supports initiatives on funding and charging to create free and fair competition in the ports sector", it seems to me that they are doing exactly the opposite. It is not free and fair competition with the continent. You can go into most of the important continental countries on the western seaboard, I shall not go into detail, and you do not have to pay light dues. Here you have to pay. It is time we changed. I do not believe it is worth £75 million, less the £5 million that we shall switch off in Ireland. Seventy million pounds are not worth a registration system for small boats. In my right honourable friend the Chancellor of the Exchequer's overall Budget for this country, £75 million is not really a great deal. It would be much better to stop all the hassle, switch off Ireland and make it separate, and then give one boost to the British shipping industry, to follow what has been done in other situations, and say that we will fund it ourselves.

8.45 p.m.

Lord Greenway

M y Lords, I, too, welcome the new Minister to his post and wish him well on his maiden voyage in this House and at the Dispatch Box. He is dealing with a subject close to the sea and ships. Debates of such a nature tend to come up rat her late at night. I am not certain whether shipping will be an ongoing task so far as he is concerned, but if it is he may have to get used to taking debates quite late at night. That is a pity, because shipping is still very important to this country. I do not need to point out that, in weight, something like 90 per cent of our goods still come by sea.

I also congratulate the noble Lord, Lord Geddes, on his assiduousness in bringing forward the topic yet again. It is not the first time that the House has discussed light dues, and I am sure that it will not be the last.

So far as light dues are concerned, the Government have followed the user-pays principle, which, after all, is one of the principles of the EU. I am only sorry that their efforts to persuade some of our close neighbours have not borne fruit, but I may have more to say on that in a minute.

Light dues were last raised in 1993—some time ago—and reduced in 1997 and again in 2002. Some reduction has been made in terms of tonnage, which has benefited the larger ships coming to our ports.

The International Association of Lighthouse Associations—IALA——recently carried out a survey on light dues. It received responses from 55 countries, 23 of which—getting on for 50 per cent—charged something for the provision of lights and buoyage, either wholly or in part. In Europe, Sweden, Spain and Greece charge fully, like ourselves. Although it is claimed that our immediate competitors across the channel do not charge, charges are probably made in other ways, with some hidden in conservancy charges, local government charges and so forth. It is not entirely true to say that some of the countries are not charging.

The real problem arises from the fact that we are too honest in this country. We are transparent: our light dues are up there for everyone to see, and it is much easier to complain about something that one can see than something that one does not see. The moneys are paid into the general lighthouse fund, which comes under the Secretary of State's aegis, and are distributed to the three general lighthouse authorities. Those are Trinity House—I must declare an interest as a younger brother of Trinity House—Northern Lights and Irish Lights. It is important to point out that 84 per cent of the dues are paid by foreign-flagged ships.

Huge progress has been made by the general lighthouse authorities over the past 10 years in cutting their costs through a very extensive modernisation programme, which has seen the abandonment of lighthouse keepers and light-vessel crews, and the widespread introduction of solar power for powering lights. The fleets of lighthouse tenders have been cut dramatically. For instance, Trinity House used to have five, and now has two. So the lighthouse authorities have been doing their bit and they should be congratulated on that. Can one imagine a government department being able to cut its cloth in that way? I cannot think of a way.

The noble Lord, Lord Geddes, is asking for a more equitable way of payment. There were suggestions that Royal Navy vessels and recreational craft should pay. Following yesterday's defence debate and what has been happening with the Navy, charging Her Majesty's ships light dues would go down like a lead balloon. The noble Lord, Lord Berkeley, touched on yachts. It can be argued that yachtsmen have just as little need for those navigational aids now as larger ships. They all use GPS these days if they are to go offshore, so they know where they are all the time and do not necessarily need those extra aids. Yachts are not earning money as commercial ships are. The noble Lord, Lord Berkeley, touched on how one can charge yachtsmen. That is probably the stumbling block. It would be almost impossible, short of full yacht registration, which I do not believe the Government want. Finding a way of charging yachtsmen, whatever the actual method of charging, would cost more than the money that would be realised. We are talking about only £2 million to £2.5 million at the most, which would not make a big blip compared with £70 million.

Contributions to the Irish Government have been mentioned. It will be interesting to see the results of the latest review. There is an argument for keeping lights—I must also mention the Royal National Lifeboat Institution, which is in a similar position—whereby services are provided without government money. It may be of interest to know that both France and Holland have approached Trinity House for information on "the user pays" system for light dues. That is a real step in the right direction and I hope that something comes from that.

Another argument against central funding comes from something that happened recently across the Channel, where the French Government have suddenly cut 25 per cent off the budget of the French general lighthouse authority. The cut is of such an extent that the authority has had to lay out tenders and it simply cannot afford to service some of its navigational aids. I suggest that that is not a road we should go down.

It is always enjoyable to have a debate that deals with maritime subjects. Looking around the Chamber I see many familiar figures. The noble Lord, Lord MacKenzie, who will speak after me, has great experience of lighthouses. I am sure that his speech will be interesting. We look forward to the speech of the new Minister and await with interest the outcome of the latest review to see whether any progress can be made.

8.53 p.m.

Lord MacKenzie of Culkein

My Lords, I, too, am grateful to the noble Lord, Lord Geddes, for initiating this short debate on an important and complicated issue. My interest in the matter, as the noble Lord, Lord Greenway, said, is as a former lighthouse keeper. I was born and brought up in the service of the Northern Lighthouse Board. Most of my comments will reflect the NLB rather than the other two general lighthouse authorities because I am more familiar with that board.

The noble Lord, Lord Geddes, was quite right when he said that a Select Committee in 1834 had recommended that navigational aids be paid from the public purse. Something of the same was said by another Select Committee more up to date in 1845—and even more recently in 2003. That does not mean that they are correct in their analysis, but it is clear that the issue of light dues has been a talking point since the three statutory general lighthouse authorities were set up.

Ship owners are a pretty hard-nosed lot—it comes with the territory and one does not blame them for, if I can use the metaphor, "wanting the penny and the bun". They would always have preferred the taxpayer to pay the Bill for lighting our shores—and when that was not on offer, at one time they wanted to control GLAs because they held that the GLAs were inefficient. But to bring history more up to date than the noble Lord, Lord Geddes, the Royal Commission on Lighthouse Administration, reporting in 1908, put it that the possibility of shipping companies controlling GLAs would be a very unusual proceeding indeed because ship owners would he interested only in the most frequented trade routes rather than the wider interests of providing sufficient sea marks around our coasts.

The issue has moved on. It is said by some that lighthouses and other aids to navigation are no longer necessary and used by shipping, given the modern state-of-the-art bridges and vessels equipped with electronic charts and global navigation satellite systems. It is said that there is no need to impose on shipping what they regard as that tax and the cost should be transferred to the taxpayers as these traditional navigational aids are now used only by leisure users. Of course, as in the past, the accusation is still made that general lighthouse authorities are not efficient operations.

Ship owners and ports have an arguable point. It is important for UK plc that we do not lose business to the continent. But I submit that the transfer of light dues to the taxpayers is not the way in which the matter should he addressed. It will not stop transhipment by smaller vessels from highly efficient ports such as Rotterdam. It will not increase the numbers of postpanamax vessels coming into the UK. There is a huge availability of coastal vessels on the continent and a lack of berths in the UK ports for post-panamax vessels to come here. And I am afraid that that is a fact of life.

Let me try to deal with three issues: funding; the efficiency of the GLAs; and the future of aids to navigation. First, everyone wants to offload costs onto the taxpayers. We see it every day and hear it in this House and in another place all the time—until the time comes for one to pay one's own bill. Witness higher education. It appears that everyone with a school-age child would like the taxpayers to pick up the bill for university education—not to mention some politicians, whose motives are much less clear.

However, that is not the real world. There is a limit to what the public purse will bear. And what of the charge that transfer to general taxation will put our ports on an equal footing with the rest of the world? As the noble Lord, Lord Greenway, said, it is not true that light dues are a system peculiar to the United Kingdom and Ireland. He confirmed what I understood to be the position: if one takes the majority of coastal states in the developed world, about one third charge light dues, one third have a mix and one third fund it wholly from taxation. Like the noble Lord, Lord Greenway, I would be amazed if France, Holland and Germany do not manage to lose their aids to navigation costs and other charges. That is much easier to do, of course, given the smaller coastlines of two of those three countries. Contrast that with the Scottish and Manx coasts, which are the statutory area of the Northern Lighthouse Board, where there are 10, 000 kilometres of coast; 790 islands; 198 lighthouses; 131 buoys; 41 beacons; 22 racons; four differential global positioning satellite stations; and most of the offshore oil installations in UK waters.

Most of all, I oppose the transfer to the taxpayer for the same reason that to this day the Royal National Lifeboat Institution is funded by voluntary contributions. It was always held in the fishing, crofting and maritime communities where I was brought up that if the RNLI were funded by taxation and transferred to, say, what is now the Maritime and Coastguard Agency, the Treasury would be quick to look for savings. Lifeboat stations would be closed on economic grounds and the absolute raison d'être of lifesaving would be compromised. That same view holds true today in the Royal National Lifeboat Institution. As a case in point, there are not too many coastguard stations left. There are very few eyes watching the sea.

I believe that the same would happen to lighthouses as aids to navigation if transferred to the taxpayer. I believe that we have had an indication from the noble Lord, Lord Greenway, as to what is happening on the French coasts. The motto of two of the three general lighthouse authorities is In Salutem Omnium, which for the non-Latin scholars among us means "For the safety of all". I believe that that motto would be quickly made redundant if the matter was passed to general taxation.

As regards efficiency, as I have said the 1908 Royal Commission rejected the charges then of inefficiency, which left it with very few recommendations to make. Coming on many years, in my own experience there was no profligacy in the lighthouse service. I can well remember annual storing requisitions coming back full of red ink, deleting almost everything that we had asked for that the superintendents thought—no, knew—was unnecessary for the efficient running of the station. There was no chance of that extra boiler suit, extra pot of red lead or an extra few fathoms of rope. As I recall, there was never much shortage of Brasso. But there was efficiency.

The standard that we operated to was nothing but that the best was good enough. Even so, the service today bears absolutely no resemblance to my experience. It would be easy to be sentimental, but I can be as hard nosed as anyone. Today, there are no lighthouse-keepers; the solarisation programme is leading to huge cost savings and at many of the lights is obviating the need even for part-time attendants. The Northern Lighthouse Board has closed bases at Leith, Granton and Stromness. They have a wholly automatic and remote telemetry-operated service. They have two ships instead of four and one of those is a smaller, although a very capable, buoy tender.

Ships used to be kept for 30 or more years, but they are now worked so hard that already plans are in hand to replace the not-so-old NLB "Pharos". The use of helicopters working with a helicopter-capable ship has transformed the economics in servicing and storing lights and in reducing ship and crew complements.

The same process, as we have heard, has applied in the Trinity House Lighthouse Service and in the Irish Lights. There is close co-operation between the three general lighthouse authorities. When I was on the Isle of Mull last summer the Irish Lights ILV "Granuiale" was working in the Sound of Mull. I understand that both NLB ships were in Irish waters last year and Trinity House ships have been seen in Scottish waters. That is as it should be. The GLAs are working together to replace NLB "Pharos" and THV "Mermaid" to a common design based on the Irish Lights "Granuiale", again reducing costs with common ships with a smaller crew complement.

The Northern Lighthouse Board has certified to ISO 9001:2000 obtained at the first time of asking last year and that, as noble Lords will know, is an internationally recognised standard in business management practices.

Costs continue to be reduced and efficiencies increased in all three services, which are to the benefit of all who sail in our waters. That has enabled light dues to be reduced from 46 pence per tonne a few years ago to 40 pence per tonne. There is now the new tonnage cap at 40, 000 tonnes.

I turn briefly to the continuing need for aids to navigation. There seems to be a fiction that if only some shipping companies were listened to then some lights could be extinguished. The truth of the matter is that GLAs have in depth discussions and consultation with commercial and leisure users. They have good working relationships with bodies such as the Chamber of Shipping. Yes, some lights may be discontinued where they are solely used for waypoint navigation. But for the remainder—and that is the majority—lighthouses will continue to be part of the aid to navigation mix for the foreseeable future, not least probably for the next 20 years or so. That is going to include lights, beacons, floating aids, buoys, perhaps some audible signals, racons and terrestrial and satellite navigation.

At present the GNSS is not wholly reliable, and given the mix of equipment on bridges and the mix of quality and training of watchkeeping officers on the bridges, it is essential that there is comprehensive back-up to the seafarer. That is not just for the sake of the mariner, the ship and the cargo but for that of the environment.

For example, on the environment, the report of the noble and learned Lord, Lord Donaldson, Safer Ships: Cleaner Seas, led to the construction of new lights to the west of the Outer Hebrides during the past few years. Some former major lights have been downgraded; some have been discontinued. That will have been done in consultation with users. At present, Tor Ness lighthouse in Orkney is being upgraded—obviously in agreement with users—to a major light.

So we are a long way from the demise of aids to navigation. They are as vital as ever and they need to be funded. How do we do that? As I said, my view is not that we should transfer the cost to the taxpayer. The Question tabled by the noble Lord, Lord Geddes, is along the right lines: how can the cost be fairly redistributed? I have no objection to leisure craft paying up. I know that there are difficulties with a licensing system, but I do not believe that people should be able to go to the boatyard, buy a cruiser or yacht and set sail without a licence or demonstration of qualification or competence of any kind. With a licence could perhaps come light dues. There is no reason why ferry companies should not pay up; I would not even mind if the taxpayer had some involvement through the Royal Navy and the Royal Fleet Auxiliary.

My time is up, so I shall leave my speech there, but I want to welcome my noble friend to his new brief—this is a rather esoteric subject for his first outing, but I look forward to hearing what he has to say.

9.6 p.m.

The Earl of Mar and Kellie

My Lords, it is always a pleasure to follow the noble Lord, Lord MacKenzie of Culkein, who speaks with such personal authority. I add my welcome to the Treasury Bench to the noble Lord, Lord Triesman, who will make his maiden speech in answer to the Question. I wonder how he will deal with the requirement not to be controversial. Perhaps he will agree with everything that the noble Lord, Lord Geddes, said. We will find out. I am certain that he will say whatever he has to say non-controversially.

I start by reminding the House that during the 1980s I was a member of the now-defunct Royal Naval Auxiliary Service in the seaman's branch and as such used and trained on the lights, beacons, marks and buoys around the shores of Britain, Ireland and the Channel Islands. The RNXS was equipped with radar and echo-sounders, but insisted on its seamen being trained on traditional navigational methods—largely by looking out of the porthole but also by taking visual fixes and subsequently plotting the course on a chart. The lights were well named—Skerrybore, Dubh Aach and Muckle Hugga—and many are correctly celebrated as part of our built heritage.

This is by no means the first time that this subject has been debated in Parliament. I, too, read the same briefing material and learnt that Select Committees have been urging changes since at least 1834. Yet there seems to have been little movement. Perhaps the reason for that is that, on the face of it, light dues as currently determined are fairly easily collected in large amounts from relatively few companies, therefore meeting one of the canons of taxation—that it should be collectable.

Other noble Lords have dealt with the general inequity of the current scheme and its potentially harmful effect on the economics of the shipping industry. I reinforce that economic disbenefit, which may harm the development of tourism in the form of visits to Scotland, say, by cruise liners. My honourable friend Viscount Thurso MP has cited the difficulty that Scrabster Harbour Trust has had in developing that trade. That is a good complaint, because many cruise passengers would like to visit the nearby Castle of May, if not other areas of Caithness. If light dues are harmful to the development of tourism, that adds to the demand for a change in the financing of navigation aids.

On the subject of Ireland, raised by the noble Lord, Lord Berkeley, the subsidy to the Government of Ireland is presumably a hang-over from the treaty negotiations in 1921, and may need to be viewed in the same context as the four treaty ports, which expired in 1938. I suspect that the British negotiators did not trust the evolving Irish free state to maintain the lights properly. Ireland is central to the western approaches to England, Wales and Southern Scotland, so I am not surprised by the concern to ensure the Irish lights. The recent success of the Irish economy has reduced the likelihood of a failure to finance the Irish lights. However, I am not surprised that the Government of Ireland are dragging their feet over assuming responsibility for their lights. It reminds me of the attempt by the Danish Crown to pay off the mortgage on Orkney and Shetland. Curiously, the Scottish Crown regularly developed acute selective deafness.

I look forward to hearing the Minister's answer to the most apt question posed by the noble Lord, Lord Geddis. Will he admit that the Government will implement their proposals in opposition, full-steam ahead, or have they rung down to "dead slow ahead" and recanted?

The issue is one of subsidy, which is paid at present by a few large shippers for the benefit of many others. That subsidy is certainly collectable but may result in harm to our economy. The choice facing Government seems to be one of either extending the range and scope of subsidy collection to most users—the leisure sector and possibly even the Royal Navy—or abolishing light dues and absorbing the subsidy into general taxation. Shipping and marine recreation both contribute to our economy, so the cost of providing lights, beacons and marks—navigational aids—can be seen as a national interest and hence suitable to receive funding from general taxation.

9.12 p.m.

Viscount Astor

My Lords, I am very grateful to my noble friend Lord Geddis for introducing the debate. The noble Lord, Lord Triesman, who is the new Minister, will have to make an uncontroversial speech on a controversial subject, as the noble Earl, Lord Mar and Kellie, said, so we wish him luck. Having been deeply involved in the Labour Party over the past few years, the noble Lord is uniquely placed to cast light on his party's policy in this area, which is clouded with mystery.

Perhaps I may start by taking the noble Lord back to a day that I am sure he remembers, 2 May 1996, when his colleague in another place, Graham Allen, talked about light duties. Mr Allen said that his plan would be to have the matter reviewed by the European Commission to minimise its impact on the competitiveness of UK ports. He said: Light dues is one instance where the UK is adopting a different position to its European partners, and we need to establish consistency". Whether the cost would be paid for by the taxpayer, as in other European countries, remains to be seen.

Mr Allen added: In addition, on the Continent there is evidence of substantial payments from state governments for basic infrastructure, such as new quays and container terminals, and even subsidies for basic conservancy services, such as pilotage, navigational aids and dredging. Labour should consider pressing for a more rigorous enforcement by the European Union of the provisions to prevent unfair subsidies and to ensure that fair competition operates within the single European market". He continued: We should look at pressing for the EC"— I suspect that he meant "EU"— to publish its fact finding studies in this area, e. g. transparency of accounts and abuse of monopoly. A formalised and effective system of identifying sources of national aid is needed, covering both established sources of aid and 'one-off contributions". Those are stirring words from someone in opposition. We must look at them and ask: what has happened, where have we got to, and what have the Government done since those words were spoken? It is a perplexing subject.

We have some great expertise on the subject. The noble Lord, Lord Berkeley, has talked about the difference between port dues and light dues, and the noble Lord, Lord Greenway, on the Cross Benches, has shared with us his usual expertise in shipping matters. The noble Lord, Lord MacKenzie of Culkein. who is an acknowledged expert on lighthouses, confirmed that, as far back as 1834, there was pressure for navigational aids to be paid for from the public purse. He then took us further forward to about 1908, a step further than my noble friend Lord Geddes got in his speech.

In 2002, the Government launched a consultation on the possibility of reform. The consultation document stated: The UK Government remains committed to a cost recovery system. It does not believe that taxpayers … should meet the costs of providing aids to navigation for shipping. The DTLR wishes to consult light dues payers and the users of marine aids to navigation on how the system costs should be met by existing charge payers. The consultation will also consider whether charging can be extended to other users and/or redistributed among existing payers". Again, that was modest progress.

Unfortunately, in March 2003, the Transport Minister in another place, Mr David Jamieson, took the opportunity to make what was, in one sense, quite a good move by announcing the freezing of light dues rates for 2003–04. He also commented on the Government's consultation and said that what had emerged had been "inconclusive" and that "no consensus" had emerged on a way forward. The Minister then announced that further work would be carried out.

Where have we got to? What is the answer? Some weeks ago, I had the good fortune to ask the noble Lord, Lord Bassam of Brighton, what the Government's policy was. With his usual good manners and deftness, he dodged the question, so I look forward to hearing this evening where we have got to. Some interesting points have been brought up, particularly the Irish issue, which is important. The Transport Select Committee in another place noted that 70 per cent of the expenditure of the Commissioners of Irish Lights related to the provision of aids to navigation in the Republic of Ireland. It is clear that the Government of this country funds a large amount of the costs incurred by the Irish Republic. Luckily, the Government have realised that, and they have got on to it. They have said: The UK is seeking to renegotiate the current agreement to require Ireland to meet the full costs of their aids to navigation. Discussions with FCO and Irish Government are ongoing, but progress is slow".— [Official Report, Commons, 14/10/03; col.171W.] We know that the Foreign Office has many things on its plate. I suspect that the discussion of light dues is not terribly high on the Foreign Secretary's agenda, but we can live in hope.

The Transport Select Committee said that light dues were inconsistent with those in other European countries and distorted competition. It also said that the Government should reconsider the entire concept of light dues. It supported the Government's aim to end the subsidy to the Republic of Ireland. Do the Government agree with the Select Committee's report? It would be interesting to hear.

I did a little background research. As far as I can see, the European countries that are wholly funded by the levy are Belgium, Greece, Ireland and the United Kingdom; those funded by a mixture are Finland, Norway and Sweden; and those funded by the exchequer are Denmark, France, Germany, Italy and the Netherlands. There is no consistent policy in Europe.

I cannot leave the subject without saying that we have all received many briefings on the subject, particularly from the Chamber of Shipping, as well as suggestions on how more people should contribute. As the noble Lord, Lord Greenway, pointed out, the difficulty is that they all have said that everyone should contribute. But they have not pointed to a successful way in which that could be raised and how those who have a yacht could be forced to pay.

I should love to declare an interest that I own a yacht. Sadly, I think that a 21-foot boat with an outboard motor probably counts only as a boat rather than as a yacht. I am rather disappointed to acknowledge that to noble Lords. But I am ever hopeful that one day, with one more lottery ticket, I may be able to move up to something large enough to call itself a yacht. I am not entirely sure how large that would be.

It is quite difficult to extend light dues to a great number of other sectors because I do not believe that there is a satisfactory way in which to collect the money. We look forward to the Minister's response and some clearer understanding of what the Government's policy is on this subject.

9.20 p.m.

Lord Triesman

My Lords, perhaps I may start by expressing the deep sense of honour and privilege that I feel on being made a Member of this House. I am well aware of the fact that I have joined a Chamber in which there is an exceptional body of knowledge and a remarkable gathering of experience. I doubt that there is an equivalent in any legislature anywhere that can match it. That makes the honour, of course, both special and particularly daunting.

So it is with some trepidation that I contemplate what I shall be able to add to the sum of knowledge that is concentrated here. All that I can do is to try my best both for this House and for the Labour Government, which I have the opportunity to serve. I thank noble Lords of all parties, and the Cross-Benchers, who have been very welcoming and very helpful. I certainly thank those who have offered their help and advice. I shall presume on those kind offers; I shall need all the help and advice that I can get, especially if I am to try to remain non-controversial.

The very first kindness that I was given was in the first letter that I received. It was from the House of Lords Yacht Club, which I took to be some kind of induction into this debate. My thanks for all of that. The noble Lord, Lord Greenway, has promised me some late-night debates on this subject. I look forward to them with great enthusiasm. The noble Viscount, Lord Astor, has already made reference to owning some type of vessel. I must tell the House that I do not think that I own anything more than 21 feet long.

I turn now to the intriguing discussion that we are having today on the safety of our wonderful coastline—10, 500 miles of it in the United Kingdom alone—and to the shipping industries and the leisure users mentioned in this debate. I thank noble Lords for their expert consideration of the issues. In particular, I thank the noble Lord, Lord Geddes, for securing the debate. I am glad to feel that I am contributing to a debate that has lasted approximately 170 years. It is always nice to know that there is some durability in a subject.

I welcome the opportunity to respond to the interesting comments that have been made. As has been mentioned, the Government undertook a review of light dues in 2002. We approached all classes of users and sought views on restructuring the charge. We made it clear right from that point that we were committed to retaining the charge, but that we would be happy to review the effects on various classes of users. Safety at sea is the overriding issue of importance to us. Lights contribute to the safe passage of vessels and the safety of mariners, while also safeguarding the environment and cargoes from risk of hazard.

I was very interested to hear the noble Lord, Lord Greenway, talk about what has happened in France—an issue that I have promised to study. I shall also draw on the experience of the noble Lord, Lord Mackenzie, and his very perceptive comments that the critical issues and the critical values in all of this are about life saving and the safety of people. I do not think that I have ever had the chance to discuss such a matter with a lighthouse keeper. Since there are so few left and their numbers are declining, it may be the last occasion on which I shall have a chance to do so. But the core of it surely was right.

The response received during the government review has been disappointing. There were 158 responses. The split was roughly 25 from merchant shipping, 14 from fishing vessels and 63 from pleasure craft. The remaining 56 represented the port authorities, the cargo industry and individual responses. A number of the responses came from organisations representing a number of users, such as the Royal Yachting Association, the Chamber of Shipping and the National Federation of Fisheries Organisations. There was little by way of consensus in how the costs should be split. Well, that is not strictly true. There was general agreement on all sides that someone else should meet the costs. The pleasure users were generally convinced that the aids to navigation were mostly designed to meet commercial needs. The commercial users felt that their ships were better equipped and relied much less on traditional aids to navigation—lighthouses, buoys and beacons. The pleasure users did not accept that view. Overall, while we were grateful for the significant contributions to the debate, we had to conclude that the exercise has not shown a new approach to the structure of the charge.

There was another area of agreement. Many people would like the Exchequer to meet the costs. We do not accept that view. We are committed to a cost recovery system. The charge distributes the costs among users. It is cost-effective to collect, with a running cost of 1.5 per cent of the amounts collected. I agree with my noble friend, Lord Mackenzie of Culkein, that it is unlikely to distort competition. Taxation is familiar in this form in roughly a third of the major coastal states. The noble Earl, Lord Mar and Kellie, has made a very important point about the possible distinctiveness of tourism. That is likely to be considered in the review and I shall certainly be asking that question.

However, we see no justification for the Exchequer taking on the costs. Despite frequent claims that elsewhere in Europe aids to navigation are state-aided, the UK is far from unique in operating such a system. The noble Viscount, Lord Astor, is right on the distribution of countries. In Europe alone, Belgium, Cyprus, Greece, Ireland and Spain also fund aids to navigation by a levy on shipping, and Sweden and Finland raise some of the costs in this way. Many member states make other charges, such as piloting charges that are higher in European ports, balancing out the light dues costs of the United Kingdom. In any case, we are different from many other EU states—we are an island whose coastlines border many of the busiest shipping lanes in the world. The noble Lord, Lord Greenway, is quite right to say that in many of those cases there are also local taxes which are very much harder to detect.

I have been asked to comment on where we are. I shall do my best. I am hopeful that, in due course, we will learn where the Opposition are, as a reciprocal arrangement to understand their policies. In March 2003, the Minister for Shipping announced that the department would undertake a study of the economic effect of light dues. The terms of reference were discussed with users. The study is being guided by a steering committee that includes representatives from all classes of user. The consultants have used the response to the department's review in developing their proposals. As I have stated, the report will be published following completion of the study, expected at the end of January. It will need careful consideration. That means it will probably be too late for any recommendations to be put in place in time for the new financial year. But we will make an initial announcement in March when the light dues rates for 2004–05 are announced. We aim to establish charges in discussion with the industry that can be sustained over significant periods—at least three years. We will also publish the responses to the earlier review on the DfT website, with copies available in the Libraries of the House.

Good progress is being made on the programme of work also announced at that time. A new collection system will come into operation in April 2004. This will provide an electronic method of collecting light dues, permitting direct payment and removing the paperwork. It is expected to reduce costs and to open up the possibility of greater variations in the charging system. The review of the future requirements of aids to navigation will get under way once the conclusions of the economic study are known and fully evaluated so that they can be taken into account at that time. We remain fully committed to renegotiating the current arrangements with Ireland to meet the full costs of its aids to navigation and we shall work closely with the FCO and the Irish Government to achieve this objective. Work is proceeding.

We accept that the current charging system may not be ideal since many users pay nothing. But as has been pointed out in the debate, reductions in the rates have been made during the past 10 years. The last increase was made in 1993 and reductions were made in 1997 and 2002. We shall continue to look at the charging structure and the economic study.

I do not wish to pre-empt any part of that study, but changes must be cost-effective to operate. It is for that reason we feel that, although it is not an impossibility, the idea of making a significant change in relation to leisure and pleasure craft is extremely unlikely. As my noble friend Lord Berkeley pointed out, it is more than likely that the overall costs of trying to implement such charges would far exceed any of the benefits. Collecting the money would he a hugely complex exercise. Indeed, the noble Earl, Lord Mar and Kellie, made essentially the same point.

It is quite easy to criticise any charging scheme. Any replacement of the present structure must be cost-effective and efficient if it is not to make matters more difficult. The light dues system has its advantages and has broadly worked in its current form for 150 years. It is cost-effective to collect and it funds one of the best navigation aid systems and services in the world.

Of course there are disparities in payments, and I have been asked by the noble Lord, Lord Geddes, to comment on them. However, the system covers the whole of the United Kingdom and Ireland and it is important that the service overall is integrated. I would also point out that the reserve is kept for various purposes, such as for pensions, variations in income and to meet statutory requirements in relation to activities such as the surveying and marking of wrecks. I do not suggest that the reserve could not he reduced. That is a possibility, but it must be retained to meet essential developments such as new ships, depot redevelopment and other activities which are key to the safety features which I described in my opening comments.

We shall approach change with caution and I hope that I have indicated that there is every intention to ensure that we proceed rapidly and achieve the changes necessary.

9.33 p.m.

Lord Geddes

My Lords, with the leave of the House, and on behalf of the whole House, I very much want to congratulate the noble Lord, Lord Triesman, on an exceptional maiden speech.

As I said in my opening remarks, unfortunately the rules of the House, as laid down in the Companion, do not allow me to comment on the content of the noble Lord's speech in relation to what I had to say. Be that as it may, he displayed immediately all the considerable attributes that he brought to his job as general secretary of the Labour Party. I note, having done some research, that he is also still a visiting Fellow of Economics at Cambridge. It is his good fortune that he is slightly younger than me. I struggled for one year—my first year at Cambridge—trying to learn economics under the tutelage of the late Lord Bower. I sympathised with him thereafter, as he had a hard, uphill struggle. The noble Lord, Lord Triesman, did well that he is not quite of my age and did not have to do the same thing.

I, and the whole House, congratulate the noble Lord on an exceptional maiden speech on quite an erudite subject, and one that will certainly come up again. We thank him most sincerely.

House adjourned at twenty-six minutes before ten o'clock.