Examination of Witnesses (Questions 1
WEDNESDAY 14 FEBRUARY 2001
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
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
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
(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
(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.
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
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
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 meanand that is what
you appear to be sayingthen 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.
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.