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Mr. Wallace : I thank the hon. Member for Middlesbrough (Mr. Bell) for his kind comments earlier on events in my constituency and for the advice that he gave me.

When this matter was debated in Committee, I was occupied elsewhere and missed the vote. As I understand it, on a recount the Government lost the Division on the amendment and they had to table new clause 9 to ameliorate the effect of clause 16.

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It is difficult to work out the Government's precise intentions. I agree with much of the analysis of the Bill by the hon. Member for Kingston upon Hull, East (Mr. Prescott) and, in particular, of the objectionable parts of the Bill about the compulsory nature of privatisation and those parts which relate to the levy on the proceeds of sale. However, different considerations apply to the provisions relating to the levy on a subsequent sale of land. Much has been made of how much the Treasury would like to get its hands on through particular provisions in the Bill. I do not doubt that that may be one of the motivating factors, but if it is to rely on the proceeds under clause 16 and new clause 9, no such economic planning could take place. There is no mention in the financial memorandum of any likely proceeds or revenue to the Treasury which might come from clause 16. That would depend on how many ports were privatised, on how many ports subsequently sold land and on whether the sale of that land would lead to a sizeable gain to which the levy would be applied. Therefore, I do not think that that is the primary concern of the new clause.

However, the new clause is an attempt to stave off the worse effects of land speculation. I well remember the privatisation of Scott Lithgow in Greenock and Port Glasgow and the Government arrangement which allowed the sale of additional land to, I think, Trafalgar House at a relatively low price. Subsequently, the land was sold at quite a premium. There was considerable outrage at the use of public funds to help the sale and at the great profits that the private sector reaped from the sale.

If the Government are trying to discourage such land speculation and the taking of land out of port development, that should be encouraged. If they are trying to achieve a balance so that at least some proceeds from the sale remain with the port, providing additional capital for port development, although that is clearly a difficult balance to strike, an honest effort has been made to strike it. I do not think that the arguments that we have heard so far from the Opposition, not least the 100 per cent. levy which at times seemed to contradict the points made earlier by the hon. Member for Kingston upon Hull, East, persuade me that that would be a better balance than the one proposed in the new clause.

8.15 pm

Mr. McLoughlin : The hon. Member for Hartlepool (Mr. Leadbitter) was right to say that the levy could be varied with the consent of the Treasury and by affirmative order of the House. Therefore, if it were to be changed, the House would have an opportunity to take a decision on it. It could not be done without the matter coming before the House.

Mr. Leadbitter : That usually happens late at night when everyone has gone home. Let me put a simple point to the Minister, who is always anxious to reply to points made. In March 1988, the Secretary of State for Transport made clear in an address to the British Ports Federation his disappointment at the ports' reluctance to respond to his invitation to privatise. The Bill comes in the light of that reluctance. Does the Minister suggest that, in the circumstances and having regard to the levy and the little bit that would be left to the ports, the Bill benefits the Treasury or the ports?

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Mr. McLoughlin : There is no doubt that the Bill will be a tremendous benefit to the ports industry in the United Kingdom. It builds on a number of changes which have taken place over some years. However, that is probably more relevant for the debate on Third Reading.

I agree partly with the points made by the hon. Member for Orkney and Shetland (Mr. Wallace). The Opposition seem to want 100 per cent. for five years, although in Committee they voted for the amendment tabled by my hon. Friend the Member for Thurrock (Mr. Janman). That would seem to be the most damaging of all, because it would delay any development in the ports for five years.

Mr. Prescott : The only trouble with that statement is that it is not in line with the facts. The hon. Gentleman knows that my hon. Friend the Member for Stoke-on-Trent, North (Ms. Walley) wrote to all the ports concerned, and they wrote back saying exactly the opposite--they did not believe that this was helpful and they did not want to be forced into such a position. If the Minister believes that, why did he not leave it to the ports to make the decision instead of being forced into privatisation?

Mr. McLoughlin : We are dealing with the levy on disposals of property after the port has been privatised ; we will come later to the compulsory element.

The Government have tried to take on board the concerns which were ventilated in Committee by my hon. Friends, and that is why the concession has been made. We have tried to make far clearer exactly how and on what criteria the money will be raised. There was confusion as to whether it was capital gains on top of the 50 per cent. That is why we have tabled new clause 9, about which I wrote to the Opposition and all members of the Committee before the Easter recess.

I have explained the reasons for what the Government have done. This represents a fair response to the criticisms made by my hon. Friends. I think that the Government have got it right. It is a fair balance for the ports industry to know exactly what kind of development would come under the windfall gains. We do not want to see huge windfall gains go : that is why, for 10 years, there will be some repayment to the Government, but on a tapering basis. That is fair.

Mr. Prescott : One of the amendments to clause 16 concerns a variable application. Is it possible that, by a new order, the Secretary of State could secure more than 50 per cent., or does new clause 9 set the limit? Might one end up with a levy of more than the 50 per cent. suggested by one amendment to clause 16?

Mr. McLoughlin : No. I made perfectly clear the procedure in respect of the amendments under consideration. A change could be made, but it would have to be done by affirmative order. However, I cannot help it if particular hon. Members are not present at the relevant stage. If they feel strongly enough, they will be certain to be present. On occasions, affirmative orders have attracted a very high attendance, depending on how controversial they are.

New clause 9 strikes a fair balance between the concerns that were expressed by my hon. Friends in Committee, and I commend it to the House.

Question put, That the clause be read a Second time :

The House divided : Ayes 224, Noes 164.

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Column 982

Division No. 120] [8.20 pm

AYES

Adley, Robert

Aitken, Jonathan

Alexander, Richard

Alison, Rt Hon Michael

Amos, Alan

Arbuthnot, James

Arnold, Jacques (Gravesham)

Arnold, Sir Thomas

Ashby, David

Aspinwall, Jack

Baker, Nicholas (Dorset N)

Baldry, Tony

Batiste, Spencer

Beaumont-Dark, Anthony

Beith, A. J.

Bellingham, Henry

Bellotti, David

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

Bottomley, Peter

Bottomley, Mrs Virginia

Bowden, Gerald (Dulwich)

Bowis, John

Boyson, Rt Hon Dr Sir Rhodes

Brazier, Julian

Brown, Michael (Brigg & Cl't's)

Browne, John (Winchester)

Bruce, Malcolm (Gordon)

Budgen, Nicholas

Burns, Simon

Burt, Alistair

Butterfill, John

Campbell, Menzies (Fife NE)

Carlile, Alex (Mont'g)

Carlisle, John, (Luton N)

Carlisle, Kenneth (Lincoln)

Carr, Michael

Channon, Rt Hon Paul

Chope, Christopher

Churchill, Mr

Clark, Rt Hon Alan (Plymouth)

Clark, Rt Hon Sir William

Colvin, Michael

Coombs, Anthony (Wyre F'rest)

Cope, Rt Hon John

Cormack, Patrick

Couchman, James

Currie, Mrs Edwina

Davies, Q. (Stamf'd & Spald'g)

Davis, David (Boothferry)

Day, Stephen

Devlin, Tim

Dickens, Geoffrey

Douglas-Hamilton, Lord James

Dover, Den

Dunn, Bob

Emery, Sir Peter

Evennett, David

Fallon, Michael

Fearn, Ronald

Field, Barry (Isle of Wight)

Fishburn, John Dudley

Forman, Nigel

Forsyth, Michael (Stirling)

Fox, Sir Marcus

Franks, Cecil

Freeman, Roger

French, Douglas

Fry, Peter

Gale, Roger

Gardiner, Sir George

Gill, Christopher

Gilmour, Rt Hon Sir Ian

Goodhart, Sir Philip

Goodlad, Alastair

Goodson-Wickes, Dr Charles

Gorman, Mrs Teresa

Grant, Sir Anthony (CambsSW)

Greenway, Harry (Ealing N)

Greenway, John (Ryedale)

Gregory, Conal

Griffiths, Peter (Portsmouth N)

Grist, Ian

Ground, Patrick

Hamilton, Hon Archie (Epsom)

Hamilton, Neil (Tatton)

Hampson, Dr Keith

Hannam, John

Hargreaves, A. (B'ham H'll Gr')

Hargreaves, Ken (Hyndburn)

Harris, David

Haselhurst, Alan

Hawkins, Christopher

Hayes, Jerry

Hayhoe, Rt Hon Sir Barney

Heathcoat-Amory, David

Heseltine, Rt Hon Michael

Hicks, Mrs Maureen (Wolv' NE)

Hicks, Robert (Cornwall SE)

Higgins, Rt Hon Terence L.

Hill, James

Hind, Kenneth

Hogg, Hon Douglas (Gr'th'm)

Howarth, Alan (Strat'd-on-A)

Howarth, G. (Cannock & B'wd)

Hughes, Robert G. (Harrow W)

Hughes, Simon (Southwark)

Hunter, Andrew

Irvine, Michael

Irving, Sir Charles

Jack, Michael

Jackson, Robert

Johnson Smith, Sir Geoffrey

Jones, Gwilym (Cardiff N)

Jones, Robert B (Herts W)

Kellett-Bowman, Dame Elaine

Key, Robert

Kilfedder, James

King, Roger (B'ham N'thfield)

Kirkhope, Timothy

Knapman, Roger

Knight, Greg (Derby North)

Knight, Dame Jill (Edgbaston)

Knowles, Michael

Knox, David

Lang, Rt Hon Ian

Lawrence, Ivan

Leigh, Edward (Gainsbor'gh)

Lester, Jim (Broxtowe)

Livsey, Richard

Lloyd, Peter (Fareham)

Lyell, Rt Hon Sir Nicholas

McCrindle, Sir Robert

Macfarlane, Sir Neil

MacGregor, Rt Hon John

MacKay, Andrew (E Berkshire)

Maclean, David

Maclennan, Robert

McLoughlin, Patrick

Mans, Keith

Maples, John

Marshall, John (Hendon S)

Martin, David (Portsmouth S)

Maude, Hon Francis

Maxwell-Hyslop, Robin

Mayhew, Rt Hon Sir Patrick

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