Examination of Witnesses (Questions 660
WEDNESDAY 28 MARCH 2001
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
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
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
(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
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
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
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.
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
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.
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
(Mr Mordaunt) Very back of the envelope, it has to
be £30 or £40 a box, probably more than that.