House of COMMONS









Wednesday 27 January 2010



Evidence heard in Public Questions 256 - 378





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Oral Evidence

Taken before the Transport Committee

on Wednesday 27 January 2010

Members present

Mrs Louise Ellman, in the Chair

Mr David Clelland

Mr Jeffrey M Donaldson

Mr Philip Hollobone

Mr John Leech

Mr Eric Martlew

Ms Angela C Smith

Sir Peter Soulsby


Witnesses: Sir Michael Pitt, Chair, Dr Ian Gambles, Director of Strategy, and Mr Robert Upton, CBE, Deputy Chair, Infrastructure Planning Commission, gave evidence.


Chairman: Good afternoon, gentlemen. Welcome to the Select Committee. Do Members have interests to declare?

Mr Martlew: I am a member of the GMB and Unite trade unions.

Q256 Chairman: Louise Ellman, member of Unite. Would our witnesses like to identify themselves, please, with their name and organisation, for our records?

Dr Gambles: I am Ian Gambles. I am director of strategy at the Infrastructure Planning Commission.

Sir Michael Pitt: My name is Michael Pitt. I am the chair of the Infrastructure Planning Commission.

Mr Upton: I am Robert Upton. I am one of the deputy chairs of the Infrastructure Planning Commission.

Q257 Chairman: Thank you very much. Sir Michael, in the written evidence that you have given to us you do talk about the importance of giving more consideration to intermodal freight facilities at ports and say it is very important that the National Policy Statement on Ports is consistent with treatment given to the same aspects by the National Transport Network Policy Statement. We only have one draft policy statement. Does that mean that you think it is a major failing to have a ports draft national policy statement without a transport statement?

Sir Michael Pitt: I do not think that is an overriding problem in these particular circumstances. The evidence that we are giving to you today and the viewpoint of the IPC is what is it like to be a Commissioner having to make decisions on individual applications with the National Policy Statement being a document that we must take fully into account. Clearly, it is important from a policy point of view that there is a tie-up between what is said about ports and what is said about national networks. I think, as we mention in our evidence to you, we do not have as at this moment any proposals for ports in the pipeline. We have about 40 or so projects coming towards us in the next 12 to 18 months, but none of those is ports projects. My understanding is that there will be a draft NPS on national networks. I assume that will be joined up in terms of its policies with the NPS on ports and, therefore, I suspect it will not present Commissioners with a major problem.

Q258 Chairman: Many of the witnesses that we have had in this inquiry have identified that as a problem, the fact that we are looking at one policy statement in isolation. Are you saying you do not agree with those concerns?

Sir Michael Pitt: I wonder if I could just make a very short statement about the position of the IPC in relation to national policy statements, because one of the things we cannot do as Commissioners is comment on policy itself. We have to leave that entirely to the Secretary of State and to the government departments concerned, because it is important that we are not seen to be prejudging in any way any applications which may come before us. The matter for us therefore is that, when we have national policy statements which have been approved by the Secretary of State, they are written in such a way that Commissioners can properly interpret them and apply them in making their judgments on individual applications.

Q259 Chairman: Do you think that this policy statement should be designated in the form it currently is in?

Sir Michael Pitt: Our view is that the current draft of the ports NPS could be improved. We have made a number of suggestions in our written evidence to you of ways in which we think the drafting could be improved, but nevertheless we do believe that the document as it stands is fit for purpose. If we were required to work to this document as Commissioners, we would be in a position to undertake our challenge, our mission, as an independent Commission.

Q260 Mr Hollobone: A lot of our witnesses said that they felt it was inappropriate for the ports policy statement to come out before the transport one. You could have a situation where the ports statement said, "All new ports should be built in the north", and the transport policy statement came out saying, "All major new roads should be built in the south because of the congestion." Clearly the two would not tie up. Given that the purpose of ports is to offload, in many cases, bulky goods which then have to access the road and rail networks, do you not understand the concerns that have been raised to us, that it is important that these two policy statements are looked at together?

Sir Michael Pitt: I can see the point that is being made. In a perfect world, the various NPSs would all have been issued at the same time. I think then we could have all seen the extent to which they do join up and make overall strategic sense. Having said that, as far as the work of the Infrastructure Planning Commission is concerned, we do not think that will inhibit us in dealing with ports applications because of the timing point I made earlier on.

Q261 Chairman: Has the Government clarified the role of the IPC in relation to security matters?

Sir Michael Pitt: I have not seen anything on that specifically, Chairman. Our understanding is that we will conduct our business in the open as much as we possibly can. In other words, all of the business of the Infrastructure Planning Commission is open to public scrutiny. Our various advice that we give is published on our website and also we will be publishing minutes of our meetings and our correspondence with outside bodies. We are conducting a very open arrangement as a Commission. However, there may well be matters to do with national security where we are prevented from operating in that way, in which case we would have to deal with those matters in confidence.

Q262 Chairman: Do you think you have enough skills to deal with defence issues in relation to ports?

Sir Michael Pitt: I am entirely satisfied that we are building a Commission, both the secretariat of the Commission and the Commissioners that we are appointing, to deal with the applications that will come before us. The Act makes provision for me to make appointments of experts on any matter where that is material to a particular application that is before us. If there were a difficulty in relation to, say, national security or other specialist matters, then we will be able to appoint people to work with us to support Commissioners in making their judgments.

Q263 Chairman: Are you satisfied with the consultation process?

Sir Michael Pitt: Again, if I could speak purely from the point of view of the IPC, we are satisfied that we have had sufficient time to look at the draft document, to formulate our views following discussions within the Commission and to make representations accordingly.

Q264 Chairman: Do you think consultation with the public has been adequate?

Sir Michael Pitt: That has not really been a matter for us. I think that is a matter for ministers and government departments.

Q265 Chairman: How can the National Policy Statement be designated without any input from the Marine Management Organisation which is not yet operational? Does that make any sense?

Sir Michael Pitt: Yes, that does. I do understand the point. We are already talking to the Marine Management Organisation which I think is setting itself up at the moment and will become a statutory consultee to the Infrastructure Planning Commission. In terms of designating the National Policy Statement, ministers will have to take account of timing and the extent to which they can get advice from the MMO.

Q266 Mr Hollobone: How much knowledge and experience do you three individuals have of ports?

Sir Michael Pitt: Speaking for myself, I am not an expert on ports. Formerly, I was a transportation planner, many, many years ago. Other people will speak for themselves.

Mr Upton: I certainly do not claim any expertise, although it is a fact that I once served on the Port Development Board of Hong Kong, which is a significant port.

Q267 Chairman: When was that?

Mr Upton: About 1990.

Dr Gambles: I would not claim any such expert knowledge.

Q268 Mr Hollobone: How big is the IPC?

Sir Michael Pitt: The IPC is a growing organisation. We currently have 40 staff and we have ten Commissioners. We are currently making a bid for approximately a doubling in size of the number of professional staff working for the IPC and at the moment we are in the process of recruiting more Commissioners to add to the total. There is a very careful analysis done of workload, the projects which we know are coming towards us over the coming months, and the amount of time and staff commitment needed to fulfil that workload. We are very conscious of the statutory timetable that we have to work to on each and every application.

Q269 Mr Hollobone: How many people do you have employed with you currently who have some kind of knowledge of ports? Do you have a target for how many ports experts you might require?

Sir Michael Pitt: If I could go back to the earlier point I made, we have no applications in the pipeline for ports at the moment. If and when those applications come forward, it will be my job as chair to ensure that we either have staff appointed by the Commission, Commissioners or experts appointed externally from outside to ensure that we have the working knowledge we will need in order to act as a Commission.

Q270 Mr Hollobone: You do not have any recruited specialists and the Marine Management Organisation is also in the process of being formed. To the lay observer, it may appear that you, the MMO and ourselves do not really have much knowledge of ports and yet this is a major part of the nation's infrastructure. You are charged with making important decisions in the future about it.

Sir Michael Pitt: Yes. I think the reassurance I must give to this Committee is that at the time we are dealing with a ports application we will ensure that we do have the appropriate expertise to undertake that work.

Q271 Chairman: If you do not have the expertise, how can you come to a judgment on whether the statement is adequate?

Sir Michael Pitt: The Commission is becoming very expert at reviewing national policy statements across the board, the energy ones as well as ports. We are becoming increasingly clear about the role of Commissioners and what has to be done as Commissioners and, therefore, we are able to interpret whether the wording in the draft NPS is appropriate and could be exercised and used by Commissioners in carrying out their work.

Q272 Chairman: What do you mean by "wording"?

Sir Michael Pitt: It is very important to us that the NPS is written in the clearest possible terms. In fact, one of the recommendations we are making to you in writing is that we think it would help the National Policy Statement if there could be clearly defined, perhaps in bold print or in boxes, an absolutely straightforward statement of government policy to summarise what is in the longer narrative inside the document.

Q273 Chairman: One example is that the statement contains an assessment about what national ports' capacity should be. If you do not have any expertise in ports, how can you assess whether that statement is reasonable or not and whether it is adequate or not?

Sir Michael Pitt: The policy contents of the National Policy Statement has to be a matter for the Secretary of State, ministers and the relevant government department. As I mentioned earlier on, it would be wrong of any member of the Commission to comment upon the policy, whether it is appropriate or inappropriate. We have to restrict our consideration as to whether, as Commissioners, we can interpret a policy document and make use of it in our decision-making.

Mr Upton: As we interpret the forecasts in the draft National Policy Statement on Ports, what they are doing is making the case as to why there will be a need over time for more port capacity in this country. In other words, they demonstrate a significant increase in the case of container traffic, a significant increase in the case of ro-ro traffic and other growth elsewhere. The point is made not actually in the forecasts but we do not know what the growth might be in relation to energy-related traffic. That is the case as to why we need more port capacity. What the NPS actually says for IPC purposes is that it is not for us to assess whether a particular application is in line with some general projection of need because it is for the market to define what the actual demand is. I think that the draft NPS is quite clear on that.

Q274 Chairman: Is that you opting out of making an assessment of whether the statements in that document are right?

Mr Upton: I think that is background to the approval of the draft NPS. That is not a matter, I think, for the IPC. The statement that it is for the market to determine what actually constitutes need or demand in any particular instance of proposed development I think is what is significant for us as policy.

Q275 Chairman: Therefore, how would you assess an application when you are looking at the statement if you are saying it is just for the market and there is nothing else? What criteria would you be using? What would be relevant to it?

Mr Upton: I think that brings us back to the way in which the IPC is expected to operate. It is absolutely not a question of us bringing our own expertise, real or imagined, into the assessment of evidence, except in so far as we are actually conducting an examination of the evidence which is put before us. It is for the applicant to make the case as to why a particular development is justified in a particular location and to demonstrate what the demand is that they intend to meet and the adverse effects which they might have to overcome. We will have to look at those applications on what is included in the application, in the draft development consent order, in the background environmental impact assessment and in the light of other evidence which is brought by other parties.

Q276 Mr Hollobone: According to the National Policy Statement, sufficient additional ports capacity to meet the likely growth in container traffic for the next 20 or 25 years has already been granted consent. How will an applicant convince you that further port capacity is needed?

Mr Upton: I think the first question is will there be applications in the near future. As Sir Michael has said, we are not aware that there will be any applications in the near future.

Q277 Chairman: We are assuming that there are going to be. If there are no applications, there is not much purpose in this whole venture, is there? Let us assume there are applications. How would you assess their adequacy?

Mr Upton: The draft NPS also goes on to say, for example, that there may be growth in the energy sector in particular in ways which we cannot predict at present because of the changing nature of the energy market. Then we would have to consider that application on its own merits. The overriding message of the draft NPS is that it is not for us to determine whether there is actually a need that the market should do that.

Q278 Chairman: We have been told in evidence to us that there could be a legal challenge on the basis of inadequacy of evidence in you reaching your decisions. Is that something that concerns you?

Mr Upton: If I understood it correctly, the evidence was that there might be a legal challenge to the NPS.

Q279 Chairman: Not to you?

Mr Upton: Yes.

Q280 Mr Leech: I might already have established the answer to this question from what you just said. Some people in the ports industry have suggested that the thresholds for nationally significant ports projects have been set ludicrously high. I think that was the term that was used. I do not expect you to comment on whether or not they have been set ludicrously high because that would be a policy issue but, given where the thresholds have been set, is it realistic that within the next five years you will not actually deal with any ports applications? Is that what you were suggesting before?

Mr Upton: What the draft NPS says is that over the long run there will be significant increase in demand. That may have been set back a year or two as a result of recent economic vicissitudes, but it is going to come sooner or later and the market may change in ways that we cannot predict. Therefore, we need this framework now in case the market perceives a need which it wants to meet.

Q281 Mr Leech: Have you made any assessment of the likelihood of applications coming forward in the next five years then?

Mr Upton: We are not aware at this stage that there will be any port applications to us.

Q282 Mr Leech: How would the new planning system have affected the decision on Dibden Bay?

Mr Upton: Of course we cannot get into any hypothetical discussions on the merits of Dibden Bay. I think that the point to be made there is that we now have a completely different planning system for such projects and that the application which would have to come forward for a project like Dibden Bay would be in a very different form from the application which was made before Dibden Bay.

Q283 Mr Leech: Is it your view that probably the same conclusion would have been reached?

Mr Upton: I could not possibly reach that view or any view on Dibden Bay.

Q284 Chairman: Which is it? You could not reach that view or you do not have any view?

Mr Upton: I have no view at all. I am sorry.

Q285 Mr Leech: Would the process have been sped up, regardless of the outcome of the application? Would the new system have allowed the decision-making process to have happened much quicker?

Mr Upton: I think what you have to understand about the new system is that it is very heavily front-loaded in a way in which the old system was not. It requires the applicant to do a great deal more work with stakeholders and communities, in terms of environmental work, before they can put in what is a complete development proposal. What the new system then says is that there are rigid timeframes within which the application must be allowed to go forward or not allowed to go forward, within which it must be examined and within which a decision must be reached.

Q286 Mr Leech: That is a really interesting comment. Basically, are you suggesting that the process might not actually be any quicker but the official timescale of the decision-making process would be quicker? There would be an unofficial time before that in which the applicant was expected to do lots of additional consultation?

Mr Upton: I think it is a great and general truth in planning that time is well spent before an application is made. That has been codified in terms of the new regime. You have had evidence from the major port operators and they refer, for example, to their port masterplans. They spend a lot of time thinking about what their future development plans will be so in a sense they are always in a planning phase. The point is when they start to engage local communities, local stakeholders and other stakeholders with what those plans will be as they want to bring them forward.

Q287 Mr Leech: The intention is to try and streamline the process and to quicken it up. From what you have said, that will not necessarily happen.

Sir Michael Pitt: I wonder if I could jump in on this. I am absolutely confident that we will be dealing with a fairer and faster regime compared to the former regime. The big difference is that the obligation is on the developer to do their work effectively in the right order and to ensure that they bring to the Commission a complete application which has been properly thought through and which has been properly consulted upon. That certainly was not the state of affairs with the previous regime. What that then guarantees is a delivery of a decision one way or the other within the statutory timeframe that has been set. I think the total elapsed time from start to finish for the project will be significantly faster than under the old regime.

Q288 Mr Leech: That includes all the additional work that will need to be done prior to the application being brought?

Sir Michael Pitt: If I could rephrase your point, it means that the promoters will be required to do the work in the right sequence that they should have done previously under the old regime. The big difference now is that the Commission can refuse to accept an application. In other words, it cannot even come through the door if the Commission believes that it has not been properly prepared or if there has not been effective public consultation.

Mr Leech: From what you are suggesting, you have given a very good politician's answer, I think.

Chairman: That is meant to be a compliment.

Q289 Mr Leech: There is no guarantee that this will improve the time that it takes from the inception, when someone thinks, "We have to bring forward a planning application." There is actually no guarantee that this new process will be any quicker. You hope and think that it probably will be but if all the proper work is done by the developer, there is no guarantee, is there?

Sir Michael Pitt: There is a fundamental difference under the new regime and that is that, from inception to final decision-making, it is a managed process. I think the previous regime could be described as an unmanaged process. As soon as a project is notified to the IPC, we will start talking not just to the promoters of that development but also to all the other stakeholders, the local authorities, the objectors and the statutory consultees. We will start to organise all of the arrangements that need to be made. It is entirely up to the developers themselves how they accept or take that advice. The advice we will give to them will help them organise themselves to get the matter dealt with as promptly as possible. I think things in the past were not at all like that.

Q290 Mr Leech: You think it will massively improve consultation with all the stakeholders?

Sir Michael Pitt: There is no doubt in my mind that developers are beginning to realise that this new Planning Act puts upon them a statutory duty to properly undertake consultation, to ensure that they are listening hard to what people are saying and in due course to also demonstrate that they have responded to what objectors or consultees are saying about their proposals.

Q291 Mr Donaldson: We have heard from some witnesses that there seems to be a little bit of confusion about the relationship between regional and local planning documents and the NPS. What weight will the IPC attach to all their plans and strategies such as regional, economic development strategies and regional special frameworks?

Dr Gambles: The statutory provision, of course, is that the Commission must determine applications in accordance with the National Policy Statement. The National Policy Statement is therefore the primary document to which Commissioners will refer. However, Commissioners are free and, indeed, obliged to take account of all other relevant and important matters and documents. I think it is quite safe to say that relevant regional strategies will figure in that category.

Q292 Mr Donaldson: Do you think it is reasonable that the NPS automatically overrides regional development frameworks?

Dr Gambles: If I may, I do not think it would be right to use the word "overrides". Commissioners will have a duty to weigh up the impacts of various policies, the benefits and impacts of the proposal. Whilst the National Policy Statement has a statutory primacy, it does not, if you like, trump everything else. All other things can be considered and will be weighed in the balance.

Q293 Mr Donaldson: Does the ports NPS need to say anything about port masterplans?

Mr Upton: I do not think it is necessary for it to do that. The ports masterplans are not statutory documents. They are actually prepared and owned by the port developers themselves. Therefore, they represent part of the ongoing process of planning by the owners of the ports that I talked of earlier. To the extent that they often are or should be a matter of public consultation, they have become part of the background of the development of a future application, but I do not think that they need to have any particular status in the statutory system.

Q294 Mr Donaldson: They would be taken into account but, unlike regional and local development strategies, they have no statutory force and, therefore, their status is somewhat diminished?

Mr Upton: I think their status is different. One would expect them to have informed very fully the application which was being made by the port developer.

Q295 Chairman: How will you balance economic benefits with environmental impacts? Have you enough guidance to enable you to do that?

Sir Michael Pitt: Again, if I could talk about the role of the Commissioner, the Commissioner is going to be hearing a great deal of evidence about the project itself and is going to have to come to a view about the extent to which the wider benefits of national infrastructure to the country as a whole and to the region may exceed or not exceed the impact of the disbenefits locally. When we are looking at the local area concerned, I think there will be important factors such as the social and economic impact, whether there would be additional jobs and the extent to which having that infrastructure at that location would be a benefit to that wider, local community. These are all factors which Commissioners have to take on board in reviewing all of the evidence made available to them prior to making any decision or recommendation.

Q296 Chairman: Are you satisfied with the guidance you have on how you would weigh one up against the other?

Sir Michael Pitt: Yes. I think it goes as far as it probably can on that subject. It is only when you get down to the individual cases that you can start to make inroads into the evaluations and to try and sort out which should take priority. It would be rather difficult, I think, in a document like this to take this particular subject very much further.

Q297 Chairman: What about the Appraisal of Sustainability of the Ports NPS? Is that adequate?

Mr Upton: That is a background document which is referred to.

Q298 Chairman: Is that adequate? That is part of the statement.

Mr Upton: It contains a great deal of useful information about the factors which have been brought into account in appraising the ports NPS as it has developed. I think that is there to be drawn on. There is also other material to be drawn on apart from ports masterplans. There is also the project appraisal framework for ports which is I think quite a longstanding process which has developed over some time. Behind the NPS itself if you like, in the Appraisal of Sustainability and the project appraisal framework for ports, there is quite a lot of material, of methodology, to be drawn on.

Q299 Chairman: What about the climate change impacts of decisions? Greenpeace told us they felt that there was a disregard for climate change issues. Do you agree with that?

Sir Michael Pitt: Once again, that will be a factor which Commissioners are required to take into account. Remembering that we are dealing with each site, each project, individually, there are issues about the cumulative effect of successive decisions which I think also needs to be dealt with appropriately. Clearly, the impact on climate change, the footprint of a particular project, is a factor that a Commissioner would weigh up in considering the evidence.

Q300 Mr Leech: I want to follow on from that but also to return to what Sir Michael said in relation to the weighing up of economic benefits against environmental impact. You talked about the local impact. How would you then define "local"? Would it be literally the surrounding area of the proposed development or could it possibly be a more regional impact in terms of the environment? We have heard from a number of people that about 60% of freight which comes into ports in the South East heads north of Birmingham so obviously that has a big environmental impact on the South East and travelling up the motorways. One in two vehicles on the A14 being a lorry, for instance. How is the wider regional impact or national impact of decisions being made, particularly about expansion of ports in the South East as opposed to ports around the rest of the country where there is a great deal more scope for capacity increases?

Sir Michael Pitt: Commissioners do have to look at the wider picture. Commissioners would expect to have information supplied by the developers on, for example, traffic flows, not just in the immediate vicinity of the site but also much further afield as well. Therefore, the longer distance issues are material to the development and I think Commissioners would have to take that into account.

Q301 Mr Leech: Do you feel that the balance is correct? You are talking about the wider economic benefits as opposed to the local, environmental disbenefits of an application. Do you feel that the guidance is good enough to give you the scope for looking at the wider, environmental disbenefits of a particular application?

Sir Michael Pitt: One of the things about this is that there is no simple algorithm that you can build and says, "If we put all these bits of data in, out will come the answer either for or against a particular development." The way that the Act has been drafted is to put the responsibility firmly on the shoulders of the single Commissioner or the panel of Commissioners who are making the judgment and therefore they have to weigh up, using their professional judgment, the factors for and against the development and come to a view about whether it should be approved or not. If it is approved, also to think very carefully about the conditions that should be placed upon that development, because another way of mitigating the adverse impacts of a proposal is by placing conditions on the way in which that particular activity operates in the future.

Q302 Chairman: Would you enter into discussions with port developers and suggest alterations or amendments to them before there was a formal submission of an application?

Sir Michael Pitt: That would be very difficult for us, Chairman. One of the provisions we already have is that Commissioners do not have conversations with promoters or developers at the pre-application stage at all.

Q303 Chairman: Is that forbidden or prohibited?

Sir Michael Pitt: It is one of the rules that we have imposed upon ourselves, so it is forbidden, if you would like to use that particular word. The reason for that is that if a Commissioner were to comment on a proposal by saying, "Well, if you made that building slightly smaller" or, "If you did something of this sort, it would be much more acceptable", the Commissioner is effectively prejudging the application. I think that prejudices the independence of the Commissioner and, in fact, I would have to disqualify any Commissioner who ever made a comment of that sort to a promoter or in public. We have to be extremely careful as Commissioners about what we say at the pre-application stage. Likewise the secretariat even, the professional officers of the IPC, also have to be extremely careful what conversations they have. I think the way in which we can influence applications is by asking challenging questions.

Q304 Chairman: After an application has been submitted, would you enter into a discussion of that sort then, when you might suggest change?

Sir Michael Pitt: Once the application has been submitted, then that is the proposal that the Commissioners have to evaluate. There might be a degree of freedom within the context of that application to make changes or to place conditions on the operation of the project, but it would be impossible for the project to be significantly amended. If it was significantly amended, the promoter would have to go back to square one with further consultations and make a new application.

Q305 Chairman: Who would assess what "significant" meant in the context of the specific application?

Sir Michael Pitt: I think ultimately it would have to be the Commission itself. The judgment I would take on whether something is significant is whether the changes proposed mean that the public consultation exercises and the consultations which took place previously are prejudiced.

Q306 Mr Hollobone: To try and get the ports NPS in context with your other responsibilities, how many national policy statements are you expecting?

Sir Michael Pitt: Twelve.

Q307 Mr Hollobone: You have already said that you do not anticipate any ports applications. What would be the busiest end of the spectrum as far as the IPC is concerned?

Sir Michael Pitt: Energy by far is the most significant number. As I mentioned earlier, we are in the order of maybe 40 to 50 projects a year. Currently we are running with about two-thirds of those projects being energy related. That is nuclear power, fossil fuel energy, improvements to the National Grid and wind farms, both on and offshore. Also, we have a number of transport projects which we anticipate as well. That is the general mix. We do not have any ports projects. We do not yet have any projects in relation to water or waste. They may be coming soon. I think they relate more to housing development and when that starts to become more significant.

Q308 Mr Hollobone: In this era of tight public expenditure, why should you not be merged with the National Planning Inspection Service?

Sir Michael Pitt: We are putting all our energy at the moment into implementing the current legislation of the government. Clearly, if there were a change in government policy, then we would respond to that in whatever way we would have to.

Q309 Mr Hollobone: What are the differences between you and the NPIS?

Sir Michael Pitt: Surprisingly, it is quite a different organisation from us. The Planning Inspectorate focuses the great majority of its energy on dealing with planning appeals. For example, if somebody has applied to extend their house and that has been turned down by the local council, that appeal will go to the Planning Inspectorate. They deal with something like 25,000 of those appeals a year. They are dealing with the end of the process after the local authority has dealt with the planning application or the consultations and so on. The Commission is a national planning authority for the 40 or 50 projects that we deal with. We deal with those projects, if I could say, from cradle to grave. Therefore, it is a very different function to the Planning Inspectorate, but that is not to say that some form of merger could not be achieved if that was the wish of government.

Q310 Chairman: Would you like to see some guidance on location in the policy statement?

Sir Michael Pitt: It is quite interesting, is it not, that the energy NPS on nuclear is quite specific about a number of sites where the Government would say that there is a good case to be made for placing a power station, but there do not appear to be any other site specific NPSs so far. I think the Government has made it clear in those documents that it wants to leave choices about location to the marketplace, that these are commercial risks that should be taken by the private sector. From my perspective, that seems to be a perfectly reasonable position for a government to take.

Q311 Chairman: Would you be considering the impacts of new development on existing ports?

Mr Upton: New developments in what sense?

Q312 Chairman: In the sense I am saying. If you have an application for a development, would you assess its impact on an existing port in coming to your decision?

Sir Michael Pitt: I see. You are saying if there is a proposal for a new port or an expanded port at location A, what about the impact on port B? As far as I can tell, that would not be a consideration for us. It would be very much down to the marketplace and a commercial risk being taken by operators.

Dr Gambles: If I may, it would have to be a very substantial alteration within the meaning of section 24 of the Act before it would come to the IPC. It would have to meet the same thresholds as a new application. It is defined in the statute.

Sir Michael Pitt: I think the Chairman is saying what about the economic impact on port B because of the proposal.

Q313 Chairman: Would that be part of the consideration?

Sir Michael Pitt: No. I think that would be largely down to commercial judgment being taken by the port operators.

Q314 Chairman: You would not see the Commission having a role in assessing that, or would you?

Sir Michael Pitt: If I could put it back to you in this way: as I see it, the Commission is not there to decide which is the best location for a port expansion in the country. What the Commission is required to do by law is to consider the application that is placed before it and to decide whether that is an appropriate location for that port expansion or new development to take place, so it is quite possible that we would be giving approval to a port development at point A that would have an adverse impact on the economy of port B in a different place.

Q315 Chairman: It would not be your role to judge the impact of one on another?

Sir Michael Pitt: Under normal circumstances, no.

Q316 Mr Martlew: This surprises me a little. The sort of projects you are talking about are large projects, are they not?

Sir Michael Pitt: Yes.

Q317 Mr Martlew: You are perhaps talking about taking considerable areas of green field site. You do not assess the need for that particular project? Need does not come into it? It is just whether the marketplace decides to have it? You are prepared to take the fact that you will be destroying a green field site and you do not look at the need?

Sir Michael Pitt: The Commissioners would be taking into account the impact on the environment and the loss of land and would be taking a view on the suitability of that location for new port development.

Q318 Mr Martlew: Sorry, Sir Michael, you are not really answering the question. You do not look at whether this particular project is needed? It is just whether it is going to upset the greater crested newt?

Mr Upton: The NPS is quite clear that these are major investments. They are not made capriciously. The NPS is quite clear that it is for the market to decide whether it wishes to risk its capital in a particular development. It is for the Commission to decide whether the adverse impacts of that development might outweigh its benefits.

Q319 Chairman: The guidance does say that you should ensure effective competition between ports and provide resilience in the national infrastructure. That implies that you would be making judgments about the impact of the proposed development on existing facilities.

Sir Michael Pitt: I think that reference is there to make the point that it is quite possible that there will be greater port capacity available in the country than the minimum needed to cope with the amount of goods going in and out of the country. There will be an element of spare capacity in order that the marketplace can operate effectively.

Q320 Chairman: Would you say that you would be precluded from assessing the regional, economic impact of a proposal? Would that be outside your discretion?

Sir Michael Pitt: No. The Commissioners concerned would take evidence on regional impact, would want to consult the relevant regional body or bodies and would want to take into account regional implications when coming to their decision about an individual site.

Q321 Chairman: How would that be weighted as against other considerations?

Sir Michael Pitt: As Dr Gambles said, we are required by law to give precedence to the National Policy Statement but, nevertheless, Commissioners would want to take into account local development frameworks, other local plans, regional plans and so on in coming to their conclusions. I would expect them to address those plans in their reasoned justification, the report that they write, when they come to their decision.

Mr Upton: I think it is back to Sir Michael's point that there are no algorithms for this. It is impossible for us to say in advance, "We will give more weight to this than we will to that." What the guidance in the NPS seeks to do is to give us the framework for exercising judgment. That judgment has to be exercised on the case which is brought to us and the case which is brought against that, if that applies. In other words, it is only when we are into the actual evidence and examination of that we can start to make those judgments.

Q322 Mr Martlew: When you come to a decision you see as very complex, would you find yourselves being taken to court over that decision?

Mr Upton: The Act provides for the possibility of judicial review if we give grounds for judicial review.

Q323 Mr Martlew: As you are a new organisation, there are no judicial guidelines. I suspect it could well happen.

Sir Michael Pitt: We are extremely conscious of the potential for judicial review. The way in which we conduct our business and the very careful way that we are trying to answer your questions is a consequence that. Though, if we do misdirect ourselves in some way, we would lay ourselves open to judicial review. Perhaps I could just reassure you that we are spending a great deal of time and energy making sure that the processes we adopt and the way that we conduct our business will be legal and, as much as we possibly can, reduce the risk of judicial review.

Q324 Mr Hollobone: If you were taken to judicial review and the judicial review did not find in your favour, would you resign?

Sir Michael Pitt: It would depend on the reason why. I think it is quite possible that we will be tested at judicial review. I think it will be important for the Commission to demonstrate that it conducted its business carefully and reasonably. There could be circumstances where we might lose a judicial review for reasons beyond our control or for reasons that no chair could have foreseen, but if I felt personally that the Commission had badly fallen down on the job in some way I would resign.

Chairman: On that note, thank you for answering our questions.

Witnesses: Paul Clark MP, Parliamentary Under Secretary of State, Mr Richard Bennett, Head of Ports Division, and Mr Philip Grindrod, Team Leader, Ports Policy Review, Department for Transport, gave evidence.

Q325 Chairman: Good afternoon, Minister. Would you and your team like to identify yourselves for our records, please?

Mr Grindrod: I am Philip Grindrod. I am from the ports division of the Department for Transport.

Mr Bennett: I am Richard Bennett, head of the ports division in the Department for Transport.

Paul Clark: Paul Clark, Minister for Shipping in the Department for Transport.

Q326 Chairman: Minister, would you like to make an initial statement?

Paul Clark: Very briefly, thank you, Chairman. Thank you to you and Members for inviting us to come along to the Committee on what I think is an important part of the Department's work in terms of the National Policy Statement for Ports. It is an important element of the Government's programme to deliver the reforms to the planning system, including the Planning Act 2008. Indeed, as Members will be aware, the aim of the Act is to make planning systems fairer and faster, with a fuller public scrutiny of such major developments. Under the Act, the IPC is required to decide planning applications for nationally significant infrastructure projects in accordance with the policy statement, once designated, essentially, unless the adverse impacts outweigh the benefits or, of course, it is out of step with domestic or international law. The NPS will also provide guidance for the smaller development cases falling below the thresholds of those nationally significant projects in the Act. They will be decided by other decision-makers, in particular in this case the Marine Management Organisation, the MMO. The Government's policy for ports is to encourage sustainable port development to meet demand while leaving judgments about when and where that development should take place to those who are best placed to make those judgments, working within the ports industry and the port developers themselves. The market-led policy has been shown to work and there has been a series of container terminal developments that have been consented in recent years, including those at Liverpool, Tees Port, Felixstowe and London Gateway. We know that some are not of course proceeding as urgently at present, but this is a sensible response to market conditions. Despite the uncertainties, all the evidence points to a resumption of growth in demand for port capacity as the wider economy recovers. Meeting that demand is not just a matter of simple arithmetic to predict and provide at national level; it is about exploiting the new opportunities for more efficient logistics. It is about responding to the demand and that demand itself will be responding to a whole range of environmental and decongestion initiatives at sea and on land. In conclusion, let me say something finally about the steps we have been taking to consult widely on the NPS. It is open to all to respond online or on paper. We have been holding a series of regional consultation events, again open to all, and my officials have participated in those events along with others. Indeed, we have been assisted by the Planning Aid Organisation that has helped us to reach a wider readership indeed. We are obviously always ready to discuss points with individual stakeholders, as has been happening. With that, Chairman, I think that sets the broad principles of where we are at. I am delighted to be here to take questions.

Q327 Chairman: When do you plan to designate the National Policy Statement on Ports? Have you any plans to change the draft statement at this stage?

Paul Clark: We will obviously reflect on the consultation that is currently under way, which closes on 15 February, and I am grateful for the Committee's involvement in receiving the submissions that we have received up to 15 January so that they could form part of the work that you are undertaking. Clearly, we will take into account what has come forward and is coming through that process. We will also take into account evidence that has been submitted here. In terms of the underlying fundamentals of the NPS as it stands, I would not see a need to fundamentally change the underlying parts of it. In terms of when will it be designated, we are looking at the completion of those processes, including the parliamentary scrutiny process, and of course needing to respond to the Transport Select Committee, yourselves, in terms of that.

Q328 Chairman: Could you give us a date or possible date?

Paul Clark: I cannot give you a date for when that will conclude, but we are keen obviously to progress as quickly as possible. The conclusion of the consultation is 15 February, so it could not obviously possibly be before that stage, but certainly we will give fair wind to move as quickly as possible thereafter.

Q329 Chairman: Before May?

Paul Clark: It would certainly be within this year. I would hope that we could move as quickly as possible and look to that to be sooner rather than later. I am not being deliberately obtuse in that date, Chairman. I am being realistic in the sense that I have not seen all the consultation and responses that have come in. You will no doubt be producing a report arising from your work that you have been doing as a Committee and we want to be able to respond to that as well, so there are a number of factors that are involved in that timing.

Q330 Mr Hollobone: Quite a few of our witnesses have expressed concern that the Ports Policy Statement should not be designated ahead of other policy statements, for example on major roads and railways. If it were the recommendation of this Committee that the Ports Policy Statement be not designated until other policy statements have been brought forward, is that something that the Department would consider carefully?

Paul Clark: We always consider any recommendations that come forward from the Transport Select Committee carefully. Is it likely that we would necessarily concur with that view? I would have to say I do not believe we do. I have read some of the evidence that has come before the Committee; I saw some of the comments of some people on the national networks policy statement and what they have said. I believe the Ports Policy Statement stands alone but of course it has many references in it to requirements in terms of transport and infrastructure provisions. It also would not be surprising, with the work that has been going on on the Ports Policy Statement and the National Networks Policy Statement within the same department, that people do not work in isolation from each other and, therefore, that has to be reflected. If indeed we are to have strong port facilities that are successful economically, creating jobs and opportunities, they need to have - as indeed is reflected in the document - a transport infrastructure that supports them and that will be multimodal. I do not think it is necessary that the national networks document has to be decided beforehand. Certainly one of the things we would always make sure of is that any comments and so on that are received in relation to the ports document on national networks would be considered by the National Networks Policy Statement when that is published in the fullness of time after consultation.

Q331 Ms Smith: Following on from that I have to say, Minister, that I did not hear anything then which evidenced to me any reason why the networks document should not be produced at the same time or integrated with the ports document. If the Department is working on this and different parts of the Department are working together on this, then surely it is possible for the documents to be seen to be worked together?

Paul Clark: Obviously there are a number of elements to this and a number of workstreams that are going on on what is clearly a complex position. Infrastructure and national networks are needed not just for supporting ports but for supporting a whole range of networks. Indeed, some of that is reflected very clearly in the document Delivering a Sustainable Transport System with the 14 critical corridors which involve something like 10 or 11 of the major ports around our country. I think you would find it surprising if I were to say anything else other than that it would be surprising if the document then came out from the very same department and did not reflect other work and other streams that have gone on within that department. In terms of the national networks document, rightly so, it is not just about national networks to deliver ports; it is to deliver a whole range of areas. It will not surprise you that the Secretary of State made clear at the beginning of December that he wanted to make sure that the national networks reflected work on what will be a critical part of that, I suspect, which of course is the work that was being done by the High Speed Two Company to be reflected in there as well. Therefore, you need to take those processes as they come through.

Q332 Ms Smith: Two points on that. First of all, when is it envisaged that the networks document will be produced? To be frank, the one thing that all the witnesses have agreed upon so far is the need for that second document to be integrated with the document before us today. I would suggest there will be very little confidence in the status of the ports document if the networks document is delayed.

Paul Clark: In terms of the national networks document, the Secretary of State has said that by the end of March he intends to have responded on High Speed Two and that would form a critical part of the national networks document. Therefore, in terms of it being by around the end of March, that would be the right target time that we are talking about. I do emphasise if the documents did not recognise the needs across the range of the transport provisions, it would be highly surprising within the same department.

Q333 Ms Smith: The second point I would make is this: you have made two intriguing references in your opening statement, Minister, and just now. The first was a statement you made to the effect that the market-led policy appears to work, and you then listed a number of developments, all of which took place in the South East of England: Southampton, Felixstowe and so on.

Paul Clark: Liverpool.

Ms Smith: That is fair, I do apologise, but principally we are talking about the South East of England. If the networks document is predicated to some extent on HS2, we are again looking at North-South links. Surely it is time to use this planning tool to help the different regions of this country to close the gap in economic terms with the South East, and it is time for a document like this to suggest that a presumption ought to be put in place of development first where it is most needed; that is, Liverpool Merseyside, the Humber, the Tees, rather than allowing us to continue the market-led approach which leads to further intensification of development in the South East of England which is leading to unsustainable congestion.

Q334 Chairman: Minister, a market-led approach or a little guidance?

Paul Clark: I gave the examples of Liverpool, Teesport, Felixstowe and London Gateway. They were the four that I gave.

Q335 Ms Smith: I apologise for that.

Paul Clark: That has been led through the policy and the principles of the policy that we have in place now and which is replicated here within the NPS. It is absolutely correct that High Speed 2 is there to deliver on a number of agenda items, but one of them is clearly about having far better facilities and links north and south, running the length of our country. That is absolutely right: I make no apology for that. In terms of the North-South divide, I looked very carefully at the evidence that the Select Committee received previously, when looking at the interim policies and so on, and I know that the Select Committee concluded that the evidence which was submitted was contradictory as to whether you could be able to deliver a policy directed in that way that would deliver what some Members of the Committee wish to see. Let me also say, in terms of economic development, that I could not agree more: we need to take the steps necessary to make sure there are job prospects and opportunities for all people within every region of this country.

Q336 Chairman: What guidance or weighting would you give to regional economic strategies in relation to ports as against a national policy statement?

Paul Clark: That is exactly where the regional development agencies and the regional economic strategies are part and parcel of that process.

Q337 Chairman: What weighting will they have?

Paul Clark: I would expect the IPC to take that into account. Indeed, when you go through, economic issues and job prospects are contained within this as part and parcel, along with other areas, in terms of environmental issues and so on.

Q338 Chairman: The IPC have told us that they will take regional strategies into account but they do not seem very clear about how much into account. Will you be giving any more guidance on this area?

Paul Clark: We will review. I know that some comments have come forward about a greater emphasis in terms of regional economic strategies and the RDAs' roles in this document. That is an area that certainly we will undertake to look at as to whether there needs to be a stronger reference in this document. We are certainly undertaking that as part of this process.

Q339 Ms Smith: Surely it is really important, therefore, as part of that discussion, to take into account that, increasingly, it is the congestion of the network particularly in the South East that needs to encourage us to think more radically about where we develop our further ports capacity. For instance, the M3 to Southampton and the roads in East Anglia are increasingly congested, whereas we have opportunities in the North to develop quite effective networks in terms of getting freight in and out of the country, reducing road miles and therefore congestion and CO2 emissions. Clearly we have considered in here, in some guidance on assessment, issues about commercial impact and economic competition but also about congestion and how that feeds into the whole agenda in that way. Through some of the work that has been going on, such as the work of DAS, we have been identifying those critical corridors. Of course that will be part of the influence as to where those developments would go, as part and parcel of the normal process that would happen, as to moving clearly around the country, from the port and into the hinterland, in terms of that easy access and the way you can do that.

Q340 Ms Smith: What is the point of a national policy statement if we are going to have all sorts of other pieces of work and strategies brought to bear on decisions to be made?

Paul Clark: The ports policy brings forward very clearly and this strategy lays out the factors that do need to be taken into account. It shows applicants what they need to consider and the items that they need to take on board, and it shows the decision-making body the factors that need to have been taken in and whether those are within the applications that are before them. That is how we can speed up and make more transparent the whole process for local people and those wider afield.

Q341 Mr Leech: Minister, 60% of freight that comes to Britain through ports in the South East is going to end up north of Birmingham. How will the National Policy Statement on ports encourage shippers to take their freight to ports around the rest of the country instead of through the ports in the South East?

Paul Clark: Part of it will be, for example, looking at issues of transport requirements and picking up on the issues that have been raised already in terms of congestion. Those issues have to be taken on board. There is a presumption in the document, indeed, that if the vast majority is going to be moved by road, there has to be an explanation as to why that is going to be the case. What are the factors they are going to put in place in terms of alternative modes? That may well be in terms of rail, but coastal shipping as well, and there are various supporting mechanisms that we have as a department to get that modal shift going. I will say, equally, that some two-thirds of all products coming in move within the region they come into. There is a whole range of complex issues that come into play when looking at locations and where to locate. One other part of the evidence that I saw was on the question of how many shipping lines would deviate from a line north of the Wash level. That was part of the evidence that I know was given to the Select Committee previously.

Q342 Mr Leech: What you have just said is completely contrary to what we have been told. We have been told that 60% of the freight that comes into the South East ports has a destination north of Birmingham. Yes, it travels around the South East, because it has to travel through the South East to get to the Midlands or the North, but is it not the reality that this National Policy Statement for ports is going to do absolutely nothing to try to encourage ships to take their freight to ports in the rest of the country, closer to the destinations to which the freight is ultimately going?

Paul Clark: As I have already said, there is a whole range of factors in the decision-making process that will be taken into account by those seeking to develop port facilities. One of those will be, as I mentioned right at the very beginning, in terms of the changing demands that happen. Last night I was at a reception around the whole British offshore energy programme. There are discussions going on with some of the ports in the North East, for example, of utilising those to help support that. There are a number of factors that over a period of time will change the demand and the patterns of the use of ports. That will happen naturally through the processes of demand and change of demand that will happen.

Q343 Mr Leech: Is it not the case that a location-specific NPS would have helped to distribute freight around the rest of ports in the UK and away from the South East?

Paul Clark: I do not think the evidence is there that does suggest that is the case. As I said earlier on, evidence to this very Committee before said that it was contradictory as to whether that policy could work.

Q344 Mr Leech: Is it not the case, under the current system, that shipping companies will continue to want to bring stuff into the South East because it is more convenient for them, and we need to see a national policy statement that actively encourages the extra use of ports outside of the South East?

Paul Clark: We need to make sure that the policy we have is such that it supports the needs of our economy to be able to continue to have viable ports which meet a whole range of demands, whether that be in terms of cruises, leisure, goods coming in and goods going out or in terms of meeting new demands; as I have already indicated, offshore wind farms, for example.

Q345 Mr Leech: You have made the point that it is important to weigh up the economic benefits of developments. Do you feel that the current draft is going to work? Do we have the right balance between the economic benefits and the environmental disbenefits of proposed developments?

Paul Clark: The assessment processes here and the list of areas that are covered - which are, as I say, substantial: economic impacts and commercial impacts are listed with environmental impacts, climate change adaptation and mitigation, flooding, coastal change, and transport in section 17 - is the right balance. That will give us a ports industry that is robust and strong to take us over the next 30 years, to continue to develop and to meet the changing needs as they happen.

Q346 Chairman: Are you going to give any further guidance on how to assess those different aspects? You have already said that you are going to look at the regional economic impacts issue more closely. Are you going to give more guidance on, say, environmental against economic objectives where there is a clash?

Paul Clark: As I said earlier on, we are always willing to look at whether there is a general thought that a better balance needs to be given. I believe, on the whole, that the list of areas that need to be considered in that assessment process by both the applicant and the decision-making body is pretty well balanced, but, as I say, part and parcel clearly of the process we are in is undertaking to look at the representations that we receive. In terms of the balance, I do not know whether there is anything either of my colleagues would like to add.

Q347 Chairman: Mr Bennett; can you tell us any more about whether you will be giving further guidance on how to assess the balance between these different aspects?

Mr Bennett: We have been struck by this being a recurring theme in the evidence you have heard so far. The National Policy Statement is a planning framework document. Those who take these decisions are familiar with some of the language that it uses. We were very careful in the descriptions of the weighting that we used. For example, as you have just been discussing, attaching "substantial weight" to the positive impacts of economic development was deliberately chosen compared to the "limited weight" or "less weight" that are attached to some of the other impacts. Clearly we have to see whether we have got these relative judgments right and we need to look at whether the overall message it is giving is clear enough for the decision maker, and we will do that.

Q348 Mr Clelland: Most of the points I wanted to raise have been covered, but I am just disappointed that the Labour Minister seems to be married to the market process when we have an opportunity here to aspire to the regional policies of the Labour Government and Labour Party over many years by using a planning and national policy process to ensure that we develop the regions as opposed to allowing the market to dictate where the areas are to be developed. Obviously the shipping companies will want to go where it is easiest and most convenient for them, and that then puts a huge strain on the infrastructure of that area. The South is becoming overpopulated and over-congested, uncomfortable for the people who live here and costly for the people who live here, whereas at the other end of the country, where we have excellent facilities, we are not able to develop them because the market has decided they will not be developed. Surely there must be a role for government in ensuring that that imbalance is corrected.

Paul Clark: That is part and parcel of the regional development agencies, the regional economic strategies.

Q349 Mr Clelland: Yes, but this policy seems to be fitting in with that.

Paul Clark: Absolutely. We have said in here that that should clearly be taken into account. It is a discussion I have had with the IPC and so on and I believe the tools and mechanism are there for them to be able to do that. But, indeed, I have already indicated that there has been expansion. There have been improvements, for example, at Teesport and Liverpool. Indeed, one of the discussions that I had only last night was exactly around the use of port facilities to support what is a new, emerging, and larger scale development in terms of energy provision and so on.

Q350 Mr Clelland: We are not getting anywhere near the potential of these areas, Minister, are we? Teesport, the Port of Tyne, Liverpool. The potential there for development, for improvement, for more transport, for more shipping traffic is tremendous, but we are not encouraging it. We are getting the crumbs that might fall off the table, as it were.

Paul Clark: I think it would be unfair to say crumbs ----

Q351 Mr Clelland: In comparison. Relatively speaking.

Paul Clark: -- in terms of in the round and in terms of the provisions and so on that are made. I do not believe that by having a directed, location-specific policy we would achieve what both he and I and clearly other Members of the Committee would want to see. I do not believe that we would necessarily be able to deliver it, that that would actually be delivered. I do believe that we need to look at how we best make use of facilities around the country by ensuring that we have a policy that does state very clearly what the criteria are, which is laid out in this NPS, so that everyone is clear about what those options are, what those criteria are.

Q352 Chairman: We are looking forward to seeing how you resolve that. You have indicated that it is an area you are going to look at.

Paul Clark: We will.

Q353 Chairman: The Marine Management Organisation does not yet exist. Is that of concern to you now that the port statement is being broadened?

Paul Clark: Is it a concern? We are working closely, clearly, with our colleagues, and developing the skills and so on that are required obviously with the NMO to be able to take forward the work on those applications that are below the threshold. No, it does not concern me, but obviously I want to see with all concerned that that organisation is in place as soon as possible and that we work with others to make sure that that happens.

Chairman: We will suspend the meeting.

The Committee suspended from 4.13 pm to 4.22 pm for a division in the House.

Q354 Chairman: The National Policy Statement is based on an interim report on ports policy rather than a final report. Why do we never get a final report?

Paul Clark: You will recall that back in 2006 we had consultation and in 2007 we had the interim report. It was arising from that when the Transport Select Committee made provision on that. Then we were discussing, if I recall correctly, government-wise, obviously creating the provisions that ultimately came in the Planning Act 2008, which would be supported by policy statements in critical areas. Of course it is the interim policy report that has helped to form the strategy that we have before us today.

Q355 Chairman: The strategy is the final report.

Paul Clark: It is the policy in the report that will of course govern, yes, our policy on ports over the next 30 years.

Q356 Chairman: How does the National Policy Statement reflect the Government's other transport policies, such as encouraging rail freight?

Paul Clark: If I might refer directly to it in the section that covers transport directly, it says at 2.17.17, "...broadly speaking, rail and coastal or inland shipping should be encouraged over road transport..." That does very clearly say that that should be the presumption. I also said earlier on, in response to another question, that where there is a predominance of using road, for example, justification should be made within the application as to why that is the only route to be followed. There is a presumption here that alternative modes should be the norm rather than relying solely road.

Q357 Chairman: Some witnesses have told us that the NPS is too focused on container traffic. Do you think the statement addresses a sufficient range of ports activities?

Paul Clark: I do not believe it is; indeed, the forecasts on page 12 of the document show the anticipated increases there would be in container operations but also in roll-on/roll-off traffic and other areas, so I do not think it is. I think it is reflecting what are the best forecasts and so on that we see for the development of port demand within Britain, in what is going to be an escalating and increasing provision across the world in terms of world shipping and demand.

Q358 Chairman: Defence has also been identified as an issue. Do you think the IPC has sufficient skills to deal with defence issues in relation to the ports?

Paul Clark: The document does refer to issues of security of ports. Where they are critical applications in terms of security issues, then consideration should be taken through the channels that exist now in terms of advising on security issues and provisions in that way, which includes that the Centre for the Protection of National Infrastructure provision should be taken into account. We also have facilities and work that goes on through various organisations including TRANSEC which is of course the transport security provision which gives advice and keeps under review information relating to national security and threats to transport modes.

Q359 Mr Hollobone: With all respect, Minister, you are not an expert on ports, nor am I, and nor, would it appear from our earlier evidence session, is the IPC. On the basis of the current document, how long do you think it should be before it is revised?

Paul Clark: There is provision in here, clearly, for revision to happen as an overall document in terms of the policy. That is down to the secretary of state at the time to make a judgment on when that is necessary. If there are major shifts in demand, then clearly you would expect the secretary of state at the time to consider and take that into account. Indeed, it could be through an inquiry by the Transport Select Committee that believes that a change should happen. In terms of demand and forecasts of provision that is required, we have indicated that those reviews should be undertaken in the region of about every five years.

Q360 Mr Hollobone: Why should it just be the secretary of state who can trigger a review of the NPS? Why can there not be some other trigger mechanisms to facilitate a review?

Paul Clark: I am sure the honourable member would not want to make a provision of layers upon layers of trigger points within any policy. The secretary of state, whoever he or she is, has a responsibility overall for transport and particularly for ports policy, so it would seem right that he or she should make that decision. Of course, they will take into account evidence and information that comes from many sources: from industry itself,; as I have indicated, from the Select Committee; or from other sources that clearly are relevant.

Q361 Mr Hollobone: Some witnesses have told us that the statement that is drafted lacks an international perspective. Clearly we are an island, ships are coming to our ports from other ports elsewhere. Ports on the Continent are obviously in competition with our own. Are you concerned that the statement lacks an international perspective?

Paul Clark: It clearly is a statement about ports in England and Wales. That is the policy focus of it. It cannot ignore, as you say, the fact that 95% of items coming in come in by sea. Clearly that involves an international flavour, therefore the work continues to reflect issues around, for example, shipping security, which is an international issue and needs to be taken into account in that way, as well as other discussions and so on that go through the IMO. Again, I do not know whether my colleague would like to add anything in terms of the international perspective.

Mr Grindrod: There are several references in the draft NPS to our international obligations, treaty obligations and legal obligations, including the EU Directives and so forth. In that sense, there certainly is an international context to the document.

Q362 Chairman: The statement does not seem to take account of climate change considerations. Why is that?

Paul Clark: If I may say, I think it does. Overall, there is the environmental impact assessment, but particularly sections 13 and 14 refer to climate change mitigation and climate change adaptation, taking into account those areas that are already on-stream, trying to mitigate those that are already in the pipeline that are affecting ports and the work there, and mitigation in new proposals coming forward to take into account alternatives and operations there. I believe the climate change agenda is well reflected in the document as it is there. It lays out very clearly what is expected of the applicants and the decision-making body.

Q363 Ms Smith: A comment was made about the European Union context in terms of the international perspectives on the statement. Has the department taken into account, however, the impact of the global economy and the emerging markets in Asia, particularly in China, on the cargo that comes in and out of the country? In other words, we are going to get different trade patterns in the future and that will impact on the ways in which our ports are used.

Paul Clark: Indeed. There are two things to say there. In terms of the position we are in and the assessments that are made in terms of cargoes coming in and routes in, they are clearly made on the best evidence that we have now, on the forecasts that are undertaken by numerous sources, to be able to take account of that. Indeed, in relation to an earlier question in terms of looking at how those patterns change and forecasts change, we have said that that should be taken into account, probably, over roughly a five-year cycle. Indeed, it could well be that if there were substantial changes that could well trigger a need to look again at that policy as a whole.

Q364 Ms Smith: Is it taken into account in this document as it now stands?

Paul Clark: In terms of the projections of cargo coming to visit the country from a range of sources, it has to take that into account to be able to produce the table on page 12 of this document, to be able to make an assessment of the level of business that will come into this country from international sources.

Q365 Ms Smith: Moving on to Dibden Bay, the application for Dibden Bay was turned down. Do you consider that the new planning system in the National Policy Statement might have affected a major proposal like Dibden Bay in any way?

Paul Clark: I sincerely hope that this will affect all major proposals. It lays out very clearly the areas that applicants need to look at. There is a clarity of what we are looking for, there is a clarity of what steps need to be taken, and a clarity for the decision-maker to consider what has been presented. Whether it would have made any difference in terms of a decision about Dibden Bay is not a matter that I would be able to speculate upon.

Q366 Ms Smith: If Dibden Bay were to be resubmitted - and of course it may well be in terms of its impact on the environment and so on - will this statement make it any easier or will it make it more difficult for approval to be given to such a scheme that can have such a significant environmental impact?

Paul Clark: It certainly gives clarity to what is required to be taken into account of any major application for a port development and for the decision-maker to make a judgment against that.

Q367 Ms Smith: Surely, Minister, it is a job of the department to give clarity as well in terms of the priorities on the part of the decision-maker, especially in relation to things like climate change and environmental impact.

Paul Clark: Absolutely. That is why I do believe that the provisions within this on biodiversity, climate change, flooding and coastal change, waste generation, air quality and water and so on, are all issues that are part and parcel of the complex picture of such critical applications that we are expecting to be considered against this policy statement.

Q368 Ms Smith: What changes? Again I ask the question: What is different from what we have already?

Paul Clark: Because it is much clearer as to what is expected to be covered in those major applications, as I say, both by the applicant, in terms of what they are expected to cover and deliver on and put before the IPC, and by the IPC, as the decision-making body, to judge those against. We have already agreed that we are looking, because of the consultation exercise and the comments that have been given to the Committee and that we have been receiving, in terms of the weight and the balance in those issues, and we have said that we will look further at those.

Q369 Ms Smith: You made a comment earlier - and perhaps you could repeat it for me, so I am sure I am accurate on this - that two-thirds of the cargo that comes into the country is distributed within the region that it enters the country.

Paul Clark: It stays within the region.

Q370 Ms Smith: Can you break that down in terms of the type of cargo? I suspect that coal and oil will stay very local: it will go to the local power station or the local refinery. I would like to know what the figure is for container traffic, whether that stays within the region it is brought into, whether if it comes into Southampton, it stays within the south East, and if it comes into Felixstowe ----

Paul Clark: I understand entirely the question and I will write to you with the detailed figure, of the figures that we have and the evidence that we have on that.

Q371 Chairman: The NPS says that "pre-existing approvals fulfil the capacity requirements anticipated until 2030 or beyond." Could additional capacity be approved by the IPC allied to that statement?

Paul Clark: It says provision certainly up to 2020. Yes, clearly additional capacity could be approved in that period. I have indicated that some of the decisions that had already been given are not moving forward as fast as was anticipated, because of the global downturn we have faced, but clearly it would be possible for the IPC to give approval for further such claims.

Q372 Chairman: Has the impact of the recession on demand been taken into account?

Paul Clark: I know that a number of people have said that perhaps we should consider amending the forecasts that are laid out here in the NPS. Our view is that it is not necessary to do that. There are fluctuations, as you appreciate, constantly in terms of demand in these sorts of statistics. This is to cover a period to 2030. Indeed, when we published those forecasts originally, there were some quarters that were saying that they thought we were not being bold enough and that we were underestimating what was going to be required. I do believe that in the fullness of time they are the right figures to be using at this stage, but, as I have already indicated, the decision in the guidance is that they should be reviewed broadly on a five-year cycle.

Q373 Chairman: Does that mean that the forecasts will be updated before the statement is designated?

Paul Clark: No, it is not our intention that they should be updated at this stage.

Q374 Chairman: Do you think that will lay you open to legal challenge?

Paul Clark: I would not have thought so, because, as I have indicated, these are indicative figures over a long period and a long timescale, so I think they are robust in that way.

Q375 Chairman: Why were the National Networks and Ports statements not issued at the same time?

Paul Clark: For the reason that I gave earlier on. There are a number of statements that we have to produce within the Department for Transport. An airport statement will be another document that we will need to produce in due course. As I have indicated, in terms of the national networks there is a substantial piece of work that is being undertaken on High Speed 2 and the options for further links and much improved links running broadly north‑south but also the options for east-west. Clearly the secretary of state has said that he wishes to consider that and to add to what is clearly obviously the right document, the National Networks document, and will need to do that. The secretary of state received that document, the High Speed 2 report, just prior to Christmas. He has indicated that we would expect to have that report out by the end of March.

Q376 Chairman: The inland transport networks are very important to ports development. Does it not seem incongruous that there is no transport corridor statement when we are looking at ports?

Paul Clark: I have, as I said earlier, looked very carefully at some of the comments from some quarters who have shared that view. Equally there are others who do not believe it is necessary - for one reason, in terms of provisions already made, that no major applications are anticipated before the National Network document comes out. Having said that, one cannot pre-judge everything, but it is not anticipated that that will be the case. Indeed, even if it was received now, it would not be considered before the National Networks document is scheduled to appear. Equally, the National Networks document is required. You could argue this for a number of other policy statements that would come out, because the argument would be that you need that national network for the provision of airports, you need that national network for the provision of energy sources and so on. I do believe that this is a freestanding policy statement that does refer very carefully to transport assessment that is required in terms of ports applications by those applicants, and I think it does cover the necessary issues about transport provision, particularly road, rail and coastal shipping, in the document as it stands.

Q377 Chairman: Quite a number of our witnesses have said that the absence of the National Networks Policy Statement is sufficient not to designate the port statement. They think it is that serious. How do you react to that?

Paul Clark: I am sorry that they do believe that. I saw some of the comments that, equally, they believe the policy as it stands clearly is right, with some requirements that are needed in terms of tweaking at the edges. Having said that, I do not agree with them. I do not believe that there is a necessity. As I have indicated, this has not been worked on in isolation from national networks within the same department and, indeed, with other policy initiatives that are already out there and in the public domain, of which Members here and many others are well aware; for example, the DAS document. I do not know whether there is anything my colleagues would wish to add on that in terms of the importance. I understand this is an issue that has been raised by a number of people in terms of the National Networks policy.

Q378 Chairman: A number of our witnesses see this as extremely important and sufficiently serious an issue as to conclude that the port statement should not be designated at this stage on those grounds.

Mr Bennett: We appreciate the comments that have been made by witnesses and we can understand that not having seen the National Networks draft NPS there is some uncertainty about what might be in it or not, but, as the Minster has said, we are not working in a policy vacuum on road and rail connections. There are clear policy statements already available, including DAS work, which if the IPC were to get an early application for ports development, they could take into account and weigh against a framework in the NPS which itself also contains some pretty clear guidance into how the transport assessment, the inland connectivity issues, should be dealt with.

Chairman: Thank you very much.