The subject which I intend to raise in the remainder of this afternoon is one of very great importance to Bristol and to the neighbourhood of Bristol.
I need hardly tell the House that the Port of Bristol is one of the most famous not only in this Kingdom but in the maritime world generally. It is an ancient trading port with a history which is nearly as long as that of London. In its modern version, concentrated principally upon Avonmouth, it is a flourishing commercial centre and remains one of the most outstanding ports of Western Europe.
It is an enterprise which is of great pride to the citizens of Bristol because it is a municipally-owned port. I suspect that it is probably the largest municipal trading undertaking still left in the country. It is financially sound. It has ample cash resources for development. There is no question of Bristol bringing any kind of begging bowl to Whitehall.
Nor does the management of the port lack ideas. In 1964, the Port of Bristol Authority submitted to the National Ports Council the ambitious Portbury scheme on the west side of the River Avon. It was a scheme ultimately for 40 extra berths at a total cost of some £27 million. The scheme was approved by the National Ports Council approximately a year later as meeting a national need for a third major liner port.
To the bitter disappointment of Bristol generally, in which I include commercial industrial and all shades of political opinion, under the powers which it possesses, the Ministry turned down the Portbury scheme. It was rejected on the very narrow argument that the industrial hinterland of Bristol as too small to sustain the development. I think that that was a singularly myopic view, and it is one which had no support as a commentary from anyone who understands Severn-side. Nor did that view have the support of the regional planning council. Severn-side does not exist in isolation. Since Roman times it has been a natural meeting place for land communications. In addition, it now has a river bridge into industrial South Wales, and the new motorways to London and to the Midlands will ultimately join just outside Bristol. Railway communications have been excellent for more than a century. The railway engineer Brunel saw to that
Following the rejection of the Portbury Scheme, the Bristol Port Authority, at the request of the Government—I emphasise that—submitted an alternative, more modest, development plan for Avonmouth, known as the West Dock Scheme, the total cost of which is proposed to be £15 million. Unfortunately, once again the familiar pattern of administrative delay has reasserted itself in this matter. The National Ports Council favoured Portbury, and I am sure willingly approves the much more modest West Dock Scheme. In fact, for the benefit of my hon. Friend, I can quote the view of the National Ports Council. It said:
Without development in one form or another of Avonmouth, there will be slow strangulation of this vigorous, bustling, and enterprising port.
As I say, once again the familiar pattern of delay has reasserted itself, and the Ministry has intervened with lengthy correspondence and time-consuming inquiries.
Its preoccupation is with discounted cash flow accountancy techniques in relation to the expected capital return on what is fundamentally a public utility, and not an industrial enterprise in the ordinary sense. I know that some of my right hon. Friends are much dazzled by these sophisticated economic techniques for deciding the merits of public investment. I am not so smitten. I think that it is a highly subjective business, the truth is that economics is always a black art, wearing only the borrowed clothes of science, it is not scientific in itself. Very often with investments of this kind, provided the proposed scheme is imaginative in the first place, that there is plenty of vision, and that there is skill in management and afterwards hard work, results usually flow.
In any case—and I do not think that my hon. Friend will be able to deny this—the Port of Bristol's own experts have had no difficulty in knocking many holes in the Ministry's calculations. Indeed, at one stage errors were found in the Ministry's calculations; the sums had to be done again for the expected rate of investment return.
A supporting view to mine, expressing great doubt about the economic outlook, of the Ministry to this West Dock development was given by the Economic Planning Council in its comments on he Government's reply to the Tress proposals for the West of England. It said hat it was sceptical of the calculations which led to this reported Government conclusion and added that
such efforts may assist decision-making, but they have not yet attained the reliability, if they ever will, which entitles them to determine the decision.
In other words, the planning council, with many expert resources at its command, rejects some of these narrow calculations made by the Ministry on the estimated rate of return for the West Dock. The Port of Bristol Authority, I know, is grateful to the Planning Council for the fine support that it has given. But one must be blunt. As a convinced supporter of the Government I say that in these days in the West of England the difficulty is that the views of the Planning Council do not apparently influence the Government greatly in any case. Everything the Council puts up is rejected, or is put away for the distant future.
I have it on good authority that the Port of Bristol Authority thinks that it no longer has direct access to the Ministry of Transport. It has to go via the Planning Council—and the Planning Council, in turn, as I say, has little authority. I ask my hon. Friend whether it is time that a bar is placed against the Port Authority of Bristol in the matter of direct access and, if so, whether a similar bar is placed against the ports of Southampton, London and Liverpool. I should doubt it.
Four years have passed since Bristol first put forward its plan for the further development of its docks. Bristol is anxious and ready to expand its docks, but time is passing. Four years in which to argue, discuss and inquire is much too long a period. Bristol has been kept standing on the doorstep while other ports have pressed ahead with schemes, with the consent of the Ministry. One thing that Bristol has the right to ask for is parity of opportunity with the other great ports of the land.
Many people in Bristol are beginning to feel that the Ministry long ago weighted the scales against their port. In spite of all that has been said by the National Ports Council and the Regional Planning Council in support of Bristol docks development, the Ministry, after apparently first deciding what its conclusion would be, has spent the time since then looking for arguments.
I want to ask my hon. Friend some questions. First, when can Bristol expect a decision, one way or the other, in the matter of the West Dock Scheme? Remember this scheme was invited by the Ministry itself in substitution for Portbury—a much larger scheme which was rejected by the Ministry.
Secondly, does my hon. Friend appreciate that if the West Dock Scheme is to be turned down in the way that Portbury was turned down—and there is much pessimism in Bristol on this point—any suggestion of some Utopian scheme instead, a third scheme which Bristol is expected to consider favourably, for an industrial estate on the North Somerset coast, which is to be combined with minor docks arrangements—would be no substitute for the schemes which the Port Authority itself has put up already, being anxious to continue with the profitability and expansion of its enterprise.
Third, does he appreciate that Bristol is as much a commercial as an industrial centre, that the port is the key to Bristol's commercial prosperity and that, if the Ministry's barriers to expansion and modernisation are maintained, that prosperity cannot indefinitely continue. There are many great commercial undertakings in Bristol, but, if port facilities are not strengthened, they will inevitably move away. What then will be the port's future? If it cannot evolve and expand, under competitive modern conditions it can face only a slow but sure decline. I should be grateful for answers to these important questions.
I am grateful to my hon. Friend the Member for Bristol, Central (Mr. Palmer) for raising this subject, because it allows me to clear away some misapprehensions. Although I come from far to the north of Bristol, I know, as everyone does, of its importance and historical significance. It is by far the largest municipally-owned and controlled port and the city's justifiable pride in the port and its history is obvious in the fact that the municipal toast is not just to the city but to the city and the port. Historically, they have been closely bound together.
Perhaps we should review the history of the last few years. The original proposal for the development of the docks on the Portbury flats envisaged the provision of a third major liner terminal to supplement and compete with London and Liverpool. The Government considered this proposal at length but concluded that
…the case for allocating a substantial part of the resources available for fort investment to the creation of a new major liner terminal, whether at Portbury or elsewhere, has not yet been made out.
The reasons for this decision were set out in the White Paper published in October, 1966.
At the same time, however, my right hon. Friend invited the Port of Bristol Authority and the National Ports Council to consider and submit alternative plans for the development of the port. They examined a number of schemes and it became clear that the physical conditions of the Severn Estuary, coupled with the already congested development of the Avonmouth Docks, limited the possibilities to comparatively modest changes inside the existing docks, or a major scheme at a cost of about £15 million.
Of the various possible major schemes, that for the West Dock was the most promising and it is that which they submitted to my right hon. Friend for approval and which is now under consideration. The scheme would provide for a new dock just across the Avon from the existing docks. It would have about 3,500 feet of quay and space for an oil berth for medium-sized tankers, and provision of the dock, with its lock entrance, quay walls and main services, but without any superstructure such as sheds, cranes, and oil jetty, would cost about £15 million.
The total port investment for the whole country under the previous Government averaged little more than that per annum and now amounts to £45 million or so a year, so one project costing about £15 million would be a very major undertaking. It is exceeded in cost only by the major developments at Tilbury and Sea-forth, although the great deep-water ore harbour at Port Talbot will cost in the same region and the major development at King George Dock, Hull, will provide new facilities on a similar scale at only one-third of the cost of the proposed West Dock Scheme.
Would my hon. Friend agree that port development in Britain was neglected in recent years, certainly under Conservative Administrations, and that we should not take that as our yardstick for the future?
I was saying that; that it has been neglected and that we are now beginning to spend money. However, in any situation, let alone in the present economic situation, it is incumbent on the Government to decide objectively where, and in what order, the money should be spent. Therefore, when we have a limited sum to spend we must decide where it is best spent. We must decide whether it should be £15 million in Bristol or one-third of that sum to get the same results in another port, which, in this case, happens to be Hull. If my hon. Friend will have patience and allow me to unfold the story he will see how decisions of this kind are coming together.
I come to the nub of the matter. On any reasonable assessment of traffic and revenue prospects, the West Dock Scheme can at best barely pay for itself. The Port of Bristol Authority has given its estimate of the return on the scheme on the normal discount cash flow basis mentioned by my hon. Friend, which is the yardstick used by the Government in most of the assessments made of investment and it is widely used in other countries. It is, therefore, not sufficient to say that in this case it is not the best way to proceed, although it is not the only factor to be taken into account. The Port of Bristol Authority's estimates of the return on that basis lies between 6·3 per cent. and 9·5 per cent. as against the normal minimum for low risk public investment projects of 8 per cent.
But we cannot accept some of the assumptions on which Bristol has reached these estimates. In our view, even if Bristol's traffic forecasts are right, and even if completely new traffic does appear to replace the oil traffic originally included in the estimates, which it is now known will not materialise, the ceiling rite of return would be 6 per cent. On realistic traffic assumptions, it would be substantially less.
The Minister is faced with a very real dilemma. On the standards which are applied to public investment, and against which all other approved port projects have been judged, this project is not viable. On the other hand, she is very much aware that, as the South-West Economic Planning Council has emphasised, ii some such development is not undertaken, the physical limitations of Avonmouth will restrict further development of the port, and lead eventually to the loss by Bristol of its status as a major port—and possibly, in the long-term, to a decline in traffic handling.
It is for this reason that, as the Government's reply to the South-West Economic Planning Council made clear, we are still considering the proposal in the light of the representations made by the Council. This is not an easy matter, and I am afraid that I cannot tell my hon. Friend precisely when a decision will be reached, but my right hon. Friend certainly hopes that it will be within the next few weeks.
My hon. Friend referred to the rather sensational reports which appeared in the Bristol Press about a fortnight ago about the M.I.D.A.S. study. Let me say at once that there is no Government study considering the development of a new industrial complex stretching from Port-bury to Weston, as one report had it. What is happening is that the Govern ment are looking into the possibility of trying deliberately to develop in this country one or more maritime industrial development areas, where bulk processing industries can be established adjacent to port facilities capable of handling large bulk carriers and tankers. As hon. Members will know, areas of this type have been or are being developed by a number of continental countries, and in Japan and the United States.
As a first step, the Departments concerned, together with the National Ports Council, have commissioned a study by engineering consultants to identify sites physically suitable for such development. They have examined some 30 areas, have identified three areas as containing sites matching the criteria, and eight others, including the Portbury Flats, as worthy of consideration, though they do not fully meet the criteria for such development. The consultants are now preparing broad estimates of the cost of developing the sites in the three "first-class" areas, and in certain of the "second-class" areas, including the Portbury Flats. Once this has been done, we will consider urgently whether or not to put in hand fully detailed technical and economic studies of one or more of these areas.
But I must make it quite clear that no decision has been taken to go ahead with such a project anywhere; that the Portbury Flats, while under study, is a site with considerable disadvantages for this purpose, and that in any event any such project will be a very long-term one.
I can assure my hon. Friend that that is not the case. I am informed that the Authority is in close touch with the Deparment and has direct access to it. I have no idea where the lines have got crossed to produce the idea that the Authority must go through the economic planning council. The Authority frequently approaches the Department, and on certain aspects of the work an opinion is asked from the economic planning council, but I can assure my hon. Friend that there is continual contact, and that the Department is on remarkably good terms with the Port of Bristol. I hope that this will remove an unnecessary irritation in what is already an intrinsically very difficult situation; and that I have been able to reassure my hon. Friend.
Even if the Portbury area were chosen, and I have indicated that it is not very promising, the port provision required might not be all that different from the West Dock. I do not want to try to pretend to my hon. Friend, or give any excuses, but there is no intention to hold up any decision on the West Dock because of the M.I.D.A.S. study. That is something quite separate, because it may require port facilities different from those proposed for the West Dock.
Every effort will be made by my right hon. Friend in the next few weeks to reach a decision on the West Dock scheme. My hon. Friend suggested that if that scheme was turned down he did not want a Utopian scheme. I have tried to put the matter into perspective. I do not think that I have drawn a Utopian picture of the M.I.D.A.S. scheme, but have merely put the record straight by saying that there is a possibility of such a thing.
We are very well aware that Bristol is a commercial as well as an industrial centre and that the port is important to the life of the city. What has to be decided is whether the expenditure of £15 million on the Port is the only way in which the commercial life of the area can be continued and expanded. This is my right hon. Friend's problem. The economic planning councils produce the schemes and the ideas—