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AYES
Barnes, Harry
Bell, Martin (Tatton)
Benn, Rt Hon Tony (Chesterfield)
Bermingham, Gerald
Best, Harold
Bradshaw, Ben
Butler, Mrs Christine
Campbell, Rt Hon Menzies
(NE Fife)
Cann, Jamie
Cawsey, Ian
Clapham, Michael
Clarke, Tony (Northampton S)
Connarty, Michael
Corbyn, Jeremy
Cotter, Brian
Cousins, Jim
Crausby, David
Cryer, John (Hornchurch)
Dalyell, Tam
Davey, Edward (Kingston)
Davidson, Ian
Dawson, Hilton
Dismore, Andrew
Dobbin, Jim
Efford, Clive
George, Andrew (St Ives)
Gibson, Dr Ian
Golding, Mrs Llin
Gordon, Mrs Eileen
Heath, David (Somerton & Frome)
Hinchliffe, David
Hood, Jimmy
Hopkins, Kelvin
Hurst, Alan
Iddon, Dr Brian
Illsley, Eric
Jones, Mrs Fiona (Newark)
Jones, Dr Lynne (Selly Oak)
Keen, Alan (Feltham & Heston)
Kirkwood, Archy
Ladyman, Dr Stephen
Lepper, David
Linton, Martin
McDonnell, John
Mackinlay, Andrew
McWalter, Tony
Mahon, Mrs Alice
Marshall-Andrews, Robert
Michie, Bill (Shef'ld Heeley)
Miller, Andrew
Morgan, Alasdair (Galloway)
Naysmith, Dr Doug
Olner, Bill
Perham, Ms Linda
Pickthall, Colin
Pike, Peter L
Pond, Chris
Prentice, Gordon (Pendle)
Rammell, Bill
Rendel, David
Russell, Bob (Colchester)
Sanders, Adrian
Sawford, Phil
Simpson, Alan (Nottingham S)
Skinner, Dennis
Smith, Angela (Basildon)
Smith, Llew (Blaenau Gwent)
Starkey, Dr Phyllis
Stewart, Ian (Eccles)
Stinchcombe, Paul
Stunell, Andrew
Taylor, David (NW Leics)
Turner, Dr Desmond (Kemptown)
Turner, Neil (Wigan)
Tynan, Bill
Wareing, Robert N
Whitehead, Dr Alan
Willis, Phil
Wise, Audrey
Wood, Mike
Wright, Anthony D (Gt Yarmouth)
Tellers for the Ayes:
Mr. Peter Bradley and
Mr. Harry Cohen.
NOES
Ainsworth, Robert (Cov'try NE)
Allen, Graham
Amess, David
Anderson, Janet (Rossendale)
Arbuthnot, Rt Hon James
Armstrong, Rt Hon Ms Hilary
Bayley, Hugh
Beard, Nigel
Betts, Clive
Blunt, Crispin
Boswell, Tim
Bottomley, Peter (Worthing W)
Brazier, Julian
Brinton, Mrs Helen
Brooke, Rt Hon Peter
Browning, Mrs Angela
Campbell-Savours, Dale
Casale, Roger
Chapman, Ben (Wirral S)
Chidgey, David
Clark, Dr Lynda
(Edinburgh Pentlands)
Clifton-Brown, Geoffrey
Clwyd, Ann
Coaker, Vernon
Collins, Tim
Colman, Tony
Cooper, Yvette
Cormack, Sir Patrick
Cran, James
Davies, Quentin (Grantham)
Davis, Rt Hon David (Haltemprice)
Day, Stephen
Dowd, Jim
Duncan, Alan
Eagle, Angela (Wallasey)
Ennis, Jeff
Evans, Nigel
Fitzpatrick, Jim
Flight, Howard
Flint, Caroline
Foster, Michael Jabez (Hastings)
Foulkes, George
Fox, Dr Liam
Gill, Christopher
Gilroy, Mrs Linda
Gorman, Mrs Teresa
Green, Damian
Griffiths, Nigel (Edinburgh S)
Hamilton, Rt Hon Sir Archie
Heald, Oliver
Healey, John
Heppell, John
Hill, Keith
Hodge, Ms Margaret
Hogg, Rt Hon Douglas
Howarth, George (Knowsley N)
Howells, Dr Kim
Hughes, Ms Beverley (Stretford)
Hughes, Kevin (Doncaster N)
Humble, Mrs Joan
Hutton, John
Jack, Rt Hon Michael
Jamieson, David
Jenkins, Brian
Johnson, Miss Melanie
(Welwyn Hatfield)
Jones, Rt Hon Barry (Alyn)
Jones, Helen (Warrington N)
Keeble, Ms Sally
Kemp, Fraser
Key, Robert
King, Andy (Rugby & Kenilworth)
King, Rt Hon Tom (Bridgwater)
Laing, Mrs Eleanor
Lait, Mrs Jacqui
Levitt, Tom
Lewis, Ivan (Bury S)
Lidington, David
Lock, David
Loughton, Tim
MacGregor, Rt Hon John
McLoughlin, Patrick
McNulty, Tony
Marsden, Paul (Shrewsbury)
Mates, Michael
Meale, Alan
Merron, Gillian
Morris, Rt Hon Ms Estelle
(B'ham Yardley)
Mullin, Chris
Murphy, Jim (Eastwood)
O'Brien, Stephen (Eddisbury)
Pearson, Ian
Pope, Greg
Portillo, Rt Hon Michael
Prentice, Ms Bridget (Lewisham E)
Primarolo, Dawn
Quinn, Lawrie
Randall, John
Reed, Andrew (Loughborough)
Robathan, Andrew
Roche, Mrs Barbara
Ross, William (E Lond'y)
Russell, Ms Christine (Chester)
Ryan, Ms Joan
Smith, Jacqui (Redditch)
Soley, Clive
Southworth, Ms Helen
Spellar, John
Spelman, Mrs Caroline
Squire, Ms Rachel
Stanley, Rt Hon Sir John
Stoate, Dr Howard
Stuart, Ms Gisela
Syms, Robert
Taylor, Rt Hon Mrs Ann
(Dewsbury)
Thomas, Gareth R (Harrow W)
Twigg, Derek (Halton)
Wicks, Malcolm
Widdecombe, Rt Hon Miss Ann
Wills, Michael
Winterton, Nicholas (Macclesfield)
Tellers for the Noes:
Mr. Desmond Swayne and
Sir Peter Emery.
Question accordingly negatived.
It being after Ten o'clock, further consideration stood adjourned.
Bill to be further considered on Wednesday 2 February.
Mr. Deputy Speaker (Mr. Michael J. Martin):
With permission, I shall put together the motions relating to delegated legislation.
Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),
Motion made, and Question put forthwith, pursuant to Standing Order No. 25 (Periodic Adjournments),
Motion made, and Question proposed, That this House do now adjourn.--[Mr. Betts.]
Dr. Alan Whitehead (Southampton, Test):
I was delighted to be selected to initiate this debate.
During the two and three quarter years I have been a Member, I have observed that Adjournment debates come in all shapes and sizes. Some deal with large issues involving a national or international sweep, and others with very local issues, often pertinent to the constituency of the Members initiating them. My chosen subject does both. On the one hand, it is a large issue that goes to the heart of the well-being of United Kingdom manufacturing and retailing and the competitiveness of the UK economy; on the other, it affects everyone's lives in a detailed and local way. In Southampton, every time I visit Safeway, just down the road from me, I am relying on the just in time system. At Ford, just up the road, every time a production worker turns round to look for a component from the box to fit the shell of a Transit van, he or she relies on just in time.
Perhaps it is because the factor is all-pervasive that no one notices it. I did a trawl of the number of times that just in time has been mentioned in the House since 1994, and there is virtually no trace; yet the importance of the system is incalculable, and to date has been a source of some pride to the United Kingdom. Indeed the White Paper on sustainable distribution states:
Recently, that has worked to the UK's advantage. Between 1986 and the present, the ratio of stock to turnover in the UK has reduced from about 15:1 to just over 10:1. The UK now holds the lowest number of weeks stock of all the major European Union countries. However, as maximum efficiency requires for just in time the integration of each stage of distribution, the system is centralised. Distribution is based on the UK motorway spine. It relies on the transit of goods to depots on the spine and redistribution to their destinations back along motorways.
That means that goods are transported substantial distances overwhelmingly by road. There is a downside. The system's profligacy with vehicle miles means that just in time will become an increasingly potent source of carbon dioxide emissions. More than 80 per cent. of UK freight goes by road, a far higher proportion than in other EU countries and a significantly higher proportion than the 60 per cent. carried by road in France and Germany.
There is a further complicating factor. As a nation, Britain trades externally to a greater extent than many of its competitors. Some 30 per cent. of goods entering the just in time system come from abroad and 95 per cent. of those arrive at UK ports.
Although goods come in a variety of forms and will require differing methods of handling at ports and subsequent distribution, a significant proportion arrive in containers and are then transported to national or regional distribution centres, mainly by road. The containers arrive at port on ships that are rapidly increasing in size rapidly. Currently, vessels transporting 6,000 to 7,000 boxes are operating and vessels able to take up to 10,000 boxes are under construction.
The draught of those ships and their port handling requirements mean that, increasingly, port facilities for containers will be concentrated in three places: Felixstowe, Thamesport and Southampton. That will inevitably add to the problems of just in time as the logistics of getting boxes to distribution centres are compounded by the need to navigate the M25, in the case of Felixstowe and Thamesport, and the A34 and M40 in the case of Southampton.
The system relies for its efficacy on specifying the arrival time as a starting point for the consideration of logistics. That works only as well as it is possible to identify reliable delivery methods. If those methods become suspect, logically, the whole system will fall down.
That is exactly what is happening in the UK; it is a little noticed side effect in the debate on road congestion. We know that car traffic is predicted to increase by one third over the next 20 years. Freight transport is predicted to expand even faster. Estimates for 20 years' time suggest that miles driven by articulated trucks will almost double.
As congestion worsens, each distribution company vies for ways to maintain its supply routes, often employing computer modelling to evade congestion delays. That produces a classic "tragedy of the commons", in that it is overwhelmingly in the interest of each company to invest in ways of avoiding congestion to keep its business afloat, but in no one's joint interest to investigate ways of reorganising the overall system so that it continues to work. Collectively, therefore, the companies involved in just in time are entering a cul-de-sac, with no logical way out. What was a competitive advantage for the UK then becomes a competitive disadvantage.
We are therefore faced with three challenges to just in time. Congestion will change it from just in time to just too late. The concentration of imports to a few ports will exacerbate that effect. To maintain the system, reliance on road transport will radically increase vehicle miles and carbon dioxide emissions.
As just in time is predicated on arrival time, transport managers will resort to planning earlier start times to distributional journeys. That will inevitably run up against the legal limits of drivers' time. The companies will then either press drivers to flout the regulations, or they will have to introduce of modern version of the old stagecoach system. That would entail stationing fresh drivers in motorway service areas or the doubling of cab crews for longer journeys. In either event, over time such measures would introduce to the system a step change in costs, cancelling out many of the cost advantages of the system's initial introduction.
As a consequence of the combined pressure of just in time and the development of container vessels, additional capacity in the three receiving ports that I mentioned is likely to be needed. At the same time, the future for the
United Kingdom's approximately 200 other commercial ports will become uncertain. Although some of them will continue to trade successfully in the import and export of bulk or specialist cargoes, many others will effectively close down and be converted to leisure uses. Already, most of the medium and smaller United Kingdom ports are under-used, and together, they represent a huge amount of long-term investment which is in danger of being lost as an element of the United Kingdom's distribution system.
As transport managers resort to avoidance stratagems to maintain the flow of goods, overall journey distances will increase. Even if they do not increase, fuel expended in traffic jams will cause the same effect. Advances in fuel efficiency, engine design and co-operation between distributors will certainly offset some of that outcome, but overall, it is unlikely that the result will be to reduce emissions of carbon dioxide from the transport sector, as is required under the targets in the Government's strategy on climate change. The eventual trajectory, as just in time becomes less effective, is for such emissions to be increased substantially.
At this point, the weary Minister will undoubtedly be saying to himself, "That's the problem defined, but what about the solutions?" Although we are not short of solutions, the problem is that many of them do not really help--or, if they do help, they mitigate the problem, not solve it.
We could, for example, build more roads. Simply increasing the capacity of the United Kingdom's roads to deal with maintenance of just in time would be a straightforward policy. The policy might also be accompanied by freight-only lanes on major roads, to provide greater time reliability for haulage. However, the environmental consequences of such increased road building would be devastating, and the emissions produced by the greater use of roads that would follow such a policy would make it a politically and environmentally unacceptable route to follow.
We could put more goods on to rail. Initially, that is a very attractive option, and, in the medium-term, it is a very important policy imperative. However, use of the current rail system is not favoured by hauliers, as they believe that the system is not reliable and that transit by rail would involve complex and expensive switching of modes. Certainly, the railways have dealt with the short-term problem of reliability in freight transport. Modal split remains a problem, but could be dealt with by more efficient transfer facilities. However, a structural long-term problem remains if we are considering a road-to-rail policy.
Even if all the targets of the two rail freight companies now operating were met, only about 10 per cent. of road haulage would be diverted. That would flatten out road haulage growth in the short term, but would only alleviate the long-term problem, rather than solve it. To go further than that would require fundamental change to the rail network. Although freight slots could be given priority over passenger slots, that would impinge on the Government's plans for increased passenger traffic, as slow freight trains run in front of faster passenger trains.
Alternatively, new track to accommodate freight could be built, but the environmental impact of such new infrastructure could well be as difficult to justify as a programme of new motorway construction.
We could distribute goods by sea. Such a suggestion has historically been regarded as somewhat cranky, but is now becoming increasingly realistic. Distribution by sea would rely on trans-shipment, perhaps from the hub ports that I have mentioned, such as Felixstowe and Southampton. In principle, that is eminently possible, because of the network of available receiving ports along the length of Britain's coastline and the relatively short distances inland that would be required to distribute goods to their destination.
Advances in the design of roll on/roll off and fast-goods vessels ensure that the journey times and the unpredictability of sea routing could be considerably reduced.
Environmentally, sea distribution would be the almost perfect solution, combining very low energy use per kilometre hauled and the capacity to remove a far greater percentage of road haulage than could be done by transferring to rail. Transport managers object that sea freight also suffers from modal exchange problems, is unreliable and--as distribution routes largely do not exist--is effectively unusable. Moreover, the existence of distribution centres on the motorway spine ensures that the whole distribution system would need to be reorganised.
Currently, port charges and ancillary dues mean that 60 per cent. of the costs of many short sea journeys will be taken up by payments due before the shipment leaves port. This compares very unfavourably with the ease of access to road, and the still relatively low cost of entering a truck into the haulage business. These problems are real and serious, but are all in principle resolvable.
We could deconstruct the present assumptions behind the just in time system itself. Considerable scope exists to question the structure that has developed around just in time. Are there methods of sourcing goods which do not entail such profligate movement of materials around the country? These might relate to an examination of the arrangements employed at present of hauling goods to one central point in the UK to redistribute them; changing the way in which containers come into the UK; or encouraging the adoption of more local sourcing by attaching the true costs of the travel of goods to the eventual cost to the consumer.
My preferred policy approach starts with what I hope is an important understanding--that just in time, as a method of securing efficient distribution of goods, must not be seen as the enemy. The assumptions slotted in behind just in time, which have created an almost total reliance on road distribution, are the problem. If we are to attempt to analyse the requirements of a genuinely sustainable distribution system that breaks out of the logical cul-de-sac of present practice, we need to address a simple policy question--can we retain just in time without its pitfalls?
In reality, this is a difficult target, but just in time--or something like it--is not negotiable unless we are to contemplate the dismantling of much of the pattern of food and consumer goods shopping that our society now regards as a given; and, of course, unless we contemplate adding substantial stock-holding costs to our manufacturing industries.
Policy imperatives therefore stand out. We should not look for a magic bullet, because there is none. Instead, we should look at a combination of modes--importantly, bringing the sea into full use around our coasts--which match, crucially, the mode to the transportation need. That is the opposite of the current practice of just in time.
We need to recognise that the market will not--and, logically, cannot--solve its own dilemma. Integrated Government policy initiatives which provide incentives for change, protection from short-term adverse consequences and regulatory penalties for recalcitrant distributors are necessary.
We need to develop distribution routes based on the trans-shipment of goods arriving at the main UK ports to the dozens of regional ports that can serve as new distribution centres. The technology of short sea shipping already exists in a way that can establish fast routes. The political issue is to examine the economics of port handling, so that the front-loaded costs which make short sea shipping disproportionately expensive are reduced.
We must combat the perceived unreliability of short sea routes by extending establishment and support grants to the long-term development of effective routes. We can overcome the perceived time delay on sea routes by priming just in time shuttles--that is, ensuring that a continuous conveyor belt of goods to arrive just in time is established. Ford already operates such a system between Zeebrugge and Dagenham.
Priming essentially consists of underwriting the initial day or arranging that goods will be in transit when they are switched to a slower mode. Once the shuttle is established, no further underwriting is then needed, assuming that the overall costs of the new system are equivalent to its predecessor's.
We should examine with the distribution industry the economics of breaking down the logistics of long-term trunking to national and regional distribution centres. This could consist of a variety of mutually supportive measures, such as co-operation in distribution between companies; developing source-packed containers, so that they travel as close as possible to their eventual destination before being opened and redistributed; and the encouragement, through financial incentives or penalties, of the local sourcing of goods to minimise haulage wherever possible.
This is, unashamedly, a discussion of a big issue. However, I sometimes think that the pursuit of how we get through next week often blinds us to the work that we should be doing next week to get us through the next 50 years. The problem with this subject is that no one will notice that it is a real policy problem until the system has actually broken down.
Professor Charles Handy, in his book "The Age of Unreason", cited the alleged scientific fact that the central nervous system of a frog is insufficiently developed to impel it to jump out of a saucepan of water provided it is heated gently. The gradualness of the change at no stage triggers a reaction in the frog, and it eventually boils to death. I do not know how Professor Handy knows this, and it is an experiment that I would strongly advise against trying at home. However, it serves as a metaphor for our current position.
That the draft Contracting Out (Functions in Relation to Petroleum Royalty Payments) Order 2000, which was laid before this House on 16th December, be approved.
24 Jan 2000 : Column 119
That the draft Industrial Training Levy (Construction Board) Order 2000, which was laid before this House on 16th December, be approved.
That the draft Industrial Training Levy (Engineering Construction Board) Order 2000, which was laid before this House on 16th December, be approved.--[Mr. Betts.]
Question agreed to.
That this House, at its rising on Tuesday 22nd February, do adjourn till Monday 28th February 2000.--[Mr. Betts.]
Ordered,
That Mr. Stephen Hesford be discharged from the Northern Ireland Affairs Committee and Mr. Tony Clarke be added to the Committee.--[Mr. Betts.]
24 Jan 2000 : Column 120
10.3 pm
"the evidence suggests that the UK is now amongst the world leaders in efficient management of the supply chain, representing an important competitive advantage for UK companies."
How does just in time work? It works on the basis that goods arrive to serve their purpose--display for sale, or entry into the production line--literally just in time, by means of planning the transit of goods from internal source or entry port, via national or regional distribution centre to destination, so that warehousing is eliminated and minimal time is lost in storage.
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