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

Examination of Witnesses (Questions 660 - 679)



  660. Precisely and it is less likely to happen if there are so many ports for that to be able to be engineered.
  (Mr Jones) There are not so many major ports. There are not a great many major ports that move large volumes of goods and have the rail connections that would—


  661. I think the trouble is the Committee saw, for example, large numbers of Toyotas being moved by road and one wonders why.
  (Mr Jones) A lot of those cars go directly from port to showroom.

  662. This is from the factory to the port; this is not from the port to the showroom.
  (Mr Jones) If you take our port of Sheerness, we have large numbers of cars imported from France in particular and from Germany which are stored on the quay in Sheerness, but are delivered from the quay in Sheerness directly to showrooms after having in effect been ordered by end customers. You can contract the requirement for land usage at Sheerness by moving all of those cars to an inland location. That is a practical alternative, but it does involve inefficiency because it involves an additional movement of goods. In all probability, that additional movement of goods would take place by road in any event, under current circumstances.

Miss McIntosh

  663. I would remind the Committee of my interest in Eurotunnel. I was a Member of the European Parliament for the sister port of Felixstowe in Harwich which is now under the same ownership. Could I return to the evidence at the end of the first set of witnesses about environmental sustainability and the lack of development in coastal shipping which, to a certain extent, relates to these points? Why are we failing in this country to develop coastal shipping? Why are we not, for example, taking the last case that we discussed of moving cars round the country, moving them by coastal shipping as well as by internal transport methods?
  (Mr Mordaunt) It is very simple economics. We are all under enormous pressure and if it is cheaper to go one way we will go that way. We would all like to see more coastal shipping. We have just touched on the Port Services Directive and certainly the effect of that Directive in the United Kingdom will totally misfire and it will make ports more expensive, not less expensive.


  664. In what way?
  (Mr Mordaunt) Because we are small units, if you break up a small unit which is already relatively efficient, whereby creating more competition, you will not reduce the prices because each of those new units will have another overhead.

  665. You just told us we are drifting towards very large ports anyway.
  (Mr Mordaunt) Not on a continental basis. We will always have more ports than the continent because of our island geography.

  666. You have just told us that there is a drift back towards major ports.
  (Mr Mordaunt) It is.

  667. Why is it a hazard from the major ports?
  (Mr Mordaunt) It is a hazard for the major ports, if you take our example, we have 230 people in the frontline, if we read the Port Services Directive it says that we would have to split our work force into eight stevedore companies and be separate from the Port Authority, that is eight overheads. That is so ridiculous I know that it will never happen, but that is what the Directive says. If you have thousands of employees there may be cases for it but when you have such a small work force, which we use for both port authority work and for stevedoring, it makes absolutely no sense at all.

  Chairman: Mr Mordaunt, never underestimate the ability of European institutions to institute things which are ridiculous.

Miss McIntosh

  668. Or even the way they are interpreted in this country by our own administration. Could I ask on light dues, the way they are applied in this country and the way that I understand the European tax payer in most continental ports pick up those dues, does that disadvantage our ports against continental competitors?
  (Mr Davey) It certainly adds to the cost of shipping through United Kingdom ports. An example, the largest container ship at Felixstowe would pay about £25,000 per call in light dues, which is approximately half of its total fixed cost of the calling at the port. That charge would not be made in continental Europe.

Mr Bennett

  669. How much does that put on to each box that is taken on and off?
  (Mr Davey) It works out on average of something in the region of £7 per container.

Miss McIntosh

  670. Could I ask, if that is your reply how could these light dues and other aids be collected and paid for in this country?
  (Mr Davey) I think it is important there is a level playing field in whichever method we use. It should be the same as is used in continental Europe, where they come from the general exchequer.


  671. We should not accept what it says in the Directive when we do not like it, but we should accept it when we want to alter things?
  (Mr Davey) I am not sure that light dues are covered in the Directive.

  672. They are not but we are going to be asked to justify the basis on which the services are provided. Do you think that makes a significant barrier towards movement of containers, is that what you are saying?
  (Mr Davey) I am not saying it is a significant barrier towards the movement, I am saying it does add costs to the movement.

  673. Sufficient cost for it to be regarded as a hazard or something that can be offset by the sort of costs that would be found in continental ports, which would be different in kind but nevertheless a barrier?
  (Mr Davey) It is one element of the cost difference. The other issue is the question of funding the ports, the state funding of ports and state aid given to ports.

  674. Is that the fundamental difference between the ports in the United Kingdom and the ports on the continent?
  (Mr Davey) The fundamental difference is in the United Kingdom the majority of ports that handle the majority of traffic are private sector ports, fully private owned. On the continent the major ports there are all public sector ports, owned by the main local municipal governments.

  675. They are investing rather heavily.
  (Mr Davey) They are investing heavily, yes.

Mr Bennett

  676. If the subsidy adds £7 a box as far as the light dues are concerned what would you say the subsidy is as a result of all of the infrastructure provided by local authorities in the state?
  (Mr Davey) I cannot say. The European Commission have made several attempts to quantify that but I understand they have not received the best co-operation and have equally been unable with their resources to come to an answer to that.

  677. You cannot give as a guess as to sort of scale, are we talking about another £7 per box?
  (Mr Mordaunt) We are talking about massively more than that. The state aid on the continent is enormous and part of the papers that came with the Port Service Directive admitted that it existed and, indeed, it was growing, and it was growing faster than trade.

  678. Can you give us some side of the scale?
  (Mr Mordaunt) In Zeebrugge I think we must be talking about hundreds of millions of pounds.

  679. Let us turn that down to the price on each box?
  (Mr Mordaunt) Very back of the envelope, it has to be £30 or £40 a box, probably more than that.

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