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

Examination of Witnesses (Questions 740 - 759)



Mr Bennett

  740. You do not need all three?
  (Mr Cuthbert) I said that you would need at least two by 2010/2005. It would be a very brave person who said you did not need all three. I think in 20 years you will certainly need all three.

Miss McIntosh

  741. Could I just ask also the same question on coastal shipping I asked of the previous witnesses. Do you believe that there is a demand or potential for coastal shipping? How do you advise that you could reach that potential?
  (Mr Cuthbert) I think there is, and indeed coastal shipping exists, and we have quite a lot of it on the Thames running coasters on short sea route across to the North West Continent and indeed, to some extent, straight up the Rhine, so some of the ships actually go as far as Basle in Switzerland. The Government I think is going to extend the Freight Facilities Grant for coastal shipping and I think that encouragement and that bit of pump priming will help in moving some cargoes north-south in the UK. At the moment, indeed in London, we are looking at recycling glass and moving recycled glass from the Thames to be processed in Goole by water and that seems to be a double environmental benefit.

  742. Do you have a view as to the way that light dues are charged on shipping in UK ports and are not made at ports in continental Europe?
  (Mr Cuthbert) Yes, we do. In Germany, France, Holland and Belgium, light dues are borne by the state. The fact that ships—and you heard in earlier evidence the kind of charges that are made on the big container ships—have to pay up to £25,000 for the privilege of using the lights, which they largely maintain they do not because they navigate by GPS, and they feel they are subsidising yachtsmen and people like that who do still navigate using lights and buoys to a much greater extent, it does not actually help. I think it only has a marginal effect but it is something which the big shipping companies moan about, the British costs, because the British Government charge light dues and our four competitor governments, if you like, in terms of the deep sea container trade actually do not. It does not help but I would not put it stronger than that. We would ask that they were borne by the Exchequer but then I expect the Treasury would say "Why should the British taxpayer pay for this" and I understand that argument.

  743. The four ports that you have named, do they have the concentration of container traffic?
  (Mr Cuthbert) The big ports that could potentially be in competition would be Le Havre in France, Rotterdam in Holland and then Hamburg and Bremen in Germany.

  744. Given the fact that neither of the two main political parties are likely to offer that the state take over these payments, how do you see the way forward to achieve the level playing field?
  (Mr Cuthbert) I think the Government have announced that they are actually going to look at light dues. I think the Shipping Minister, Keith Hill, announced this on Monday. I suspect that will turn into "Can the cake be cut in a different way?" In the end, I think it is probably something the shipping companies will have to live with. It is a continual source of irritation, I would not put it stronger than that.

  745. You would not say what percentage of your overall costs light duties are?
  (Mr Cuthbert) I do not run a shipping company and I never have so I cannot really answer that question, I am sorry.


  746. Can I ask you about the economic impacts of this. If you have competition and if all these container ports are becoming almost full but there is nevertheless very considerable cost cutting competition between them, does this have an impact on the long term investment in a particular port?
  (Mr Cuthbert) I think it must do. As far as London is concerned, P&O is going to make the decision at the end of the day to make the £500 million or whatever it is investment, not the Port of London Authority. Yes, this is finely balanced. I think if one looks at ports as a national strategic asset, which they have to be—95 per cent of British trade by volume comes and goes by water—this is something that obviously the Government and Parliament will wish to keep a close eye on so as to make sure that the conditions are such that investment can be made in the ports where people can make a reasonable and proper and appropriate return so that in the long run we do not run out of port capacity in the UK.

  747. That is not the ultimate responsibility of the Government, is it? It is the responsibility if the country is under some kind of attack but under normal commercial situations you would expect the shipping companies and the ports themselves to be able to assess whether they are charging enough to be able to reinvest in new equipment, would you not?
  (Mr Cuthbert) Yes, you would but there is competition between the ports, both in the UK, as you heard from the previous people giving evidence, and also, to some extent, competition from ports like Rotterdam as well.

  748. Competition keeps down the amount of profit that can be made.
  (Mr Cuthbert) Yes.

  749. And keeps down the kind of investment that is needed to modernise ports?
  (Mr Cuthbert) I would not go as far as that. My own view is that competition is healthy and you need competition in any business, particularly when private capital is involved but it is finely balanced, I put it that way. It forces ports to make sure they give a very good service. It forces ports to be very efficient. I think I would argue that overall in the British ports industry, the larger ports are efficient because they have to be, because they have had to reduce costs, they have had to reduce prices and they are overall making a good substantial return.

  750. If the investment does not go in it is the fault of the port and the shipping company?
  (Mr Cuthbert) Primary responsibility would have to be that of the port, first of all, I agree.

  751. Mr Lerenius?
  (Mr Lerenius) Yes, well, basically I agree with what Mr Cuthbert said here but in addition I would like to add, coming back to the container ports again, if you look at the growth rate, we have seen over 15 years, even with a slightly cautious view, if that continues, I believe all the three terminals are going to be needed. My view is if we get the permission to build them—I think there is, from a market development point of view, all the reason in the world to build them—it is a matter of being competitive in relation to European ports.

  752. The competition will not be between the British container ports but between yourselves and the Continent of Europe?
  (Mr Lerenius) I would say yes, we will compete with each other but I still believe—and I should mainly talk for ourselves—yes, there is a good solid ground for investing. The way we would do it, we would always contract customers before we build the terminals so from that point of view we minimise the risks, obviously.

  753. What is the structure of the industry doing to the landside provision in terms of access to the ports?
  (Mr Lerenius) I should talk about Southampton and Dibden again. With Southampton it is well placed, well situated in relation to London and access not passing the London system up through the country. There is a good road system, there is reasonably good rail access, what we need to do then, as part of our investment, the access into the actual ports estate is obviously going to be our responsibility.

  754. You would expect to develop that access and put money into it?
  (Mr Lerenius) That part, the access part, into the ports estate is part of our investment, yes.

  755. The Port of London?
  (Mr Cuthbert) The same applies in the Port of London. As part of the proposed planning consent—no submission has yet been made for Shell Haven -no doubt Thurrock Council, which is a unitary council, will require certain benefits in terms of road access. We are fortunate the A13 and the M25 are relatively close. P&O are also talking to the Strategic Rail Authority regarding improvements to the London-Tilbury and Southend railway line so we hope a great proportion of the trade will move by rail.

Mr Donohoe

  756. Why is it that safety is so bad in the ports in the United Kingdom?
  (Mr Cuthbert) We run a harbour authority. In the Thames we actually own virtually all of the River Thames, the Crown owns bits of it as far as Southend and we control it out to Clacton and Margate. There are something like 70 terminals operating on the banks of the river which are all in private ownership. Really from our own business point of view—I can only speak from our own business which is the authority responsible for navigation—it is a hazardous environment. The Health and Safety Executive have produced these figures which are of concern to everybody in the industry. There is some argument, as you have heard, as to whether everybody accepts that they are bad. The Deputy Prime Minister called a Ports Safety Conference at the beginning of last week or the week before and it is clear that we have got to work hard on health and safety to reduce the number of accidents in the port. Why the numbers appear so bad we find it difficult to see. Our own record, I will say, is a reasonable one, I would not put it higher than that at the moment. We have to take greater steps, that is evident from that conference, to bring down the number of accidents in the UK ports.

  757. If you were able to provide figures for the full time employee compared with the casual employee and then look at the figures, would it clearly demonstrate that there is a difference and that perhaps that is the main reason for the industry being in the state it is?
  (Mr Cuthbert) My honest answer has to be I do not know because we do not employ any casual people.

  758. Do you?
  (Mr Lerenius) We do not employ any casual people either. The statistics we have are for all our employees[1].


  759. It is very comforting in a way, is it not, to say "We own the port" or "We own and control what is going on but of course we are not responsible in any way for anybody operating in the port"?
  (Mr Lerenius) No. I think that is a very fair point. I think, first, the statistics we have are only for our employees, we do not have any casual employees. We had an incident figure in 2000 of 12 per thousand and, frankly, nothing more than zero is actually good enough, now that is going to take time but it has improved substantially. I suppose everybody seems to be saying that today but in our case we know that the figure is substantially below the average. However, I understand that an issue that came up in the conference that Steve Cuthbert talked about was what the responsibility was for the port for the people who work for tenants on the port. Now, today, we have no possibility to control that.

1   Note by witness: ABP does supplement their labour in some ports, but this is by contracting with reputable labour supply/agency companies. All staff contracted are trained and the requirement is for them to have a Port Safety Induction Card (Passport) Back

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