The Hon Gwyneth Dunwoody MP


Transport Select Committee

House of Commons







Great Minster House

76 Marsham Street

London SW1P 4DR


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I am writing in response to the Transport Committee's Report on The Ports Industry in England and Wales (HC 61).


I am grateful to the Committee for agreeing, on an exceptional basis, that it would be appropriate, in the interests of providing the fullest possible point-by-point Government response, to defer making that response until we have completed our Ports Policy Review (PPR) later this year.


I promised, in the meantime, to write further to update the Committee on progress. In doing so I will give some interim reactions, from the Department's perspective, to some of your recommendations.


The Committee (rec. 1) stresses the diversity of views within the ports industry on its main challenges, and urges the Department not to accept unquestioningly the views of vested interests. I can assure you that we will not do so. It is for that very reason that the Department undertook last year a thorough consultation with a wide range of interested parties, and is taking time to weigh their responses alongside other contributions including your report, and the Eddington Study.


In a complex market with many competing interests and locations, it is not surprising that there is a wide range of views on both broad and detailed matters. However, we do detect a strong consensus that the ports sector should continue to be primarily market-led, and at the same time that there is a proper role for Government in areas such as safety, security and inland transport connections. The differences arise in the answers to more detailed questions as to how far and in what way it should do so.


The Department is currently exploring the scope for better statistics on inland traffic to and from ports (rec. 2). The national port freight demand forecasts, produced by our consultants to inform the Review, were generally welcomed, though they inevitably elicited debate - as intended: there is a range of views as to prospects in critical traffic sectors such as lo-lo containers and ro-ro. Forecasts are always uncertain, and I agree with the Committee (rec. 3) that our policy needs to be flexible enough to allow the ports and logistics industry to adapt to an ever-changing worldwide commercial environment.


We are considering the Committee's recommendations on wharves (rec. 4) and on foreign acquisition of ports (recs. 5-6). For the time being, I will say only that I see no current evidence of instability, or that foreign-based owners have in general acquired UK ports for other than port purposes, or that they are any more prone than commercially-active domestic operators to identify and sell off surplus operational land.


I am pleased that the Committee has recognised the need for the ports industry to play to its various geographical strengths (rec. 7). The Review is proceeding towards conclusions on the question of appropriate incentives for activity to locate appropriately, having regard to the inland transport, social and environmental consequences (recs. 8, 10, 11 and 14) and on the way the planning system should contribute (rec. 9).


Network Rail has now, after consultation in parallel with and informed by the PPR, finalised its Freight Route Utilisation Strategy (RUS), and I welcome the Committee's continued interest in the commitment to continue to meet growth in demand (rec. 12). We shall respond in due course to the recommendation (13) for the Department to assume greater responsibility for inland waterways.


The Department agrees that UK ports should, as far as is possible, be able to compete on level terms with their counterparts in Europe (rec. 15), where such competition exists (principally, for direct call and transhipment container flows). To this end we continue to press the Commission to issue persuasive guidance on the application of State Aids for ports infrastructure. We will respond in greater detail to this and to rec. 16, on implementation of EU legislation, in the detailed Response.


I share the Committee's desire to see an appropriate balance between environmental and other considerations, and join with you in commending the very substantial progress which the ports industry has made in recognising its environmental responsibilities, not least in the habitats sphere (recs. 17-18). We will respond in detail on cost-benefit assessment of Directives (rec. 19): I am clear, though, that in general the main priority should be forward-looking regulatory impact assessment rather than retrospective analysis of legislation already passed and implemented.


The Government has now published its Marine White Paper, and one of the objectives of the proposed Marine Management Organisation is to simplify and if possible speed up the process for deciding consents for ports development (rec. 20), by bringing together separate consents regimes. We intend soon to publish a White Paper on planning reform, following up recommendations by Barker and Eddington, in respect of major infrastructure projects and wider planning process matters. In both cases our objective is and will be to make the process more efficient for all parties, while maintaining fairness.


Meanwhile, we agree that simplification of the Harbour Revision Order process is needed (rec. 21), and we continue to look for a suitable opportunity to bring forward legislation.


We shall respond in detail to the Committee's recommendations on safety (recs. 22-23), including that for a new independent regulator, at the conclusion of the Review. Meanwhile, it is essential that there remain an effective mechanism to coordinate port safety strategies of all stakeholders in the sector.


We stand by the statistics published in Port Employment and Accident Rates in 2005. One of the aims of this study was to consider methods for producing more accurate accident rate statistics for ports linked to the HSE's reported accident statistics, annually. One conclusion of the study was that it is feasible to produce more accurate estimates of port accident rates annually, and Government and industry need to consider what information is needed for monitoring purposes, taking into account additional costs and expected benefits of improved data.


The Department fully recognises the importance of treating ports as part of an integrated supply network (rec. 24), and agrees that the strength of the ports industry depends in part upon the strength and resilience of the wider infrastructure within which ports are located.


The Department also agrees that the national strategy should reflect the regional context in which ports operate, and also strive for an appropriate balance between national trade requirements and local concerns, where these interests happen to diverge (rec. 25). We shall expand, in concluding the Review and in the formal Response, on how this objective is to be realised to meet the challenge that the Committee identifies.

Along with colleagues in other Departments, and in the Welsh National Government, we continue to work towards completion of the Ports Policy Review culminating in a policy statement which will inform full responses to all the Committee's recommendations.