The
Chairman: If no more hon. Members wish to ask questions,
we shall proceed to the debate on the
motion. Motion
made, and Question
proposed, That
the Committee takes note of European Union Documents Nos. 5779/09,
Commission Communication on Strategic goals and recommendations for the
EU’s maritime transport policy until 2018, and 5775/09,
Commission Communication on Communication and action plan with a view
to establishing a European maritime transport space without barriers;
and endorses the Government’s support for appropriate action at
the European level where this would be effective in promoting European
shipping, and providing economic, social, environmental, and regulatory
benefits. [12th Report of Session 2008-09, HC 19-xi,
Chapter 3]. —(Jim
Fitzpatrick.) 5.5
pm
Mr.
Brazier: The European maritime space without borders
seeks, as page 57 of this enormous document bundle
states, “by
eliminating or simplifying administrative procedures in intra-EU
maritime transport...to make it more attractive, more efficient
and more competitive, and to do more to protect the
environment.”
All those are ultimately
highly desirable goals. The key words
are “more
attractive, more efficient and more
competitive”. I
trust that, in considering this extremely broadly drawn and general set
of documents, it is in order for me to refer to the one great albatross
hanging round the neck of the UK shipping industry compared with almost
all its competitors in the EU—light dues. Ships docking in UK
and Republic of Ireland ports pay a fee, known as light dues, to cover
the costs of maintaining coastal navigation aids such as lighthouses
and beacons in UK and Republic of Ireland waters. Those fees are not
applied in almost all the other states covered by the bundle. That
competitive disparity is compounded by the fact that the Secretary of
State proposes huge increases, from 35p to 41p per net registered
tonne. That is an increase of more than 17 per cent. For some vessels,
according to tonnage, it will be a rise of 45 per
cent. Light
dues are cost multipliers. If all other inefficiencies and inequalities
are being stripped out to make the industry more competitive relative
to other, less environmentally friendly forms of transport—one
of the central aims of the document—that arguably unfair tax on
UK and Republic of Ireland shipping will hold back the UK’s role
in developing the short-sea shipping market, which is a key part of the
document. At a time when the Exchequer is under so much pressure, no
political party can simply commit to abolishing light dues, but I put
it to the Committee that other EU members are not paying those dues, so
it is incumbent on the Government to put pressure on Trinity house and
its Scottish and Irish counterparts to bring their proposed cost
increases under
control. If
evidence is needed that the proposed increases are already having an
effect, I can give examples. COSCO is pulling one of its big container
ships out of a UK port and putting it into Rotterdam. Maersk has
announced that it is considering pulling five out of six of its
container ships out. Grimaldi and APL have also made announcements; I
heard more about Grimaldi’s position in a visit to Tilbury this
morning. The
Minister knows my concerns on the matter, because of a series of
letters that we have exchanged, but I urge him to act. He made a very
thoughtful speech on the subject just a few weeks ago and said how
carefully the Government were considering it in the consultation. We
need Trinity house and its counterparts to be brought to book. We must
have an end to the nonsense that has been going on. The Government
pledged four years ago to end the subsidy for the Irish, which is 10
per cent. of the total. Costs must be driven down and capital spending
brought under
control. Page
4 of the bundle outlines the key goals of stable competitive conditions
and taxation rules designed to maintain the competitiveness of
Community shipping. Many recent issues seem to make it harder for the
UK’s industry. For example, the very strange change in
arrangements for seafarer’s earnings deduction, which appears to
continue the anomaly of some people who have no maritime-related skills
being able to continue to get the deduction, while bona fide sailors on
certain categories of ships that have been picked out are excluded from
it. The Government’s plan for administrative incentive pricing
will suddenly find shipping in ports paying for spectrum, which they
are required to use under international law. I am deeply conscious that
the Minister does not
have personal control over such issues—he is in the bed of thorns
situation, to use a mixed analogy. Those issues come from other
Departments, but each is a blow for an industry that is suffering from
an absolute collapse in shipping rates, and struggling for survival, as
the Minister
knows. May
I delve a little deeper into the bundle, Ms Walley? You have
been very tolerant with me. On page 8, paragraph
3.8, the document states that the Commission would like to
see “enhanced
visibility and recognition of the
Community” within
the IMO. The Minister gave me a clear and robust reply on that, which I
was pleased to hear. I welcome the fact that the EU is looking hard at
what the IMO is proposing, and the IMO is quoted quite frequently in
the document. We believe that the IMO is the main appropriate forum for
shipping agreements. Like the Minister, I have no problem with the
EU’s sending an observer to IMO meetings, because, when the EU
Energy and Transport Directorate-General is cooking up its next set of
documents, it means that they will have some sensible background. Any
attempt to achieve full member status, let alone actually trying to
compromise the status of individual members, will meet vigorous
opposition from the Conservative party, as, to the Minister’s
credit, I know it does at the moment from the
Government. There
appears to be a number of inconsistencies in the document. On pages 18,
20, and 21 of the bundle, part of the Commission’s maritime
goals until 2018 is that members should more actively support the work
of the IMO in a number of areas, and more specifically,
“Oversee
the smooth implementation of the amendments adopted by the IMO in
October 2008 to MARPOL Annex VI to reduce sulphur oxides and nitrogen
oxides emissions from
ships.” That
is a worthy goal, which I am certain the Committee supports.
Introducing a tougher stand on genuinely noxious substances is an
extremely worthy goal. But at a time when shipping is absolutely flat
on its back, to jump all the way from a 1.5 per cent. limit to a 0.1
per cent. limit has consequences that I am sure the Minister is aware
of. I am told that reducing the limit from 1.5 per cent. to
0.5 per cent can be done comparatively easily and cheaply. We cannot go
down to 0.1 per cent. For a start, we do not have the refinery capacity
around the world to implement it. I am told by the industry that it
means that large amounts of crude oil would have to be put through
catalytic crackers, which involves a huge carbon penalty as well as
raising the price by around 60 per cent. Also, it would take
a long time because the refineries would have to be built. The document
has a great deal to say about competitiveness and supporting a
struggling industry, but a balance needs to be struck and I urge the
Minister to think hard on
it. I
have noted the Government’s cautious approach to many of the
proposals in the documents. As the Minister said in his opening
remarks, the proposals involve areas for study; they are not proposals
per se. Having been my party’s spokesman on shipping for some
years now, I leave the Committee with this thought. The EU often
produces admirable-sounding goals. The Minister is right to be
cautious, and we will certainly be very cautious in considering the
detail when it comes out, but the document at least represents
something that is rather more firmly grounded in the IMO’s ideas
than has been the case in the
past.
5.15
pm
Mark
Hunter: May I say at the outset that I broadly welcome the
strategy outlined in the document? It seems obvious to us that for
Europe, and specifically for the UK as an island economy within the
Union, improved shipping is extremely important to economic growth and
placing the EU on a competitive footing with other global economies. In
the current economic climate, to which other hon. Members have
referred, we should do everything that we can to welcome action in such
matters to ensure that the movement of goods within the single market
is always as effective, easy and fast as possible. The focus on
shipping is to be welcomed because of the environmental impact of
freight transport. Only by making the transportation of goods by ship
as smooth as possible will we encourage more companies away from road
and air freight services and into shipping, which is a more
environmentally friendly form of transport.
The shortage
of maritime workers has had an adverse effect on the industry, so I
particularly welcome the Government’s commitment to signing the
International Labour Organisation’s maritime convention of 2006,
which sets minimum requirements for seafarers to work on ships and
addresses conditions of employment, accommodation, food, health and
welfare. However, will the Minister confirm where we stand with regard
to ratifying those proposals? Is there a final date on which we will
know that they have been
agreed? In
light of the news last month that the United States is to impose a
strict 230-mile low-emission shipping zone around its coastline because
of the environmental and health costs of high emissions, I was hoping
to see proposals for an equally strong stance on shipping emissions in
the strategic document. Although I welcome
“the long-term
objective of ‘zero-waste, zero-emission’ maritime
transport”, no
date has been set for the achievement of that goal. I agree with the
Commission that we should work first and foremost through the IMO, as
we have said, but does the Minister not agree that it would be a good
idea for the EU to set an example by linking the excellent aims
mentioned in the strategy to a specific target date and a set of
targets, to encourage the industry to invest in emission-reducing
technologies and new ships? I look forward to hearing more about the
specific proposals that the programme will
include. The
concept of European maritime transport space without barriers seems a
good one. It would open up the EU market as the EU decision to open
land-based borders did. In our view, the policy would not only
encourage trade but would, by speeding up shipping administration and
customs, encourage many businesses to transport their goods by sea
rather than by road. However, as we have heard, there are genuine
concerns about such a policy, some of which were mentioned when the
consultation on the issue was discussed in Committee last year. In
particular, the proposals carry safety and security implications that
must be clearly thought through.
First, I have
some concerns about opportunities for tampering and smuggling, which
the proposals could increase. The Minister can confirm this or not, but
as I understand it, goods moving between EU ports sometimes travel in
international waters. Although technologies exist to check shipping
positions, such systems are not yet foolproof, which would provide some
opportunity
for goods to be tampered with between EU ports. Obviously, that ought to
be a concern for all of us. If goods travelling between EU ports are
not required to prove their status as European Community goods and that
status is not verified, the system might be open to abuse,
especially, as we have heard, at this time of increased concern and
heightened security. Does the Minister agree that the security
implications of the proposals require closer scrutiny? I agree with the
Government that the medium-term measure, to extend the rights to ships
that have called at non-Community ports or free zones, increases the
safety and security risks, and such risks should be thoroughly examined
before the proposals are implemented. The changes to
the rules pertaining to the carriage of dangerous goods and the
speeding up of documentary checks relating to animal and plant products
must be treated with extreme care. We always need to put safety first.
Simplification and promptness should not be taken to mean minimal
checks and undue haste, which put public health and safety at risk.
While the concept of maritime space without borders is a good one,
shipping regulations are more complicated than harmonising road and
rail. The details of the proposals that we have heard have not yet been
fully fleshed out. More work still needs to be done to assess the
potential problems, as well as the advantages, of the plans before they
are finally put in place.
5.21
pm
Jim
Fitzpatrick: I thank Opposition Members for their
comments. The hon. Member for Canterbury raised the issue of light
dues. I do not blame him in the slightest—I guess that it is
entirely legitimate to take any opportunity to have a pop at the
Shipping Minister about that and I fully understand why he has done it.
As he knows, we adopt a fundamental principle of “the user
pays” in most of these areas. Other countries have to pay for
the same service but, as an island nation, we have perhaps more to
protect and look after. They do it through general taxation or levies
on industry, but it must be paid for
somehow. On
the hon. Gentleman’s accusation about charges, he is aware that
light dues have not increased since the mid-1990s. The costs of the
lighthouse authorities have reduced by 50 per cent. over that period. I
would not want anybody to gain the impression—and I know that he
was not suggesting this—that great efforts have not been made to
reduce the authorities’ costs,. The shipping companies, which I
have met on several occasions, have raised points about the formula,
about a possible contribution from recreational shipping, about further
savings from the lighthouse authorities, about the Irish contribution
arrangement, which is very contentious and under which we are still
working, and about other things. I have told the companies, as the hon.
Gentleman outlined, that we are looking closely at the proposals. The
consultation is still running. We will look at all the submissions and
make announcements in due course.
Mr.
Brazier: I am pleased with the point that the Minister has
just made. All parties accept that the current arrangement is
different, and nobody is proposing taxpayer-funded arrangements. Does
the Minister accept that the difference with the taxpayer-funded
arrangements is that the Treasury of the country concerned puts firm
downward pressure on costs? The recent planned capital spending
programmes are not the kind of thing that any private sector
organisation involved in shipping at the moment would think
about.
Jim
Fitzpatrick: I hope that I can reassure the hon. Gentleman
that, notwithstanding the fact we are not the Treasury, we are putting
downward pressure on the lighthouse authorities. They are looking
seriously at costs. They will have to defend the planned expenditure
because, when the submissions come in from the industry and the items
to which they want us to respond are listed, we will have to put out a
formal document saying what is happening on each point and detail why
we are in the position that we are in at the end of the consultation,
which, as he knows, ends on “le quatorze juillet”. It is
his favourite French holiday, which he will celebrate with great gusto,
as
ever. The
hon. Gentleman also raised questions about inconsistency in the
documents. I said that the documents are proposals about proposals. The
inconsistency is perhaps no great surprise, because there are no final
details, which we will discuss them in due course. He also raised the
issue of shipping emissions, as did the hon. Member for Cheadle. I will
return to the IMO position in a moment. The interesting thing is
that—it is probably the wrong analogy to use—shipping,
being the industry that it is, takes longer to respond to recessions
because of the nature of the business; certainly, orders for
shipbuilding are being cancelled. There are great difficulties for the
industry in being able to deal with the type of recession that we are
in at the moment. However, with regard to by-products, the implication
is that over the next few years, emissions from shipping are likely to
fall, because the demand for services will fall, vessels will sail more
slowly, burning less fuel, and all the less efficient vessels will be
laid up. Retrofitting of new, efficient propulsion technologies will
probably become more financially viable, and shipyards will engage
otherwise redundant engineers to do that work. So every cloud, if I may
suggest, means that something is likely to happen in that regard.
Clearly, we are sensitive to the pressures on shipping generally
because of the recession.
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