Examination of Witnesses (Quesitons 113-143)
Q113 <Chair:
Good morning, and welcome to the Transport Select Committee. We're
very pleased to be here and to hear evidence directly from you.
Could I ask you please to give your name and the organisation
that you represent? It's for our records and to make our recordings
easier to identify.
Matt Jukes: I'm
the Port Director for Associated British Ports in Hull and Goole.
ABP is the largest port operator in the UK and on the Humber we
operate Hull and Goole on the North bank and Grimsby and Immingham
on the South bank.
Dr Kelly: I'm Ian
Kelly. I'm Chief Executive of Hull and Humber Chamber of Commerce.
Carole Goodair:
Morning, I'm Carole Goodair. I'm here to represent the Federation
of Small Businesses in the East Yorkshire area.
Malcolm Bingham:
Good morning, my name's Malcolm Bingham. I'm Head of Policy for
the Freight Transport Association in the North of England.
Q114 <Chair:
Is there a case for more investment in transport and what's the
most important area of that investment, if so? All hands go up.
Dr Kelly: I think
one of the bits of information we've produced based on Treasury
statistics is how badly the Yorkshire region has done compared
with the 12 UK regions and nations over the past two years since
2003/4. We've come 11th, 12th, 12th, eighth, ninth and eighth
out of 12. Within the Yorkshire region, we feel that the Humber
is particularly badly done to in terms of coming at the bottom
of the Yorkshire and Humber region. From that perspective, over
a long period of time we feel we've done very badly, which is
why we're keen to have three schemes come forward all in a very
short time period in order to catch up.
Q115 <Chair:
What's the most important investment needed at the moment?
Dr Kelly: I think
we very much accept what Government have come out with. The Chancellor
has talked about reviewing the bridge tolls. We can live with
Castle street. We have some issues with A160 on the current timescale,
but I think the bridge toll review is paramount at the moment,
given the economic difficulties that we'll have in this area and
the money that is taken out.
Matt Jukes: I agree
with Ian's comments, but I would also say that the road developments
on both the north and south bank are particularly key. Obviously,
we have had the announcement with regard to the DFT's policy in
assessing the various road schemes stating that the A63 and Castle
street will be looked at in 2015. I think if you look at the potential
that the Humber ports have for creating new jobs with regard to
what Mr Harris said about rebalancing the economy, I think it
isn't just about a north bank to south bank switch for me, it
is about creating manufacturing jobs. We're not moving people
down to the south-east to do jobs down there; what we need to
do is create jobs in this region. I think the ports have a fantastic
opportunity to be able to do that. There is private sector investment
that will go into the ports, that would bring massive benefits
to the regions that surround them. I think in Hull there are 5,000
people that come to work on the port every day. There are between
20,000 and 25,000 people that work in the port of Hull because
the port is here. We have some significant opportunities, but
it's almost as if we need a catalyst of money to be spent on infrastructure
upgrades in order for us to be able to deliver these opportunities.
Q116 <Chair:
Any other views on the most important kind of transport investment
required?
Malcolm Bingham:
I think for freight operators generally, one of the biggest problem
areas is unreliability of journey time by road or rail. Where
we see the problem is in an enormous amount of pinch points right
across the north of England, effectively, but in this region as
well. These areas need that investment to ensure that freight
isn't held up, which adds cost to the industry and the goods that
are sold on to the customer.
Carole Goodair:
Basically, in the last decade I think we've done all done a very
good job in Hull in attracting people to live here and to get
small businesses growing. Some of these businesses have grown
into bigger businesses. I agree with everybody here, we've found
ourselves in a situation where our road infrastructure just cannot
take any more. We've widened them and done everything possible.
Q117 <Chair:
Your written evidence stresses roads a great deal, so is that
what you see as an important area?
Carole Goodair:
Yes, but it is linked in with customers being unable to get here.
Q118 <Chair:
So it is congestion and delays on the roads.
Carole Goodair:
Basically, yes. We need some new infrastructure over the whole
town. The roads are full to capacity at the moment. We've widened
them and done everything we can to them. We just need a completely
new infrastructure; for example, someone touched on the subject
of a new ring road.
Q119 <Paul
Maynard: I'm delighted we've managed to establish
that abolishing the toll was the No. 1 priority, because in all
the briefings it was not clear which of the many transport projects
in the area was the crucial one. How do you feel it is best to
arrive at a hierarchy of importance? Everybody has ideas. This
is addressed to Mr Dukes in particular: I note in Eddington he
emphasises the importance of international gateways. Do you believe
that the interests of the international gateways are best promoted
at a national level or at a regional or sub-regional level?
Matt Jukes: There
are a couple of questions within that. To go back to the point
that we are all in agreement regarding the tolls, I think it's
a close run thing. I think that from the port's perspective, the
road and infrastructure is very important as well, as is free
movement of labour across the Humber. In terms of Eddington, the
main ports on the Humber—Hull, Immingham and Grimsby—were
all identified as major important gateways in various DFT reports.
I think the market will pretty much dictate where the port developments
need to take place. It's a competitive environment. There is private-sector
investment that will take place on these facilities. I think if
you look at how you prioritise transport investment, I think what
isn't taken into account now is the potential for future development.
Currently we look at the existing structure and the existing problems.
I think the next stage that is needed is to look at what doors
could be opened as a result of various investments. I think there
is a regional case to make there; there is also a national decision
to be made.
Q120 <Paul
Maynard: Who should make that regional case?
Matt Jukes: I think
you have got a selection of those individuals sitting in front
of you today. It is for us to make sure that national Government
are aware of the potential that we have both in terms of investment
and job creation, and to make the case. We know funds are tight
and will be getting tighter, but I think the balance needs to
be between private-sector investment in the ports themselves and—because
of the wider benefits—the wider stakeholders, be they regional
or national, making sure that those international gateways are
connected to the rest of the UK.
Q121 <Chair:
If resources are getting tighter—and they are—you
have to identify what matters most. We're trying to get a sense
of what you think matters most. I know that everything matters,
but what matters more?
Dr Kelly: Could
I first of all say thank you very much for coming here, for a
start? I appreciate that Philip Larkin called it the end of the
line, but we see it as the gateway to Europe and the world, and
that is why we emphasise that we do feel that we've been rather
badly done to over generations. Therefore we feel we ought to
be allowed a little catch up time, particularly if deprived areas
in the private sector are going to play a leading role going forward.
On the bridge tolls issue, again we take a sophisticated approach.
We would say, for example, a £1 toll is a sensible toll for
cars and also a calibrated approach for lorries, because we do
appreciate that we can't have everything all at once. As Matt
says, there are three clustered issues, if you like, of schemes
that are top of our list. We do have a dialogue, particularly
in the private sector, with our local authorities across four
authority areas in the Humber, to try and give you a generally
calibrated, intelligent and consensual message.
Malcolm Bingham:
I want to come back to the point about who should prioritise,
and whether it should be a national issue or whether it should
be a sub-regional issue. We've talked a lot this morning about
goods coming through the international gateway, but those goods
have got to get to the marketplace. The marketplace will not simply
be a local area around the port. You must distribute it inwardly
through corridors into the hinterland to the customers. Therefore,
we believe that stage of planning and approval for infrastructure
investment should be a national issue rather than a local one.
Q122 <Iain
Stewart: Mr Bingham touched on exactly the area
that I wanted to raise. One of the areas we're looking at is the
balance between smaller, local, infrastructure projects and national,
supra-region, strategic ones. Specifically, if you get your wish
approved for rail improvements to the ports and then that is successful
in generating high volumes of traffic, what is your capacity within
the rest of the network to bring those goods in and out, or are
we just going to be moving the problem from here to another part
of the network? If so, that is something that needs to be addressed
at a national level.
Matt Jukes: That's
right. Speaking from my own perspective, we've been working with
Network Rail to identify the high capacity upgrades that we can
do to the rail line in Hull. We did benefit from some funding
from Yorkshire Forward and Network Rail, and Northern Way and
ABP invested in upgrading our rail facilities about four years
ago. Obviously, the high cube issue will only get us to Doncaster.
The rail investment that is forecast for getting us up to high
cube will get us to Doncaster and then we have to wait to get
it to the rest of the UK market. I think it is important that
the National Networks Study joins up along with the National Ports
Study to not just identify what we need to do in our ports but,
exactly as you said, to make sure that an onward distribution
network is in place to connect the ports further inland.
Q123 <Mr
Harris: I'll be delicate in how I put this. We've
been here an hour so far and I get the distinct impression that
you, and the previous witnesses, all have priorities and great
ideas and everything. However, it comes down to who speaks for
the area and who prioritises. I have to tell you, a Minister with
spending decisions likes nothing more than a region with no specific
action plan and with a whole range of spending commitments and
spending requests, because then a Minister can just pick a few,
and please some people and annoy other people. Where you don't
speak with a single voice and show that you are looking for specific
priorities, it is not good for a particular region. Up until now,
we've had a consensus on, "It would be a great thing to get
rid of the tolls." Now we have a split there. Now a £1
toll is what is being looked for. I make that as a point rather
than a question, but I'd appreciate your comments.
For example, we heard earlier on that the gauge enhancement,
which would be needed to provide direct access to the port, has
something like a £5 million price tag, whereas many
of the road schemes are talking about hundreds of millions of
pounds. Would it even be possible for there to be a consensus
to say that the gauge enhancement project should take priority,
since presumably the business case for that would be significantly
higher in terms of outcomes? Is there not even consensus on prioritising
that particular project?
Q124 <Chair:
Gauge enhancement, is that the top priority?
Matt Jukes: I think
gauge enhancement is important but what you have to do is look
at the growth areas that the Hull and Humber ports are looking
at. We're a short-seaport operation, which means we don't handle
the biggest deep-sea container ships. We handle smaller feedering
vessels that will have come in from the continent from places
such as Rotterdam and Antwerp. I think if you look at where the
growth opportunity areas are, they're in areas like renewables,
which we have spoken about today. We have significant areas of
land available for development on both the north and the south
banks. It is an area where significant levels of investment and
jobs are almost waiting for us to develop so that they can take
advantage. It is the rebalancing that I touched upon earlier on.
So I think looking at the potential of the ports, and looking
at the development, investment and business growth potential from
running the ports, I would say that rail enhancement would come
after the road upgrades that we need.
Q125 <Chair:
Ms Goodair, what's your view on that from a perspective of small
businesses?
Carole Goodair:
We need road improvements.
Q126 <Chair:
Is this new roads, or improvements and maintenance?
Carole Goodair:
As I've said, the roads we have have been widened. We're really
stretched, there's nothing else. I'm not an engineer, but looking
at the roads when I'm driving around, there's nothing more that
we do that they haven't tried to do. So we need to look at a whole
new system that our town badly needs.
Q127 <Chair:
Is this to do with local roads?
Carole Goodair:
It's mainly the city centre, which affects the ports, the rail
and the buses. How do the people get around once we bring them
here?
Q128 <Chair:
You think city centre roads have more priority?
Carole Goodair:
Particularly round the Hessle which links with the Humber bridge.
When you get past there, it's not quite as bad. As you know, once
you head into Hull you go nowhere. Garrison road, which leads
in, has engineering works and roundabouts. I could go on.
Q129 <Mr
Harris: I want to add a supplementary question
there. As we approach the new age of austerity, isn't it incumbent
on you to go for the low-hanging fruit? If you hold out for some
of these road projects, once you're replaced a couple of roundabouts
or widened them you will have hit the £5 million mark.
Wouldn't it be more strategic for you to go for what is actually
achievable; not exclusively, but for example, the gauge enhancement.
Frankly, looking into the future with a crystal ball, you're not
going to get hundreds of millions of pounds for these road projects.
Carole Goodair:
All I'm saying is that it seems to me as though they've tried
to do a very good job with the space that we've got here in Hull,
but the population and small businesses have grown drastically
over the last 10 years, and we're now having a problem in trying
to accommodate everything to keep it growing. The question is:
where do we best spend the money? I'm willing to debate that this
morning.
Dr Kelly: Unlike
my colleague Mr Shipp's buses, we've had nothing for so long that
we now have three schemes that have come together all at once
and are all critical for us. This is why we're pushing all three.
We have a complete consensus across the public and private sector—
Q130 <Chair:
What are the three?
Dr Kelly: That's
the bridge tolls, Castle street and the A160. The bridge tolls
have been a logistical noose that has been tightening over the
past 30 years. It is a debt issue—a revenue issue—for
the Treasury. It is a toll tax; it is not a capital roads programme
issue, so the two should be looked at in separate senses. We've
paid over £330 million to the Exchequer for a bridge that
cost £98 million—
Q131 <Mr
Harris: And we're very grateful.
Dr Kelly: Indeed,
but it's a tax from this deprived part of the world, as we're
sometimes seen, down to London, which equates to £20 million
a year out of the local economy. We get that right with a pound
in the bucket from cars and you get £500 million worth of
benefit to the local economy over the next 20 years. That is valuable.
Therefore, what we're saying within that is that we'll not request
complete abolition, because we're reasonable people up here; we'll
say a pound in the bucket, but let's get on with these two capital
schemes as well—Castle street and the A160.
Malcolm Bingham:
Can I just go back to the gauge issue to try and explore one area?
We can move high cube boxes without increasing gauge. The problem
is, it's expensive to do so because you end up having to use low-slung
wagons, which effectively you can only put one large box on as
opposed to two on flat-bed wagons. Therefore it becomes a more
expensive option and it starts to deter that type of freight movement
through an area because it's too expensive to do it; however,
it can be done. I suppose really it depends what you're trying
to deliver. A lot of the things that come out of the south bank
of the Humber are actually bulk freight that doesn't need a high
cube clearance, but if you tried to develop that potential to
get fast moving commercial goods through the Humber ports, you
would need that development to encourage private investment and
private industry to receive it.
Chair:> I know
that all of these things are important; we're just trying to identify
things you see as the top priorities. It is not that other things
don't matter, though.
Q132 <Kelvin
Hopkins: I have a particular interest in rail freight
and I don't accept the arguments about rail freight not being
the future simply because we haven't got the right railway system
at the moment. In Holland, by contrast, the Betuweroute from Rotterdam
to the Ruhr was built by state funding and is capable of taking
full-scale lorries on trains and double-stack containers. Everything
is just done because the state wanted to do it. I don't accept
either that the age of austerity is going to go on. I think in
three years' time, the Government will be looking desperately
for public sector projects to build in order to revive the economy,
because we are going to go into a recession. That is a personal
view that won't be shared by the others. They will be looking
for big things. What about a Betuweroute from Hull to the west
midlands or the midlands, linking up with motorways, where you
can roll on your lorries straight on to trains, either with the
trailers or the tractors as well, and then roll off with a separate
service, backwards and forwards, getting them to the places they
need to go? That takes the pressure off local roads as well, there
would be less road damage and less coned-off lanes for road repairs
because lorries cause the damage. There would be all sorts of
benefits. Would the thought of a dedicated rail freight route
on flat land—there is plenty of it here, it seems, so it
would not be difficult to do—from Hull to these other areas,
with roll-on roll-off capacity, not be attractive?
Malcolm Bingham:
I sometimes find it difficult arguing against how goods come in
through our southern ports as compared with the northern ports.
I advocate northern ports, but that exact opportunity for freight
routes running across the north of England is sadly missing and
it does discourage that type of movement.
Q133 <Kwasi
Kwarteng: My understanding is that we're trying
to find out from you what your needs are. I could come up with
a scheme, with respect, and say, "Wouldn't this be a good
idea?" Actually, I think the fact-finding is very useful.
From what I'm hearing, the bridge tolls and the road network are
the two most important things by a very long way in terms of the
eight people we have seen. That seems to be a very interesting
finding from this morning.
Q134 <Paul
Maynard: We've had lots of ideas, lots of priorities
and lots of schemes. I'd just like to explore what would happen
if your dreams ever came true. You all represent business. What
economic development planning did you observe taking place by
the local councils when the direct rail services to London were
restored? Equally, you've done a very good job campaigning over
the issue of the tolls, what planning for economic development
is currently occurring for if you ever got your wish and tolls
were abolished on the Humber bridge? Is there any planning going
on, or are you just going to make it up as you go along once it
happens?
Matt Jukes: To
answer your question, I think planning goes on all the time in
relation to looking at the developments we have planned.
Chair:> Could
I ask members of the public, please, not to keep talking to witnesses?
I'm sure they're quite capable of answering for themselves. They're
doing very well.
Matt Jukes: So you look at the
various schemes for development and investment that we have across
the Humber ports and that goes on all the time. I think the argument
in relation to bridge tolls has always been that it has been a
hindrance to labour markets moving across the Humber bridge. Does
it stop it? No. Does it stifle it? Probably yes, it does. Speaking
from a parochial side, in Hull we have a bigger workforce so it's
not creating quite the same level of issue as it is on the south
bank. We are on with our planning now; we don't do it in case
the bridge tolls go. We can't stop our development plans on the
basis of something we might not get, so it goes on all the time.
Q135 <Paul
Maynard: There is no specific response to specific
projects. It's ongoing.
Matt Jukes: Yes.
I think the other point that I would make in relation to that
particular north bank issue regarding the roads—and Mark
Jones and Councillor Woods covered this to a degree earlier on—is
that we are getting close to reaching capacity restriction on
the A63 in Castle street. When we do reach that, further development
at the port, which is on the eastern side of the city, will be
objected to by the Highways Agency. We will stifle growth in the
port. We can't move the port. There have been some people that
have suggested that we move it somewhere else; it's not quite
as straightforward as that. We will be facing the issue where
we do have investments to make, where we do have jobs to create,
and we have a lot of schemes on the table, but we won't be able
to because the highways network will be at capacity.
Q136 <Chair:
I want to turn to appraisal schemes. Do you think that current
ways of doing appraisals for schemes to see which are better for
economic growth are adequate? Indeed, are they clear on how decisions
are made? Does anybody have a view on that?
Malcolm Bingham:
From our point of view, inputting into appraisals can be difficult
from an industry point of view. We think we understand what it
is and we try to lobby in that way to make sure that our members'
views are reflected in those appraisals. We do that by consulting
democratically through our system to get our members' views about
what priorities should come first. Sometimes we find it very difficult
to get that information into the right place. We feed it, but
we're not sure how much notice is taken of it.
Q137 <Chair:
Is that a general view of it, that you're not clear or happy with
it?
Matt Jukes: I've
alluded to it a little bit before, but the point that I would
make in terms of the appraisal process as it stands is that looking
at the potential the investments can unlock is not something that
is taken into account at the moment to any significant degree.
The Humber is the busiest port complex in the UK. We are right
next to the round three offshore development zones for the biggest
offshore wind developments in the world. If we can unlock both
north and south bank access issues, we have the key strategic
sites in the Port of Hull and on the south bank that we can develop.
We need to make sure that the logistics that work for the manufactures,
both in terms of their supply and in terms of their staff. If
that kind of potential regarding what we can achieve if we spend
the money is actually reflected in an assessment, that's the way
you'll get best value for money. I don't think that happens at
the moment.
Q138 <Chair:
Are you involved in the new Local Economic Partnerships? You're
laughing, which we can't record, so you will have to say something
about that. Why are you laughing?
Dr Kelly: I think
obviously one or two people may have spotted that we had a small
hiccup on the LEPs issue locally, which we are looking to resolve
in a multi-tier way. We feel we've all been put on a football
pitch with no white lines or goalposts by Eric Pickles and Vince
Cable, because the two Departments have differing views themselves.
So our business perspective, looking at a pan-Humber model—as
there is a ports cluster, a chemical cluster and a chamber development
support through the Humber model—is different from what
Eric Pickles has been talking about, which was a, "Run barefoot
through the grass and do what you like," sort of approach.
In that sense, it's not been helpful to us.
We will find solutions: we're probably going to need
a multi-tiered LEPs approach that reflects differing local authority
requirements to get access to pathfinder housing cash. Business
needs to look at this as the largest trading estuary in the UK
and recognise the huge opportunities for renewables. ABP and ourselves
at the chamber have been working very closely to try and work
with the four local authorities; indeed, even when they're whispering
in my ear, we do still talk to the local authorities and we will
find solutions. However, we in the private sector do feel we've
not been helped by what, I think Richard Lambert called, "A
bit of a shambles of a process."
Q139 <Chair:
Well that's quite diplomatic. Does anybody have anything to add
on LEPs and your involvement or non-involvement?
Malcolm Bingham:
Only stepping back one stage. When industry looks at a new Government
proposal of this sort, there's always uncertainty about how you
engage with that process. I think that's our problem at the moment.
The uncertainty of where LEPs are going, and indeed even the formatting
of them, means that it seems to be pretty open to local organisations
to set up, and that's difficult for us to understand and input
into at this stage.
Q140 <Chair:
How important are local bus services to your businesses?
Dr Kelly: They're
not specifically important usually to the Chief Executives or
Managing Directors, but to the employees they are actually. Good
transport infrastructure through the buses is important. We don't
have trams or guided bus systems. We do have some good bus companies
and I think, in that respect, we are able to access larger rural
areas to bring into our urban centres. In that regard, we are
very much supportive of the bus industry being allowed to function
effectively across the whole Humber sub-region, rural and urban
areas alike.
Q141 <Chair:
We had a very good journey up here this morning on Hull First.
Has that made a big contribution to the economy here?
Dr Kelly: I was
part of the delegation led by Alan Johnson and Hull City Council
that led the charge. Chris Garnett at the old GNER said there
wasn't demand in this part of the world for a good train service
above and beyond once there and once back a day. I think we've
proved, having put the evidence base in front of the Strategic
Rail Authority at the time, that there is the demand for a quality
service in this part of the world, and we have a first class service
which we worked together on to get. It has made a big difference
in helping businesses to come up to Hull and for us, as business
leaders, to get down to London to tell you our needs.
Matt Jukes: I would
just emphasise that point. I think increasingly, as we try to
attract inward investment of significant levels from big international
companies, the links with this region and London are very important.
Most of them will have head offices in London. It's all about
not just the offer in terms of what we can develop and what we
can provide but the quality of life, connectivity and everything
else. So I think the direct calls are important to us.
Q142 <Kwasi
Kwarteng: I just wanted to pick up on something
you said earlier about appraisals. You were suggesting that we
weren't looking at the potential; we were looking at page, as
it were, as we see it. What specific decisions would your approach
support that aren't been taken now? That is directed to Mr Jukes.
Matt Jukes: I think,
again, our written evidence made reference to the Humber Green
Economy Gateway scheme that we're looking at. There is Humber
potential for all of that. There has obviously been Government
involvement in relation to trying to attract the offshore wind
turbine manufacturers to the UK and we're in the ideal spot to
be able to deliver that. I think when you look at that kind of
potential, and when you join us, not just locally in doing a hard
sell in relation to national Government but listening to the big
international companies that want to come to the UK and want to
come to the Humber, the decision-making process for road upgrades—I
would focus specifically on seeing that as the key growth market
that we have in the short to medium term—would be speeded
up dramatically.
I accept the point that road upgrades are significantly
more expensive than rail enhancements, but we have to recognise
the strengths that we have as well as the weaknesses. Regarding
the southern ports and their rail access, there are large volumes
of containers coming in to the southern ports on deep-sea ships
all going to single locations. The Humber isn't a deep-sea operation
in relation to containers, so you get 300 or 400 containers coming
in at a time; the way logistics works is that it's best to distribute
those by road, like it or not. Of course, I suppose the other
side to that and the other thing we have on the Humber is in waterway
connectivity and sustainable transport, not just through rail
but through coastal shipping. We can take advantage of that. To
your specific point, it would be to get the engagement from the
people that will invest and listen to local businesses both sides
of the Humber. This is something on which we are entirely agreed.
This is a massive opportunity for us. It's not a case of either,
"We'd like it on the south bank," or, "We'd like
it on the north bank." What we're saying is that there's
potential on both sides, and we'd like it on both sides please.
In doing this we will unlock a massive opportunity.
Q143 <Chair:
Thank you very much and thank you for coming and answering our
questions.
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