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1 Mar 2005 : Column 247WH—continued
Freight (Tees Valley)
4.17 pm
Dr. Ashok Kumar (Middlesbrough, South and Cleveland, East) (Lab): I am very happy to have secured the debate after several attempts to do so. I have been lucky.
I want to focus on two things. First, how can we make local freight movements environmentally sound and improve them on non-road connections to the ports of Tees and Hartlepool? Secondly, I want the freight originating in my area to be switched from road to rail. My constituency is a typical Tees valley constituency. Many of my constituents work in traditional industries such as chemicals, steel, heavy engineering and mining—industries that generate a large tonnage of bulk products and use large volumes of bulk products in their manufacturing processes.
Other industries in my constituency are also bulk producers. At Boulby in east Cleveland, we have Britain's only deep potash mine, which directly employs some 600 people and produces potash and rock salt. Teesside is also home to Britain's largest deep-sea ports, which regularly host huge vessels of more than 200,000 tonnes. Tees and Hartlepool—operated by PD Ports, Logistics and Shipping—represent the second largest port in Britain in terms of tonnage and handle a significant amount of the United Kingdom's exports. That tonnage has the potential to grow very rapidly.
More than 53 million tonnes of goods of all sorts are moved through local ports per annum. Steel, chemicals, general goods and potash are all moved in bulk. The port is becoming an important player in roll-on, roll-off ferry freight operations and is also able to handle container traffic. Goods pour in from all continents, although much is moved in ways that do not impact on the local road network. For example, potash and salt from the mine at Boulby are shipped by rail freight wagons direct to the port five times a day. Similarly, often five or more trains per day carry steel to the docks. Many liquid chemicals coming into the port are shipped to the end users by pipeline. However, much of the traffic still ends up on local roads and moves through my constituency on its way further north or to Scotland or the midlands.
A good proportion of such traffic accesses the national road network, but much of it mixes with local traffic on some of the busiest roads in my constituency. The A172, known as the Marton road, takes more than 12,000 vehicles a day. In some places, the road is only slightly wider than the average country highway. It runs through residential areas and also serves the largest hospital in the Tees valley area, the James Cook university hospital. Drastic minimalisation of the HGV traffic using that road would free up the commuter flows and make access to the hospital quicker for everyone.
There is a far bigger reason for it being desirable to improve rail connections to the port: that would allow the port to pursue ambitious expansion plans and also ensure that we could even out UK regional disparities. As most people know, the global shipping trade is increasing almost exponentially. Ship sizes are increasing to accommodate more exports and larger containers. Those factors combine to produce a requirement for increased UK and mainland Europe
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port capabilities to accommodate the new bigger ships, each carrying more than 8,000 containers. More and larger UK port capacity is required, and deep-sea capacity is necessary for the UK to remain competitive in that important growth market.
The main container-handling ports are in the south of England. Overcrowding and delays at those ports are getting worse. Exporters to the UK do not place great weight on the exact port location. The most important factors are capacity, waiting time and turnaround on unloading and loading. Southampton container terminal has suffered problems with congestion of berths, long dwell times for stored containers and delays for hauliers collecting boxes.
Felixstowe recently opened its completed port extension four years after applying for permission, but the capacity created will cope with only one year's anticipated growth in UK deep-sea container volumes. Other ports, including Felixstowe and Harwich, are awaiting the outcome of public inquiries on planning applications for new terminals. More than 2 million containers entering the UK each year are destined for locations in the north. The southern location of the main UK deep-sea ports means longer road journeys to deliver to the north of England, creating further congestion and pollution.
Bringing containers to the south for road transfer to the north adds, on average, about 150 miles per container to the journey. That process creates congestion and adds to pollution. In the south, the rail lines are already overworked with commuter passenger traffic. Acting to improve connections to Tees port would take pressure off the national UK road network. As recently as July 2004, introducing the Government's transport White Paper, the Secretary of State said:
"We also intend to take a long-term approach to port development and will publish a review of the policy framework for ports by the end of next year."—[Official Report, 20 July 2004; Vol. 424, c. 160.]
PD Ports' deep-sea container port development at Tees port would help to ensure that the UK was in a position to exploit the growing global shipping market and on a level playing field with its European competitors.
The existing port and planned development will attract retailers and others to construct import and distribution centres in the Tees area. There is room to develop up to six distribution centres near Tees port, each capable of providing up to 200 to 300 new jobs. The deep-sea container port development will also create between 200 and 300 new dock-related positions and a significant number of indirect jobs in the ports, logistics and shipping sectors, estimated at between 1,000 and 1,500.
Creating that gateway to the north would remove more than 1 million containers from the UK's southern roads, thereby drastically reducing congestion, but the Government need to take a strategic view of all UK port capacity, particularly that in the north, before deciding whether to allow southern ports to expand. The key to improving UK national port structure and to the aspirations of the ports of Tees and Hartlepool lies in enhancing port rail links.
Vera Baird (Redcar) (Lab): Based on my conversations with the management of Tees port, which
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is in my constituency although close to that of my hon. Friend, I can confirm that they are willing and ambitious to expand their container resources hugely. Their proposal would generate about 3,000 jobs, which are much needed in the Tees valley, as it still has higher unemployment than much of the rest of the country. Tees port management asserts that Tees port could supply much of the north of England's container traffic needs. Is it my hon. Friend's understanding that supplying that traffic by rail, which is the optimal way of doing it, would require substantial enhancement of the gauge and tunnelling of rail links? Is he arguing for such investment?
Dr. Kumar : I thank my hon. and learned Friend for that contribution. I am about to turn to the issue of rail. I endorse everything she said; it is in similar spirit to what Tees port management said to me.
Tees port is linked by a spur line originating on the Saltburn to Darlington rail corridor. An analysis of the necessary improvements shows the need for signalling improvements on the spur. It is estimated that those would cost £1.2 million and produce savings in reduced road transport costs of more than £17.9 million in 10 years. The rest of the branch line would need investment to carry what are called "high cube" large containers, which are the industry standard. That would require gauge improvements to a tunnel near Yarm or the provision of a new chord on to the east coast main line near Darlington. That might also look costly, but I believe that that cost would be more than outweighed by the savings made in getting HGVs off the road network.
Where do we go from here? I believe that the essential starting point must be for the Strategic Rail Authority and Network Rail to see the great opportunity of improving links to Tees port. Tragically, as things stand, they do not see it. Indeed, in the key freight document "Gauging Policy", issued in November 2004, the SRA identified only two "strategic route priorities" for gauging improvements. Amazingly, both are in the south. One priority is to improve the line from Southampton to the west midlands; the other is to improve the line from Felixstowe to the east midlands and West Yorkshire. The short and comparatively cheap option of improving the corridor from Tees port to the national network is considered to be only a possible future opportunity.
I ask the Minister to ask the SRA and her officials to query that policy, as it only adds to yet more investment for the relatively wealthy south and does not even begin to address the issue of the key port access improvements identified in the Northern Way growth strategy. Those improvements could be made quickly and cheaply. If PD Ports knew that there was genuine commitment to them, it would be prepared to invest in new expanded port facilities. Indeed, my hon. and learned Friend has heard it say so several times. This is a great opportunity for public investment and for generating private investment.
I conclude by saying that I hope I have enhanced the case for improving the environment and so benefiting my constituents, for helping the economy of part of the north-east and for reducing the environmental overheating of the south-east. In short, I propose a
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golden solution—a win-win situation for my constituents, the Tees valley in general and the UK as a whole. It richly deserves to be considered an overarching issue for the policy document that the Government are preparing and which will be issued later this year.
I hope that I have made my case seriously and that the Minister responds with positive suggestions.
4.32 pm
The Parliamentary Under-Secretary of State for Transport (Charlotte Atkins) : I congratulate my hon. Friend the Member for Middlesbrough, South and Cleveland, East (Dr. Kumar) on securing the debate and on providing the Chamber with the opportunity to discuss sustainable freight distribution in the north and through the Tees port. He has raised several issues that I shall try to address.
The Government are committed to supporting industry by helping to ensure the efficient, free and reliable movement of goods. Our policies to achieve that are set out in "The Future of Transport" and "The Future of Rail" White Papers, providing a framework in which the freight industry can contribute to our continuing economic growth.
We have made real progress. Rail freight volume has increased steadily, rising by more than 45 per cent. since 1995. Almost 19 billion tonnes of freight were moved by rail in 2004. The market share of freight moved by rail has also increased since 1995, and it is estimated that industry has invested some £1.5 billion in rail freight since privatisation.
Certain rail freight initiatives are also being driven forward, the most important of which is the proposal that freight operators and their customers will be given long-term access contracts. That will provide the stability and certainty needed to enable the industry to grow and invest. Indeed, that process has already started. The Office of the Rail Regulator is currently consulting the industry on this very matter.
Of course, structural issues, though important, are not the be all and end all of the Government's support for rail freight. The Department for Transport also provides extremely significant levels of financial support to take freight off road and on to rail through direct and indirect subsidy. Perhaps the most important way in which the Government provide funding is through the funding of the national rail network. Freight-operating companies are charged only for the incremental costs that they impose through their use of the network. All the core costs of the network are picked up through track access charges paid by franchised passenger operators, and by direct grant from the Government.
The Government also provide substantial grant support for freight—well over £20 million a year for each of the next two years. That support has helped to create the impressive growth in rail freight that I mentioned, and the company neutral revenue support scheme has taken more than 600,000 container journeys off the roads in the past year.
However, my hon. Friend really wants to know what the Government are doing for Tees valley, and I am happy to tell him, and my hon. and learned Friend the Member for Redcar (Vera Baird), that the Government are doing a great deal. Two major grants have been
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made under the company neutral revenue support scheme to support the transport of intermodal containers out of Tees port by rail. They will provide about £200,000 of funding this year and in each of the next two years, and will take up to 4,000 containers a year off the roads of the Tees valley.
In addition, the Strategic Rail Authority has recently announced a track access grant for the movement of chemical products from Tees port to Workington, which will remove a further 1,462 lorry journeys from the roads. Finally, in 2000, we made two substantial freight facilities grants, totalling over £800,000, to provide funding to support capital investment. That supported the transport of potash to the port, and the facilities became operational in 2002. Those grants are helping to remove 9,700 lorry journeys from the road every year. The Government's commitment to supporting the transfer of freight from road to rail in the Tees valley and beyond should therefore be very clear.
It is, however, vital to ensure that the Government get the best possible value for money from their freight grants programmes, and last month the Department for Transport outlined its proposals for future freight grants through the sustainable distribution fund. That will ensure that grant funding is allocated across rail, water and road schemes in a way that focuses clearly on the objectives of reducing congestion, pollution and the impact on the environment. With the creation of that fund, we were also pleased to announce the reopening of the freight facilities grant—from April 2007—to rail schemes in England, enabling applications to be made for grants to purchase new assets or to replace assets necessary for the carriage of freight by rail. That will help to meet the need for rail freight facilities in the regions, where they can be shown to offer real benefits.
I take my hon. Friend's point about the adverse impact of HGVs on roads and congestion, and the real need to move freight from the road to rail. I can assure him that the way in which congestion impacts on pollution and other environmental issues will be a key factor in determining which schemes receive support. Taking freight on to the railways is not the only way to tackle congestion. We also need to ensure that we make best use of existing road capacity—and the Government are providing important funding to ensure that that is done.
In Middlesbrough, for instance, the council has been awarded a local transport plan block allocation of £3.94 million for 2005–06. That will support small schemes across the borough to reduce congestion and improve accessibility, safety and the local environment. The figure includes more than £800,000 for structural maintenance of the A171 Cargo Fleet lane, which parallels the A172 Marton road and provides access to the western end of Tees port. The Department for Transport has provisionally approved up to £11 million of funding for the major north Middlesbrough accessibility improvements scheme, subject to further development.
The Department is keen to ensure that the freight industry has the necessary support and infrastructure to deliver a continued rise in rail freight movement. I understand my hon. Friend's point about the impact of increased traffic from south-east ports on road networks across the country, including those in the Tees valley. That is why the Government have invested heavily in infrastructure projects that benefit the transfer of freight from port by rail. My hon. and learned Friend raised the issue of PD Teesport's intention to proceed with a container facility there. The Department looks forward to receiving that ambitious application. Indeed, we are doing much ongoing work in order to facilitate the use of large containers on rail.
My hon. Friend spoke about the infrastructure work that has to be done to facilitate that move, but much has already been done. Last October saw the completion of the Felixstowe-Nuneaton gauge enhancement project on time and under budget. That will enable the larger 9 ft 6 in containers to be carried by rail from our largest container port to key freight terminals in the midlands, Wales and the north of England. Likewise, capacity improvements in the Cherwell valley, linking the port of Southampton to the west coast main line, were completed in May last year, which will benefit freight as well as passenger rail.
The SRA has done some extremely good work with the industry in developing a good, value-for-money proposal to make the entire line between Southampton and the west coast main line suitable for 9ft 6in containers. The Government are now discussing with the industry how the project can be funded. However, the enhancement does not need to have the word freight attached to it to be of benefit. The upgrade to the west coast main line is expected to provide increased capacity for freight traffic from the channel ports, and will considerably improve links to the north-west and Scotland. The increased level of track renewals being carried out by Network Rail is also of enormous benefit to freight operators.
As my hon. Friend knows, having inherited a shambles of an infrastructure, the Government are making a huge investment, which is greatly improving the opportunities for carrying freight by rail. Indeed, the Office of the Rail Regulator last week went out to consultation on a new framework for investment in rail infrastructure enhancements. The Government's agenda is to encourage the carriage of freight by rail whenever possible. Clearly, my hon. Friend is rightly impatient for that agenda to benefit his constituency. However, it does not stop at the south-east ports. It is important also for the north-east and the rest of the country.
As I said at the beginning, we are committed to driving forward the continued success of rail freight, both across the country and in the north-east of England. I assure my hon. Friend and my right hon. and learned Friend that, as part of the new regional assessment of transport needs and the new structure of rail, we will endeavour to achieve the best for rail freight and sustainable freight distribution in general.
I congratulate my hon. Friend on securing this debate and for representing his constituents, who I know are concerned about congestion and about the regional development of the north-east. My hon. Friend wants to ensure that the port facilities in his patch create the best possible environment for economic development.
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