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Mr. Deputy Speaker : With the leave of the House, I shall put the remaining amendments together.
Subsequent Lords amendments agreed to.
Committee appointed to draw up a Reason to be assigned to the Lords for disagreeing to their amendment No. 38 : Mr. Stuart Bell, Mr. Neil Hamilton, Mr. Andrew Mitchell, Mr. Martin O'Neill and Mr. Tim Eggar be members of the Committee ; Three to be the quorum.--[ Mr. Eggar. ] To withdraw immediately.
The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Tim Smith) : I beg to move,
That the draft Ports (Northern Ireland) Order 1994, which was laid before this House on 19th January, be approved.
I understand that it will be convenient for the House also to discuss the second motion :
That the draft Ports (Northern Ireland Consequential Provisions) Order 1994, which was laid before this House on 19th January, be approved.
The orders reflect provisions already enacted in Great Britain under the Ports Act 1991. It is primarily an enabling measure, designed to offer a more efficient mechanism than currently exists for ports to privatise themselves.
The order would empower any relevant Northern Ireland port authority to submit a privatisation scheme to the Department for approval. The scheme would transfer all the property, rights, liabilities and functions of the port's undertaking to a successor company formed under the Companies (Northern Ireland) Order 1986. The order would provide powers for the Department to initiate a privatisation scheme for a port with an annual turnover of £5 million, index-linked, which has not itself submitted such a scheme within two years of enactment of the order.
It would require the port authority to pay the Government a 50 per cent. levy on the sales proceeds and it would empower the Department to vary the levy percentages on any gains from the disposal of land within 10 years of privatisation.
Mr. Kevin McNamara (Kingston upon Hull, North) : Reverting to the point the Minister made earlier, why is such a scheme not subject to an affirmative order in the House, as it is for the privatisation of trusts in the rest of the United Kingdom ?
Mr. Smith : Because it would conflict with the constitutional position of the Assembly. It would create a difficult constitutional precedent. It requires an affirmative resolution of the Assembly, but here it would have to be subject to a negative resolution. In practice, if the Opposition were to pray against it at the appropriate time, there would be a debate in the House.
Mr. James Molyneaux (Lagan Valley) : The Opposition spokesman has raised a fairly crucial point. Perhaps we could return to it on Thursday, when we debate the renewal of direct rule. We shall be debating and voting on the renewal of the Northern Ireland Act 1974. I hope that it is the ambition of the House to get rid of the 1974 Act as soon as possible.
Mr. Smith : I hope that the right hon. Gentleman agrees that I have described the current position accurately.
Mr. Peter Robinson (Belfast, East) : I apologise for interrupting the Minister so early, but could he help the blissfully naive ? He referred to 50 per cent. of the proceeds being clawed back by the Government. Who gets the other 50 per cent. ?
Mr. Smith : The other 50 per cent. goes to the company. That follows the position in Great Britain, so that half the proceeds would go to the Treasury and, subject to any costs
Column 744which would be deducted first, and subject to any possible capital gains tax, half the proceeds would go to the company. That would be one incentive for privatisation.
Mr. Robinson : Is the Minister telling us that, if a company bids £50 million, or whatever the going rate for a port may be, they would have to pay only £25 million to the Government ?
Mr. Smith : Will the hon. Gentleman repeat his question, as I did not understand it ?
Mr. Robinson : If only 50 per cent. of the money from a private company purchasing the port goes to the Government, the other 50 per cent. effectively goes into the company's coffers. If a company bid £50 million, it would pay only £25 million to the Government.
Mr. Smith : Because there is no beneficial owner of the trust ports- -the Trustee Savings bank is in the same position--the proceeds would go to the company, which would take that into account in deciding its bid. The position of trust ports in Northern Ireland is the same as it is for trust ports in the whole United Kingdom ; there is absolutely no difference.
Finally, the order would provide powers to reimburse the costs incurred by a management-employee buy-out team in mounting a bid for the port undertaking.
The Department would issue guidelines for voluntary privatisation under the order. Those guidelines would provide that, in framing their objectives, ports should have regard to
"the desirability of encouraging the disposal of the whole or a substantial part of the equity share capital of the successor company to managers or other persons employed by the company."
While the guidelines will be concerned primarily with privatisation by trade sale, other methods are not ruled out. However, any such proposals must be agreed by the Department.
Dr. Norman A. Godman (Greenock and Port Glasgow) : The hon. Gentleman mentioned functions to be carried out by the successor companies that are now carried out by the authorities. On the important activity of dredging, will a statutory obligation be placed on the successor companies to continue that function ?
Mr. Smith : I shall check on that point. I think that the successor companies will inherit the responsibilities of the trust boards. I shall give the hon. Gentleman a full reply at the end of the debate.
Sir Teddy Taylor (Southend, East) : I thank my hon. Friend for being so courteous in giving way to so many interventions. I assure him that the issue I am about to raise is the only one that concerns me, so I shall not trouble him further.
All the ports in southern Ireland are being stuffed with EC funding and subsidies. Does my hon. Friend believe that a private port company would have the same eligibility for EC funding as a public authority ? That is an important issue in terms of competition between the north and the south.
Mr. Smith : My hon. Friend has raised an extremely important point. Currently, trust ports qualify for up to a maximum of 75 per cent. European regional development fund funding. In the private sector, that entitlement would be reduced to 50 per cent. It is an extremely important issue
Column 745when considering the benefits of privatisation. [ An hon Member :-- "Which the Government will ignore."] I shall deal with that sedentary intervention, although I have been quite good at giving way to those hon. Members who have taken the trouble to stand up. We shall consider all the factors at the relevant time. As I have made clear, it is an extremely important consideration.
Rev. Ian Paisley (Antrim, North) : Is it not amazing that, because the EC has been prepared to give a larger grant to a company controlled by the Government, it is now prepared to give those larger grants to Government-controlled operations in the south ? The south is moving towards Government-controlled companies just to get EC money, whereas our Government are moving away from that. In doing so, they will prevent money that we pay into Europe from being returned to us.
Surely, as a Conservative believing in private enterprise, the Minister should realise that the EC is actually opposing competition and the very philosophy in which he believes. Rather than doing what he proposes tonight, he should keep the ports as they are in order to get back our money from Europe.
Mr. Smith : I have some sympathy with what the hon. Gentleman says. I do not see any rationale in distinguishing between businesses that happen to be publicly owned--and giving them a larger grant--and those that happen to be privately owned. I repeat the point that I made to my hon. Friend the Member for Southend, East (Sir T. Taylor). He identified what is undoubtedly an extremely important consideration. Obviously, I believe that considerable benefits would accrue from privatisation. However, he raised an important factor that must be considered at the relevant time.
As in Great Britain, the underlying policy of the order is essentially one of voluntary privatisation, although it does provide the Department with compulsory powers to require ports with a turnover limit of £5 million index-linked to bring forward privatisation schemes if they have not done so within two years of enactment. As I am sure the House appreciates, at present the only relevant Northern Ireland port in that category is Belfast. I can inform the House that I received more than 50 formal responses during the consultation process, none of which has necessitated any change to the order. Some concern was expressed about the possible impact of the privatisation of the port of Belfast. I must again emphasise that this order is purely enabling legislation and does not implement the privatisation of Belfast or, indeed, any other port in Northern Ireland.
Mr. William O'Brien (Normanton) : I am interested in the Minister's point about the order being enabling. Did not the hon. Gentleman say this morning that this was a privatisation Bill ? Therefore, his remarks now about it being an enabling measure conflict with the point he made this morning. Will he now clarify the position ?
Mr. Smith : If I remember rightly, what I said on television this morning was that this is a privatisation measure, which it clearly is because it facilitates the privatisation of the trust ports. It will enable privatisation to take place. Within the next two years it will be open to the Belfast harbour commissioners, if they so decide, to put forward a scheme for privatisation. Only after two years had elapsed would the Department consider the possibility
Column 746of compulsory privatisation. That is the position. The measure does not give us the authority to compel the privatisation of the port of Belfast.
Rev. Martin Smyth (Belfast, South) : I appreciate the Minister giving way to so many interventions. He has compared this order with the 1991 legislation for Great Britain. How many ports have operated under that legislation ? What steps have the Government taken to try to compel those who have not turned to privatisation to do so ?
Mr. Smith : I am not sure of the exact position in Great Britain. I do not know whether the Department of Transport has required any particular privatisation scheme. I shall investigate and answer the point at the end of the debate. We may have reached the point where it would be open to the Department to do so, but I shall find out and provide the hon. Gentleman with that information. I think that the answer will be none.
As I explained, no such decision could be taken until two years after enactment of the order, and only then following consultation with both the port authority and interested parties, and detailed consideration of the implications of privatisation. If, after two years, and after consultation with the port authority, the Department decides not to use its compulsory powers, those powers will cease to be exercisable for a further period of five years.
I commend both the orders to the House.
Mr. Kevin McNamara (Kingston upon Hull, North) : I do not think that I have ever heard such a short speech justifying such an arrant bank robbery of the people of Northern Ireland as the one we have just heard from the Minister. Because the order has remained below the line for such a long time, I had hoped that the Government would retreat from such a foolish and senseless course. Such a retreat would have been welcomed by all who are concerned with or work in the port. The Government have united opposition from those who work in Belfast harbour, from all the main political parties in Northern Ireland and from the vast majority of people living and working in Belfast and across the region.
Hon. Members have already pointed out the unsatisfactory way in which the measure is being introduced--as compared with what is happening in the remainder of the United Kingdom. Although the problems of an Assembly may be real, they should not take away from the Government the onus on them to introduce and justify their proposals. They should leave it to the Opposition to pray against the order. The Government should find a way of introducing their proposal in their own time.
The undemocratic nature of compulsory privatisation without debate, as exemplified by this procedure, is typical of the Government's cavalier attitude to this matter.
Mr. David Trimble (Upper Bann) : The hon. Gentleman has rightly criticised the undemocratic nature of the procedure that is being used. Will he therefore vote against the interim period extension order on Thursday ? That would cure the problem because, if the provision were not extended, we should again have democratic procedures in Northern Ireland.
Mr. McNamara : The hon. Gentleman tempts me too much. I should be delighted if the powers went to a devolved Assembly in Northern Ireland-- when that is agreed among all the parties and both Governments with a strong internal settlement and even stronger cross-border institutions.
One of the senior executives of Belfast harbour commission described the procedures thus :
"Overall, one has to view privatisation as Tory dogma. If we assume that privatisation is not a good thing, the next thing you would bump into would be that the Government has a power compulsorily to privatise you."
If the harbour commissioners do not volunteer to commit suicide, they will be put down painlessly two years later.
At a time when the Government are rightly encouraging inward investment in Northern Ireland, there is a real possibility that one of Northern Ireland's indigenous profit-making organisations will be sold--possibly taken out of Ireland's control, and possibly even sold to a foreign purchaser, unless the Government say that they will prevent it.
Let me explain the broader significance of the port of Belfast to Northern Ireland's economy. Fifty-five per cent. of all imports and exports to and from Northern Ireland pass through the port of Belfast. The port thus provides not only employment and a degree of economic stability for the Greater Belfast area but a central focus for investment and employment throughout the region. Given the peripheral nature of Northern Ireland in relation to the United Kingdom, its ports provide a vital trade and tourism link between the island of Ireland and the rest of the European Community. Northern Ireland, however, is in a unique position. Individual ports in the region not only compete with each other but face severe competition from ports in the Republic. It is against what is already a fiercely competitive background that the Government seek to privatise the port of Belfast--and, in doing so, have again decided to apply ideological dogma rigidly rather than following economic common sense.
The Government claim that the aim of the order is to improve effectiveness and efficiency, but they do not propose to privatise the most inefficient and ineffective ports in Northern Ireland ; instead, they are forcing the sell-off of the most profitable of those ports, which has a turnover of at least £5 million. There could be no clearer illustration of the Government's real motives. They are not interested in the future of the region's dock industry, but they are eager to get their hands on substantial returns from the port of Belfast to cut the Treasury's deficit and put fat profits into the hands of their political and industrial friends.
That was brought out brilliantly by an intervention from the hon. Member for Belfast, East (Mr. Robinson), who asked what would happen to the other 50 per cent. It is a case of "Bid us a price, and we will give you half your money back" : it is a Dutch auction. The money is going back to a company, and thence to private shareholders--money that has been raised by the harbour commissioners, and by the effort and integrity of a non-profit- making organisation to bring about the most efficient port in the north of Ireland. By "non-profit-making" I mean that it does not distribute its profits, but reinvests them in its own industry. All that money will be lost. It would be ironic if, for example, one of Northern Ireland's main competitors in the Republic successfully
Column 748took over the port of Belfast. The hon. Member for Antrim, North (Rev. Ian Paisley) drew attention to the position of ports in the Republic. Northern Ireland's ports have drawn considerably away from those in the republic, but in the event of privatisation and the consequential increase in charges, that traffic will almost certainly be lost back to ports in the south.
At present, about a third of traffic going through the port of Belfast comes from the Republic. Ports in the Republic receive full support from the European Community, and--as has been pointed out--as a result of the decision to give them semi-state body status, that aid looks set to continue. Because of the cohesion fund, it is likely to amount to up to 75 per cent., and may rise even further.
The Government are deliberately, specifically and directly forcing the port of Belfast to face increased competition from the Republic--from ports that will be increasingly subsidised to enable them to make their affairs more efficient and invest more in their own infrastructure. They propose to sell off a profitable, efficient port that is gaining traffic from all over Ireland : they are prepared to see that traffic lost.
Sir Teddy Taylor : As a respected democrat, is the hon. Gentleman not genuinely worried about the EC sabotaging the Conservative principle of privatisation by exercising such discrimination in regard to grants ? I accept that, as always, his views are sincere ; does he not think it ridiculous that the EC should have a policy that discriminates wholly against Conservative policy, and may prevent us from doing what we wish to do ?
Mr. McNamara : I have no problems with discrimination against Conservative policy--and if I am not worried about it, I do not see why the Community should be. I am prepared to see more and more money going into public infrastructure : that is why I want to keep the port of Belfast in the public sector. It works efficiently and effectively as it is.
Mr. Tim Smith : The hon. Gentleman says that, if the port is privatised, charges will immediately rise and a great deal of business will be lost to the Republic. How does he account for the success of the port of Larne, which is already privately owned ?
Mr. McNamara : Regular fast catamarans carry people to and fro across a 16-mile strip of water, but the port of Larne cannot take the shipping that the port of Belfast can take.
Mr. Roy Beggs (Antrim, East) : As the Member of Parliament representing the port of Larne, I assure the hon. Gentleman that as yet we have no catamarans running ; but we have a very efficient ferry service. It is easier to get a boat to Scotland than to get a bus to some of the outlying villages. It is the regularity and reliability of a competitively priced service that makes the port of Larne attractive.
Mr. McNamara : The hon. Gentleman forgot to mention that an effective road system is needed to increase the attraction still further. I was disappointed that he left that out.
The port of Belfast has enjoyed substantial financial assistance from the European regional development fund transport programme, which has enabled it to keep several steps ahead of its competition in the Republic. That,
Column 749however, will be lost. During the past five years, a combination of substantial European funding and investment from its own funds has produced a £100 million port fund in Belfast, which has significantly improved the port's infrastructure and, consequently, its competitive edge. The facilities are new and modern ; they are a testament to the sound management and astute business practice of the current Belfast harbour commissioners. However, the privatisation of the port--like the privatisation of Aldergrove airport--raises the question of the clawback of EC funds totalling approximately £60 million. The Minister will recall that, at the time of the airports order, my hon. Friend the Member for Wigan (Mr. Stott) drew his attention to a letter from the European Commissioner, Bruce Millan. In effect, the letter stated that the question of clawback could arise in the event of the privatisation of the international airport. I must warn the Minister that the advice that we have received from the Commission about the privatisation of the port of Belfast is the same as that offered at the time of the Aldergrove sell-off. The EC may well decide to reclaim aid that was granted towards the development of the port's infrastructure in the ERDF programme ; it may be especially encouraged to do that when told that half the purchase price is going back to the person who bought it.
Far from enhancing the port's effectiveness and competitiveness by privatising it, the Minister will prevent any further development of port infrastructure by means of EC funding. Meanwhile, the port's major competitors in the Republic will continue to enjoy all the benefits of European aid.
The order has a further worrying aspect, which is linked to infrastructure development and the ownership of the harbour estate. As a consequence of successful development across the estate, the port of Belfast now has a host of major and minor industrial tenants, including Shorts Bombadier, Harland and Wolff and many others. All the companies that located in the estate did so in the knowledge that the site had a good record for constantly developing and improving its infrastructure, and that the trust port arrangement ensured the existence of fair rents and leases. The Government's plans, however, leave the estate open to those who might seek to exploit the peripheral nature of the region.
The island of Ireland will be the only part of Europe that is wholly dependent on the use of ports for bulk import and export to and from the rest of the European Community. Consequently, if the new owners so wish, the estate can be left to run down on ever-increasing rents and leases. If short-term profit is the only motivating factor, why should the new owners make long-term costly investment in the infrastructure of the port ? Thanks to the European taxpayer, the new private owners of the port of Belfast will be presented with a highly profitable concern.
What will consequently become of the development plans following the building of the new £10 million link road on the County Down side ? That link is helping to develop an additional 200 acres of estate and should bring an additional 5,000 new jobs, increasing the total Belfast harbour estate work force to about 22,000. In an area where jobs are desperately needed, the gamble that the Government are taking with that future investment is clearly unacceptable. The plans contained within the order jeopardise significant future investments in the harbour estate and
Column 750with them the possibility of getting some of Northern Ireland's jobless back to work. There is less chance of a harbour rail link if we have to depend on private investment in order to achieve it rather than having public investment, possibly backed up by EC funds. Let me deal now with ownership and accountability. The Minister will know that the regulations under which trust ports operate currently place the responsibility of care on the various statutory authorities that control the ports on behalf of and in the interest of the people serviced by the port. The regulations ensure that the harbour operates in the broadest interests of the wider community who benefit from long-term employment and investment prospects. The regulations further ensure that businesses are encouraged into the harbour industrial estate with fair charging and equal treatment in the allocation of berths and other port facilities. In short, the current regulations under which trust ports operate ensure that the long-term interests of the port and the estate prevail.
That formula has proved to be successful in the outstanding performance of the port of Belfast. Consequently, the Government should ensure that predatory ownership, particularly by companies in other member states, is not possible. Can the Minister tell the House whether the Government intend to retain a golden share in the port as they did with Belfast international airport ? Would such a golden share be used to prevent investment by companies outside the United Kingdom ?
Currently, all the profits made in the dock are reinvested in the estate. Money is raised in Ireland through the productivity of the people of Northern Ireland, and the profits are utilised for the benefit of the asset and the Northern Ireland economy. It is those very profits that are now to be used as an inducement to the potential purchaser. Those profits are all the incentive a predator needs to purchase the land bank. Thereafter, there is no incentive for any purchaser to improve on or invest in the infrastructure for the future. That is partly because the infrastructure is now very good and partly because purchasers can just sit there for 10 years, after which there is no levy and no clawback. Some of the richest land in Belfast, certainly some of that most ripe for development, will go to whoever purchases, at 50 per cent. of its face value, the new asset.
The people of Northern Ireland will have lost and the asset stripper will have gained a fast profitable return. Who might some of the predators be ? Will it be the Mersey Docks and Harbour Company, creating a monopoly in crossings to and from Liverpool ? Will it be P and O, creating a monopoly with the port of Larne ? Whoever else wishes to purchase the port of Belfast, will the Minister give an undertaking to the House today that the first option, if the Government go ahead with the sale, will be a management-employee buy-out and not a trade sale ? Will he give an undertaking to the House that that will be the first thing that they will consider ? That would at least ensure that a genuine commitment to the future of the port and to the Northern Ireland economy survived privatisation. That is very much a second best, however ; things should be left as they are. As things stand now, there is a real danger of profit created in Northern Ireland being exported and creamed off ; it could be just another example of absentee landlordism.
It seems that the success of the port of Belfast is not enough to curtail the Minister's zealous hunger for the notion of privatisation, even when the object of the Government's desire is operating competitively and
Column 751efficiently. This debate, as with others on Northern Ireland Electric and Aldergrove airport, will expose the Government's privatisation plans in Northern Ireland for what they really are--plans to stuff the Treasury with money and to sell off assets to their friends.
The debate will show how belated, ill-judged and inappropriate attempts to keep pace with the discredited sell-off of assets throughout other parts of the United Kingdom during the 1980s are now being followed again in Northern Ireland. I very much regret the fact that Ministers feel that they must prove their ideological purity by indulging in this foolish measure.
Above all, we are seeing a trust established by the people of Belfast--the users of the port--pass out of the control of Northern Ireland. The trust has been developed by the people of Northern Ireland. It has developed an infrastructure and a going concern of considerable efficiency, but now the moneys generated by it are likely to be passed out of Northern Ireland. There is a real chance that charges will be increased and that the port will lose its competitive edge against the improved infrastructure within the Republic. Is that really what the Government think is sound economic sense ? The Government are engaged in a foolish process. They are playing dangerously with the jobs and opportunities of people who work within the dock estate, and with the whole basis of Northern Ireland's economy.
Mr. Peter Robinson (Belfast, East) : I cannot recall how long it has been since I followed a speech by the hon. Member for Kingston upon Hull, North (Mr. McNamara) with my blood pressure as settled as it is now. I am pleased that we shall be fighting in the same corner this evening.
On the face of it, the draft statutory instrument appears simply to place upon the port the ability, if it so wishes, to consider putting forward a proposal for privatisation. In reality, when the order becomes law it will pave the way for privatisation and will put Belfast port, to which the order essentially applies, on the slips to be sold off--some might say sold out.
Before I deal with the content of the order, I should like to raise two issues. The Minister referred to the consultation process. He told the House that he had received more than 50 responses. I very much regret the unhealthy arrogance that he showed by saying that the 50-plus responses did not require the slightest change in the measure. That is in effect what he told a number of hon. Members at the beginning of January when he said that he did not consider that any changes were required to the order.
Will the Minister tell us how many of the 54 responses that he received--I believe that that is the correct number--supported the Government's action ? Does he consider those most directly involved in the port to be among the supporters of the measure ? Do the harbour commissioners support him ? Are they cheering him on ? Does he have the support of all the trade unions in the port ? Does he have the support of the shipping agencies in the port ? Does he have the support of all the other users of the land site of the port ? It is worth providing a breakdown of the 54 responses so that we know how many support the Minister and how many oppose the order.
Column 752The second issue is a procedural matter about which I spoke earlier. The Minister will recognise that when similar legislation was proposed for the mainland under the Ports Act 1991 the same provision applied to ports on the mainland. If within a two-year period they wished to put forward a proposal for privatisation to the Department, the measure could be dealt with directly on their suggestion. If they failed to make a proposal within two years, the Government could proceed to privatise the port, but in those circumstances the Government were required to table an affirmative resolution in the House. In the case of Northern Ireland, however, the Government will have to table not an affirmative resolution but a negative resolution. If the wisdom of the harbour commissioners is such that, after two years, they recognise that privatisation is not in the interests of Belfast and Northern Ireland, the Department can step in and determine that the port should be privatised. The House will have no opportunity to debate the matter.
I wrote to the Minister on the issue, and he replied :
"If . . . the Belfast Harbour Commissioners failed to come forward with a scheme within the first 2 years, the Government would at that stage have to decide whether it wished to invoke the reserve powers and enforce the privatisation of the Port. Of course, such a decision would only be taken after detailed consultations with the port authority and with all other interested parties".
We are aware of the Minister's approach to detailed consultation, so I shall avoid making any comment about that. He does not believe that such consultation requires his attention, but his response suggested that there would be consultation with all other interested parties. Surely Parliament is an interested party. Surely it has the right to debate such matters. It is not good enough for the Minister to say in his letter that
"in the event of a prayer against such an order the Government would consider any request to have the matter debated on the floor of the House."
I urge the Minister to go a little further and to give a firm undertaking that if a prayer is tabled he will ensure that the matter is considered by the House.
It is sleight of hand to refer to the order as enabling legislation. As it affects only Belfast port, the Minister will understand if I concentrate on the Belfast harbour commissioners. The Minister clearly intends to reduce the number of seats on the Belfast harbour commission and to retain the power to appoint future commissioners. If a commissioner does not toe the line and is not pro-privatisation, the Minister can turf him out and arrange for the right people to be appointed. The Government have decided to privatise Belfast port. Referring to the measure as enabling legislation is a con trick, a sleight of hand and an act of trickery to ensure that the order is passed.
I agree with the hon. Member for Kingston upon Hull, North that this is not a trifling matter but a serious issue that is important to the Northern Ireland economy. Naturally, it most closely affects the Belfast constituencies and I trust that the hon. Member for Belfast, West (Dr. Hendron) will join us before the end of the debate and vote against the order, which will seriously affect his and my constituents and other hon. Members who represent Belfast. The Northern Ireland economy will be affected by the proposal. As the hon. Member for Kingston upon Hull, North said, more than half of the imports and exports to and from Northern Ireland come through Belfast port. When the channel tunnel becomes operational, the
Column 753Republic of Ireland and Northern Ireland are the two parts of the European Community that will be isolated. Bulk imports and exports will be shipped to and from the main ports of Dublin and Belfast. I agree with the hon. Member for Kingston upon Hull, North that the draft order will result in poorer services and in dearer prices.
Mr. Robinson : The Minister asks why. Less public finance--if one can call European Community funds public finance--will be allocated to Belfast port, so it will have to spend more money from its reserves. It will have to put up prices to meet the difference between what its competitors in Dublin receive in grants and what it receives. It will need more finance, and more finance through expenditure automatically requires higher prices.
Mr. Tim Smith : Does the hon. Gentleman not appreciate that the current charges have been set in a highly competitive market, as everyone who has spoken in the debate has agreed ? There is healthy competition among the ports in the island of Ireland and, in the face of that, no port would increase its prices. Prices are set by the market.
Mr. Robinson : I hope that the Minister has now got it. He is making Belfast port uncompetitive and leaving it in a competitive market. It will not be able to compete because its main competitor, the port of Dublin, will grab all the EC funding at a much higher rate and will be much more competitive. Belfast port has the choice of putting up its prices or going out of business, so what will it do ? It will put up its charges, to the detriment of the Northern Ireland economy. Belfast port is in a unique position. It already faces considerably more competition than ports on the mainland not only from other Northern Ireland ports but from Republic of Ireland ports.
The proposal is based on the Government's philosophy of privatisation. I do not take a doctrinaire view for or against privatisation. I was involved in pushing competitive tendering and privatisation before Thatcherism was popular, although it did not end up being very popular. Privatisation worked where I applied it because it was recognised that it would not work in all circumstances. It was necessary, therefore, to consider how it would work in commercial terms, in terms of jobs and in terms of the economy. When one applies those terms to the port, one finds that privatisation brings no advantage to Belfast port.
The Government have argued that privatisation takes the weight off the taxpayer meeting the costs of failing industries, but Belfast port is a success. It does not require handouts from the Government to meet its running costs or capital investment programme. The usual Tory line that propped-up, failing industries require the breath of privatisation does not apply to Belfast port. In the House of Lords, the Government spokesman said :
"The Government have consistently taken the view that the privatisation of the larger trust ports is an important element of the long-term strategy of opening up the ports industry to market forces."--[ Official Report, House of Lords , 18 July 1991 ; Vol. 531, c. 348.]
The Northern Ireland trust ports, however, are already subject to market forces via competition either from Larne and elsewhere or from the Republic of Ireland. So that argument does not apply to the Northern Ireland ports.