Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence

Examination of Witnesses (Questions 1 - 19)




  1. Good afternoon, gentlemen. I am very grateful to you for coming to talk to us this afternoon. Would you be kind enough to identify yourselves for the record?
  (Mr Wadsworth) I am Brian Wadsworth the Director of Logistics and Maritime Transport at DETR, which means I look after road haulage, ports and shipping as well as one or two other bits and pieces like dangerous goods and defence planning.
  (Mr Reeves) Stephen Reeves, Head of Ports Division in DETR.

  2. Do you want to tell us what you think is the role of major ports in the economy of the United Kingdom?
  (Mr Wadsworth) Ports above all are an essential link in our global supply chain. The major ports carry the bulk of UK import and export traffic by volume and indeed the bulk by value, although air cargo is quite a significant force in the low volume, low weight premium markets. The major ports are a significant generator of employment, they perhaps do not employ huge numbers of people in their own right, in fact the figure for the ports industry as a whole is roughly 25,000. However, there is obviously a substantial multiplier effect, particularly in the local and regional economy which is important to the nation. The interest of the Government lies in ensuring that we have a successful, sustainable and safe ports industry overall and that the major ports in particular make an effective contribution to our international logistics.

  3. How will that role change in the future?
  (Mr Wadsworth) It will develop significantly. There have in the past been substantial changes, particularly in the bulk markets, with of course the development of the oil market and the decline of some other bulk shipping sectors. Those markets will continue to evolve and with that evolution some ports fortunes will wax and others no doubt will wane in future years. It is difficult to give precise predictions about that. Where we can be rather more confident, particularly in the near term is that the deep-sea container business and the ro-ro markets will almost certainly continue to expand quite strongly, more rapidly than the increase in GDP in all probability, which will create significant opportunities and cause development pressures in those two sectors in particular. It may also be the case that the market will evolve as ports increasingly take on a range of value added services and there are ports which do that already, for example in the automotive sector. It may evolve in response to changes in the regulatory environment and indeed some ports have expressed concerns about the European Commission's proposals for an access to—

  4. We shall come to that in a minute. Are you really saying in effect that containerisation, whether it is a ro-ro or whether it is low loading, whatever it is, is one of the ways in which you expect development, and the other is bulk but only in small terms?
  (Mr Wadsworth) I was not suggesting that I thought there would be strong overall growth in bulk. There has been fairly slow growth in bulk and what I was really saying was that there may be some structural changes in bulk markets in response, for example, to changes in the oil sector. We have seen recently changes in the steel producing sector.

  5. That is something negative as well as positive.
  (Mr Wadsworth) Absolutely; I was meaning that. I was not intending to suggest that I thought the future was rosy for bulk shipping.

  6. I am interested in opportunities, so you are really saying containerisation.
  (Mr Wadsworth) The strong growth sectors as we perceive them are likely to be containers and ro-ro.

  7. Do you want to give us a definition of a major port?
  (Mr Wadsworth) We ourselves have defined the major ports in our document as being those ports which handle over two million tonnes of cargo each year which gives you a total of 35 or 36 in the UK. There is another definition of major ports used for European statistical purposes, which puts the threshold at one million tonnes which would give you 52 ports in the UK.

  8. Is there a particular reason why there is this difference in definition?
  (Mr Reeves) It just came out of the Maritime Statistics Directive which came into force last year. It is a definition of one million tonnes of cargo and detailed information is now being collected on that basis; that would give us about 52 major ports in the UK and account for about 97 per cent of cargo.

  9. Practically everybody gets to be a major port.
  (Mr Reeves) No, there will be quite a few others because we have over 600 all together on all definitions but only about 100 of them commercially active.

  10. Which are the ports which handle mainly passengers which would come within that definition?
  (Mr Reeves) They would be in the definition now and in the definition in the future.
  (Mr Wadsworth) Harwich.
  (Mr Reeves) Portsmouth, Holyhead are the largest.
  (Mr Wadsworth) Southampton?
  (Mr Reeves) No, not Southampton any more but they do have cruise traffic as well.

Mr Donohoe

  11. Given that we are talking of a UK policy that does not cover Scotland, does it?
  (Mr Wadsworth) Yes.

  12. But all the ports are private; the ports in Scotland are in private hands.
  (Mr Reeves) No, not all of them. Aberdeen is a major trust port in Scotland; there are several others, Montrose, Cromarty Firth, Peterhead which are significant. There is a huge number of fisheries ports also in Scotland. A variety of ownership as in the rest of the UK. A lot of local authority interest in ports, small facilities, quays and wharves and so on in Scotland. In Orkney and Shetland there are two very major oil related facilities: Flotta and Sullom Voe respectively, which are local authority in the background but operated by private sector companies.

  13. In these circumstances, given that mix in Scotland, how do you expect there to be cooperation between ports in the reality north of the border?
  (Mr Wadsworth) The main opportunities we see for cooperation between ports lie in areas such as best practice, safety, training, environmental standards rather than in the area of commercial traffic.

  14. It is nothing to do with the commercial tie-up between, say, the west and the east of the country and in between the Strategic Rail Authority (SRA) coming into play. In that respect, can you tell me what you see as the priority of the SRA, giving some indication as to the direction of cooperation to the strategic transport policy?
  (Mr Wadsworth) The SRA has been charged with bringing forward a strategy for the development of rail freight services. An important element of that strategy is very definitely associated with port traffic. As you no doubt know, a large proportion of railway freight traffic in the UK is in the-deep-sea container sector, for example, though that is not by any means the only rail-borne port traffic. We expect to see the SRA bringing forward a range of specific proposals and indeed some are already under discussion, such as the cross-country route from Felixstowe to the Midlands and also improvements to the route northwards from Southampton.

  15. How is that going to work north of the border? This conflict comes into play with the Scottish Executive playing some part in this. How is your Department going to overcome these projects which will mean you have to gather up more partners in terms of trying to lay down a blueprint as to where we go forward? There have been plans in the past to link the west to the east, having hammer-heads in the west and taking them to the east and therefore managing to overcome some of the major problems which there have been in the past. These are proposals which would require a great number of partners if you are talking north of the border. What have you done to address that to make it simpler?
  (Mr Wadsworth) The Scottish Executive has been fully involved in developing the policy and indeed are one of the co-signatories to the Modern Ports policy document. We certainly envisage them taking a very strong role in connection with Scottish ports which they are already doing in fact. We do not see it as our role to try to manage all the relationships in Scotland. We would expect that to work largely on a devolved basis.

  16. In that sense the strategic aspect will in many ways be devolved and will not be as strong as it might have been in terms of the proposal there is when you talk about Modern Ports: A UK Policy. In these circumstances you are going to find it more difficult to be able to have a strategic plan over a ten-year area where there is the possibility of there being a different policy adopted north of the border, are you not?
  (Mr Wadsworth) It is more a question of different policies for different ports and in different market sectors. It is an aspect of the Modern Ports policy that we do not envisage there being a role for central government in producing something approaching a national ports plan or strategy. We do not certainly intervene in the day to day operation of ports or their management, we do not determine their investment decisions or their forward strategy. What we do hope to do is put in place a framework which will enable the ports themselves, together with the local stakeholders and customers to develop appropriate strategies for their own markets and their own geographical locations. I would not perhaps see quite such a strong national architecture as I think you perhaps might be suggesting.

  Mr Donohoe: Surely in these circumstances there is the prospect of us falling further behind mainland Europe if you are to allow the market to be the controller.


  17. We are confused slightly by the fact that you seem on the one hand to be talking about UK and regional competitiveness in the ports industry. Then you say you want them to cooperate, but your definition of cooperation is extremely minimalist, is it not? One would expect people in the same industry to adhere to the same levels of health and safety, the law requires them so to do. The Committee would welcome a little clarity. If you have less competition and greater cooperation between ports, does that mean you are trying to give some structure to the investment decisions? If that is not what you mean—and that is what you appear to be saying—then who decides where the infrastructure priorities will lie that the Government presumably have plans for because the Government have plans for roads, the Government have plans for connections, the Government has to apply to the Community for extra money for all these grandiose scheme. Could we have a little clarity on which it is we are being? Are we cooperating or are we competing?
  (Mr Wadsworth) It is for the ports to compete with each other for traffic, as they have done historically in the UK. That is the framework we have. We do not direct traffic.

  18. So what do we mean by UK and regional cooperation?
  (Mr Wadsworth) We expect that cooperation will develop between the ports and their local communities and the regional planning authorities and so on, which is developing.

Mr Donohoe

  19. What proportion of your business is international against moving goods around the UK itself?
  (Mr Reeves) It is about two to one.
  (Mr Wadsworth) Yes, it is two to one.

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