House of Commons Hansard Debates for 28 Jan 1991

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through Parliament, this measure is about finance. It has nothing to do with transport, other than that it is the Secretary of State for Transport who is presiding over the sale of public assets. If he cares about transport, he should be safeguarding the trust ports. Even the definition of trust port is now about how much money such a port makes and how much its turnover is. It has nothing to do with transport infrastructure.

What have we heard from Government Members about the importance of trust ports and their place in an integrated transport system, where investment in the local infrastructure complements and underpins the national transport infrastructure, rather than undermining it? The main body of the Bill is about financial arrangements. Under this privatisation, it will be more important to pay the privatisation tax, to pay the levy and to invest in property than to invest in the local ports and build them up to serve the interests of the local community and economy.

So far, the Second Reading debate has failed to spell out the implications for trust ports. They can be bought by companies with scant interest in their operation as ports. We should remember to look at the comments of my hon. Friend the Member for Aberdeen, South (Mr. Doran) about fishing interests. Companies will want to buy the trust ports to strip them of their assets. In doing so, they will increase the profitability of other companies in which they may already be involved. Those companies will have no commitment to run the ports for the local area. The Government are obsessed with profits, but at least those considering the Tees and Hartlepool Port Authority Bill have managed to wring from the Minister a commitment that that port authority will seek a local office in the area that the new plc will serve.

The Secretary of State said that the trust ports will be free to privatise, but even the British Ports Federation acknowledges that privatisation is not the answer to the development needs of some trust ports.

Mr. Ian Bruce rose--

Ms. Walley : I shall give way in a moment.

When the Minister replies, he should say whether all the ports will be dealt with in the manner spelt out by the Secretary of State when he spoke of his commitment to compulsion.

Mr. Bruce rose--

Ms. Walley : In view of the time, I had better proceed.

Mr. Bruce : But the hon. Lady said that she would give way.

Ms. Walley : I shall give way if the hon. Gentleman's point relates to compulsion.

Mr. Bruce : I am grateful to the hon. Lady for giving way so gallantly. In view of what she just said, can she confirm whether it is Labour party policy to take back all the ports into trust status and to reintroduce the dock labour scheme, which many of her Back-Bench colleagues would love?

Ms. Walley : I can only say that much depends on the timetable and the likely date of the general election. We shall consider the situation when we know that timetable.

Tonight we have heard a lot about level playing fields. We have been told that the Government have a stated

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intention of introducing such a level playing field in terms of all ports--municipal, plc or trust. The hon. Member for Dover (Mr. Shaw) made particular reference to that. Perhaps the Minister can tell us what has happened to the draft European directive on state aids to ports, which was published in 1989, but has not seen the light of day since. Do not many continental ports receive massive subsidies for the development of new facilities? Where does that leave the concept of level playing fields?

The hon. Member for Great Yarmouth (Mr. Carttiss) said that that port had not received a penny piece from the Government. That contrasts unfavourably with those infrastructure subsidies--they are not ruled out under the treaty of Rome--which other European countries give to develop their integrated transport structures. Most European Governments recognise that ports are part of the essential infrastructure, and they heavily subsidise their operating costs and investments. The Government, in comparison, do not have the same attitude.

The Bill is a further step towards establishing ports as business entities that provide their own resources with the minimum of state or local authority support. Trade will naturally be directed to the subsidised ports. The Government should be warned that, under the new arrangements, our ports could be taken over by European competitors. That would make the prospects for the British economy, already suffering from recession, even worse. I agree with my hon. Friend the Member for Middlesbrough (Mr. Bell) that the Standing Committee should consider an offers ceiling on the amount that foreign companies can invest in the plcs which replace the trust ports. In Committee, I hope that the Government will consider what happens when the successor companies go bankrupt, a problem to which my hon. Friend the Member for Aberdeen, South drew attention.

The lack of reference in the Bill to an integrated transport policy is matched only by an omission of health and safety considerations and the need for an integrated environmental policy. Subsidiary companies will take over existing responsibilities, but Conservative Members and the Government have expressed little concern about conservancy and the detailed operations in the ports--maritime access, channels, lights, buoys, navigational aids, sea locks, breakwaters, docks, quays and reclaimed land. We need a regulatory body of some sort. During proceedingts on the Bill to privatise the water industry we heard a great deal about the need for such a regulatory body, and after much pressure on the Government we ended up with the National Rivers Authority. Have the Government any proposals for a similar body to deal with these issues?

How do the Government intend to resolve the potential conflict between a profit-maximising port operator and his responsibility for safety and conservancy? When the directors of the holding company and the statutory corporation are members of each other's boards, independence must be doubtful. How does the Minister envisage that the newly identified environmental objectives such as safe and environmentally sound management of the waste generated by ships in port and contingency plans for cleaning up spillages will be paid for under the new financial arrangements for trust ports?

Given the maritime and navigation security changes about which the Minister is consulting even now, what arrangements does he have in mind for security under the new plcs in the ports?

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Trust ports have been responsible to their local communities ; they have served local interests ; and they have served the port industry. Today many Conservative Members have said that they agree with privatisation in principle, but that they do not want it for the port or constituency that they represent. In view of the decision announced by the Government on 4 December 1990

Mr. Janman : Will the hon. Lady give way?

Ms. Walley : I will not, because there is no time.

Fifty-six national health service trusts were to be set up precisely to look after local issues and to enable local decision-making to go ahead--

Mr. Janman : On a point of order, Mr. Speaker--

Mr. Speaker : Is it a point of order or of frustration?

Mr. Janman : It is a point of order. Is it in order for the hon. Lady to mislead the House by claiming that many Conservative Members are against the Bill, when that is clearly not so?

Ms. Walley : The Minister knows full well what I meant. He is the one who will have to deal with Conservative Members who do not fully support the proposals in the Bill.

The case for the privatisation of the trust ports has not been fully made ; the case for a national strategy, in the ports industry is, however, overwhelming. The Bill does not give us such a strategy, and that is why we shall vote against it.

9.42 pm

The Minister for Shipping and Public Transport (Mr. Patrick McLoughlin) : We have heard a confusing set of arguments from Opposition Members today. Listening to the first part of the speech of the hon. Member for Kingston upon Hull, East (Mr. Prescott), I had the impression that he was going to support the Bill, but then his arguments, as usual, became more confused. At one point he mentioned how trust ports are serving the community ; at another, he said that a Labour Government would want to direct certain ports and invest huge sums in them. But how would ports not lucky enough to have been selected by that Government be able to serve their communities under the interventionist policies of the hon. Gentleman?

The hon. Member for Kingston upon Hull, East referred several times to the Rochdale committee, which sat more than 20 years ago and is thus not very relevant to the port industry today.

The hon. Gentleman suggested that the Bill's sole purpose is to maximise some £5 billion for the Treasury. We expect the Bill to raise between £30 million and £50 million in its first year of enactment, so we shall have to look elsewhere to maximise a return of £5 billion.

The hon. Member for Stoke-on-Trent, North (Ms. Walley) referred to the Aviation and Maritime Security Act 1990. There will be no exemptions in respect of private ports, because that legislation covers them, too. Any regulations that the inspectors consider necessary will be applied to those ports, as to others. However, when we consider that Act, it was made very clear that we would scrutinise the individual circumstances of each port, as they are all, by their very nature, different from one another.

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I did not imagine that I would find myself agreeing with the hon. Member for Liverpool, Garston (Mr. Loyden), who said that he wanted to see the Government out of the ports. However, I agree. I want to see the Government out of the ports, and for them to become part of the private sector, as fully fledged independent bodies subject to no Government interference in the appointing of their boards. The only point on which I would part company with the hon. Member for Garston is that I want to see all Governments kept out of the ports, which I want to see thriving in the private sector.

Mr. Ian Bruce : My hon. Friend says that he wants all Governments kept out of ports. Will he extend that philosophy and introduce a clause that will keep all councils out of ports as well? Weymouth is not a trust port but is owned by the council. It was a profitable port when the Conservatives lost control of the council some years ago--but for 1991, the council is budgeting for an income of £400,000 and a subsidy of £750,000. What will the Government do about that?

Mr. Prescott : The hon. Gentleman should tell the truth.

Mr. McLoughlin : As my right hon. Friend the Secretary of State explained, the Bill does not embrace local authority ports because they can be subject to privatisation under existing provisions. There is an important distinction to be drawn between local authority and trust ports.

Mr. Ian Bruce : On a point of order, Mr. Speaker. I distinctly heard --and I am surprised that you did not--the hon. Member for Kingston upon Hull, East (Mr. Prescott) shout "Tell them the truth." I did tell the truth.

Mr. Speaker : That is a frivolous point.

Mr. McLoughlin : The Bill has two particularly unusual features. First, we are not seeking to privatise a single organisation--as we did, for example, in the case of British Airways. Nor are we seeking to privatise a finite and specified group of such bodies, as in the case of the electricity industry. Instead, our main objective is to lay down a framework that any of the trust ports will be able to use in selling themselves into the private sector, without the need to promote their own private Bills. I hope that I can reassure my hon.Friend the Member for Great Yarmouth (Mr. Carttiss) by confirming that his port could come within the scope of the Bill as drafted, but not within the scope of the compulsion clauses--on which I shall comment later.

Secondly, the Bill is concerned with bringing fully into the private sector substantial bodies that have no direct owners and which can only be described as being owned only by the state. That gives rise to the issue, which some hon. Members find very interesting, of whether there should be a Government levy. By restricting the levy to 50 per cent., we are providing a substantial incentive to the trust ports to come forward for privatisation. That incentive is over and above the benefits that privatisation will itself bring to the ports and which my right hon. and learned Friend the Secretary of State described in opening the debate.

The benefits are such that the Clyde and Tees and Hartlepool port authorities brought forward their own

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Bills to privatise themselves before the opportunity arose for the Government to introduce the present Bill in its programme. It will be for those two authorities--I hope that this answers the question of the hon. Member for Stoke on Trent, North--to decide whether to press on with their private Bills or to withdraw them and seek privatisation through this Bill. I could well understand it if they took the view that they are likely to secure the benefits of privatisation more quickly by pursuing their private Bills than by waiting for the enactment of the Ports Bill and seeking privatisation thereafter.

I noted the arguments put forward by a number of my hon. Friends about the time scale for the clawbacks. I think that at least three or four of my colleagues, including my hon. Friends the Members for Teignbridge (Mr. Nicholls), for Thurrock (Mr. Janman) and for Dover (Mr. Shaw), mentioned that issue. Obviously, we shall return to it in Committee, when we may want to discuss it in greater detail.

Mr. Moate : I am most grateful to my hon. Friend. Does he agree that virtually everyone who has caught the Chair's eye today and some of those who did not--even though we represent the largest ports in the United Kingdom--has expressed support for the management-employee buy-outs and believes that the Secretary of State should give preference to such schemes? If he finds that the levy and clawback proposals militate against such buy-outs in favour of outside investment groups, will he undertake to discuss revising those rules with the Treasury so that, in every case where they are proposed, sensible schemes from management and employees would prove to be the winners?

Mr. McLoughlin : I am very sympathetic to the idea of management- employee buy-outs. That goes along the line that the Government have developed in the many privatisations that we have steered through the House. That line will ensure that--

Mr. Robert Hughes : On a point of order, Mr. Speaker. Is it in order for the Minister to show such discourtesy, instead of addressing the House?

Mr. Speaker : I had not noticed. I think that the Minister was addressing one of his hon. Friends on the Benches below the Gangway.

Mr. McLoughlin : I was saying that we hope that privatisation of the trust ports will continue with Government policy, which has meant that, through various privatisation measures, people who have worked in those industries for many years can play a proper role and start to own some of them. That is where our policy diverges so greatly from that of the Opposition, who are only interested in the state owning and people having no rights and powers in their own industries.

My hon. Friend the Member for Faversham (Mr. Moate) referred to management- employee buy-outs, and I am keen on that idea. The hon. Member for Kingston upon Hull, East has opposed every privatisation measure which has been brought before the House by the

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Government. The Conservative party have given rights to workers in industries, whether they are state-owned or, as in this case, trust ports, so that they can own part of the industry in which they work and which is so much a part of their livelihood.

If I may revert for a moment to the levy, hon. Members will see that the levy provisions in the Bill include, in clause 12(5), the possibility for the Secretary of State, with the consent of the Treasury, to vary the rate of levy. There is a similar possibility in the provisions about the clawback of part of the gains from subsequent land developments. That is in clause 16(6). I should explain the intention here. As I have explained, the Government believe that the 50 per cent. rate of levy is a fair one. We intend to apply that rate in all cases. But we believe that it would be a mistake to have to look to further primary legislation to make it possible to vary the rate. It would be wrong to speculate at this stage in what circumstances the Government might wish to do this, but it is, I think, a sensible precaution to have these provisions in the Bill.

It may be sensible if I elaborate on the question of ownership of the trust ports, which has been a matter of some significance in the framing of the Bill. I should make it clear from the outset that no one is arguing-- certainly not the Government--that trust ports are not the direct owners of their assets and property. What is at issue is the ownership of the trust ports themselves. Hon. Members may recall that it was decided in another place in July 1987 that the Trustee Savings bank belonged to the state. This followed the passage of the Trustee Savings Banks Act 1985. The same principle applies to the trust ports.

Following that judgment in another place, the National Audit Office pointed out that it was open to the Government to consider whether parliamentary approval should be sought to enable the Crown to assume some measure of ownership of the Trustee Savings bank. The same considerations apply in the case of the trust ports ; it is therefore for Parliament to decide who should benefit from the sale of the ports.

The Government, however, took none of the proceeds from the privatisation of the TSB. How, then, do they justify taking a 50 per cent. levy in the case of the trust ports? The trust ports are similar to the TSB in that they are trusts owned by the state, although not, of course, by the Government ; but they are different from the TSB in a number of important respects. We consider that those differences justify the passing of a share of the proceeds to the Exchequer.

The ports themselves are, I think, concerned about several main issues in the Bill. The first is the levy on the sale of the ports, about which enough has already been said ; the second is the clawback on gains from the development of land. As I have said, we shall deal with that point in a separate order and we shall welcome the views of the port industry. Another point of concern relates to when the Secretary of State will use his powers of compulsion. We decided on the two-year delay because we feel that it allows the ports substantial period during which to see the benefits of privatisation. Some ports already see those benefits, and will privatise quickly. I take the points made by the hon. Member for Orkney and Shetland (Mr. Wallace), and my hon. Friends the Members for Poole (Mr. Ward) and for Dover, about the anxieties felt by certain ports. We appreciate the importance of considering the ports individually and we shall take part in consultations before any decisions are

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made. I was pleased to hear from the hon. Member for Orkney and Shetland that his party would be supporting the Bill- - [Interruption.] I gather that he did not say that ; I am not really surprised. I was interested to read the following in Lloyd's List International not long ago :

"If you do not understand the question, sit on the fence--that seems to be the motto of the UK's Liberal Democrats when it comes to dealing with ports.

Only last year their 17 MPs managed to split three ways in the votes over abolishing the Dock Labour Scheme and now, it seems, ports privatisation is causing them a few problems as well.

In March, five Liberal Democrats voted against the Tees and Hartlepool Port Authority Bill. So far so good. But this week five Liberal Democrats voted in favour of an almost identical Bill--seeking to privatise the Clyde Port Authority.

What is more, two MPs"--

the hon. Member for Berwick-upon-Tweed (Mr. Beith) and the hon. and learned Member for Fife, North-East (Mr. Campbell)--

"voted in different lobbies on each occasion. Even more surprising is the fact that their transport and shipping spokesman did not vote

The Liberal Democrats Press office seemed as perplexed by the issue as their MPs. When asked about a reason for the change of heart, back came the reply, I haven't got a clue.' Pressed further on the issue, the answer changed to such is life'."

Mr. Wallace : Will the Minister give way?

Mr. McLoughlin : The hon. Gentleman knows that I have not time to give way, although I am as keen as anyone else to find out the true views of the Liberal Democrats.

We have had an interesting debate. I look forward to the Committee stage of the Bill, when we shall be able to argue about some of the detailed points raised by a number of hon. Members. There is no doubt that the Bill is greatly wanted by a number of ports throughout the country : it will free them from the constraints under which they suffer as trust ports. The demand is clear ; two ports have already introduced private Bills--which, as a number of hon. Members have pointed out, have already taken up a good deal of parliamentary time.

The Bill is the right way in which to privatise trust ports. Its passage will represent an important first step in the development of the ports industry. It is an important Bill, which marks a positive step forward for the ports industry. Without Government interference, the ports will be able to get on with the job. I commend the Bill to the House.

Question put, That the Bill be now read a Second time : The House divided : Ayes 260, Noes 204.

Division No. 48] [at 10.00 pm

AYES

Adley, Robert

Aitken, Jonathan

Alexander, Richard

Alison, Rt Hon Michael

Amess, David

Amos, Alan

Arbuthnot, James

Arnold, Jacques (Gravesham)

Arnold, Sir Thomas

Ashby, David

Banks, Robert (Harrogate)

Batiste, Spencer

Beaumont-Dark, Anthony

Bellingham, Henry

Bendall, Vivian

Bennett, Nicholas (Pembroke)

Benyon, W.

Bevan, David Gilroy

Biffen, Rt Hon John

Blackburn, Dr John G.

Blaker, Rt Hon Sir Peter

Body, Sir Richard

Bonsor, Sir Nicholas

Boscawen, Hon Robert

Boswell, Tim

Bottomley, Peter

Bottomley, Mrs Virginia

Bowden, Gerald (Dulwich)

Bowis, John

Boyson, Rt Hon Dr Sir Rhodes

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