House of Commons Hansard Debates for 5 Dec 1996 (pt 11)

4.37 pm

Mr. Neville Trotter (Tynemouth): Tyneside's strong maritime history goes back to the days of the Romans, although in practice its prosperity is based on the coal trade.

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One hundred years ago, more than 3 million tonnes of coal was exported from the Tyne. It was the foundation of the industrial prosperity of the whole river and Tyneside area. In 1923, 22 million tonnes of coal was shipped from the river, and we now have the most modern coal facility in the country, with a capacity of 5 million tonnes a year.

Unfortunately, the market for coal has disappeared. Last year, only 2 million tonnes was exported from the port, and the representatives of the port have admitted that it is prudent to assume that the trade will soon cease altogether. That is an important factor in considering the plans for the future of the port. It must be able to adapt further to changed circumstances. Although the port made a big profit last year, it cannot rely on that continuing if it simply remains as it is.

In 1970, 4 million tonnes of other traffic went through the port; now, it is down to half that figure. In the port's heyday, the number of ships entering the river was 40 a day, or 14,000 a year; by 1970, it was down to 12 ships a day; now, it is down to only four or five ships a day. The Tees has 10 times the amount of business that the Tyne has. When I looked at the official statistics for the port industry, I saw that the Tyne was not in the list of top ports. It is the only major river in the country not listed as a major port. We should bear in mind the realities of the situation.

There is a positive side. We have heard about Nissan coming to the Tyne. That was a big achievement for the port. Nissan exports 80 per cent. of its production to 36 countries, including Japan. It is the biggest car exporter in the country and exports 5,000 cars a week from the Tyne.

We have a booming ship repair industry, which is revitalised and highly competitive. We have a successful offshore industry, with Amec and Swan Hunter employing many people again, and other firms such as A and P Appledore, McNulty and Tyne Tees.

The river has been cleaned up. One of the most remarkable achievements in recent times has been the success of the Tyne and Wear development corporation, in particular, in redeveloping the river frontage. Some years ago, the Tyne had become miles of dereliction--an eyesore. Now, it is revitalised, modernised and attractive to new business.

Fears have been expressed about the sale of port land for development, but we have heard from both sides in the debate that that has already happened. Land has already been disposed of by the Tyne and Wear development corporation, which successfully carried out the redevelopment.

We have heard fears expressed on behalf of employees, but as my right hon. Friend the Secretary of State pointed out, they will be protected by legislation. In his opening speech, my right hon. Friend also referred to the benefit of share ownership. That is important. Employees can participate through share ownership in the new company. That would be encouraged, as my right hon. Friend said in his presentation to the port. In many of the ports that have been privatised, more than half the shares ended up being owned by people who worked in the port. That is a positive development.

There are fears that the new company will have the wrong financial motivation. It must be in the interests of the owners that success should follow from the transfer of ownership. They want the port to succeed--that is why

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they are acquiring it. They will achieve that by satisfying their existing customers and attracting new ones. The new company will remain a statutory harbour authority. For reasons that I do not understand, it is feared that port facilities will be closed. The company will have the same duties and responsibilities under the Ports Act 1991 as the present port authority has. It will not be able to dispose of operational land without the approval of Parliament. There will have to be an opportunity for objections to be raised to such a proposal and, if there were objections, there would have to be a public inquiry.

There are fears that charges will be increased. If I read the figures correctly, on a turnover of £14 million, the port made a profit of £5 million. If I were one of the port users, I might already bear that fact in mind. The 1991 Act states that charges must be reasonable. If there were any misguided attempt to increase the charges--I do not see why there should be--there is a right of appeal to the Secretary of State. That right of appeal has never been used in any of the previous port privatisations.

Some ports seemed to be efficient before they were privatised, but they are more efficient now, after privatisation. Port privatisation has been an undoubted success and experience from one end of the country to the other does not bear out the fears that have been expressed. Privatisation has brought increased business, profit and capital investment.

I see no reason to doubt that the Tyne will be another success story. We have a long and proud history on the Tyne, and I look to a positive future. We have a well- situated port for traffic to north-east Europe and we have further opportunities through the offshore industries.

Mr. A. J. Beith (Berwick-upon-Tweed): I declare an interest as an occasional user and licence payer on the river. Why is the hon. Gentleman so ready to ignore the views of all the established users, including Nissan and Color Line? The burden of representations was not just overwhelmingly, but totally, against the scheme proposed by the Secretary of State.

Mr. Trotter: I shall not detain the House by reading out the long letter from the chamber of commerce, which was a sensible summary of the views of 3,000 firms that trade in the north-east. It was a rational expression of the matters that must be addressed by the Secretary of State. I was about to deal with the matter in my concluding remarks.

When the Secretary of State judges the bids, he does not have to accept the highest offer. I remind the House that the bids will be assessed in the first instance by the port authority, which will make a recommendation to the Secretary of State. There have been examples where the highest offer has not been accepted for the reasons discussed in the debate. In the case of Tees and Hartlepool, if price had been the only criterion, the highest bid would have been accepted, but the board considered that the high price was not sufficient to overcome its preference. In the interests of the port's independence and long-term stability and the benefit of the community, another offer was accepted.

The Secretary of State hardly needs to be told that, when the time comes to consider the bids, we should not necessarily accept the highest offer.

Mr. Jim Cousins (Newcastle upon Tyne, Central): Will the hon. Gentleman also invite the Secretary of State

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to guarantee that the cash reserves of the port, which are substantial, should be reserved for the development of the port and its uses?

Mr. Trotter: The future funding of the port must be one of the major factors affecting the consideration of the bids. I am sure that the Secretary of State will bear that factor in mind. Investment should be guaranteed. That should be one of the requirements on those who offer bids.

I want an active and vibrant river for the future. I hope that a successful bid will emerge, and I do not believe that the fears that have been expressed will materialise.

4.46 pm

Mr. Don Dixon (Jarrow): I congratulate my hon. Friend the Member for Oxford, East (Mr. Smith), who advanced a good case against the nonsensical scheme that has been proposed by the Secretary of State for Transport.

Having lived on the banks of the River Tyne for 67 years, and having worked all my working life in the shipyards on the River Tyne until I retired from gainful employment in 1979 and came to this place, I speak with a certain amount of knowledge about the area.

Needless to say, I oppose the privatisation scheme. I never thought when I entered the House in 1979 that I would rise to defend a quango, but that is what I am doing today. Unlike most of the trust ports, all the non-executive directors of the Port of Tyne Authority are appointed by the Secretary of State, so it is a quango.

I have raised the issue of the port of Tyne on two occasions. The first was 16 years ago, when I was concerned about the reclamation of the Jarrow Slake. The Secretary of State knows how to step over homeless people sleeping rough when he is on his way to the opera, but he probably does not know a great deal about the Jarrow Slake. It was an area of mud ponds between the River Tyne and the road that runs from South Shields to the Tyne tunnel. They were used as curing ponds for large baulks of timber. I recall that, as a small child, I played on those baulks of timber.

I raised the matter in 1980, because the reclamation of the Jarrow Slake was taking so long. The Minister who replied to the Adjournment debate then is now the Chancellor of the Exchequer. In fairness to him, I should say that he came up and visited the area after the Adjournment debate. During the debate, I was extremely critical of the port of Tyne, having been involved in negotiations with that body when I was a member of South Tyneside council.

The Jarrow Slake has now been reclaimed. My hon. Friend the Member for Oxford, East referred to it. The Tyne car terminal is now situated on that land, from where Nissan recently exported its 300,000th car. It used to be mudflats. It was reclaimed and developed using the reserves of the port of Tyne. It is now one of the best car exporting facilities in the United Kingdom. I must give the Port of Tyne Authority credit for that.

The second time I raised the issue was on 22 May this year, during one of the Adjournment debates prior to the Whitsun recess. I pointed out that the Tyne Improvement Commission was set up in 1850, and that it did a tremendous job in excavating 50 million tonnes of soil to make the Tyne a port and to allow it to deal with large ships. The commission ran until 1968, when the present Port of Tyne Authority was set up.

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Under the direction of the Port of Tyne Authority, the port today is one of the most efficient and flexible in Europe--which is why the Secretary of State wants to flog it off. If the port was not a success, the Government would not get a buyer. In the past 12 years, the authority has invested more than £45 million in berths and equipment and played a major role, with the development agencies, in trying to attract investment and new industries to our region. The authority has large capital reserves and no outstanding debts. I can imagine why the four potential buyers are keen to get their hands on the assets of the Port of Tyne Authority.

The port's newly appointed managing director, David Clifford, has said:

"The Port of Tyne has carefully prepared itself for the needs of the 21st century, and now looks for increased support from port users, for cargoes starting and finishing their journeys in the region."

Like everyone else in the area, I am opposed to the privatisation. My hon. Friend the Member for Oxford, East referred to a number of local groups, and I wish to go through the list of representations made to the Secretary of State. What is the good of the Secretary of State having consultation if, after everyone he has consulted has stated that they are opposed to it, he decides to privatise?

Some 173 employees of the PTA wrote to the Secretary of State, and all 173 opposed the privatisation scheme. Eight trade unions wrote in, and all eight opposed the scheme. Seventy-three members of the general public wrote in, and 62 opposed the scheme. The Secretary of State must have some relatives in the area, because 11 people did not oppose the scheme. All five local authorities in the area opposed the privatisation. Some 21 port users were opposed to the privatisation, as were local peers and Members of Parliament. My hon. Friend the Member for Tyne Bridge (Mr. Clelland) is the secretary of the northern group of Labour Members, and he wrote in on behalf of the group. I also wrote in, but my letter is not included in the list of representations. Another 17 organisations wrote in; all were opposed.