On 6th April, Mr. John Cuckney, whom I appointed chairman of the Port of London Authority in the autumn of last year, reported to me a rapidly deteriorating financial situation in the Port of London. He had previously expressed concern about the PLA's ability to manage within its existing financial resources and the need to agree a comprehensive strategy for the port in the form of a corporate plan.
In the last month, the gravity of the situation has been fully apparent. On 4th May Mr. Cuckney told me that, in the event of no change of policy, mounting losses would total £76 million by 1982, the loss for 1982 probably being £17 million. The full picture is not yet established.
The chairman has set out his explanation of this state of affairs in his annual report, published last week, of which copies are available in the Library. In brief, the chairman says that although the fixed costs of the port have been reduced over the years by dock closures, the disposal of surplus property and the severance of personnel, reductions have not kept pace with the decline in trade. Since 1974, losses and costs have reduced the PLA's reserves by £52 million. A major contributory factor has been the cost of maintaining uneconomic facilities and a dock labour force much in excess of need.
The chairman believes that if costs can be cut and productivity raised the port can adapt by building on the positive aspects of its business. I have no reason to dissent from this broad analysis.
Mr. Cuckney is continuing his urgent examination of the financial situation and is in the closest touch with me and with my Department. I have also arranged for Price Waterhouse &Co. to advise me on the Authority's financial forecasts. I have made clear to Mr. Cuckney that any proposals from his board should be designed to chart a path to viability and a secure future.
The Government have no executive authority over the PLA, but I am considering with my ministerial colleagues whether and by what means the Government can assist the PLA in its task. We are very fully aware of the industrial, social and environmental aspects of the problem. No solution will be easy.
I will report further to the House in due course.
Clearly the position at the Port of London is both urgent and critical for those who work in it. Therefore, does the Secretary of State appreciate that the House will expect to be kept fully informed of all developments?
I have three short points. Does the Secretary of State agree that the proper starting point in consideration of this issue is that the nation's major port is now on the edge of bankruptcy and that unless steps are taken it will become bankrupt in the next few months? Do the Government accept the view of the chairman of the PLA that over the coming months the Port of London will have to be slimmed down substantially, but that if that is done there is no reason why the port, based on Tilbury, should not prosper? Above all, do the Government accept that this is a time for decisions and that, although these decisions may clearly have to be tough, that is the only way of ensuring the future of the port, which includes the employment prospects there?
Yes, I shall keep the House fully informed, as it is entitled to be, of developments. I shall let it know when the Government have had an opportunity of considering fully the figures which are now available and any others that the chairman may set before me. For that very reason it would be wrong for me to indicate any policy views until they are determined, either concerning the question of slimming down or any others that have been raised by the chairman in his annual report.
The hon. Gentleman is right to say that this major port is on the edge of bankruptcy, and it is right that we should make decisions as quickly as possible. But they must be decisions that are fully considered, because the implications both for the port and for those who live and work there can be considerable.
As the representative of some of those who at least live there, if not work on the port, may I say that we now face a situation in which mile upon mile of the greatest river highway in the world lies derelict and bankrupt? Is the Secretary of State aware that the PLA's record on this is not admirable?
Is he further aware that some of us think that the time is long overdue when the whole question of the use of the river—not necessarily by the PLA, but for other purposes, too—should be considered in order to react as any country would in this situation to bring life back to this river, not necessarily by use of the PLA, but perhaps through the use of smaller units and in other ways? It is a disgrace that the river is devoid of traffic when our roads are packed and jammed tight. What about that for lack of policy?
My right hon. Friend vividly expresses the strong feelings not only of those who live and work in the Port of London and represent the constituencies around it but of many others, too. The decline we have seen on the River Thames and in the Port of London has been tragic and has had far-reaching consequences, to which my right hon. Friend has referred. I am sure that any analysis and any decisions on the current problem faced by the Port of London must take account of our wish to see the river flourish and to regain as much traffic as it can, traffic which it has lost over the years.
As with British Steel and British Leyland, why do the Government take no action until all is collapsing around them? It is now two years since this problem last arose, and since then it has cost £16 million in extra losses alone, quite apart from the expenditure of the PLA's reserves. Will the Secretary of State take it on board that the hereditary docker, like the hereditary peer, must now at least contribute towards earning his living? Will he confirm and reiterate to the House that any future programme of reconstruction is monitored and is accountable to this House and that it has a specific purpose?
I do not think that the hon. Gentleman has made a helpful contribution to solving a difficult problem. His question shows some lack of understanding of the nature and responsibilities of the trust ports. They are not nationalised industries but are established under statute. The Port of London was established under the 1968 statute.
I therefore have limited powers. It is the job of any Minister to rely upon the evidence placed before him by the chairman on behalf of the board and then to take the necessary action when he is required to do so by knowledge of the circumstances. This situation has been developing, but it was brought sharply into focus only by the present chairman, who was appointed last autumn and who revealed to me within the last month the current state of affairs.
Is my right hon. Friend aware that the proposed closure of the Royal Group of Docks and the West India and Millwall Docks would be a body blow to the economic and social life of East London and also to the Government's policy on inner urban areas, a policy supported by the Opposition? Is he aware that last year over 2 million tons of cargo went through these docks, and Lloyd's List put 25 ships as being in those docks this morning? Is he further aware that the PLA says that it wants to get rid of 1 million tons of cargo? Will he say something about the Government's attitude to the competition of near Continental ports which receive State and municipal aid?
In reply to the latter part of my hon. Friend's supplementary question, I wish to say nothing on policy matters until we have had a fuller opportunity of digesting the facts set before us and any new facts that will emerge. I am fully aware—and if I were in doubt my right hon. Friend the Secretary of State for the Environment would remind me—that any steps taken involving the upper docks will have consequences for the inner urban areas of docklands about which the Government are concerned.
Will the Minister bear in mind that those of us, such as the right hon. Member for Bermondsey (Mr. Mellish), who represent riverside constituencies want the Government to take action to use this apparently abandoned river? Will he spell out in detail how he proposes to do this?
No, I am afraid that I cannot spell out those matters in detail. Even if I were to try, it would be a dishonest attempt, because we must examine the new situation which has now emerged. If there is unity on both sides of the House that the river must be revived irrespective of its present problems, I think that is the best guarantee that we shall find a way out of the situation.
The Minister comes to the House and makes a statement saying how terrible things are but adds that he can do nothing about the situation. Will he please now say that he will do something about it? Will he first give a guarantee—a guarantee that he did not give in his original statement—that the trade unions will be brought in and that discussions will take place with them? Will he also ensure that Members of Parliament for the areas involved will be drawn into those discussions, including local authorities and publicly elected representatives, rather than the Port of London board, which is composed of appointed people? Will he see that the elected representatives are drawn into these discussions?
I did not say to the House that I could do nothing about the situation. What I said was that I was not proposing a solution today. I propose no solution not only because I want to discuss matters with my colleagues, as I shall properly do, but for the very reason which my hon. Friend men- tioned—that if we were fully to inform and bring into consultation the trade unions, Members of Parliament and local authorities—which is a matter primarily for the PLA and not for me—it would be impossible for me to make a substantive statement on policy today.
Would it not be a good idea for somebody to visit Rotterdam to see whether its success is due entirely to Government subsidy, as is being implied, or whether there is a degree of efficiency in the Port of Rotterdam which to some extent has been missing in London?
I am sure that many people have examined the varying fortunes of different ports, and some of those fortunes have risen and others have fallen from time to time. I am sure that the experience of Rotterdam is relevant. I do not think we should draw any easy conclusion from that kind of superficial analysis. We must examine the problem in considerable depth and make comparisons not only between this country and others but between ports in this country which are seeking to meet the needs of those who use them and ports elsewhere.
Mr. Alan Lee Williams:
Will my hon. Friend confirm whether the PLA board in its report last year gave any indication of its financial plight? Does he not agree that great damage might be done to the recrudescence of river traffic which is now, at long last, picking up, if the argument about the Royal Group of Docks were confused with the case of the riverside?
In reply to the first part of my hon. Friend's supplementary question, this has been a developing situation but, as I said in reply to the hon. Member for Sutton Coldfield (Mr. Fowler), the present figures are new and I had no idea, nor did the PLA hint at this a year ago, of a situation as serious as that which has now been revealed.
I agree with the second part of my hon. Friend's comments. We must do all we can to ensure the future of the river and a better life and better prospects for it, despite the obvious anxieties and the problems we now face on the PLA, including the upper docks.
Is the Minister aware that those of us who work with Mr. John Cuckney, both in public and in private life, have great confidence in him? Therefore, will he back the chairman in recognising that this is a structural problem which has been under discussion ever since we were considering the Maplin project? Will he also back the chairman in getting greater productivity, and particularly in the work he is trying to undertake in redeveloping the London docklands for the benefit of the area as a whole?
I am grateful for the hon. Gentleman's comments about Mr. John Cuckney, who commands a great deal of confidence in all parts of the House. It is very reassuring that he has responsibility for the PLA. His responsibilities are plain, and I shall take into account any proposals he sets before me. The Government will examine those proposals in the wider context of the social consequences as well as the industrial context.
With respect to my hon. Friend, I am afraid that on this occasion he has got it wrong. Mr. John Cuckney was brought into the Crown Agents to deal with a very difficult situation indeed. I must emphasise, even if I do not carry my hon. Friend with me, that there are many hon. Members on both sides of the House who believe that he did a first-class job in dealing with a very difficult situation.
I do not agree with the hon. Gentleman. The decisions are for the Port of London Authority, and I have no proposals before me. I would not wish to indicate to the House at this moment that I am wholly satisfied with the situation as it has emerged. I shall need to be surer of the facts before I am in a position to consider any proposals. I shall consider them when the PLA makes them to me.