Examination of Witnesses (Questions 320
- 339)
WEDNESDAY 3 JULY 2002
MR DAVID
JAMIESON MP, MR
STEPHEN REEVES
AND MR
ANDREW BURR
Chairman
320. Such as? Can you give us half a dozen of
the most important?
(Mr Jamieson) Some of the changes now avoid the necessity
to break down the vertical integration of services, to unbundle
those services. We felt that could be extremely disruptive to
some of our ports running very successfully. We have now excluded
some of the dedicated terminals that just deal with oil or one
particular good coming in and some of the highly seasonal ports
as well that operate mainly in the summer period perhaps with
holiday or tourist traffic. We now have longer periods for the
contracts. Originally, it was 25 years; we have got that up to
36 years. There is an explicit acknowledgement now of private
ownership for new ports. There will be no tendering of the services
for up to 40 years. We felt, had that not been the case, that
would not have attracted the private investment that people would
have made. Very importantly, there is the exclusion of casual
labour and self-handling. We have made sure that those who are
handling things on the ships are keeping to the standards of that
port and not a lesser, more unsafe standard. We have, as this
was only decided before the Council on 17 June, drawn together
a short paper for you showing how the situation was originally
in February 2001 and where the text is now in June 2002. If it
helps the Committee, we can provide copies for you.
321. Yes please, Minister. How many changes
do you expect in this existing draft again? We seem to be at about
the sixth or seventh. What draft are we on now?
(Mr Reeves) I have probably lost count but I reckon
we have had a dozen drafts, if we go right back to the first one
from the Commission in February last year. We then had the Parliament's
position, which made a number of suggestions at the European Parliament.
We then had an amended proposal from the Commission in February
this year, which took some of those changes on board, but we have
been meeting in the Transport Council Working Group under the
Spanish presidency since the beginning of February on virtually
a weekly basis at times. The presidency has been producing revised
drafts not after every meeting but after every couple of meetings.
It has really been a very hectic pace and that is one of the reasons
why everyone has found it very difficult to keep up with it. We
have given your Committee a copy of the latest version, 25 June,
and we have also circulated that to the Ports Associations.
322. How far is that one from what you really
want?
(Mr Reeves) It will be formally a Council common position
after the jurist linguists have had a go at it. It will go to
the Parliament as the Council's common position in the autumn.
I cannot say that we have achieved absolutely 100% what we want.
Andrew Bennett
323. What extra do you want?
(Mr Reeves) We are pretty near. As the Minister said,
we have 36 years plus an additional optional 10 years for the
duration of the contracts where there is significant investment
under the transitional provisions. In essence, this means that
most of our ports, we think, are going to be very minimally affected,
unless of course they choose to have additional service providers
come in, but they do have a very major element of discretion now
resting with the ports. We think most of them are going to find
that they are not going to be adversely affected and, in many
cases, arrangements could in theory continue unchanged towards
the year 2040. We are talking about very long periods. There is
still an element of market opening which we think will be useful
in particularly some of the continental ports, dare I say it,
but we think we have gone a very long way towards achieving what
we wanted. I believe the European Ports Sea Ports Organisation,
the British Ports Association and others have acknowledged that.
Mrs Ellman
324. Have you made an assessment of the impact
of state subsidies and support on European ports to the competitive
disadvantage of British ports?
(Mr Jamieson) This is an interesting area. It is the
degree to which there is competition between ports in this country
and ports in other countries. We think there may be state aid
in other countries and it is a matter that we are keeping a close
eye on, but it is a matter of debate as to what effect that has
on ports in this country.
325. Would you consider making a complaint to
the Competition Commissioner?
(Mr Jamieson) If we felt that money had been made
available through state aid to ports in other countries and that
state aid was affecting the competition between our ports and
ports in other countries, we would certainly not hesitate to do
so.
Andrew Bennett
326. That happens on a daily basis, does it
not, because very few of them charge for access to the port?
(Mr Jamieson) Nevertheless, we still have to ask the
question whether or not that creates a lack of competitiveness
between our ports and theirs.
Chairman
327. We have a letter here from the Right Hon
John Spellar, MP, dated 7 June, to Jimmy Hood, the Chairman of
the House of Commons European Scrutiny Committee about the Transport
Council of 17 June, market access. Am I giving you enough to identify
it?
(Mr Jamieson) Yes.
328. The pages do not seem to be numbered but
at the bottom of page three—we are guessing—the last
bullet point says, "Recognition of a port's development policy
is a valid reason for limiting access and regulating the range
of commercial activities in a port." What does that mean?
(Mr Reeves) This is a reference to Article 6 in the
Directive, pages 19 and 20 of the latest text. You will see that
it says that Member States shall ensure the competent authority—which
will in general in our case be the Ports Authority—may require
providers of port services to obtain prior authorisation under
the conditions set out in the following paragraphs. Paragraph
two says that the criteria for granting the authorisation may
only relate to the following items. They include things like the
professional qualifications of the provider. What it is basically
therefore allowing is for the competent authority to take that
into account when deciding whether to grant an authorisation—in
other words, to allow a service provider to come in. We think
the aim there is to allow for consideration to be given to whether
the proposed service is compatible with existing services in the
port and whether it is indeed compatible with the future development
objectives of the port.
329. Supposing the Commission suggested that
somebody should have access to the new, extended facilities at
Barcelona and for one reason or another regional government were
not overwhelmed with this idea.
(Mr Reeves) They might be able to rely on that to
say what was being proposed was not consistent with the way they
wanted to develop the port.
330. They could maintain the same kind of control
and, dare I say it, exclusivity that they have at the present
time.
(Mr Reeves) That is always a potential.
331. Something which we could not do.
(Mr Reeves) You would have to look at the circumstances
and there would have to be a judgment.
332. I think that means yes.
(Mr Reeves) You can quite imagine that somebody who
was running a deep sea container port would not be particularly
enamoured with somebody who wanted to come in and offer a service
handling bulk coal. This is a hypothetical example. It would not
be consistent with the way they wanted to develop the port and
I think it is that sort of situation which this is aimed at.
Chairman: We shall hope you are correct.
Mrs Ellman
333. Why are there so few reliable statistics
about the economic impact of activities undertaken at ports?
(Mr Burr) The predecessor committee raised this question
and we have discussed it with the ports industry since they expressed
concern about it. We know that in some localities they have recognised
the need for a better understanding of what I might call the economic
footprint of the port and the benefits. For example, on the Humber,
the regional development agency for Yorkshire—Yorkshire
Forward has recognised the need firstly to identify the present
added value that the port does contribute to the economy and to
provide a base on which they can develop a strategy for adding
to that value. It annoys them that lorries drive out of Hull to
factories elsewhere that could be driving those things into the
Hull area and creating jobs locally. The government accepts that
that is something on which more work needs to be done. Regional
development agencies are the best people to do it. We are working
centrally and we have open discussions with the ports industry
to especially look at those who have already done studies of this
kind. The Port of London Authority, for example, have done studies
of that kind, to understand how many jobs are related to the activities
on the river. We are trying to get a bit of a head start on the
methodology by talking to people who have done it, with the object
of providing some guidance to the regional development agencies
and promoting exactly that kind of inquiry.
334. What kind of priority has the government
given to doing this?
(Mr Burr) It is one of the actions in the ports policy
paper that we have to take forward. We are a bit dependent on
the partnership with the ports industry because we will get off
to a better start if we work with people who have done this work
already. We need to agree some priority with them as well. My
personal view is that it is a pity we have not already managed
to start that work, but the statisticians and people involved
have also had to implement the Maritime Statistics Directive and
other imperatives of that kind.
Chairman
335. We are not actually doing things that are
useful; we are doing something else?
(Mr Burr) We do not always have choices.
Miss McIntosh
336. You replied in a parliamentary question
in March that the government does now recognise that operators
in the short sea trade are at a disadvantage compared with those
in the deep sea sector. You are therefore considering a short
sea shipping employment grant. Why has it taken the government
so long to realise there is this disparity?
(Mr Jamieson) We have responded in good time to this.
We took representations from all concerned and we are making grants
available at the present time. I do not think there has been any
particular delay.
337. I remember questioning your predecessor
on this very issue. What impact do you think a short sea shipping
grant would have on UK ports?
(Mr Jamieson) I think it has potential in certain
circumstances to considerably help some of the ports. The grant
is specifically aimed at taking goods off the road and putting
them onto water. We obviously look at them very carefully and
they have to be judged on that criterion. We look to see how many
lorry loads and tonnes of goods we can take off some of the major
trunk roads and motorways in particular and put them onto shipping.
We are also doing that, as you probably know, with a different
grant regime for inland waterways.
338. In many sectors—airports, housing
and minerals—the government does make predictions about
demand. Against that background in the government's White Paper,
Modern Ports: A UK Policy, states that the government cannot make
predictions for port demand.
(Mr Jamieson) Because of the nature of ports and the
way that they are structured in this country—there are many
of them of different sizes—it is very difficult for the
government. The ownership of the ports makes it very difficult
for us to make that assessment in the same way as we can in other
areas. It does depend on a number of other things. Because 97%
of all the imports and exports in this country go by sea in and
out of the country, it is very much reflected not just in consumer
demand such as for air services but in the fortunes of the economy.
(Mr Burr) The policy paper did also acknowledge that
we needed to understand the industry better.
Chairman
339. If we do not have any accurate figures
and we did not know what they were going to pay for any infrastructure,
I think you can easily say that we need to understand the industry
better.
(Mr Burr) The policy paper perforce took stock of
where we were. It was a long time since there had been a comprehensive
look at ports and we did not claim that the policy paper had all
the answers. It was a bit of a snapshot and we had to work with
what we had. We were honest about the lack of information. One
of the things since then that we did was to develop a paper on
development prospects and demand for container capacity, because
that seemed to be a critical priority. That is where the development
pressure seems to be most acute. There is quite a sharp debate
about how that capacity should be provided, how much capacity
should be provided, and we were going to have to make some very
big decisions and ministers would in the coming years. We felt
that was an area where we needed to push forward just these kinds
of concerns. We put this paper out. What we found during the research
for that paper was that there was a reasonable consensus about
the likely rate of growth and—
| 
