§ Order for Second Reading read.6.33 pm
§ The Under-Secretary of State for Transport (Mr. Reginald Eyre)
I beg to move, That the Bill be now read a Second time.
The Bill is needed to implement the Government's decision to write off part of the debts of the Port of London Authority and the Mersey Docks and Harbour Company.
As I understand that a number of right hon. and hon. Members wish to speak in this debate on matters relating to ports, it may be for the convenience of the House if I make a speech introducing the Bill and subsequently, if I catch your eye, Mr. Deputy Speaker, and with the leave of the House, seek to reply to the points raised in the debate.
The Bill was foreshadowed in the announcement about the future financial regime for these two ports, which my right hon. Friend the Secretary of State for Transport made on 15 December last year in replying to a question from my hon. Friend the Member for Bebington and Ellesmere Port (Mr. Porter).
Although this measure is short and straightforward, it needs to be seen in the context of the general strategy that we have been following to enable London and Liverpool to cope with the formidable—and exceptional—problems with which they have been faced. It may, therefore, be helpful if I first say something about the various steps that have been taken over the past two years or so before I go on to deal with the detailed provisions of the Bill.
The problems that the PLA and the MDHC have been facing have been a reflection of the fundamental changes 62 that have been taking place within the ports industry over the past 15 or 20 years. I am not sure that it is widely realised outside the industry just how dramatic those changes have been.
Until 20 years ago, nearly all general cargo had to be handled manually, whereas now as much as two-thirds travels either in containers or by roll-on/roll-off services. In this period, too, there has been massive development of oil traffic and of other bulk cargoes. Alongside these changes the direction of our trade has changed significantly. The proportion of our seaborne trade with other EC countries has doubled in 10 years, while there has been a tendency for deep-sea ships to make only a single United Kingdom call before going on to the continent.
In general terms, these changes have tended to swing the balance of our port trade from the west coast to the south and east. This has inevitably made life particularly difficult for many of our west coast ports, and I recognise the vigorous efforts that they have been, and are, making to adapt to the new circumstances, and in some cases even to win back traffic from the south and east. The two ports hardest hit by the changes I have described have, of course, been the two greatest general cargo ports—London and Liverpool. It is in these two ports that the problems of adjustment have been greatest and have necessitated assistance from the Government.
By the beginning of 19:31 both the PLA and the MDHC were effectively bankrupt. This stemmed from a number of factors, including changes in the pattern of trade and the rapid growth of container traffic, and was brought to a head by a dramatic fall in traffic in 1980, when both ports lost almost 40 per cent. of their general cargo business. Each of these port authorities therefore found itself with over 1,000 registered dock workers for whom there was no work and no prospect of there being any.
Urgent action was needed to avoid PLA and MDHC going bust, which would have had disastrous consequences. As an emergency measure we therefore took powers in the Ports (Financial Assistance) Act 1981 to provide funds for severances and to enable the two ports to stay in business meanwhile. The limit on such assistance of £160 million set in that Act was intended to be sufficient to meet the ports' needs in 1981–82, but we made it clear that longer-term support would depend on the preparation by PLA and MDHC of corporate plans showing how they proposed to return to viability.
Those plans were submitted to the Government in the autumn of 1981, and showed that further substantial manpower reductions, improvements in working practices and other rationalisation measures were needed but that if these could be achieved the two port authorities could become profitable again. The Transport (Finance) Act 1982 therefore raised the limit on assistance under the 1981 Act by £200 million to £360 million.
In bringing that legislation before the House, my right hon. Friend made it clear that he intended that the deficit grants which we had been making to both ports since the beginning of 1981 should cease at the end of 1982. However, he also said that, because of the exceptional circumstances I have described, the Government were prepared to continue meeting the cost of severances in London and Liverpool, and severance offers in April and May last year enabled the PLA and the MDHC to make the very large further reductions in manpower which were then necessary.
63 Over the past two years, considerable progress had been made in London and Liverpool to improve efficiency and reduce costs. So far the Government have provided about £210 million assistance, and more than half of this sum—about £113 million—has been to meet the cost of essential severances. Other badly needed rationalisations have also been made—for example, in the withdrawal by the PLA from cargo handling in the Royal group of docks, and by MDHC from cargo handling at Birkenhead; and major improvements in working practices have been negotiated.
The PLA and the MDHC have achieved much over the past two years to adjust to the enormous changes which have taken place in cargo handling techniques and patterns of trade and to bring their manpower numbers into line with the requirements of the traffic they now handle. Both bodies have argued that the interest burden which they now have to bear is not in line with the revenue which they can reasonably be expected to earn, and have asked for complete write-offs of their debts to the Government.
As my right hon. Friend made clear in his statement last December, such large write-offs could not be justified; but he said that the Government were prepared to agree to limited capital reconstructions in each case and would be seeking the necessary legislative authority. Hence this Bill.
In the case of the PLA the debt reduction involves writing off £26 million of debt to the Government relating to underused assets and providing the authority with £22 million of grant to enable it to repay the amount outstanding on a commercial loan, known as the Lazard loan, which is currently guaranteed by the Government under the Ports (Financial Assistance) Act 1981. I should explain that the Lazard loan was taken out by the PLA a few years ago to finance earlier losses. For the MDHC there will be a write-off of not more than £36 million of debt to the Government relating to underused assets; in this case the precise figure will be determined in the light of work which is currently being done by the Secretary of State's consultant accountants, Peat Marwick Mitchell and Co.
These debt reductions cannot be achieved using our existing powers to help the PLA and the MDHC. Clause 1(1) therefore enables my right hon. Friend, with the consent of the Treasury, to reduce the debts of the PLA and the MDHC to the Government by up to £26 million and £36 million respectively, while clause 1(2) provides for the payment of grant to enable the PLA to pay off commercial borrowing. The Bill also provides, in clause 1(3), for these debt reductions to count against the £360 million limit on assistance set in the Transport (Finance) Act 1982.
Perhaps I should say a little more about why the Bill prescribes upper limits on the amounts of debt involved, rather than the precise figures. I have already explained that in the case of the Mersey write-off the exact amount has yet to be determined in the light of work by our consultant accountants; but there is, however, one other factor which needs to be taken into account.
Until the write-offs provided for in the Bill can be achieved, the two port authorities will have to continue making payments of principal as they fall due from time to time; this will obviously affect the exact amount of debt remaining to be dealt with under the Bill.
64 Finally, let me say something about the Government's attitude on future financial assistance to the ports of London and Liverpool. For the time being we shall continue meeting the full cost of severances. This will include the 300 or so registered dock worker severances currently needed in each port. Although the reductions being sought by the PLA and the MDHC are substantially smaller than those made in each of the past two years, they are none the less just as necessary.
Both ports must continue to do all they can to reduce costs and improve competitiveness, and reductions in surplus manpower are, sadly but necessarily, a vital part of this. I very much hope that there will be a good response to the very generous special severance offer recently announced by the National Association of Port Employers, under which the maximum severance payment for dockers with 15 years' service or more will be raised to £22,500 for a limited period.
The financial consequences for the PLA and the MDHC will, of course, be serious if they are unable to achieve essential manpower reductions. But the current dispute in London over the claim by registered dock workers for parity with clerks could potentially be even more damaging. I understand that the registered dock workers' claim would represent a 30 per cent. increase in basic rates and add £3 million to the PLA's wages bill.
§ Mr. Robert Hughes (Aberdeen, North)
Before the hon. Gentleman leaves the special severance scheme, it was my understanding that the special offer of £22,000 had now been closed. Has a new offer been announced in the very recent past?
§ Mr. Teddy Taylor (Southend, East)
Apparently an extra offer has been made available to registered dock workers. Will my hon. Friend explain, either now or in writing, the position of members of the excellent Port of London police authority, who have had their numbers reduced very seriously because of the reduction of work in the port?
§ Mr. Eyre
I regret that I cannot answer that in detail now, but I shall be glad to write to my hon. Friend explaining the position.
As I was saying, the registered dock workers' claim would represent a 30 per cent. increase in basic rates and add £3 million to the PLA's wages bill. I do not see how anyone can argue that such a huge increase is defensible or realistic when inflation is so low and when the PLA itself is, to quote its finance director,living on a razor's edge".I very much hope that Opposition Members will be doing all they can to persuade the dockers involved that their current strike action is not in their own interests, not in the interests of their colleagues in the PLA, and not in the interests of the PLA.
The PLA has offered 3½ per cent. without strings to all its employees and to discuss with the unions the scope for productivity agreements for particular groups of workers.
In case there are any doubts about the Government's position, or those involved in the present dispute think that the PLA can turn to the Government for the money needed to meet their claim, let me repeat: operating subsidies came to an end last December, and there is no question of their being resumed. I hope that everyone involved will 65 bear that crucial factor in mind in the coming weeks and months as the PLA and the MDHC struggle to return to viability.
§ Mr. Robert Hughes (Aberdeen, North)
I say at once that we shall not vote against the Bill at the conclusion of the Second Reading debate tonight, because we are well aware that the Port of London Authority and the Mersey Docks and Harbour Company are in serious financial difficulties and need this help.
However, as I am sure the Minister knows, there is considerable resentment, in many parts of the country. That resentment which is shared by both the work forces and managements in ports, concerns what appears to be the preferential treatment that is given to London and Liverpool. We accept, of course, that the Government are responding to the problems in those two ports because of the difficulties that exist there. Nevertheless, many of my hon. Friends who represent ports in other parts of the country will elaborate on their financial problems. If my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) is fortunate enough to catch your eye, Mr. Deputy Speaker, he will tell us much about the problems of the Clyde Port Authority. The problems there exist in many other places.
Despite what the Government have done, I am sure that the Port of London Authority is not wholly satisfied with the Bill or with the results that may flow from it. It may have been a slip of the tongue, or perhaps the Minister's brief was not as full as it might have been, but I understand that the £26 million of Harbours Act loans is not simply a question of existing assets which are no longer earning revenue but that that £26 million was borrowed to pay interest on existing debts. When a company has got to the point of borrowing money to pay interest on its debts, it is in a very serious way. Clearly, the money is needed.
Even with this reconstruction—it is only a partial capital reconstruction—the Port of London Authority will not be financially viable in a true commercial sense. I understand that the PLA's balance sheet is not strong enough to allow it to borrow on the commercial markets, should the need arise. The Minister rightly said that, as from the end of December, the Government will not provide any further revenue deficit financing and that such Government finance as is available will only be for essential capital expenditure and the cost of severance. That means that the PLA, in particular, is in grave difficulty.
I want to ask the Minister a question about the extension of the special £22,000 severance scheme for registered dockers with over 15 years' service. Is it available to all ports, or is it primarily or solely for London and Merseyside? Of the number of registered dockers who are available for work at present throughout the country, many are in Liverpool and London. But there are many other ports where the excess of dock labour is much greater and where attempts are being made to solve some of the manpower difficulties. As long as the £22,000 is available for Merseyside and London, no one will leave until he gets that amount. So, even if the Government do not intend at present to have the special scheme for all ports, they will have to come round to it, as happened on the last occasion. When the £22,000 was initially proposed some months ago, it was supposed to be only for London and Liverpool, but it became the norm.
66 The Government seem to view the problems of ports solely in terms of the reduction of manpower, and they see severance not only as the only answer to the problem but the only problem facing the ports. In my opinion, many other factors should be taken into account.
§ Mr. Hughes
I am grateful to the Minister for that statement, which I am sure will be welcomed throughout the United Kingdom.
The Minister tells us, not for the first time—it is the first time that he has said it, but his predecessors have said it often—that this is the last time that there will be handouts to London and Merseyside. In fact, it is about the fourth time that we have had a Bill to deal with these two ports, and I suspect that we shall have another. I marvel at the Minister's almost insatiable lust to produce legislation. Bills tumble out of the Department of Transport faster than Parliament can deal with them. There is a Transport Bill now before the House. At present it is in the other place, having been driven through this House on a guillotine motion. That Bill, too, contained a provision dealing with London and Liverpool. Clause 11 provided for the writing off of the £23.8 million loan to the National Dock Labour Board, which was used to finance special severance payments.
Perhaps I am a little too charitable in thinking that Ministers like preparing and debating Transport Bills. There is an alternative possibility: it may simply be incompetence in the Department. It is difficult to understand why clause 11 was in the Transport Bill. Severance payments, after all, are a matter for the Department of Employment. Yet, only four months ago, the contents of this Bill were left out. When we discussed the future of these two ports briefly in Standing Committee, the Secretary of State, with all the firmness at his command, said that he did not agree with the strategy for the ports outlined by my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth). He said:this measure"—that is, clause 11—is introduced because it is part of a larger scheme of things, and it is only part of the measures necessary to see our ports through the revolutionary conditions in the best possible way. It is a part that requires legislation, and that is why it is in the clause".—[Official Report, Standing Committee A, 25 January 1983; c. 1039.]Apparently, however, even as late as January, the Minister did not know that he needed further legislation. It was part of a broader strategy. Yet, within a matter of days of finishing quite a lengthy Transport Bill Committee stage, this new measure was brought forward, although, as the Minister fairly said, the crisis in the ports of London and Liverpool has not arisen in the past few months.
I can see only one reason why the Government are proceeding in such a piecemeal fashion both with the ports of London and Liverpool and with ports generally. The Government have no long-term strategy for British ports, other than selling off the profitable assets that may be around, such as Associated British Ports, to which I shall return. It is equally clear that, the Government having dissolved the National Ports Council, there is no one and no body to take an overview of the ports industry. There is no one to look at the complex problems of the industry 67 as a whole, no one to comment or to give advice to Ministers from time to time to ensure that there is some balance in port traffic and that issues are discussed.
There has been a recent study on the ports, although I have not been able to obtain it from the Library, entitled "Port Choice and Routeing of UK Trade", published by Economic Consultants Ltd. at a price of £10. I am afraid that at that price not many people will rush to the shop to buy it. That report is based on a survey of the inland origins and destinations of United Kingdom international trade which was conducted by the Department of Transport together with the National Ports Council and with the help of Her Majesty's Customs and Excise. What factors does the report suggest affect port choice?
The Department of Transport issued a helpful synopsis of the report in press notice No. 453. That says that the factors are the inland distance to the port; the cost of inland transport in relation to the value of the commodity; the availability of rail services; the pricing strategies of shipping lines; the preference in certain cases for a single United Kingdom port of call and the length of the sea crossing. The only surprising thing about those factors is that they are not surprising. One would expect such factors to influence people in the choice of port.
One of the major difficulties of the report—indeed, of many other reports—is the delay in analysing statistics. As I said, the report was based on a survey in 1978, and a lot of water has passed under the bridge since then. Indeed, the other points of interest in the Department of Transport's press notice have already changed. Among the points of interest that the new report brings out is that in 1978 over half the traffic was handled by a local port—a port in the same region as the inland origin of destination. It tells us that unitised traffic—containerised traffic—is likely to travel much longer distances. For example, only 20 per cent. of container traffic travelled less than 100 kilometres while 70 per cent. of non-unitised traffic travelled less than 100 kilometres. It also pointed out that over 6 million tonnes-15 per cent. of the traffic generated in the north of England and in Scotland—was handled by ports in the south. Northern ports handled less than 2 million tones—7 per cent. of southern traffic. It also pointed out that 79 per cent. of United Kingdom trade carried inland went by road, 18 per cent. by rail, and 3 per cent. by inland waterway or by sea.
We know that since 1978 the trend towards containerisation has accelerated. We also know that the drift of cargo from the north and west of the United Kingdom to the south and east has accelerated. My right hon. Friend the Member for Barrow-in-Furness drew our attention to the statistics when we discussed the matter in Committee. He drew attention to the Department of Transport's helpful publication "Transport Statistics for Great Britain 1971–81". Table 5.2 shows that in 1971 the ports handled 2,157 units; in 1975, 2,830 units; in 1979, 3,687 units; and in 1981, 3,792 units. That must be thousands, not individual units. The number has continued to increase since 1981, because that is the modern, economic way to handle port traffic. We also see that this is a much higher proportion of total traffic than previously, so the trend has gone up. Those statistics, published at the end of last year, show that the west coast ports' share of non-fuel traffic has dropped from 46 per cent. in 1965 to only 28 per cent. in 1980. The share of non-fuel traffic in 68 the southern ports has risen from 7 per cent. to 17 per cent. and in the south-eastern ports from 25 per cent. to 28 per cent. Therefore, we see that there are already major events taking place in how ports are operating.
A major factor governing port choice is shipping lines' pricing strategy and the preference in some instances for a single United Kingdom port of call, and sometimes a single European port of call. We should not imagine that the preference for a single port of call is happening only in Britain; it is happening elsewhere. It has been put to me strongly that one reason for the shift in trafic is the operation of the grid pricing system and that that system has had a seriously distorting effect on trade patterns through northern and western ports. As I understand the grid pricing system, the customer benefits. The shipping company pays the difference between the cost of goods landed at a local port and the cost of goods landed at a further port to suit the shipping company. In other words, if a company in Aberdeen wanted to bring its goods to Glasgow, there is a price for shifting the goods from Glasgow to Aberdeen. However, if it suits a shipping company to land goods in Southampton, the customer will not have to pay any more for the transport of the goods. That is seriously affecting trade and, as I said, it has been brought strenuously to my attention. It is the shipping companies that are calling the tune, and that has been demonstrated by the figures that we have been given.
Faced with the problems in the ports and with the changing patterns of trade, we are entitled to expect a clear statement of policy from the Government. They have introduced a Bill which provides specific moneys for London and Liverpool, but that is not good enough when we know that many other ports need money. It is difficult to get the Department to make a clear statement of policy. Strangely enough, we have a clear statement of policy in page 18 of the prospectus for the sale of Associated British Ports. It comes in the form of a letter written by the Secretary of State to the chairman of Associated British Ports. We have not had an opportunity to debate that offer for sale, but we are entitled to do so because the company was set up by an order which could not be debated in the House. Therefore, we can only debate the issue after the event. That is the only way that we can see how the Government treat the ports that they intend to sell off to the private sector and how they deal with the public sector ports.
The sale of Associated British Ports was a good bargain in the market place. The initial share price set for Associated British Ports was 112p. When trading opened on the Stock Exchange, the shares were available for 137p, which is a considerable mark-up. On Friday the shares stood at 143p. I do not know what they stand at today. The lowest trading figure was 129p, the highest 147p. Why was such a premium put on the shares? The company has assets of just over £148 million. That company, in the six years to 30 December, invested nearly £60 million in the capital development of the ports.
§ Mr. Eric Cockeram (Ludlow)
On a point of order, Mr. Deputy Speaker. How is the sale of the shares of Associated British Ports and the machinations of those shares on the stock market relevant to the Ports (Reduction of Debt) Bill, which refers to London and Liverpool, which are not part of Associated British Ports?
§ Mr. Hughes
I understand the nervousness and embarrassment of the hon. Gentleman in not wishing this issue to he discussed. He knows perfectly well—he has been in the House longer than I have—how one group of ports, in direct competition with another group of ports, has been dealt with.
During the six years prior to 30 December 1982, more than £60 million from revenue, not from borrowing, was invested in capital development in the 19 ports. In 10 years this group of ports was able to invest £100 million without borrowing. Past profits, as can be seen from the prospectus, were very good. As if it was not enough that access was being made available to these expensive and good ports, an £81 million loan was written off before the company was put up for offer, thereby making the sale more attractive to prospective investors.
How much money did the Government seek to raise from the sale of shares in Associated British Ports? The Government are apparently concerned to harness the public purse, but in the Bill they are writing off £81 million of public money. Hon. Members may think that the maximum possible price would have been achieved for assets that are sold off. Some 19 million shares were being offered at 112p per share to raise £22 million. It is a pretty good bargain. Assets worth £148 million were sold off and a loan of £81 million was written off to raise £22 million. Not surprisingly, when the prospectus was available, 156,000 share applications were made, worth £700 million. The shares were 30 times oversubscribed. Even if hon. Members allow for the fact that when a good bargain is made available, duplicate or multiple offers are made—people who are aware that an issue may be oversubscribed put in several different bids in the hope that when the ballot occurs for the allocation of the shares they will get some—for the shares to be oversubscribed by 30 times is quite astonishing.
The Secretary of State for Transport, in his letter in the prospectus, makes clear that, although the Government will hold the majority of the shares, he will not interfere in any way with the decisions of the directors, except in the national interest, although the "national interest" has never been fully described. When the Secretary of State issues press notices, he ought to be careful to ensure that they are not misleading. I am the last person to accuse the right hon. Gentleman of deliberately misleading the country or the House, but he must have a care as to what is issued either in press notices or in written answers under his name.
The hon. Member for Bridlington (Mr. Townend) tabled a question asking the Secretary of State for Transport if he would make a statement about the sale of shares in Associated British Ports. The Minister said:The response from employees was very encouraging and a total of 8,115 employees, over 90 per cent. of those eligible, now have a total of 1,736,545 shares".The answer concludes:I wish the group, with the support so substantially demonstrated by its employees, a successful future in the private sector".—[Official Report, 16 February 1983; Vol. 37, c. 177.]That does not square with my information, which comes from an impeccable source. Approximately 8,000 of the 9,250 employees eligible applied for the 53 free shares worth £60. Of the 8,000 who took up the offer of the free shares, about 3,500 applied to buy shards. The prospectus for the employee shareholders stated that, having taken the free shares, they were entitled to bid for a limited number of shares, and for every share they 70 bought they were to get another free share, so they would get three shares for the price of one. Only 3,500 employees took up these shares, whereas the Secretary of State's answer suggests that 90 per cent. of those eligible actually bought them. That is the full implication of the written answer. The right hon. Gentleman ought carefully to examine how written answers are drafted and not overstress the importance of shares.
The employee shares are held in trust. Those who bought them cannot go to the stock market to sell them at 147p. They have to be held for a set time. The trustee operates on their behalf. What hon. Members do not know, and are entitled to ask—I hope the Minister will give an answer to the House on this subject—is how employee shareholders can get together to give instructions to their trustee on policy matters. The 3,500 applications for shares included the directors. Hon. Members do not know how many shares the directors bought. Perhaps the employees have a small shareholding. The employees' shareholding of equity is 2.5 per cent. of free shares and 1.5 per cent. of bought shares. Therefore, 4 per cent. of shares are in the hands of employees. That does not show a dominance of employee shareholding.
Throughout the debates on this subject hon. Members have resolutely asked successive Secretaries of State and Under-Secretaries, when dealing with the ports of London and Liverpool, to publish the corporate plans for those two ports. Every time we have asked, we have been refused the information on the ground that it would be commercially damaging to publish such corporate plans. As different legislation has passed through the House, we have tabled amendments asking successive Secretaries of State and Under-Secretaries not to pay out any money without an annual report from the Secretary of State on how he has used the money. After all, he can spend some of it without coming to Parliament. We have asked what the overall strategy is. However, time and again we have been refused that information.
It is self-evident that these two ports, as well as the other ports, suffer from the trading recession. The problems of revenue and profitability are exacerbated by the drop in the volume of trade available. However, even if the so-called great economic recovery arrives, we shall still need a national policy for the ports. For some time we have believed that we need a national ports authority to assume the ownership and control of the majority of United Kingdom ports.
The Government removed the only body that could give any advice or oversee the situation—the National Ports Council. At the first opportunity the Labour party intends to set up a national ports authority to deal with such issues. We are convinced that we can have a successful ports policy only by basing it on public ownership and that a central authority is needed urgently to consider the whole strategy.
Time and again we have warned the Government that the ports of London and Liverpool are staggering from one disaster to another and that they will always be returning for fresh financial assistance. Despite what the Under-Secretary of State has said, we are convinced from our examination of events that the Government cannot adopt a laissez-faire attitude towards the ports. There will probably have to be yet another Bill this Session to try to resolve the financial problems of those two ports. A proper strategy for them alone, if not for all our ports, is long overdue. I do not expect the Minister or the Government 71 to be able to respond, because they are prepared to stagger on. However we are not, and we shall take the earliest opportunity to put matters right.
§ Mr. Malcolm Thornton (Liverpool, Garston)
Before launching into my remarks, perhaps I could describe the remarks made by the hon. Member for Aberdeen, North (Mr. Hughes) as more of a voyage than a speech. Even as an experienced navigator, I would hesitate to follow the course that he has attempted to steer on Second Reading. The hon. Gentleman referred to Associated British Ports, and one of the features of ports such as Garston is that they are easily managed and containable. Garston is a small port, which has been sensitive to the market and remained competitive. It has been able to adjust itself to the changes in trade patterns and has won trade when many other ports have lost it. It is unfair to draw a comparison between a port such as that and the ports of Liverpool and London, whose problems are on a far different scale.
This debate takes place against an extremely depressing background. From 1955 onwards, and until I became a Member of Parliament, I was involved in the port of Liverpool and in the day-to-day operation of one of the ports under discussion. Therefore, I am well qualified to speak on some of the matters raised by my hon. Friend the Minister and the hon. Member for Aberdeen, North and on the reasons for the decline in trade.
There have been major shifts of emphasis in the way that our cargoes are carried. I remember seeing a headline that appeared some years ago in yd's Register of Shipping said "Containerisation, yes, but not too fast". Even then, in the early 1970s, it was recognised that the effects of too rapid a change would be quite dramatic, and would be detrimental to many of our ports. A market force was at work, and ports must recognise market forces or they will decline and possibly die. If the customer wants containerisation, containerisation and the facilities for dealing with containers must be supplied. Those facilities are expensive and require tremendous capital investment. If many of the existing facilities are maintained at the same time, although they are increasingly underused, the cost equation will start to look very sick.
Bulk cargoes also played their part. In the late 1950s the Mersey Docks and Harbour Company together with Shell embarked on the building of the Tranmere oil jetties. It was a huge investment for the new large crude carriers that were to bring oil into the Stanlow refinery. Despite that major investment, it was only a relatively short period before new technology, ideas and even bigger ships superseded Tranmere. Ships that once came into the river Mersey and paid dues to the port authority discharged their cargoes off the coast of Anglesey, at the single buoy mooring.
We also lost trade to other ports, particularly in Europe. The number of visits that ships were making has already been mentioned. Liverpool was once the great port for ships going to and coming from the Far East fully laden. The ships would discharge their cargoes at Liverpool as their first main port, would travel round the coast and the continent and would return to Liverpool to load fully before returning to the Far East. However, those ships disappeared almost overnight. When I say that, I mean it. Although it was more than a decade ago, it does not seem 72 long ago that one could see the River Mersey at any time of tide full of cargo ships waiting to berth. At every tide, the port radar station gave out the 15 or 16 ships that were anchored at the Mersey bar, awaiting berths. The port was busy and vibrant, but it seemed to disappear almost overnight. The ships disappeared as patterns of trade changed, but, unfortunately, all the infrastructure of the port that existed to support that level of traffic was still there and had to be paid for. Many of the jobs in the port that had been supported by the previous levels of trade could no longer be sustained.
We have now seen a world recession and a significant amount of the world's tonnage is tied up and is not carrying cargoes around the world. There are fewer ships and fewer cargoes are being carried, but the infrastructure and manpower have not been significantly reduced. Such factors have contributed to the problems of ports such as Liverpool. On Merseyside we all know that there has been a further serious consequence. I refer to the number of port-related jobs that have been lost. The port of Liverpool-Birkenhead used to sustain many thousands of jobs that were related directly to the port. They have all gone. Thus, decline almost feeds on itself and many parts of the port that were once prosperous, job-producing areas of Merseyside are now defunct and in almost total decline.
While it is good to see what has happened in the south docks, and that some use is being made of the derelict land, thanks to the Merseyside development corporation, nevertheless one can remember when those docks were full of ships, full of people employed in the shipping industry on Merseyside, bringing prosperity to the area. That is the background, and it is against that background—and where we shall be in 10 years' time—that we have to consider what the Bill means to us today.
Clearly, ports such as Liverpool and London which are facing problems must have some extra aid to enable them to get through a very difficult period. I have said on previous occasions that I do not support subsidies generally. I can understand many hon. Members on either side of the House saying that what is done for one should be done for another. Why is this support from the Government necessary?
The problems that many of the ports are facing—Liverpool is a case in point—are partly due to Government interference. The national dock labour scheme is a millstone around our ports and the problems arising from it should have been tackled long ago.
§ Mr. Frank Field (Birkenhead)
The hon. Gentleman describes the national dock labour scheme as a millstone around the ports of this country. Would he describe it as a millstone around the dockers?
§ Mr. Thornton
Yes, I would indeed. The hon. Gentleman has anticipated a point that I intended to make. Ports have been forced by an agreement, which many of them opposed at the time, to maintain unnecessary high levels of manpower, thus adding to their costs and thus reducing their competitiveness. It is an illustration of one of the problems facing industry generally. By preserving jobs artificially, we end up by destroying jobs. That is the reason why the scheme has not achieved much for the docker: any more than it has for the ports. It is nonsense to suggest that by feather bedding any industry against change, the people in the industry are protected. It simply makes the future that much less certain for them.
§ Mr. Eric S. Heffer (Liverpool, Walton)
The hon. Gentleman must surely remember the days when dockers did not have such a scheme, when they had to line up, like cattle at a cattle market, to be picked out by the employer, and when they had no protection of any kind. The only protection that they had was their unity in the trade union movement. Does the hon. Gentleman really believe that the dockers have not benefited as a result of the introduction of the decent scheme brought in through the National Dock Labour Board?
§ Mr. Thornton
The hon. Gentleman is right to refer to those dreadful days of the past. No one in his right mind would want to go back to those days. But is is nonsense to pretend that things have not moved significantly since then. The hon. Gentleman does himself no credit whatever when he tries to pretend that Conservative Members are suggesting that we should return to them.
§ Mr. Robert Hughes
The logic of the hon. Gentleman's argument is that the Bill should not be before us today and that if the Mersey Docks and Harbour Company cannot survive without any help, it should go to the wall. Why does the hon. Gentleman not follow the logic of his argument and vote against the Bill?
§ Mr. Thornton
The logic of my argument is that if the Mersey Docks and Harbour Company—the old Mersey Docks and Harbour Board—had been a free agent, allowed to shed labour and to hire and fire as the demand existed, the Bill would not be necessary. Having to keep on the payroll an excessive number of people has been one of several contributory factors leading to the decline of the port.
§ Mr. Thornton
No. I have already given way more than once, and other hon. Members wish to speak.
It is not just the number of registered dock workers that is adding to the problems of the ports. A symposium was held in Manchester some years ago by the port of Rotterdam, which was involved in a heavy promotion, trying to win trade from United Kingdom ports. At that symposium, one of the major shippers from Liverpool asked the representatives of the port of Rotterdam whether they were subsidised. They said "No, we are not subsidised." He asked them "Who pays for the lights?" They said "The Government." He asked them "Who pays for conservation?" They said "The Government." He asked them "Who pays for pilotage?" They said "The Government." The next question was "And you say that you are not subsidised?" There was no answer.
It is most important to compare like with like. It is one thing to make the ports more competitive in terms of manpower—I welcome the Minister's statement today because it is at least a recognition that something has to be done in that respect—but it is quite another thing to leave our ports with a hand tied behind their backs when they are faced with competition of the sort that I have described. By all means let us have competition but let us make certain that it is fair competition.
I refer specifically to the port of Liverpool and its survival plan. I believe that, given the right climate—the Government are helping to create that climate—the survival plan will enable Liverpool to attract back some of the trade it has lost. Indeed, there have in recent weeks been examples of cases where trade has been won back. That can only be good.
74 I believe that the port of Liverpool is synonymous with the great seafaring tradition of Britain. I hope that my hon. Friend the Minister has seen the marvellous poster, which is in Euston station among many other places, showing the new slim port of Liverpool. There is a very attractive girl on the poster—
§ Mr. Thornton
Yes. She must be a Liverpool supporter. The port is determined to solve its own problems, because ports that compete will survive. In Liverpool we have the ingredients of a survival plan that will work. We have a stable work force—far more stable than people outside Merseyside give us credit for having. The dock labour force in Merseyside will work in cooperating with the management to ensure that the survival plan for Liverpool will succeed.
For those reasons I welcome the Minister's remarks, because I believe that the proposals will enable Liverpool to survive. But I ask him to bear in mind what I have said, because the problem in Liverpool is only one part of a much bigger problem facing the ports of Britain.
§ Mr. Frank Field (Birkenhead)
Like the hon. Member for Liverpool, Garston (Mr. Thornton), I support the measure, particularly clause 1(1)(b), which allows the Mersey Docks and Harbour Company to write off debts up to £36 million, but, as would Oliver Twist if he were standing here today, I, too, ask for more.
In arguing my case for more help for Liverpool, I: refer to the Minister's speech. He talked of the dramatic change in trade patterns in London and Liverpool. The hon. Member for Garston has correctly painted a picture of the lively port of Liverpool and the dramatic change that has taken place, almost as if it were overnight.
The hon. Member for Garston referred to the amount of activity and life on the Mersey and the number of ships moving about. As he spoke, one could almost hear the noise of the ships communicating with one another. With this activity came jobs for Merseysiders not only in the port but in surrounding industries supporting the port—jobs which stretched through generations. Those jobs have disappeared. Therefore, in considering the Bill tonight, we are concerned not only with whether it will allow the port authorities of Liverpool and London to survive for a little longer but whether their debt is being structured—if I may use that rather "in" word—in a way that allows other industry to replace those jobs which have been lost in London and Merseyside, but particularly in Merseyside.
In Merseyside we have lost not just a main employer which provided jobs through generations but something which was almost inconceivable few decades ago. If, 10 years ago, we had asked Merseysiders whether they thought that their port would be facing the problems it faces today, most Merseysiders would have said no. One of the great institutions of Merseyside was its port, so not only institutional investors, but many ordinary people, invested in their ports through their work and through the local support that they gave to their port through their savings.
The Minister said that measures such as this are necessary so that the port can continue trading. He said that the port was almost bankrupt. That was the polite 75 language he used. Bankruptcy is not a new fact of life on Merseyside; it has happened before. More than a decade ago the dock company went bankrupt, and, as a result of the bankruptcy, its debt was restructured. Here lies one of the real problems facing Merseyside at present. People's savings in the port have been lost until the new redemption date. The port authority was told that if, for example, it was able to make a profit, or if it was able to sell its assets, naturally enough the sums that were realised thereby should go to pay those people who had lost their savings through investing in the port. We had, therefore, a restructuring of the debt which acts as a disincentive to success for our area.
I am linking this with a theme touched upon by the hon. Member for Garston, to which other hon. Members will no doubt refer—the role of the development corporation in our area. One of the major problems faced by the development corporation, particularly on the Wirral side of the river, has been a port authority unwilling to release to the development corporation its assets for development, for the reason that, if it does, the port authority will not get a penny. The sums which would be realised would go to those people to whom the port authority owes money. If the port authority hangs on to those assets, and it in the meantime receives a rent, even if it is only a meagre rent, it will be something to put in the balance sheet. Therefore, there is a disincentive which acts against rebuilding and against attracting new jobs into the area. It is in the interests of the port authority not to surrender land, because that will not help its balance sheet, but it is in the interests of the area that at least some of that land should be released.
At the beginning of my speech I said that I rose quite happily, as Oliver Twist would have risen, to say that one needs more. One needs help in writing off a debt of more than £36 million.
§ Mr. Field
I shall give way to the hon. Member for Garston in a moment. The Government are introducing small measures. This is the second one since I have been a member of the House and my hon. Friend the Member for Aberdeen, North (Mr. Hughes) expects that, if an election does not intervene, there will be another one before the year is out. The Government are introducing a series of small measures to try to halt the existing financial decline of these major ports, but they remain unwilling to take a long-term view of the needs of the area and to consider how to restructure and write off the larger parts of the debt.
§ Mr. Thornton
Does the hon. Gentleman agree that, with regard to retention of land by the dock company vis-a-vis the Merseyside development corporation's need for land on the Birkenhead side of the river, one of the ways forward would be a long-term commitment by the development corporation that, should that land become needed for development within a five-year period, it could go back to the dock company? At least during that period it would allow the development corporation to get on with developing and preparing the land. That would go some way to meet the need for using land, which is currently sterilised, on the offchance that it might be needed at some point in future.
§ Mr. Field
I am in favour of considering all schemes which might bring more jobs to our area. The development corporation is considering such plans. There are short-term plans for the use of the old western ship repair site while longer-term possibilities are being considered for the area. In many parts of the development area the Mersey Docks and Harbour Company is not prepared to surrender the freehold of the land, and without that surrender the development corporation believes that it will be difficult to attract considerable funds to the area. One can see the sense of the dock company doing that, given its responsibility to try to survive. Nevertheless, one can see how destructive that attitude is for the survival of the whole of that area.
Of course, I am in favour of any scheme for creating jobs in the short term, but I also wish to see the restructuring of the debts of the Mersey Docks and Harbour company in such a way that it will allow the development corporation to develop the Wirral side of the river, in the same way as it is trying to develop the Liverpool side. That is immensely important for the reasons given by the hon. Member for Garston. He rightly painted the picture of a massive collapse of jobs, not only in the port but in the surrounding area of Liverpool and Merseyside. On each of the short-term measures that the Government bring before us we must ask whether it is simply a patching-up exercise—another piece of Elastoplast being applied to the deep-seated problems of London and Liverpool—or whether the Government, even if they do so stage by stage, are bringing forward a series of measures which, when added together, hold out the prospect of a revival of long-term prosperity in our area.
Sadly, I do not believe that we shall get that from this measure, although we saw the difficulties of the hon. Member for Garston, who is against feather bedding but is in favour of the £36 million write-off of debt for the Mersey Docks and Harbour Company. How sensible he was to support that measure.
Before I complete my speech I should like to take the hon. Gentleman up on the effects of the dock labour scheme. When I intervened I was not trying to say that one cannot give people the right to a job for ever. For me, the dock labour scheme said to people who had only their labour to sell that they had property rights in the same way as those of us who own our homes and so on. In the days of primeval man, there was a struggle to establish rights to property. So in this century we have seen the attempt to extend what we mean by property rights to people who have only their labour to sell. That means that when there is a lack of demand for their labour, we need to buy those people out of their property rights. Hence the schemes which we have debated in the past, one of which the Minister has today announced in the House, to try to get people to surrender those property rights.
I do not argue that one can give jobs to people for ever and a day irrespective of what is going on in the rest of the country and the world. It was important to give the dockers a major enhancement of their status. But just as we gave them property rights, as in past centuries other people gained different sorts of property rights, so, too, we have a duty to stand by them and buy them out of those property rights as and when the need arises.
Neither Conservative nor Opposition Members are in favour of tearing up the old forms of property rights. So it does not behove anyone in the House to tear up the new 77 form of property rights—the right to jobs—in a way which we would condemn if we were considering the right to a home or the right to land.
I hope that I have explained that we made an important change in the dock scheme. It is all very well to say that it is a millstone round the necks of the dockers, but, if we do not give them new forms of property rights, how can there be a system of free market forces that would not give rise to the old position where employers could choose to whom they wished to give work that day while refusing others?
I am happy to support the measure, especially clause 1(1)(b), which will act as an important holding operation for the port of Liverpool. I hope that when the Minister replies he will deal with what I have described as the built-in incentive to fail. The Mersey Docks and Harbour Company has every interest not to bring forward land for development, but it is in the interests of Merseyside that much of this land should be developed on a long-term basis. Until we untie that Gordian knot, as the hon. Member for Garston said, the vibration and life and jobs will not return to Merseyside.
§ Mr. Eric Cockeram (Ludlow)
I declare an interest as a past investor in the Mersey Docks and Harbour Company. Those who live in that area have invested savings in the company. However, I have none invested today.
I support the principles of the Bill for the proposed reduction of debt, but there is more to the matter than that. I wish to elaborate on some of the points raised by the hon. Member for Birkenhead (Mr. Field) and be a little more specific. There is considerably more to the reduction of debt in the Mersey Docks and Harbour Company than is apparent in the Bill. It should be conditional on certain action being taken by the company. As has rightly been said, it is the owner of vast areas of stagnant land on both sides of the river. It has no foreseeable use for the land, which covers some 600 acres. It is derelict Victorian dockland and not only does it look derelict: it smells derelict. Stagnant docks and stagnant water quickly become polluted.
I appreciate that the company professes a desire to sell the land, but in reality the evidence to support that is thin. It has a vested interest in not selling. The reduction of debt should be made conditional upon the sale of land. The land lying waste at the south docks of Liverpool, Birkenhead and Wallasey is for sale. Some of the land is already leased to a host of different companies that are using either the whole or part of certain warehouses and paying rent. Some of those companies are anxious to buy, but the Mersey Docks and Harbour Company will not sell because it has a vested interest in continuing to enjoy the benefits of the lease.
The Merseyside development corporation is anxious to buy about 600 acres, but the company will not sell the land to that willing buyer. There are those who say that the company is trying to sell the land but cannot obtain a buyer because it is a depressed area in a period of world recession. That is not true. The development corporation is anxious to buy. It has been unable to reach agreement with the company and is having to resort to a compulsory purchase order. If there was a desire to sell, there would be no need to resort to that. The haggling continues and 78 outside professional advice has been sought by both sides. That is good for the fees of the professional advisers, but it is not good for Merseyside.
Industrial development in the land is being delayed. Industrialists who seek to take advantage of the many opportunities and advantages introduced by the Government for investment in that area are not willing to sink their capital until they own the buildings. That is perfectly understandable—who wants to invest money in a building that has only a short lease? The enigma is that the company has a vested interest in procrastination and leasing.
The headquarters of the company at the pier head is an asset. I do not know how much it is worth, but it must surely be a seven-figure sum. The company has made no attempt to sell that building. It is a splendid building with marbled halls, mosaic floors, leaded windows and many other grand features. But it is an illusion of grandeur to say that the company still needs such a headquarters building. My hon. Friend the Member for Liverpool, Garston (Mr. Thornton), in his capable speech, extolled the virtues of Garston docks. One of the features that led to its success was that it was a small, compact, organisation with on-the spot management. It was, therefore, more efficient. That is in direct contrast to the Mersey Docks and Harbour Company, whose head office is eight miles from the chief base of its operation at Seaforth.
Clearly, the new slimmed-down management of the company should be adjacent to the action. Does anyone know of a factory with the office running it being eight miles away? The factory may have its office across the road or on an adjacent site, but never eight miles away. It is purely historic for the headquarters of the company to be based at the pier head. The asset could be sold and the company could operate from a more modest and compact setting at Seaforth.
Although I am in favour of the Bill—as are hon. Members on both sides of the House—it is wrong to refer to the reduction of debt as feather bedding. Reduction of debt is a feature of private enterprise capitalism and always has been. It is the writing off of unrealistic debts that have no chance of being repaid. They are constantly written off in the private sector, but we do not call that feather bedding. This reduction of debt is not feather-bedding either—it is a necessary reorganisation of capital.
Subject to the condition of selling land, I support the principles of the Bill. I hope that my hon. Friend the Minister will follow up that point and slim down still further the company's assets to give it a more compact setting at Seaforth. The writing down of debt is necessary for the future prosperity of the company. It will have my good will for the future if it takes the steps that I have mentioned.
§ 8 pm
§ Mr. Arthur Palmer (Bristol, North-East)
There have been several Bills of this sort to give financial assistance to the London and Merseyside docks and I have never been opposed to those Bills as a Bristol Member. Indeed, such action by the Government was inescapable. The ports' structure and organisation 'would have collapsed without Government intervention. Whenever we have discussed these Bills I have spoken up on behalf of the port of Bristol and I make no apology for doing so again.
The Minister talked about the adverse winds of trade. I have no doubt that those winds have blown strongly on 79 the Thames and the Mersey—no port ever escapes them. The same adverse conditions and the same strong winds have prevailed on the Severn and on the Bristol Avon.
Bristol's difficulties are well known to Government Departments and to those who take an interest in these matters. The port's debt accumulates steadily but the city council cannot escape from it, it being a municipally owned port. The port's finances can hardly be separated from normal local government finances. Half the city's rate revenue will soon be called upon to keep the port in existence.
If relief were sought by the port ceasing to trade, the city would remain responsible for all the outstanding debt. Without special Government action there is no fundamental escape for Bristol. The cessation of trade would have a catastrophic effect on dock employees and workers and for large and small businesses throughout the city that turn on the port's activity.
It cannot be said that Bristol has not attempted to help itself. Every economy has been made within its reach and every attempt has been made to attract new business. Long drawn-out discussions are still taking place between the local authority and the Department of the Environment on adjustments that might be made to the rate support grant or to grant-related expenditure. Bristol has brought in expert accountancy and financial advice—in this instance, the well-known firm of Coopers and Lybrand. The last meeting was on 26 January and some of the Bristol Members on both sites of the House were present. It is hoped that RSG adjustments and other measures may help the city's finances over a period, but this will be without an effect on the port's direct trading position.
The Government's attitude towards Bristol—it has been expressed so often in the past, especially by the Departments of Transport and Industry, that I know it almost by heart—is threefold. First, they say that help had to be given to London and Merseyside because they were special cases. The Minister adopted that argument and almost expressed Conservative pride about the help that has been given. The Government argued that the ports' finances would have collapsed without Government intervention. It is always said by Ministers that it does not really matter what happens at Bristol because Bristol always has its ratepayers to meet the debt.
Secondly, it is said that Bristol made its own hard bed in the 1970s when it decided to proceed with the new west dock, which is now known officially as the Royal Portbury dock, which was opened by the Queen about two or three years ago. It is observed by Ministers that Bristol, having made its bed, must lie upon it.
The west dock was debated in the House shortly before the 1970 general election. Labour Ministers, especially Mr. Richard Marsh, as he was then—I believe that the same attitude was adopted by Mrs. Castle when she was responsible for transport—resisted the proposal to build a great new modern dock in the west. Indeed, it is one of the finest in Europe; it has everything except ships. Labour Ministers resisted the proposal but leaders of the then Conservative Opposition positively encouraged Bristol to go ahead.
In a previous debate I named eminent Conservative spokesmen, both right hon. and hon. Members—they were not all right hon. Members at that time—who encouraged Bristol to build the dock. There was an attempt 80 during the 1970 election to make it a big election issue. One of the local newspapers produced a picture of the west dock, as it was then called, with Bristol Labour Members being hanged from the cranes over it because they were not showing enough enthusiasm for the port extension. No doubt that was good party fun at the time, but now Ministers are saying "It is Bristol's fault and it should not have placed itself in this difficulty." The truth is that the dock was a fine example of municipal enterprise but Bristol has had to suffer for it ever since.
I do not wear a white sheet because like all Bristol Members, both Conservative and Labour—I think that there were five Labour Bristol Members at that time—I wanted the dock. Bristol as a whole wanted it; but it was encouraged by national leaders of the Conservative party even if Labour Ministers tried to dissuade us from going ahead.
Thirdly, it is said that it is the Government's general policy to treat ports as commercial bodies free to compete without Government intervention. If that is so, I do not understand why they have introduced the Bill. Surely it gives the lie to the Government free enterprise doctrine, if it be one.
Ports cannot move about. They are subject to adverse outside forces. One cannot talk about competition between ports in the way that one talks about competition between grocers' shops. That argument is irrational. Also, there are other factors that must be taken into account in addition to adverse trading conditions. I have a long document from the British Ports Association which deals with the European regional development fund and the maximum grants available from the EC to assist ports. They vary enormously from over £1 million in Workington to much less for other ports. The different grants vary, no doubt, according to the judgment of those who administer the European regional development fund. Bristol does not appear because it is not a development area and does not have special development area status. The Government want assistance from the EC to be confined to those ports within special development areas. Whichever way one turns, it seems that the die is always loaded against Bristol. It is nonsense to talk about free competition when the ground rules cannot possibly be the same.
I have made my point about Bristol in the past and I shall continue to do so. I support the Bill and approve of the help that is to be given to London and Merseyside. If the arguments are sound for those two ports, they are equally sound for the port of Bristol. It is unfair that normal local government amenities, repairs and renovations should be weakened to support a port which renders service not just to Bristol, but to the whole country.
The port of Bristol is situated at the junction of the M4 and the M5 motorways. Were trading conditions now as they were 12 years ago, Bristol would be doing very well. I believe that the new dock, Royal Portbury, will do well in the future. That is why the Government should intervene to give some special and direct help to the port of Bristol.
§ Mr. Keith Wickenden (Dorking)
I have a substantial interest to declare. I am chairman of the port of Felixstowe. The port is owned by the European Ferries group of companies. It owns also Larne harbour in Northern Ireland, Harwich Navy yard and Cairrnyan in Scotland. I agreed with the hon. Member for Aberdeen, North (Mr. Hughes) when he said that the House would 81 have reservations about the proposal to write off these sums to the Port of London Authority and the Mersey Docks and Harbour Company. I share those reservations, but, I suspect, for different reasons. The hon. Gentleman, other Opposition Members and some of my hon. Friends, I suspect, disapprove of the writing off of these sums unless similar sums are made available to ports in their constituencies. I disapprove of the writing off of these sums because I do not believe that any such sums should be written off to any port; they should all compete equally.
The port of Felixstowe, which is the largest independent port, the largest container port and the only port which has grown during the past four years—I shall give what I see as the reasons for that later—has no loans of any sort from Government sources. When it was acquired by the European Ferries group in 1976, it had a small amount of Government loan bearing interest of up to 16 per cent. All those loans were repaid immediately after the takeover. Since that time, the company has funded a major expansion programme of no less than £30 million during a period of recession. It has been funded entirely from private sources. The works to which those loans have been attributed have not been sufficient to cope with the demand in traffic and the port is now considering a further expansion of a similar amount.
It is a surprising story when ports worldwide are going through a difficult period. It is perhaps worth examining why that is. I shall give a few figures to show how the growth has taken place during the past four years. In the year ended 31 December 1978, the port of Felixstowe handled 180,000 containers. In the year ended 31 December 1982, it handled 460,000 containers—an increase of 250 per cent. The total non-oil tonnage passing through the port increased from 4.5 million tonnes in 1978 to 6–5 million tonnes in 1982—an increase of 50 per cent. Perhaps most importantly of all, during the same period the work force increased by 25 per cent. There are lessons to be learnt from that. I should not deny for one moment that Felixstowe has been fortunately placed geographically. It has been able to take advantage of the growth in our trade with Europe, which now accounts for 64 per cent. of our world trade. Nevertheless, major shipping lines such as United States Lines Operations Inc, Sea Containers, OOCL and Evergreen Line bring their containers into Felixstowe, passing the ports of Liverpool, Bristol, Southampton and London, and two thirds of the traffic of one of those operators returns to the north-west.
There are several reasons for that. Shipping companies, because of the size of container ships and bulk carriers, are now heavy investors in capital. They cannot afford to have their ships tied up even two hours longer than necessary. A ship costing £20 million to £30 million is a valuable asset. It must work to achieve a return. The port of Felixstowe handles its containers with up to 300 per cent. greater productivity than other container ports. There is no such thing as an out-of-date container port. All container ports by definition are modern. There are several reasons for this success. One is a highly intelligent work force, which co-operates fully in large investment programmes and new equipment and has never resisted such matters. Another reason is that the port has a management—I speak about others and not about myself—which is open to the work force at all times. That is very important in the ports industry.
82 My hon. Friend the Member for Ludlow (Mr. Cockeram) said that the head office of the port of Liverpool was eight miles from the scene of operations. If that is true, it is an appalling state of affairs.
§ Mr. Wickenden
That may be so, but one cannot go on operating from the same office for ever. At one time, Felixstowe's head office overlooked the dock basin. It does not do so now, because that would not be an appropriate location for it. The office has been moved.
§ Mr. Palmer
Felixstowe is often talked about in Bristol. The hon. Gentleman argues that Felixstowe's relative prosperity has been based on its own efforts and that there has been no outside assistance. In that case, how does the hon. Gentleman account for the article in Lloyd's List on 1 February this year under the heading:Port seeks EEC funds to expand"?The article says:This month the Transport Committee of the European Parliament will consider a suggested £30 million extension of Felixstowe port and decide whether it warrants a contribution from EEC funds. This and £4.9 million worth of Harwich improvements may be put on a priority list for possible grants of around 25 per cent. Mr. Amedee Turner, Member of the European Parliament for Suffolk and Harwich, said he would be supporting these projects very strongly. He pointed out that help from Community funds for the area was already substantial.How does that square with what the hon. Gentleman has been telling us?
§ Mr. Wickenden
I do not know. No application has been made by the port of Felixstowe to the EC, whatever Lloyd's List may have said. The administrators of the EC regional development fund sometimes offer grants without being asked, but no application has been made by the port of Felixstowe and no application will be made. We have completed surveys of our plans and I suspect that they have been considered by the EC, but the suggestions that the EC will make any grants available, or that they would be accepted if offered, are far from the truth. We expect to raise the funds for any development from normal private sources.
§ Mr. Palmer
In that case, perhaps the hon. Gentleman will write to Lloyd's List to explain the situation.
§ Mr. Wickenden
I shall be delighted to do so. Indeed, no application could yet have been made, because no plans have been finalised and we do not know how much the development will cost.
The hon. Member for Liverpool, Walton (Mr. Heifer) intervened in the speech or my hon. Friend the Member for Ludlow to refer to the old method under which dock workers were employed. We in the port of Felixstowe are fortunate because we have never operated under the old casualisation system. It was an appalling system and I agree with everything that the hon. Member for Walton said about it. The system degraded men, and a civilised community should never have countenanced it.
I am proud to say that we never had that system in Felixstowe. My distinguished predecessor, the late Gordon Parker, set his face against it when he started the port operations in Felixstowe. His prime insistence, even though he could hardly afford it in his early days, was that every man should have a guaranteed weekly wage. 'We have followed that tenet faithfully ever since. Because we 83 never had the old system, we do not have the history of bitterness which understandably exists in the areas that operated that system.
Past management in the docks industry has been inept, to put it at its kindest. It is no wonder that many sectors of the work force in many ports still bear the scars of those days. We have good labour relations at Felixstowe. That is why the port has been so successful. That lesson needs to be learnt elsewhere.
For example, Felixstowe handles twice as much non-oil traffic as Southampton, with one third the number of dockers. Southampton is a modern, well-managed container port, but it is living in the past and failing to compete. It may be claimed that we in Felixstowe are working our men too hard. If that were true, one would expect us to have a history of industrial disputes. We do not have such a history and our men earn, on average, twice as much as those in Southampton. I cannot give comparable figures for the Port of London Authority or Merseyside, but I suspect that they would be even more striking.
When the hon. Member for Aberdeen, North opened for the Opposition, he referred to the grid system of shipping and to a report which has given four criteria on the basis of which shipowners are said to pick a port. Those criteria are the inland distance from the markets to the port, the cost of transporting goods on the land side, the pricing strategy of shipping companies and the length of the sea crossings involved. Those matters are all important, but the most important criterion is the efficiency and, above all, the reliability of the port. If a shipowner can be certain that his ship will be turned round efficiently and relatively cheaply he will use one port rather than another, even though those four other factors may be against it—as they are in many instances in the case of Felixstowe.
The hon. Gentleman also referred to the flotation of Associated British Ports—formerly the British Transport Docks Board. He raised one or two interesting and somewhat contentious issues. He said that the premium that became payable in the days following the flotation was far too high. He referred to an issue price of 112p and a market price of between 140p and 150p. By most standards, that is a modestly successful issue, but not a tremendously successful one. It may be wise to compare it with the case of a company called Superdrug which came to the market a few days later. That company was very much smaller than Associated British Ports but it attracted twice the amount of subscription money and went to three times the premium.
The hon. Gentleman said that an over-subscription of 30 times was astonishing. It was not really astonishing. My company applied for a million shares. We got 28,000 and we should have been horrified if we had got more than 50,000. I suspect that many other institutions in the City of London applied for many times the number of shares that they wished to acquire.
The hon. Gentleman also referred to the need for a corporate plan. I do not believe in corporate plans and my company has never had one. Such plans take months to prepare, are usually out of date by the time that they are prepared, and are totally inflexible. The only corporate plan that is any use is the one in the minds of those whose duty it is to administer the business. The word 84 "administer" may not be appropriate because I am also thinking of the work force which is just as important as management in devising plans in industry. To reduce such plans to writing is to produce a sterile document which is often meaningless.
The hon. Member for Bristol, North-East (Mr. Palmer) referred to the way in which the European regional development fund was allocated. I do not know how that fund is allocated among ports on the United Kingdom mainland, but I know how it is allocated in relation to Northern Ireland, and the method is astonishing.
Some years ago the European regional development fund allocated about £2 million to Northern Ireland ports. It was not asked to do that. It gave the job of deciding how that money should be divided to the Department of Commerce in Ulster. It is interesting that the Department of Commerce decided that the right way to allocate funds was on the basis of the debt structure of the companies involved. As a result the port of Belfast took almost all the money available. The port of Larne—I declare my interest, because my company owns it—over many years has been extremely prudent and ploughed back all its profits into reserves and reinvestment. It has no debts and consequently received no part of the grant. I do not object to that, because I do not approve of regional development funds. I think that they create unemployment. That is a different matter, which I shall not go into today because it would be far too contentious.
I have said why I believe that ports should stand on their own feet like any other business. They must do so because ports, like any other business, compete in an international market. If one does that, one must compete with the best in that market. We shall solve the problems of ports and industry and of the closely associated unemployment problem only when we learn that we cannot succeed unless we produce goods and services which people in other countries want to buy. We can give all the grants that we want, we can provide all the regional training schemes, but if people will not buy our goods and services, we shall never permanently solve the problems.
§ Mr. Ted Leadbitter (Hartlepool)
I appreciate the time spent by the hon. Member for Dorking (Mr. Wickenden) on the achievements of Felixstowe, but he is now discussing matters about which he must be frank with the House. Does the hon. Gentleman support the Bill or not? Does he support the aid to London and Merseyside or not?
§ Mr. Wickenden
I do not. If the Opposition forced a vote against the Second Reading, I should be in a difficulty. However, since I have such a direct and substantial financial interest, it would be improper for me to vote, if it came to a vote. If I had to choose, I should vote against the Bill simply because it offends every principle I hold.
I hoped that the hon. Member for Newham, South (Mr. Spearing) would be called to speak before me, because I understand that he intends to discuss ship repair yards in the port of London. The hon. Gentleman is more competent than Ito deal with that subject, but he has asked me to observe whether there would be a requirement for an efficient ship repair yard within the port of London. My answer is, "Yes, there most certainly would be." My company, which owns 25 ships—repaired in a number of places, but mainly in Newcastle, Clydeside and in the northern ports of Europe—would welcome an efficient and 85 competitive ship repair yard within the port of London, provided of course that it was efficient and competitive. I am sad to say that in ship repairing and shipbuilding too often we are not competitive.
I do not wish to score a point, but I have looked at competitive tenders for work on my company's fleet. The tender from Britain is £12½ million. The lowest tender, from Holland, is £7½ million. One might consider subsidies and unfair competition, but one does not need to go as far as that. The answer lies in the time estimated to do the job. In the British yards it would take 320 days and in the Amsterdam yards 140 days. I do not know the reason. Perhaps it is lack of investment, bad working practices or rotten management. I do not know. What I do know, however, is that once again a valuable order will be lost to Britain which need not have been lost. If, in the hon. Gentleman's constituency, there is the prospect of creating an efficient and competitive ship repairing yard, my company will certainly welcome it, as I believe will every other shipping company based in Britain.
§ Mr. Donald Dewar (Glasgow, Garscadden)
I shall be brief, because I am, to some extent, an interloper, as I do not come from either Merseyside or London.
§ Mr. Dewar
I should like to say a few words about the general principles lying behind the Bill. They are of general importance. It is right that hon. Members should consider them even if they have no local or constituency interest to declare. I do not under-estimate the problems that have afflicted the ports that will benefit the reduction of debt that the Government are empowered to make by this legislation.
I take the point made by my hon. Friend the Member for Aberdeen, North (Mr. Hughes) when he said that he thought that there might be some representatives from other areas who would express anxiety about the manner in which the crisis was being isolated by the Government and how the ports of London and Liverpool were being examined as one specific case that required help and was distanced from the general problems of the ports industry.
I recall the proceedings on the Transport (Finance) Bill that dealt with London and Liverpool. Before this debate I took the trouble to read some of the speeches made on that Bill. The Minister, referring to the two ports concerned—I think it is arguable—said on 24 November 1981 thatthere was an immediate crisis of unique size and scale in these two ports and that in no other port was it the case that the only way of tackling those problems was by means of Government funding."—[Official Report, 24 November 1981; Vol. 13, c. 767.]In other words, the suggestion was that London and Liverpool had problems that were not seen in other ports and that they had therefore to be treated on a special basis. We should also be grateful for the Minister saying that he thought it wasunthinkable that the ports of London and Liverpool should simply have been left to go to the wall."—[Official Report, 24 November 1981; Vol. 13, c. 766.]I suppose that all Labour Members—I stress Labour Members—would take that view. I do not doubt the 86 sincerity of the speech by the hon. Member for Dorking (Mr. Wickenden). His remarks make clear that there would be a strong move for saying that ports that cannot make a go it should be left, in the Minister's phrase,to go to the wall".In the same debate the hon. Member for Wellingborough (Mr. Fry), whose remarks may be recalled by London Members, said thateverybody knows that the Port of London is dead, and the problem is that we have to pay the corpse millions of pounds of taxpayers' money because it will not go away. It is high time that the Government settled the Port of London problem, grasped the nettle and accepted that the port is finished."—[Official Report, 24 November 1981; Vol. 13. c. 814.]That is tough talking. It underlines the wisdom of saying that we, at least, on the Labour Benches are grateful for the fact that the Minister sees that a rescue operation is necessary. I do not wish to labour the point but this kind of rescue operation is getting unpleasantly near for a large number of other ports. The fact that a package has been put together for Liverpool and London consumption leads to certain strains. My hon. Friend the Member for Aberdeen, North described certain irritations in other parts of the country. We have also heard about Bristol.
I wish to draw the attention of the House to problems on the Clyde, one of the great traditional ports of this country. It is a major port and the only significant port on the west coast of Scotland. It has seen its trade and viability undermined over the years, partly by geography, partly by the general economic recession that has attacked everyone, and partly, almost, by the accident of economic happenings.
A dramatic example of this is a bit of bad news that comes from much good news. The North sea oil industry has greatly affected the Clyde Port Authority and its finances. Finnart, the great terminal that was built by BP in 1977–78, took in 12 million tonnes of oil. In 1981 it landed not one tonne. Although there has been a modest recovery since then, the significant revenue that came from that development we shall not see again for a long time.
As a Scot, I would be rather ungracious if I were churlish about the discovery of oil in the North sea, but it has had unexpected and unfortunate side effects in my port. I can give a number of other examples. For example, the granary was one of the great revenue earners for the Clyde Port Authority. This year, the whisky industry is buying more and more of its grain from the domestic market. This has rather sinister overtones for the financial stability of the Clyde Port Authority.
We all know about the general shipping problems, and I do not wish to weary the House with too many statistics. However, in 1976 there were about 10 companies and 13 services plying regularly out of the Clyde. Now we have a spanking new container terminal, but there is only one company using it, Hapag-Lloyd. We had, among others, Manchester Liners. We lost Sea Trains when it went to the wall, and the result has been a complete undermining of the revenue that had come to the port authority from the container terminal. It is horrible to think that 10 years or so ago there were over 2,000 shipping movements on the Clyde, but last year there were only 112. We have seen a collapse from about 1.6 million tonnes of general cargo to under 500,000 tonnes.
The problem is that there is little in the immediate future that gives us cause for hope or optimism. One of the great issues, rightly, of Scottish politics at the moment is 87 the future of the Ravenscraig steel strip mill. People rightly point out that this has an influence not only on the steel workers in Lanarkshire but on the jobs of people in many other parts of the country. For example, the ore from Ravencraig comes in at Hunterston, and provides revenue of about £1.5 million for the Clyde Port Authority. The Under-Secretary of State for Transport will not know this, and I do not criticise him for that, but Ministers in the Scottish Office will know that if Ravenscraig goes to the wall—and there are still worrying question marks as Mr. MacGregor runs amok across the steel industry—one of the inevitable casualties will be the Clyde Port Authority because it cannot stand the loss of that income that it enjoys at the moment.
The employment results of the picture that I am painting have been devastating in the docks industry. Two years ago there were more than 550 registered dock workers on the Clyde, but at the moment there are only 130. The Clyde Port Authority, for reasons that I can understand but deeply regret, is looking for a further reduction of 40, which will reduce the number to only 90, an extraordinarily low figure given the position that the port once held in the economic life of Scotland.
If we are talking about the unique crisis in London and Liverpool, we should remember that, despite good housekeeping, a great deal of flexibility and the remarkable co-operation of employees in what is happening to their jobs and prospects, the Clyde Port Authority is making substantial losses. In 1979 there was a surplus of £2.5 million. In 1981 there was a loss of £870,000. Because of the efforts that have been made, that figure will probably be reduced to £400,000, but we have not yet seen the final figures. However, there will be a substantial loss. There are many storm signals on the horizon for the port and for the Clyde generally.
The problem worries every one of us. I can remember, and I am not yet of pension age, when one looked around the Clyde and it was self-evidently a busy port. There is almost an eerie feeling now, crossing the bridges in the centre of Glasgow, because suddenly one thinks that those days are back again. If one looks down the Clyde, the quays are lined with ships, but they are ships that are laid up and parked, riding out, possibly unsuccessfully, the appalling recession, particularly in the bulk tanker and bulk carrier trade. There is almost nothing happening in shipping movements. The irritation to which my hon. Friend the Member for Aberdeen, North referred is shared not just because we are worried by the Government saying "Here is a rescue package for two ports. For the rest, the devil must take the hindmost." Apart from the general economic implications of that policy, there are also real worries and tensions for individuals who are caught up in the situation. I do not want to embarrass an individual constituent by mentioning his name, but one of my constituents, who I know extremely well and who has been helpful and supportive to me as a constituency Member of Parliament, has just been made redundant by the Clyde port authority after 23 years' service. He is a clerk, not a registered dock worker, and that is one of the problems. The result is that near to the age of 50 his job prospects in the present economic climate of the west of Scotland must be very doubtful. I do not want to depress him by putting it more strongly. I think that he is realistic about it.
88 The relevance of the scheme is that if that man had been made redundant in exactly the same job in Merseyside, for example, because of the rescue package which has been put together he would have been treated as a registered dock worker for severance terms and would have got the £22,500 which is on offer at the moment. He will not get that because he is on the Clyde and is treated as not being in the official scheme as a registered dock worker. As I understand it, though my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) will correct me if I am wrong, there is a considerable differential in Glasgow which would not exist if it was in Merseyside. I have been told that by a number of people who are engaged in the docks industry.
Even supposing, for the sake of argument, that that rumour cannot be substantiated, the very fact that the rumour is rife and that we have this kind of tension and difficulty underlines the problems of taking a port scheme of the kind that we are discussing and looking at it in isolation.
In the Second Reading debate on the Transport (Finance) Bill, the Minister told the House:The Clyde has reserves. It is not faced with a threat to cease trading."—[Official Report, 24 November 1981; Vol. 13, c. 838.]Technically, that is probably true. I am not suggesting that the Clyde Port Authority will go bankrupt in three months or even in two years. But we have seen its trade and its level of activity quietly subsiding and running down to the point where it is in an extremely dangerous state of health.
We see a great city and port being left a mere shadow so insubstantial as almost to have no reality left.
It would be unthinkable, to quote the words used about London and Liverpool, if at some future date the Clyde no longer operated as a port and we had no major port facilities on the west coast of Scotland. I put it down as a marker. It is very important that we bear in mind, while not being unsympathetic to London and Liverpool and while welcoming what has been done to help them, that this is not the end of the story. Other ports whose localities are equally significant have an equally important part to play in our economic regeneration and recovery. We must not leave them unaided and unmourned if the hard times continue and intensify, as some of us fear they will.
§ Mr. Nigel Spearing (Newham, South)
Those of us in other parts of the country will understand the dilemmas of our Scottish friends, particularly as the further north and west one goes, the further one goes from the world terminals of the north-west European seaboard.
I commend parts of the speech of the hon. Member for Dorking (Mr. Wickenden). His views on the ideas of workpeople would obtain the wholehearted appreciation of Labour Members. I agree with him about corporate plans; they can be paper monstrosities. Those that were produced to satisfy the whims of Whitehall or the mandates of the Ministers by the Port of London Authority were particularly pie in the sky. I have played my part in criticising what I thought were not very helpful documents.
When we vote money we have a right to scrutinise. Tonight I want to consider some aspects, and one in particular, of the activities of the Port of London Authority. I find myself in a curiously anomalous position. Normally Labour Members approve public enterprise, 89 public bodies and the public servants who serve those bodies, and are somewhat critical of some aspects of private enterprise. Here I find myself in exactly the opposite position, championing two private enterprise firms in my constituency—one in particular, which I shall mention in a moment—and strongly criticising the Port of London Authority, which is wholly accountable to the Minister. If what I say proves logical, coherent and correct, I hope that the Minister will respond with alacrity, if not now, certainly in Committee, because it is his Government who champion private enterprise and who see quangos as animals to be cut down and put in place. The PLA should not be cut down; it should be run properly and well.
As my hon. Friend the Member for Aberdeen, North (Mr. Hughes) said, this is the fourth time round the course. In May 1980, we had the Port of London (Financial Assistance) Bill, in March 1981 we had the Ports (Financial Assistance) Bill, and last year we had the Transport (Finance) Bill, as mentioned by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar). On each occasion, I said that we should be round again and calling for Select Committees. It has been clear from Ministers' speeches and the terms of the Bill that the Government have not got to the root of the problem in London. Previous Ministers have refused a public inquiry. They have even refused an amendment in the Port of London (Finance) Bill for the PLA to consult local authorities about some of its activities.
The Government have said that the PLA needs to cut its manpower to achieve viability. Indeed, the long title of the 1981 Bill had that assumption built in—facile and foolish as we said that it was. There are many other factors for success. We have said in all these debates that one can cut manpower as much as one wants, even to the point of extinction, but that there will still be a capital debt. We said that three years ago, and here we are—capital debt going down.
It was said in a letter to my hon. Friend that the reduction in PLA interest this year will be £6 million, which will just bring it into the black in this first year on its own, 1983. So it is only by means of this Bill that the PLA will go into profit of perhaps £2 million. The Government have now done exactly what we said had to happen—instituted some form of capital reconstruction.
However, there is still the question of continental competition, the Touche Ross factor—which I shall not explain, because informed people know what it is—and the possible effect of the grid. I do not know whether the grid operates on an international basis as well as a national basis, but I suspect that it does. If it does, it will bring the extinction of certain British ports even nearer than otherwise would be the case.
The final factor is the quality of management. Even if all these factors were controlled and put into place, would the management be up to it? I am not sure that I can say yes in the case of the PLA.
I do not suggest that the royal docks should remain open to handle general cargo. The days of the royal docks, Liverpool and Glasgow as ports as we used to know them, have gone. However, there are some important aspects of the way in which the authority has dealt with the problem of the royal docks. The royal docks cover an area of about 500 acres. They are as big as Hyde park and Kensington gardens put together and are filled with buildings, workshops, warehouses, welfare centres, three dry docks 90 and an 800 ft lock, taking ships drawing up to 40 ft if necessary. They are being let by the PLA to small firms on short leases—all sorts of people doing all sorts of work. At least 680 people work in the royal docks, but their activities have nothing to do with the water. They are not allowed to use the water. The PLA restricts them from using the water even though it takes their money for the rental of the workshops, offices and yards where they store containers and so on.
Ten firms would like to use the water, but they cannot. There has long been a suspicion in east London that the PLA has deliberately run down the royal docks and that the structure of charging has discouraged their use. It has been difficult to pin down any evidence of that, but I wish to draw to the attention of the House some evidence that I have from one firm that got in touch with me some years ago. That firm had to move out of the Millwall docks and could not get accommodation in the royal docks even though the warehouses were there ready to let. I persuaded the PLA to give that firm accommodation. It is a successful firm run by a Mr. Ralph Hilton whose activities would gladden the Prime Minister's heart. It was given warehousing on the south side of the George V dock as a groupage undertaking. When he took me round, Mr. Hilton explained that the company was able to provide the customer with a combination of services that could not be obtained elsewhere and 1: shall not disbelieve him. So successful was the firm that it found itself short of space. More than that, it wisely decided that it would be a good idea to use the dock. The company was on the south side of the George V dock—the last dock to be built in London other than the Tilbury extension.
The company applied to the PLA and negotiations continued for over a year. The PLA would not allow the company to bring a lighter, a coaster, or a ship of any sort into that dock. I got in touch with the PLA, which was supposed to be interested in keeping the dock going. This was long before it was decided to take out general cargo. When I asked why, I was told that there was some labour problem. It tried to fob me off with an explanation that it was something to do with the unions. Indeed, in a previous debate on this topic I was sufficiently ill-advised to say that there was some problem with labour. However, when I went to the unions, they said that they would like to see registered men with Mr. Hilton. In the end, after a year's negotiations, the PLA offered Mr. Hilton an agreement. I want to read some of the terms of that agreement because they show the way that this public authority goes about its business.
The contract is prefaced by the words:These terms will be supplemented by such other terms and conditions as the PLA's Solicitor may require".Any business man signing such a contract would need to be very careful indeed. I hope that the hon. Member for Dorking will confirm that. It is an open invitation for conditions to be changed in any way whatever. That is not a good way to go about business. The agreement also says:The licence will be granted for a period of 6 months and will be subject to termination at any time by either party giving to the other one month's notice in writing.Is it likely that a person would contract for lighters, for ships, and make an arrangement with a shipping company when the PLA is able to give a month's notice? That is what it did to Hilton Amalgamated Transport Ltd.
Condition 5 states: 91The Company's activities will be restricted to import and export cargo which is either new or returned traffic that has left the Thames for at least a minimum period of 3 months".That is for a groupage depot. How can a contractor know what are in boxes that are going inside boxes in his yard? That was in a letter from the PLA dated 20 August 1981. It was quite determined not to let ships into the royal docks to reach a flourishing and expanding business.
Hon. Members know that east London has the river as a centrepiece and that that part of our city is being rebuilt. The Government have created the London Docklands Development Corporation for that purpose. It is not a very good agency for doing that, but it is a statutory body. The London borough of Newham contains half the area of docklands and the GLC has a strategic planning function. These docks recently had many uses. There were two scrap iron depots exporting large quantities of scrap iron, although the PLA said that they did not come up to forecast. An application is pending for an airport that might take up some of the quay space. It has yet to be determined whether that is compatible with dock uses. A possibility exists for recreation. If the PLA had been more co-operative, recreational facilities for young people in those docks could have been created long ago.
I shall not burden the Minister with a summary of a paper that I have written on this topic called "The Royal Group of Docks Study". It contains appendages to a report produced by the royal docks study group for the London Docklands Development Corporation. I am not in favour of all the report's contents, but the report was produced for further discussion to examine how the future use of the docklands area would benefit London and especially east London. Just before that report was published last October the PLA announced that it was closing water access to the dock. It said that it was losing up to £0.5 million a year.
The PLA had, at the suggestion of one of its tenants, taken ships to lay up in the docks, as was happening in Glasgow. Nine or 10 medium-sized ships were providing an income for those docks. The PLA had taken money from a British shipowner for charges to 31 March this year. It wrote quit notices to all the owners. The attitude was not "turn down", but "turn out". I do not know of a port authority these days that can afford to do that with any shipowners. The position was worse than that. Half of the ships were owned by Greeks. The Greek mercantile marine is twice the size of the British mercantile marine. The British mercantile marine, especially general cargo vessels, is being decimated. It is in a serious condition. The Greeks are twice as important as the British in world shipping. As most Greek ships are chartered in London, most Greek shipowners either have agents or their own offices in London. I see that the hon. Member for Dorking agrees with me. The Port of London Authority has been telling Greek shipowners to take their laid-up ships out of the docks at three months' notice. Those ships were put there on the expectation that the would stay there until the recession ends. They have come from all over Europe. One ship came from Alexandria to be put into that dock.
The PLA told one of the biggest shipowners in this country to get out too. As a result of that inept move a meeting was held in the House in November 1982 between myself as the constituency Member of Parliament, representatives of the shipowners, the London borough of Newham and a ship repair firm.
92 I am sorry to say that the exchanges were heated and one senior member of the PLA management spoke to those important people, including marine superintendents, as though he were in the 19th century. That is not good enough. Fortunately, however, an agreement was patched up and those ships will stay there, but only until 31 December 1983. However, although it would be advantageous to lay up ships in the royal docks and although there is plenty of room, I cannot see many shipowners using them, because they may be turned out on 31 December 1983. Therefore, the PLA may be losing some revenue on that account.
What about the scrap iron exports? Those companies were told to get out by 31 March 1983. Nevertheless, last year a ship left the dock with 20,000 tonnes of scrap iron on board. I saw another ship this morning with 16,000 tonnes. The PLA cannot be losing money over that. Indeed, the claim to be losing £500,000 was never substantiated. We asked the PLA officials at the meeting in the House on 19 November to substantiate it, and they could not. Nevertheless, a public statement had been made to that effect. Of course, we knew how much income was being obtained and we had some idea of the out-of-pocket expense of pumping water into the dock and manning the lock, as distinct from the expenses of the dock as a whole, which would continue whether or not there was water access. That great public authority was unable to substantiate its claim.
The history of ship repair is even worse. In the past two or three years the history of ship repair on the Thames has been very sad. On 21 December 1979 the House devoted a whole hour to an Adjournment debate of mine on this topic. I shall not weary the House with its contents. However, ship repair is based on the system of plunder, and has been for 1,000 years. That is understandable: it is human nature. Apart from when there is a recession, a shipowner wants his ship quickly so that it can carry its cargo. Therefore, he is prepared to pay what it will pay him to pay and not what the job costs. Ship repair on the Thames, with its great tradition of cargo ships, has certainly been carried out on that basis. Certain practices were built up on both sides that were not particularly wholesome.
However, for all practical purposes the ship repair industry on the Thames disappeared for nearly a year, until the PLA woke up and at last enabled one firm to go into Tilbury docks. The PLA also allowed another firm into the royal docks. I refer to Thames Ship Repair Services, a new firm formed by an ex-marine superintendent of one of the large shipping lines, Mr. Cochran, who knew his job and had been through it from top to bottom. In modern British industry, that is an important principle. A few people in the City should learn that, unless someone has been through an industry from top to bottom, he will not necessarily know much about the job. However, this chap recruited men whom he claimed could—I do not say that it is true—through their experience, bring new insights and a new method of working to ship repair in Britain.
I wrote to the Secretary of State for the Environment, setting out some of the ways in which that firm satisfied the Government's requirements. It was a small business that wished to start up. It would employ men in an area of high unemployment. It had some guarantee or other from the Department of Trade and was doing all the things that Ministers tell us time and again firms should do. So Mr. Cochran went to the PLA in March last year and said 93 "Please may I use the dry dock? I should like to tender for some ship repairs, particularly Sealink and European Ferries. I believe I can do a better job than the people on the continent." I am not saying that he could, but he believed that he could. After what I have said already, the House will not be surprised to learn that the PLA kept him waiting for nearly a year before a contract was offered.
The PLA's first excuse was that there had been some problem with the unions—some involvement with labour. Mr. Cochran tried to sort out the problem and it took three months. He came to me in September last year complaining about the lackadaisical approach of the PLA, because he was wishing to put in some tenders. I got in touch with the PLA and tried to find out what was going on, but in October the PLA announced the closure of the dock, so that the dry dock was then not available.
After a year I suggested to the PLA that it might like to reconsider giving Mr. Cochran the dry dock. The PLA agreed and sent him a draft contract, which I have here. It put up the lock fees by 700 per cent. for the sort of vessel that he would need. The union difficulty had disappeared but instead the PLA wished to charge him £25,000 a year for two men to be standing by between 7 am and 3 pm. The work on the crane and on the dry dock was not to be done by PLA men but by Mr. Cochran's men, but there was an agreement with PLA engineers—understandably with the unions' agreement—that the maintenance was to be done by PLA men, so two had to be standing by, and £25,000 was the charge for a year. There was also £500 a day for each ship over 200ft in length. I am not sure whether that was the market price, but the point is that if he had not used the dock no one would have used it, and £500 a day, even for the PLA, is not to be sniffed at.
Even if the terms had been better, the coup de grace—I remind the House that in ship repair a quick turn-round is needed—is in the words:Serving a Requirement Notice not less than 2 weeks before a vessel is due to leave or enter the Royal Docks.Two hours might be reasonable, or perhaps even two days, but certainly not two weeks. How could a ship repair firm go to one of the firms of the hon. Member for Dorking and say "We are sorry but we cannot guarantee to get a ship in without two weeks' notice"? It is ludicrous in the extreme. Either the PLA does not know the ship repair industry, which it is its duty to know, or that draft agreement was meant to be impossible—and impossible it was.
Mr. Ian Cochran, having battled with the PLA for a year, has this very day moved his workshops and his men—admittedly not many at the moment—to the royal docks at Chatham, where he has a much larger workshop and more dry docks, hired from the Property Services Agency. Good luck to him. What annoys me is that my constituency, with a long history of ship repair, of apprenticeships and of employment, has lost that work. The three dry docks in the area could become a good industrial centre, but the chances of revivifying them have gone, not because there is not a man willing to take them on or because he did not want to stay but because the PLA has made it impossible for him to do so.
The chief executive of the London borough of Newham wrote to the chief executive of the PLA on 28 December, before the decision was made. He said:Our fear indeed is that your Authority's attitude, if it has been correctly reported, might well indicate a general intention on your part to restrict water access to the Royals which are still capable of making a valuable contribution to employment in the 94 area in spite of the discontinuance of your own cargo operations. I should be glad to have an assurance that you will take whatever action is necessary to enable Thames Ship Repair Services to carry out activities in accordance with the agreement they signed with you last April, including the use of the dry dock, and that pending longer term decisions on the future of the Royal Docks as a whole, you will do nothing which would interfere with or restrict job generating activities within the area.The PLA has the cheek and audacity to say that it is not closing options. It has said, "Oh no, we can open up the docks and the gates if there is a need to do so."
The Minister has a special responsibility in this respect. As a Member of Parliament, I have dealt with the PLA for nine years. I knew of its activities both as a London Member of Parliament and as a member of the public for some years before that. I wish that I could say something good about the PLA but I find it difficult to do so and I have yet to find someone to counter my view.
I think that the Minister should put the following questions to the PLA. Does it wish to close the options or did it decide unilaterally to cut off water access'? Why, having been in discussion with the borough of Newham and the London Docklands Development Corporation to produce a report about its future, did it pre-empt that future itself? Can it provide detailed figures to sustain its claim that it had would have saved up to £500,000 last October if it has closed the dock? Why did the PLA refuse an offer from the GLC to guarantee the loss? To what GLC proposal did it take exception? I omitted to mention, Mr. Deputy Speaker, that the GLC offered to guarantee any losses that the PLA might make.
Why did not the PLA permit Hilton Amalgamated Transport Ltd. to develop waterborne traffic? Why did it make impossible conditions? Why did it say that union problems held up this arrangement and those of Thames Ship Repair Services when none, as it has emerged, existed? Why, after an initial helpful response to Thames Ship Repair Services in March 1982, did it make it impossible for the company to operate in any other dock? Why is it discouraging all water uses of the royal docks and deliberately foregoing revenue by turning out scrap dealers? Will it now extend the deadline for lay-up booths from 31 December 1983, and, if not, why not?
I have been impelled to speak plainly and with force about the PLA. As I said, I have watched the authority for some time. Unfortunately, I have met no one who has a good word to say for it. Until now, it has been difficult to bring to public attention a matter so specific as to demonstrate the widespread criticism and lack of public confidence in this important public body in east London. Tonight I have presented a case which I believe to be accurate and, if anything, an underestimation. Of course the royal docks can never be what they were 20 or even 10 years ago—sea trade and industry have moved on—but they can be an asset to east London, possibly for groupage activity, and for bulk terminals, particularly as firms want water access today because of increasing transport costs. Unless there is an indication of willingness on the pact of the PLA, who will apply and take an interest?
The PLA has scrapped negotiations with the London borough of Newham, the London Docklands Development Corporation and the GLC, and has snapped its fingers at them by taking its unilateral decision. It has snapped its fingers at the people of Newham and the dockland areas. It has deliberately and wantonly stopped the continuation of a skill that has been traditional on the Thames for hundreds of years. It has prevented the provision of the 95 facilities that are required and the employment that could be gained. I call that civic vandalism, because vandalism is damage for which there is no apparent reason.
Will the Minister ask the PLA those questions? There is a responsibility on him and on everyone else to ensure that we obtain answers from that body. The Minister has the responsibility—we all have some trusteeship. The PLA should persuade us that it is a fit body to run the port of London—let it try that, if it can.
Mr. Eric S. Heifer (Liverpool, Walton)
I am replying to the debate on behalf of the Opposition because we felt that someone from Merseyside should put in his oar from the Front Bench. We have not done that for some time. That is not to be critical of my colleagues who have previously argued the case. It is a slight refresher to the scene.
It has been an interesting debate, and a number of important points have been made. The Under-Secretary of State pointed out that the proposals for £22,500 severance pay for those with more than 18 years' service would apply to all registered dock workers, irrespective of whether they were in the port of Liverpool or the port of London. That is an important statement. One of the great arguments has been that the payments agreed for Liverpool and London had led to difficulties in other ports that had surplus labour. Clearly the statement should help to relieve that problem.
Apart from that national declaration by the Government, we see no signs of any co-ordinated, cohesive policy on ports. The hon. Member for Dorking (Mr. Wickenden) summed up well the basic policies of the Conservative party—that ports should be prepared to compete with each other. That is the only philosophy of the Government. It does not matter what happens to some ports in various parts of the country, provided the principle of competition is there. If they are geographically in a difficult position, that is too bad. If they have to go to the wall, so be it. That is the Government's basic attitude. The Opposition do not accept it. It is deplorable. It is not what we expect from a Government trying to come to grips with the real problems in the ports.
The hon. Member for Liverpool, Garston (Mr. Thornton) referred to the years that he worked in the port of Liverpool. Although he is a Conservative Member and I am a Labour Member, we have that in common. I worked there for many years, not as a docker, but as a maintenance worker, for the port authority and for ship repairing firms and other firms along the line of the docks. I view the docks as someone who has earned his living in them. When I return to Liverpool, my home town, and see the docks, I realise that only 19 years ago, when I entered the House, the docks were thriving from the Dingle to Seaforth and along the stretch on the other side of the river. There is now mile after mile of empty docks. There is no movement of shipping. It is a sad scene. I do not think that anyone can understand the emotions of those who have been much involved in the work of the docks.
The dock workers were not a bunch of layabouts. They were not trying to put one over on the employers. They worked extremely hard. I used to see the old dockers stacking steel railway lines on a ship. I realised that if something went wrong and the line broke, the result would 96 be a tremendous whip-back and they would be dead in seconds if the line hit them. That is only one example of the sort of accident that could happen to dock workers.
We must understand why the problem arose at the ports of London, Glasgow, Bristol and on Merseyside. We must understand why the recession has hit these ports in particular. My hon. Friend the Member for Aberdeen, North (Mr. Hughes) observed that some ports were doing much better than others. There is nothing magical about this. For example, the dock workers in Felixstowe do not form a more intelligent work force than workers in other ports. I do not believe that all the Felixstowe workers have an IQ that is 600 per cent. higher than that of any of the workers in Southampton, Liverpool, Glasgow or London. Felixstowe happens to be the port that is in the best postion for European Community trade.
§ Mr. Heffer
I shall develop one or two arguments before I give way to the hon. Member for Dorking. I usually give way readily, but I should prefer not to do so at this moment.
An interesting article in the January issue of Management Today stated:All the large conventional ports of the developed world had serious problems in managing this transition"—the transition from the old type of docking to containerisation and modern technological developments—but nowhere have they been worse than in Liverpool. The Merseyside troubles have been exacerbated both by the decline in the economic hinterland of the industrial North and by the shift in trade away from the Commonwealth towards the EEC.The article continued:Liverpool does now have a large container terminal—1,100 metres of quay, five Panamax gantries and 48 hectares of land. Built by the Mersey Docks and Harbour Company to service deep-sea trade at a cost of some £50 million, it was officially opened in 1973 as part of the Royal Seaforth Dock complex, which also includes a grain terminal, timber berths and a meat berth, plus provision for substantial expansion in the unlikely event that the need should ever arise. However, the deep-sea sector has shown little movement because of the increasing orientation of trade in the 1970s towards Europe.I can give another example about Liverpool in an article in The Times of Friday 21 January:Although London has been in the headlines more, Liverpool has probably been the worst sufferer from the revolution in Britain's port industry.It has been hit cumulatively by the container revolution, which has virtually emptied the Victorian dock systems of the cargo liners that filled them 20 years ago; by the shift to big ships that has deprived the port of much of the oil trade for which substantial new investment was provided in the early post-war years; by the decline in Britain's old-established heavy industries for which Liverpool was the natural outlet; and by the shift in trading patterns from the wider world to Europe and the accompanying shift of port traffic from Britain's west to east coast.That does not apply solely to Liverpool—the point I was making earlier. It applies to Bristol, Glasgow, and all the west coast ports, including the south Wales ports. That is the reason. It is not the magic of Felixstowe. I do not deny that the hon. Member for Dorking may have the best management in the world in Felixstowe. He may have a highly intelligent labour force, but I do not believe that they are more intelligent than elsewhere. I accept that, from the word go, they accepted the principle of receiving a weekly wage, not the old system employed in the 97 traditional large ports before the National Dock Labour Board scheme, when skilled workers were treated like cattle.
§ Mr. Wickenden
The hon. Gentleman is making a thoughtful speech. If geographical position is the only reason for the switch in trade, why has Tilbury not done better? It is the best situated port in Britain for trade with Europe.
§ Mr. Heffer
Tilbury has done much better lately and is improving. The hon. Gentleman reminds me that I had some other figures from the Department of Transport—British Ports Association Port Statistics 1980. The figures are two years old. In 1970 the volume of trade through Liverpool was 29,314,000 tonnes. In 1980 it had reduced to 12,968,000 tonnes—a reduction of 52.4 per cent. The figures for the port of Manchester had declined by 31.3 per cent. and Clyde by 62 per cent. Felixstowe had increased by 58.3 per cent., Ipswich by 33.4 per cent. and Harwich by 24.6 per cent. London had reduced by 30.2 per cent., which was not as much as Liverpool, Manchester or the Clyde. That makes my point.
Once containerisation had been introduced, container ports had to be near the river estuary, not inland. Liverpool, Manchester and London suffered considerably because their ports tended to be inland. Therefore, container handling facilities had to be built on the point of the estuary. Tilbury is on the estuary and is now beginning to regain its work.
§ Mr. John Prescott (Kingston upon Hull, East)
Is my hon. Friend aware that trade is being transferred from the Clyde to Felixstowe because shippers are prepared to offer the same price to take goods to Felixstowe as to the Clyde? That is due to the cross-subsidisation of the conference lines, which affects traffic flows.
§ Mr. Heffer
I am grateful for that information, and I am sure that there is much more such information which would underline the point.
It is important to examine the situation on Merseyside. A document distributed by the Mersey Docks and Harbour Company in January this year stated:The Company has been hit due to: (i) the deterioration in South America trade because of the Falklands Islands war.Many of us pointed out that Liverpool could be hit hard as a result of the Falklands war. The document goes on:(ii) the imposition of import controls by the Nigerian, Mexican and Brazilian Governments. (iii) a deterioration in Chinese traffic. (iv) the continued depressed state of the U.K. economy having an overall effect on imports and exports.I assure the House that those who run the Mersey Docks and Harbour Company are not rip-roaring revolutionaries or, as far as I know, even members of the Labour party, though perhaps a member of the board appointed from the trade union movement may be a member of my party. Who is responsible for the depressed state of the United Kingdom economy? It is undoubtedly the Government, who are not prepared to introduce policies that would put our people back to work and, in the process, help to put some of our ports back into effective operation.
However, we on Merseyside must be even more concerned about what is happening in the Common Market. I have taken a delegation of dockers' representatives to see the Minister and we have been given some fairly good assurances, but, if the Government were silly enough to agree to the development of Falmouth as 98 a container port, that might finish the port of Liverpool for all time. I am pleased to see the Under-Secretary of State for Transport, the hon. Member for Wallasey (Mrs. Chalker), shaking her head, but I am not sure that: that represents a commitment on behalf of the Government.
If Labour's policy of withdrawing from the Common Market is implemented after the general election, we shall be able to begin the process of rebuilding our trade on a world scale. The hon. Member for Dorking said that we had to be competitive because we were competing with international trade. That is not correct. We are not competing with international trade. Trade is increasingly being moved to the Common Market. If we get back to competing for international trade, I am sure that. although Merseyside, Glasgow, Bristol and other ports which were built up on international trade can never be the same as they used to be, their future will be much brighter than their recent past has been.
I do not know whether 'we can finish this debate by 10 o'clock, but the Minister will be pleased if we can. I shall therefore conclude my speech by saying what the Labour party will do when it gets back to office. This Government's policies of encouraging port to compete against port and allowing the ports on the west coast to run down must be stopped. Our ports need national planning. We need a national ports authority that will clearly take over and publicly own all the ports and make certain that we get development, where it is genuinely required, on the basis of this country turning towards world trade. That is the basic policy that the Labour party intends to follow when it gets back into office. That is the only hope for the ports and the workers in the industry. We can develop ship repair facilities, for instance, only on the basis of publicly owned ports with a clear commitment to ensure that there are proper ship repair facilities in the ports where ship repairing is required.
In Birkenhead the development board is considering whether the old western docks should be used for a new ship repairing yard or for housing. I hope that the docks will be used for a new ship repairing yard to employ ship repair workers again. It is a shame that in London, which had a huge ship repair force, in Merseyside and elsewhere that section of the industry has been allowed to run down.
§ Mr. Heffer
I do not know whether there is or not, but we must ensure that employment is created. The best way to do that is to have a plan rather than the present hit or miss approach.
We shall not vote against the Bill, because it will be useful to workers in the ports of Liverpool and London, but we are not satisfied with the Government's approach to the problems of the ports. The Labour party is looking forward to the time when it can carry out its plans.
§ Mr. Eyre
In the early part of his speech, the hon. Member for Liverpool, Walton (Mr. Heffer) gave in greater detail the case which I had summarised about the shift in port business from the west coast to the east and south coasts. I agree with a number of the points that he made in that part of his speech, but the hon. Gentleman must not blindly refuse to understand the adverse effect on 99 our economy of the deepest recession in world trade since the 1920s. I appreciate the fact that the hon. Gentleman welcomed the arrangements which I announced for the increased severance pay scheme that will apply to all registered dock workers, in whatever port they work.
The debate has ranged wider than the subject of the Bill and I welcome that. Many questions have been asked. I might have to write to some hon. Members in reply although I shall refer to as many as possible in the limited time available. I shall make a general statement about the Government's policy in relation to the Port of London Authority, to the Mersey Docks and Harbour Company in particular and to the industry in general. The hon. Member for Aberdeen, North (Mr. Hughes) talked of resentment in other ports because of the help being given to the PLA and MDHC. Other ports have experienced difficulties. I noted what the hon. Member for Glasgow, Garcadden (Mr. Dewar) said about the Clyde port authority.
I understand the difficulties and I sympathise, but no ports experience problems and difficulties of the magnitude of those that brought London and Liverpool to the brink of bankruptcy two years ago. The financial help which the Government provided for the MDHC and PLA is aimed at enabling them to cope with their problems—primarily with their large manpower surpluses—and to return to profitability as quickly as possible. As I said earlier, we stopped paying grants to PLA and MDHC to cover operating losses last December. We have no intention of resuming those subsidies. My hon. Friend the Member for Dorking (Mr. Wickenden) will welcome the emphasis placed on that announcement.
The hon. Member for Walton referred to Falmouth. He and other hon. Members, including the hon. Member for Birkenhead (Mr. Field) brought a deputation to see me on that matter. No application from Falmouth Container Terminal Ltd. is before the Government at present. It is up to the company to present a fresh application, with additional evidence of traffic and finances, if it wishes. I explained that that was the position when the deputation came to see me. Any such application will be considered in the light of the evidence and other relevant considerations, including the effects of the development on Falmouth and other United Kingdom ports.
The hon. Member for Aberdeen, North referred to the financial situation of the PLA. Since that is so important to the Bill, I shall respond to what he said. Even after the substantial capital relief proposed in the Bill, the PLA' s debts will remain high in relation to net fixed assets. The alternative is to write off even more public money than the £48 million proposed. We cannot see the justification for that. It is up to the PLA to work itself into a position which will allow borrowing on the commercial market.
The PLA is improving its balance sheet, but the Government have made it clear that they will continue to provide new loan finance where it makes financial sense —where it will not create a longer term millstone for the PLA. The Government recognise that a £5 million overdraft and a zero cash balance at the start of 1983 necessitate careful money management by the PLA. Nevertheless, on the basis of the plans put to Ministers it should be possible for it to operate successfully within the limit. The Government cannot and should not do 100 everything. We have given the PLA a sound basis on which to achieve viability. It is for the management and work force to make the most of the opportunity.
The hon. Member for Walton asked a new question about employee shareholding in Associated British Ports. There has been other reference to employee shareholding schemes. It is true that the shares issued under the special scheme involving free shares are held by trustees. As required by the Finance Act 1978, as amended, those shares will be held by the trustees for an initial period of two years. During that time they may not be sold except in the case of death, the attainment of statutory pensionable age by the beneficiary or cessation of employment by reason of redundancy or disability. For the following five years, after the two-year period, the trustees will retain such shares unless the employee concerned wishes to sell or otherwise dispose of them. They will then be transferred to the employee concerned. While the shares are held in trust, the respective employees will be the beneficial owners and they will be entitled to receive dividends and—the main question I was asked—they will be able to direct the exercise of voting rights in those shares.
I should like now to deal with the points raised by the hon. Member for Bristol, North-East (Mr. Palmer). I understand and appreciate Bristol's difficulties. I do not think that its position, however, is comparable to that of either the PLA or the MDHC. Most of Bristol's debt relates to the Royal Portbury dock, as the hon. Gentleman acknowledged. The Government have always made it clear that financial responsibility for this project lies solely with the Bristol city council. More important, the Government's policy remains that ports should stand on their own feet and that assistance is being given to the ports of London and Liverpool only because of the exceptional scale and nature of the problem that they face and because, without it, both ports would have gone out of business. In both cases, the Government were the only possible source of help. That is not the case with Bristol.
§ Mr. Palmer
What the hon. Gentleman is telling the ratepayers of Bristol is that they must just go on paying and paying for ever.
§ Mr. Eyre
The hon. Gentleman described the port as a municipal enterprise. It is true that that was its concept. Hon. Members representing Bristol, together with representatives of Bristol city council, put recently to my noble Friend Lord Bellwin proposals for different treatment of the city's expenditure on docks in the calculation of its grant-related expenditure. My noble Friend undertook to have these ideas examined in the grants working group in relation to the 1984–85 rate support grant settlement but he could not promise Bristol that the outcome of this examination would necessarily be to its satisfaction. I am glad to pay tribute to the way in which the port of Bristol refuses to accept that there is nothing that it can do. Thanks to energetic management, its conventional cargo traffic in the current trading year has held up very well compared with the previous year, in spite of the recession. It is winning some new business and hopes to take advantage of the new special severance terms for registered dock workers which are on offer from today to help bring its labour force more closely in line with its requirements.
I would have liked to make a number of points about Merseyside. There has been mention of the possibility of 101 Liverpool city council sending a deputation to be joined by hon. Members. The request relates to a number of matters affecting a number of Government Departments. I have been in touch with ministerial colleagues. I shall shortly be inviting the council to come to discuss this range of matters with me. I look forward to seeing the hon. Member for Walton and possibly the hon. Member for Birkenhead (Mr. Field) on that occasion.
§ Mr. Field
Before the Minister concludes his comments on Merseyside, will he answer the question asked by his hon. Friend the Member for Ludlow (Mr. Cockeram)? Is the £36 million coming without strings, or are the Government using this substantial sum of money to change what can only be described as the stubborn attitude of the dock company towards bringing forward land for development?
§ Mr. Eyre
If the hon. Gentleman will permit me to go on, I was just coming to the point that he and my hon. Friend the Member for Ludlow (Mr. Cockeram) raised. The hon. Member for Birkenhead and my hon. Friend suggested that the MDHC had an incentive to hang on to its surplus land. The Government accept that surplus land should be put to good use, and we have set up the Merseyside Development Corporation to regenerate large parts of Merseyside suffering from dereliction. Much of the MDHC surplus land holdings has already been transferred to the development corporation. The 400 acres of former MDHC land now owned by the development corporation include virtually all the company's former holdings in the south docks area of Liverpool and substantial areas on the Birkenhead side of the river.
§ Mr. Cockeram
Will my hon. Friend answer the question asked by the hon. Member for Birkenhead (Mr. Field) and myself—if the MDHC was a willing seller, why is it procrastinating and causing the somewhat lengthy procedures of compulsory purchase orders to be undertaken? It is that which is causing stagnation of the land year after year.
§ Mr. Eyre
I was seeking to explain to my hon. Friend and to the hon. Member for Birkenhead what I understood to be the position regarding the major holdings of land on the Liverpool and Birkenhead sides of the river. Perhaps my hon. Friend is referring to smaller and move specific areas of land. As I understand it, there has been a transfer of large areas of the land to which I am referring, and therefore I assume that my hon. Friend must be referring to other and smaller pieces of land. If my hon. Friend will let me make inquiries about this, I shall write to him and to the hon. Member for Birkenhead in detail on this point so that they will be able to consider the matter and make any representations in detail that they wish to make.
My hon. Friend raised another point, about the headquarters of the MDHC. I understand that the consultant accountants studied the cost of the headquarters, considered the cost of the transfer to other premises and, with the company, decided against it, but that nevertheless there has been a change. I am told that part of the commodious premises to which my hon. Friend referred has been let. I hope that my hon. Friend will find encouraging the adjustments that I am told that the MDHC is making in the conduct of its business.
§ Mr. Field
I look forward to receiving the Under-Secretary's letter, as I am sure does the hon. Member for 102 Ludlow (Mr. Cockeram). However, will the Under-Secretary answer my straightforward question? Does the £36 million come with or without strings? Are the Government using substantial sums of money to change the attitudes of the port authorities?
§ Mr. Eyre
The hon. Gentleman is preventing me from referring to the points made by his hon. Friend the Member for Newham, South (Mr. Spearing). I should like to refer to many of the points made by the hon. Member about the land in or near Newham. However, he has a misunderstanding about the land in the royal docks. It would be better if, again, I wrote to the hon. Gentleman, and I would be pleased to take up his points and explain the misunderstanding.
This is a useful and straightforward Bill, and I commend it to the House.
§ Question put and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).
§ Mr. Spearing
On a point of order, Mr. Speaker. I seek your guidance. Is the Bill exempted business?