Financial Assistance for and in Connection with Measures Taken by Port of London Authority

Orders of the Day — Port of London (Financial Assistance) Bill – in the House of Commons at 7:54 pm on 6th May 1980.

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Photo of Mr Albert Booth Mr Albert Booth , Barrow-in-Furness 7:54 pm, 6th May 1980

I beg to move amendment No. I, in page 1, line 5, after ' (1) ', insert ' Subject to general cargo handling facilities being maintained in the Royal Docks '. This amendment would make the payment of finance to the Port of London Authority conditional on the maintenance of general cargo handling facilities on the Royal docks. We believe that this amendment is crucial to the whole purpose of the Bill as we understand it and which we support. The proposition on which the Bill is based is fundamentally wrong in that it contends that a reduction of manpower by the PLA will, in itself and of itself, restore the authority to viability.

We believe that the financing of severance covered by the Bill should be related to the maintenance of the Royal docks. We believe that in practice the Bill will be used in that way and for that reason we support it. But that is not what the Bill says. I shall seek to persuade the Committee that there is everything to be gained and nothing to be lost by inserting within the Bill something which would ensure much wider support—support which would not embrace some of the reservations expressed on Second Reading.

It is wrong for the Minister to contend, as he did on Second Reading, that his responsibility relates only to a relatively narrow but important financial aspect of the PLA's operations. There is no doubt that the financial aspect is important, and there is no doubt that the Bill is necessary to deal with at least one Of the PLA's problems. But no one who has studied the situation of the PLA with any degree of political sensitivity or appreciation of the consequences of the success or failure of that authority to those involved in the widest sense in shipping out of London, or in the development of the docklands or in the running of local authorities in that area, could contend that the issue underlying the Bill is merely a narrow financial one, or one which is of concern only to the PLA. This matter is of much wider concern. It concerns many hon. Members who are interested in ports policy and the development of London.

Therefore, it is our contention that the maintenance of the Royal docks and the cargo handling facilities there as specifically referred to in the amendment, is of crucial importance in terms of port policy as pursued by the Government and in terms of regional development in the South-East, to put it at its widest, or the regeneration of a part of London, to put it at its narrowest. It carries implications for jobs and the way that the local authority discharges its duties and plans redevelopment in the area. There are also the social and environmental implications and the hopes and aspirations of many people who are looking for a correct decision by the House on the future of the London docklands.

I should like to tackle the argument for making a specific reference to the Royals in the Bill under two simple headings. The first is the effect on ports policy that springs, in part, from the tremendous role played by the London docks in the movement of conventional cargo into this country. Inward conventional cargo into London in 1978, according to a survey by the National Ports Council, was 4,317,000 tonnes. London had more inward conventional cargo than Liverpool, Grimsby, Imming-ham, the Forth, Felixstowe, Manchester, Southampton, Tees and Hartlepool put together. The effect of new technology on cargo handling has left London in a preeminent position in terms of total conventional cargo coming into the country.

Many ports have developed facilities to a greater degree than London, but London is left with an outstanding role in conventional cargo handling. This has a greater impact in the upper docks, especially the Royal docks, than further down river, at Tilbury, for example, that is now a Port of London Authority responsibility and deals with container and other types of bulk traffic.

It is impossible to carry out the purpose of the Bill and to make the Port of London Authority viable on any other basis than by sustaining the Royal docks. If the Royal docks were to close—it is known that India and Millwall, except for a few existing tenants, are to be virtually closed—it would not be possible to sustain existing cargoes and existing customer contracts, let alone expand and develop cargoes that are necessary for the Port of London to operate on a viable basis. According to present plans, based, by the Port of London, on the assumption that the Royals will continue, some customers will be transferred from India and Millwall to the Royals and some to Tilbury.

The Minister has a duty to say whether there is any condition other than that in the amendment on which he can see this Bill operating. There is no financial provision, as I understand the Bill, that would permit the expansion of Tilbury, even if that were physically possible, which I question. There is not the financial provision to bring about the expansion of Tilbury to take all the existing customers who would move from India and Millwall and certainly not the existing customers of the Royals as well.

If we are to try to make sense—I admit it is difficult—of the financial arrangements in the Bill, we must insist that one of its conditions is that there shall be provision in the Royal docks for handling conventional cargoes. The Royal docks have facilities for considerable expansion. I believe that only about 16 of the 54 berths are currently in use. Without any substantial capital expenditure, there could be the expansion of cargo handling that we want to see within the PLA. That is the aspect of the amendment that hinges on ports policy.

There could be no closing of the Royal docks unless a decision were taken that, intentionally or otherwise, would change the whole balance of conventional cargo handling as currently defined by the National Ports Council. The definition used by the council is useful. It is new to me. It divides operations from ship to shore between those that are labour-intensive and those that are capital-intensive.

The second issue raised by the amendment is the broad political question of the social effect of withdrawal from the upper docks. If, as I expect, the Minister accepts that the Royal docks are one area where potential exists for carrying on conventional cargo handling and that conventional cargoes involve labour-intensive handling, jobs can be maintained in the upper docks. That would be impossible if the Royals were closed. Given, the room that exists for expansion, there is an opportunity for increased cargoes that the PLA, in its strategic plan, states are essential in plotting a course to viability.

I deeply regret that the Minister of Transport is not present, because we are discussing a fundamental issue of the Bill. I say that with no disrespect to the Parliamentary Secretary. If the Minister believes that there is any other way of dealing with the problem to which this Bill is addressed, he should say so. If he accepts that there is no other way, he should accept the amendment.

It is only fair to those affected by the Bill that they should know whether or not the House is discussing the sanctioning of expenditure of public money for the purpose of sustaining the Royals and an upper dock presence of the PLA and for maintaining a vital aspect of ports policy in conventional cargo handling. We cannot accept that the Government's only role is to say how much money should be available to the PLA. The issue is much wider than that. It is a major political issue. The Minister cannot shelter behind the argument that there are inadequate financial criteria. He cannot be a Pontius Pilate. He is not dealing with the legal jurisdiction of an occupied territory. He is dealing with ports policy, shipping practices and local authority development plans for a part of London which has suffered grievously as a result of the change in dock practices. He is dealing with the social future of the people who live in the docklands area.

He should, therefore, make it clear whether he will accept the amendment as being the only basis on which the Bill can work, or whether he intends to spell out a serious alternative which will lead to implementation of the proposition written into the long title—to make the PLA a profitable organisation.

Photo of Mr Peter Shore Mr Peter Shore , Tower Hamlets Stepney and Poplar

My right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) has already made a cogent case for the amendment. I support him. It is plain to all who have studied the Bill that it is a narrow measure in terms of what it seeks to do. At the same time it is wide in the scope that it gives to the PLA to achieve its objective. All that the Bill sets out to do is to restore profitability and to give such financial assistance for the reduction in manpower as will bring that about. It is totally unconditional. It is not conditional upon the future operation of the docks or the port of London as a whole. It is not conditional upon the effects that the PLA's policies might have on the wide problems of employment in the East End communities which are so greatly affected by PLA decisions.

It is therefore necessary to insert into the Bill at least one objective. That is what the amendment seeks to do. The objective is to retain at least the upper dock presence by keeping open for general cargo use the Royal docks. That is a modest objective. In itself the maintenance of the Royals is a marked retreat from the position taken up by the previous Government, who made their financial assistance conditional upon the maintenance of the Royal and West India docks. The Labour Government urged upon the PLA what was called the " concentration option ". That has been abandoned.

Let us be clear about what that involves. It means the closure of one of the major upper docks. The Government, or the Government and the PLA together, have " yo-yoed " for years about their preference between the Royal and West India docks. In the five-year feasibility study which the PLA produced last summer preference was shown for the West India dock. However, that preference has been abandoned, not for the first time. We seek to support the modest proposal to keep open at least one of the two great upper docks and to insist that that is a condition for the receipt of the moneys which the Bill provides. The amendment is crucial.

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By inserting the words in the amendment we shall give a strong commitment to maintain part of the upper docks in the form of the Royals. Without the words there is no commitment to main- tain any part of the upper docks. The phsychological effect of that must be considered. It will have an effect on the registered dock workers and other port employees and on the management of the PLA. There is a strong feeling along the River Thames that the PLA is not strongly committed to retaining the Royals and to making a go of that part of the upper dock system. That strong feeling might be unjustified but it is there.

The preferences and views of the PLA have swung from one dock to another and from one strategy to another over the years. Nobody can be surprised that strong doubts exist about the commitment of management to maintaining and making a success of the Royals. We all know how the traffic has changed, how the size of ships and cargo handling methods have changed. However, conventional cargo or conventional and container mixed cargo will still be brought in ships to Britain in substantial quantities. There is no doubt that the Royal group, if it is run efficiently, can handle sensibly and profitably substantial cargoes. It is a major facility for the port of London. The Royal and West India docks have substantial advantages in terms of where they are placed and the services that they can provide to customers—and there are many—and consumers in greater London. That is the first strong reason why the amendment should be accepted.

My second reason relates to the dockland communities which are involved in employment and activity associated with the upper docks. The Labour Government tried to energise and create a new inner city policy. We tried particularly had in the dockland area. We knew about that area's decline and we were anxious about it. A range of measures were taken to give it better prospects. The pace at which such action can be taken must be judged.

A considerable amount of additional employment is coming to the dockland area and new infrastructure will help to attract more industry, but the pace at which that can be done must be judged. If the dockland area suffered the closure of the upper docks system in the next two to four years that would be a major blow to the efforts to revive the area through inner city policy. That is an important point.

As I looked at the background to this debate, I noted that the Minister of Transport and others had prayed in aid the Price Waterhouse report as authority for a number of the things they are doing. I was struck when I examined the last paragraph on page 2 of the report at the precise point which is made. The report says: In reviewing the PLA's general strategy there are wider issues than the detailed financial analysis. These wider issues, which we have not considered, include the relationship to the Port of London and the PLA to Dockland's redevelopment, the economic role of the PLA, competition policy between ports and the social consequences of the various courses of action. Not a word of that is reflected in the Bill. Nor is it reflected in the speeches that were made on Second Reading by the Minister of Transport and the Parliamentary Secretary, who is here today. Clearly, that report is of great importance to the community when we consider not only the number of jobs directly involved—employment in the upper docks—but the number of jobs linked with it. Some studies have been made—I would not claim that they are definitive—of the linkages between the maintenance of the West India dock and associated industry.

I do not think that it is an exaggeration to say that we are speaking of about three to four supporting, or connected, jobs for every job directly involved in the docks themselves. It would be a terrible setback if there were to be a further closure in the upper dock area. I can tell the House that it is bad enough with the West India dock. Therefore, I hope for that second reason—connected with inner city policy and dockland policy and revival in particular—that this amendment will be accepted.

My last reason for urging this course is one that might, perhaps, appeal to the Government. I am not sure that the point has yet been entirely taken by them. In the report from which I have quoted a series of options are examined, including what is called the " radical " option. That option is the one under which the Royal group of docks—the whole of the upper docks—would be closed. Hon. Members, if they have their papers with them, will know that not only would another 2,000 jobs be lost if the Royal docks were to close, but the Government severance grants would go up from the £35 million allowed for in the Bill to no less than £59 million.

Therefore, unless the Bill is nonsense, the " radical " option has to be ruled out—unless the Minister is about to tell us that he will be prepared to come forward with further sums. If that is the case, I do not see how there can be any objection to inserting the amendment of my right hon. Friend the Member for Barrow-in-Furness. I therefore urge the amendment upon the House.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

The Royal docks lie entirely within my constituency and entirely within the borough of Newham. My right hon. Friend the Member for Stepney and Poplar (Mr. Shore) has outlined in vivid terms the important part that the upper docks have played in the social, economic and industrial heritage of East London.

In Committee we discussed the terms of the Local Government, Planning and Land (No. 2) Bill, which includes a provision for the establishment of an urban development corporation. Under that provision it is the desire of the Government, as it is the desire of the whole House, to ensure that the areas of so-called deprivation, of inner city need, are given what the Government in Committee called regeneration—the object of which is no different from ours.

I believe that the purposes on which everybody is agreed can best be achieved by the legislation introduced by my right hon. Friend the Member for Stepney and Poplar in the Inner Urban Areas Act and the partnership arrangements—and the committees under it—that that Act gave to those areas. I pay tribute to my right hon. Friend for his work in that direction.

It was not merely a matter of keeping open a national and community asset. I shall come to that issue in a moment. There was also the need to sustain the social network and the traditional community life of an inner urban area, which alone make it attractive, and which alone will enable it to be regenerated in the way in which we are all agreed.

The Royal docks are huge. Those who talk about dockland and take up the parrot cry that the docks are too small and that ships are not getting up the river do not, perhaps, realise that the Royal docks are more than 2 miles long. The Royal Victoria dock alone is 1 mile long, and there are 10 miles of deep water quays. I do not mean 10 miles of river; I mean 10 miles of quay space, alongside which ships drawing up to 45 ft. of water can be moored. That is within 5 miles of Tower Bridge.

I referred to the river highway on Second Reading, and I shall, therefore, not spell it out again. That highway is wider and deeper than the Panama Canal, yet we frequently hear it said that these facilities are, apparently, outdated. Those facilities include, at their entrance, a lock that is 800 ft. long and 100 ft. wide and can take ships up to 45 ft. deep at high tide. There is also a dry dock—one of the second biggest in South-East England—with a length of 750 ft., which is only a few feet shorter than the only remaining dry dock, that at Tilbury.

I believe, therefore, that if the PLA decides, in response to purely financial restraints, that it is in its short-term internal accounting interest to close the Royal docks we do away with assets that are of national as well as major local and regional significance.

I do not believe that such a closure would be in the long-term interests of anyone. I do not say—I am the last person to suggest it—that the conventional cargo activities of the Royal docks can continue as they did until about 10 years ago. It is clear that there is a new phase in the potential for all the upper docks, and I include the West India and Millwall docks, which are in my right hon. Friend's constituency. I include them because I believe that what could apply to the Royal docks could possibly apply to those docks also.

The Royal docks are significant, too, in that they had a system of labour for port activity that marked them out as separate from the West India docks. Until recently most of the labour on ships—the stevedoring labour, to which I shall return in a later contribution, if I catch the Chairman's eye, in relation to the inquiry—was employed not by the PLA but by shipping companies direct, which had permanent dock workers related to one line or another, or by labour contractors. All those have now disappeared, and disappeared rapidly. So we are confronted with new opportunities in these considerable physical assets.

8.30 pm

The first suggestion that I make concerns the relationship of the PLA with its tenants. The West India docks, contrary to what the newspapers have said, and contrary to inaccurate phrases in the House, will not be closed. The West India docks are to be opened for the use of PLA tenants, particularly Montague Meyer, and there are to be facilities for the wine terminal and for the grain elevators, if they wish them.

All that the PLA is doing—I say " all ", but it is significant for the West India docks—is withdrawing its cargo operations. In other words, the cargo handling activities of the PLA, as a supplier of dock labour, are to be withdrawn from the West India docks. But that does not mean that the West India docks do not have a future role to fulfil in some form or other, particularly in relation to current and future tenants.

This is where I come back to the Royal docks. The Royal docks have tenants connected with the grain trade, and there is a considerable throughput. A timber firm, which came out of the Surrey docks and went there, is happy to remain, and its labour relations are excellent. There is no reason why similar ships which go to those installations should not go to further tenants' berths if they were made available in the Royal docks, just as they ought to be made available in the West India docks.

On Second Reading I asked about the future of the West India docks. Why does not the PLA bring in tenants? I suppose that I should have written formally to the PLA and asked that question. I have had no reply. Nor have I had a reply from the Government Front Bench. I suggest that it would be possible to extend the tenancy arrangements inside the Royal docks so that some form of dock-related activity could continue.

I have mentioned the grain terminals and the timber yard. Recently there has been a new tenant on the south side of the King George V dock—a contractor involved in gathering together cargoes of a particularly specialised nature. He is a forwarding agent who employs dock labour and is using road transport to bring goods in and out of of the sheds on the south side of the King George V dock. The agreement that that tenant has with the PLA—I am speaking from hearsay, although I am fairly sure it is right—precludes him from bringing in ships or barges to handle those goods. That relates to a technical matter concerning the organisation of dock labour and of shipping on the Thames. That is another reason why we should have an inquiry into this matter. But there is a tenancy, which has come into being in the last few months, which relies entirely on road transport.

There are considerable warehousing facilities in the Royal Victoria docks which largely rely on road transport. Therefore, there is a potential for the continued use of water transport in ships of all sizes in the Royal docks, particularly in the Royal Victoria and the King George V docks on the south side.

Another cry that we often hear is that containers have to be handled at Tilbury because the upper docks are too small or too far away to be an economic proposition. But that is just not true. In the PLA annual report for 1978 we read that no fewer than 52,000 containers had been handled at the non-specialised container berths—a very significant number. That was an increase over the previous year.

The biggest irony of all in this respect is that the Victoria deep water terminal—which must be distinguished from the Victoria dock—which is a wharf on the river upstream of the entrance both to the Royal and West India docks, is a successful container terminal. But, generally speaking, the PLA has to date made little or no effort to provide facilities for container operations in either the West India or the Royal docks.

Indeed, there was a scheme—perhaps we should return to it on a later group of amendments—for a crane to be built in the West India docks, or purchased and put there, to deal with containers and the coming type of combi-ship, carrying a combination of containers and conventional cargo. That has had an unhappy history, but there is no reason why that should not have gone into the Royals, or why such an operation should not continue in the future. Yet the fact that the PLA has not apparently been active in this way has meant that there is suspicion, and that, rightly or wrongly, people are saying that the PLA is not serious about keeping the Royal docks open.

I know that a letter was sent by the PLA two or three months ago saying that it had no intention of closing the Royal docks—rumours were going around East London that it would do so—and I accept that. However, what is wanted by the community in East London is some sign of good faith that the PLA will really use the undoubted assets of this enormous enclosed group of docks. When people come from the Continent and see them, they say "Why on earth are you not using them? You must be mad. You have the best river highway into, perhaps, any capital city in Europe, and you appear not to be using it."

I believe not only that there is a case for the PLA to answer but that the Government have a duty, to East London in particular and to London and the nation in general, to say " These facilities are of such a nature and such potential that they should not be closed", and, on the other hand, to investigate their future use for some of the purposes that I have outlined. The Government may well say—and I see the Parliamentary Secretary getting ready—" Hard luck. The figures show that they make a loss. Yes, it may be that the King George V dock was opened in 1923 by King George V himself and the ' Mauretania ' passed through the entrance lock in 1939 "—as, indeed, it did—"but they make a loss, so we cannot put this duty on the PLA."

I want to pay tribute to the open figures which Sir John Cuckney, the former chairman of the PLA—I am sure that Mr. Victor Page will continue in the tradition—made available at the time to those of us who were interested. For the purposes of evidence before a Select Committee in February 1979, Sir John kindly made available to me the provisional figures for the Royal docks in 1978. They showed that the revenue for those docks—it was quite considerable, bearing in mind that we are told that no ships come up—was £20 million. Payroll costs were about the same. In addition to the payroll costs for cargo handling, there were supplies and services, depreciation, internal services, lock, police and catering. The PLA said that the internal services for the Royal docks in 1978 came to £2·3 million for lock, police and catering. That sounds a bit steep. Some may like to ask questions about that later. But the PLA calculated that there was an operating loss on the Royal docks for that year of £4·8 million and for the Millwall docks—that is, India and Millwall of £4.3 million.

I shall accept those figures for the moment, although as I have indicated, all sorts of questions could be asked about the overheads and whether ships were being unnecessarily turned away. Again, there have been spates of rumours throughout East London about that. But the most important point is that I also asked what was the cost of the surplus labour attributed to the Royal docks or, rather, attributed to the upper docks. Sir John Cuckney told me that £4 million of surplus labour costs was included in those losses in 1978. I admit that a high proportion of the excess labour cost was related to conventional cargo. That is what the Bill is about. It is saving the operators, virtually all of whom are private contractors, whose labour went to the PLA by default. On the PLA's figure of an operating loss of about £9 million on the upper docks in 1978, £4 million—about half the loss—was attributable to the surplus of labour—a situation that the Bill is intended to rectify.

If the Minister will not accept the obligation that was entered into by the previous Government, he must accept that there is room for investigation of all the matters that I have outlined. However, I should prefer the docks to be kept open, and that is why I support the amendment.

Photo of Kenneth Clarke Kenneth Clarke Parliamentary Secretary (Ministry of Transport)

I begin by reassuring the Committee and particularly the right hon. Member for Stepney and Poplar (Mr. Shore) and the hon. Member for Newham, South (Mr. Spearing) that the Government are fully aware of the wider implications for East London of the future of the PLA. The Government's commitment to the aim of inner city revival is no less than that of their predecessors, though our methods of achieving that aim are different and controversial.

The Bill referred to by the hon. Member for Newham, South contains provisions that will allow urban development corporations to be set up, and docklands has been clearly identified as one of the first problem areas to which the new policy will be directed when Parliament has authorised it and the machinery is in hand.

In looking at the problems of East London and the substantial problems of dockland, we must realise that a great deal depends on the future of the PLA and great hopes are placed on the future of the authority in that area. We have to look at the problem not only from a financial point of view but with an appreciation of the social, employment and other implications for a part of London that is at present desperately hard hit.

The basis of the policy of the Bill towards the PLA as a whole and the Royal docks in particular is that the Government are fully sympathetic to the efforts being made by the PLA and all who work for it to try to secure a future for the Royal docks and the closed docks.

There is a determination to try to cure the problems of the PLA and to secure a future for the Royal docks, The Government wish those efforts success, but in the end they will depend on the efforts made by the PLA and its work force and by its ability to attract traffic back into the docks.

In the Bill, the Government are discharging their obligations, which were inherited in part from the previous Government, and playing their part financially to put the PLA into a position where it can, if it is successful, return to viability and competitiveness and secure a future for all its activities, including, we all hope, the Royal Docks.

It is said that the Bill is based on an assumption that the only problems afflicting the PLA are those of excess manpower. No one who looks at the PLA or the problems of any other major port—and I see hon. Members from Merseyside waiting for debates on later amendments —believes that the only reason for the present condition of our major traditional ports is that they have excess manpower. Many other circumstances have intervened.

The shipping trade has gone through uncertain and difficult times and is badly affected whenever the economy goes into recession. Most important, there has been a transformation over the past 10 or 20 years in the way in which shipping traffic is handled in our docks and a massive turnover from traditional labour-intensive ways of handling cargo to containerisation and much more capital-intensive methods.

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There are further difficulties in the case of the PLA. There has been generally a shift away from closed docks to newer facilities nearer the mouths of estuaries, including, within the PLA's own area, a shift away from the closed docks to Tilbury, where the journey times are less. There have also been very considerable problems of efficiency and working practices in the Port of London, which have been a considerable obstacle to attracting traffic. All those problems must be dealt with. Many factors have to go in favour of the ports, and the Port of London in particular, if they are to get out of their present troubles.

Nevertheless, when all that has been said, there is no doubt that in the case of the Port of London the nub of the problem is its excessive manpower and the outdated working practices by which that manpower is employed.

The Port of London is by far the biggest of our traditional cargo-handling ports. The figures were quite rightly cited by the right hon. Member for Barrow-in-Furness (Mr. Booth). It was because it was the biggest traditional port that it was so much more affected by the change in technology and the advent of containerisation. It has had to change very dramatically, but the fact remains that, as the Price Waterhouse report is only the last survey to bring out, the nub of the problem now is that they still have too much manpower, both registered dock workers and other staff, to handle the traffic they are likely to handle, and the working practices still have to be revised to make the port more attractive to potential customers.

That is the background against which we are working and within that background we have inherited a certain financial commitment to assist the PLA to cope with the next stage of change—a commitment that we have honoured in full and indeed have slightly updated in the light of inflation and present circumstances.

This amendment proposes that, as a condition of the assistance that the Bill is now offering, general cargo-handling facilities should be maintained in the Royal docks.

The policy of the Government, given this background and sympathetic understanding, is that the future of the Royal docks, as with every other facet of the Port of London's business, is for the PLA itself to decide. It is not a mattter for Government either to request the closure of the Royal docks or to make it a condition that they remain open. We have every confidence in the ability of management to handle decisions in the port. We realise that in the docks in particular those decisions are taken in close consultation with the trade unions.

We hope that all those in the Port of London Authority realise the commitment to change they must have in order to provide the prospect of a future for these closed docks. The matter is in their hands and there is no question of the Government at this or any other stage stepping in with a condition either that the Royal docks should close or that they should remain open. We very much hope that those involved in the PLA will make a success of their business in order to give the Royals a future.

Our role is to deal with the interim stage, during which we quite accept that it would be impossible for the PLA to maintain a steady and stable trading position for either the Royals or Tilbury unless some assistance were given. The financial assistance in this Bill is aimed at giving grants on severance exactly in line with, but slightly updated for inflation, those offered by the previous Government, and that money has already been committed. The main purpose of the Bill is to give financial assistance in dealing with the severance payments to men whose discharge is, unfortunately, necessary but whose severance payments could not conceivably be met by the PLA out of its present resources. While that severance is going on we are also offering support with commercial loans, and we have also introduced a new facility whereby the Government will be prepared to stand behind an overdraft.

All that is aimed at financing the PLA through a period within which it has to return to profitability and competitiveness by 1983. That aim of a return to viability—to use the awful jargon phrase which is always used on these occasions—by 1983 is the PLA's own declared aim in its five-year plan.

The target is difficult, but it is perfectly possible to achieve it. We trust that the management and the work force are committed to doing so. They need this financial assistance in order to cope with the severance payments and to finance the business while the necessary rundown in manpower is taking place.

That alone will not save the management and work force. They also need during that period to make the necessary changes to their business to attract the traffic. One effect of reducing manpower should be to increase productivity. They also have to improve the working practices in the port and the port's efficiency. Only in that way will they attract the necessary traffic.

The right hon. Member for Barrow-in-Furness and the hon. Member for New-ham, South were right to emphasise the space in the inner docks, the capacity to handle additional cargo. But the point is that that cargo must be attracted into the Royal docks. The customers must be won in competition with other British docks, which are entitled to compete for the trade.

Photo of Mr Eric Ogden Mr Eric Ogden , Liverpool, West Derby

Is not the Minister really saying that within the narrow terms of the Bill the Government are prepared to provide taxpayers' money for severance payments rather than provide an equivalent amount of taxpayers' money to the Port of London Authority to reduce the numbers of those who might be made redundant? The hon. and learned Gentleman is prepared to make severance payments. He is not prepared, as the amendment would allow, to permit the PLA to use taxpayers' money to make redundancies unnecessary, to make the docks more attractive, to bring more industry in. It is not a matter of principle. It is a matter of the Minister's judgment as against that of my right hon. Friend the Member for Barrow-in-Furness.

Photo of Kenneth Clarke Kenneth Clarke Parliamentary Secretary (Ministry of Transport)

I repeat that the Government have taken up exactly the position of the previous Government, who reached the conclusion, on the same evidence, that there was no way in which the PLA's present manpower could be gainfully and securely employed in the Royal docks. The future of the Royal docks, if they are to win one, must be in secure jobs for the work force. That means that the workers must be employed in a port that is manned at a proper level, using modern, efficient techniques to serve the traffic that can realistically be won.

There is no point in committing taxpayers' money, for what is supposed to be an interim period but will rapidly turn into an indefinite period, in an attempt to maintain employment, at the expense of the general public, for large numbers of men for whom there is no work conceivably available in the type of traditional cargo handling that has always been, and must be, the pattern of work in the upper docks.

What I am really asked is how far what the Government are saying, and what the previous Government and the PLA said, is a reassurance to those who work in the Royal docks that there is good faith, that there is something to aim at. Under its new chairman, the PLA has gone out of its way to emphasise that it is seeking a future for the upper docks as well as for Tilbury and down river.

The PLA's executive vice-chairman recently wrote to all PLA employees reiterating the authority's wish to make a success of the Royal docks. Following the recent unfortunate decision that was forced upon the authority to close its cargo-handling facilities at the India and Millwall docks, the authority will now be improving facilities at the Royal docks to deal with traffic directed there from the India and Millwall docks.

The PLA hopes to make a success of the Royals and to put them back into a secure position. The Government hope that it will be successful. As the right hon. Member for Stepney and Poplar correctly identified, using the Price Water-house report, the basis of the Bill is that the finance being offered in it is the minimum cost to the taxpayer to secure viability by 1983 on the basis of a policy of closing the India and Millwall docks and perhaps not closing the Royals.

Page 14 of the Price Waterhouse report shows the possible costs of Government funding of the various options before the PLA. We are dealing with the figure given there of £35 million for what is called the modified transfer option—closing the India and Millwall docks and keeping the Royals open.

The alternative option, the radical option, so-called, which means closing all the upper docks—the Royals, the India and Millwall—would cost £59 million Government funding on Price Water-house figures. What has been chosen, given the discussions with the PLA, given the PLA five-year plan, given the work of Price Waterhouse, is what appears to the Government to be the cheapest option to the taxpayer consistent with achieving viability, on which everyone is determined, and that is the modified transfer option. We are, therefore, making the finance available to the PLA to pursue that modified option and, if it is successful in the management and operation of its business, it could reach viability with the sums of money before us.

That does not mean that there is any guarantee that it will succeed. I will not repeat all the other conditions that have to be fulfilled in the management and operation of the business before success can be guaranteed for the Royals. It may well be that if things go wrong, if co-operation is not forthcoming, if there is a breakdown in industrial relations, if trade does not respond to changes made in the port, problems will arise again with the Royals, but that is a matter very much within the PLA's hands.

This is the Government's commitment to the PLA. If this is not successful, although we have chosen the option preferred by PLA, and the option preferred by the Committee tonight, there can be no question of further moneys being forthcoming from the Government if at some stage after this matters go wrong and there is a question of reconsidering these options again. The PLA has accepted our cash limits and committed itself to trying to secure a future for the Royals and to ask for the co-operation of its work force, and it must be a matter for the PLA, with the good wishes of us all, to try to achieve that aim.

There is a suggestion that what I am saying is slipping back from what the previous Government did. The previous Government gave no more guarantee than we are giving to the future of the Royals. The financial basis of the Bill is precisely the policy of the previous Government. Indeed, a great deal of the money had already been committed by the previous Government before we came to office. There is no substantial change of policy, and no substantial change in the position of the port vis-á-vis the Government.

A great deal turns on the interpretations now being put by hon. and right hon. Gentlemen opposite on the statement of the then Secretary of State for Transport on 31 July 1978 when he announced his policy. I shall not quote extensively as I did on Second Reading, but he told the House then that he was: prepared to provide financial assistance towards severance costs for registered dock-workers and staff, on condition that the authority set in hand urgent measures, in cooperation with its trade unions, to secure the most rapid possible rundown of surplus manpower and on the understanding that no steps are taken towards the closure of the Royal Docks."—[Official Report, 31 July 1978; Vol. 955, c. 169.] He emphasised that a rapid run down of manpower was required and that the Government's financial commitment was to finance that rundown of manpower. He had an understanding—it was an option at that stage before the Government—that the PLA would not close the Royal docks.

It seems to have been interpreted in these debates that there was some long-lasting commitment implied by that, and the nature of the policy which we inherited was that there was a guarantee that the PLA should continue to operate the upper docks indefinitely with a financial commitment forthcoming.

Perhaps it does not help to enter into semantics about the statement of 31 July and the difference between an understanding and a condition. The then Secretary of State dealt with a parliamentary question on his newly announced policy when he made quite clear what his statement meant. He was asked critical questions by my right hon. Friend the Minister of Transport, his successor, about the position of the Royals. His second question was: is he now saying that there is a permanent future for the Royal docks? If so, is he aware that so far his answers in the House and outside give the clear impression that he himself does not believe that to be the case, so that this is simply a cynical device for getting past an election? The then Secretary of State dismissed the suggestion that there was any electioneering in his statement of August 1978. Dealing with the question of the Royal docks, he said: As for the future, nobody can forecast the extent of world trade. Nobody can forecast the share of it coming to Britain which the PLA may secure. I should like the Port of London to have a viable, stable and prosperous future. But the future of the port lies with all who work in it, and they will decide whether the Royal docks and the other docks stay open for a matter of months, a matter of years or for a very long time ahead. 9 pm

That was the position on 2 August 1978, three days after the new policy was announced. The closure of the Royal docks was then deferred and a new financial opportunity was offered. That financial opportunity has been repeated and confirmed by the present Government, and it has been slightly improved, both for inflation and by backing the overdraft.

Because of the change in policy by the PLA, the Royal docks are still open, and an alternative option of closing India and Millwall docks has been chosen. Both sides of the Committee are united in wishing the PLA success in securing the Royal docks. I can do not better than to repeat the words of the right hon. Member for Stockton (Mr. Rodgers): The future of the port lies with all who work in it, and they will decide whether the Royal docks and the other docks stay open for a matter of months, a matter of years or for a very long time ahead."—[Official Report, 2 August 1978; Vol. 955, c. 746] It is not possible for this Government to give a guarantee that the Royal docks will remain open—as it was not possible for the previous Government to do so. We hope and believe that we give a realistic possibility that they will remain open, and we hope that the PLA responds and secures the traffic necessary to secure the future of those people who work in the Royal docks.

Photo of John Prescott John Prescott , Kingston upon Hull East

The Parliamentary Secretary has shown to the House tonight that he is fully aware of the social implications of a collapse of the Royal docks or of the further deterioration of the Port of London Authority, but that he is not prepared to use port policy as a means of alleviating that. Labour Members have already said that a national ports authority is an essential instrument by which a national ports plan is implemented—and it was not a Socialist who advocated it. Lord Rochdale advocated it in 1963. We shall deal with its ramifications later in the debate—particularly the National Ports Council, which was the Tory Party's response to a national ports authority.

The Parliamentary Secretary has also shown a lack of understanding of the development of port policy. I have some sympathy with him, to the extent that it has been an industry which has been in considerable turmoil over the last two decades. Having worked in it, and having a seafaring background, I have a familiarity with the industry that may give me a certain advantage over the specialist advice that the Parliamentary Secretary no doubt receives.

The Parliamentary Secretary tends to believe that, somehow, trade is solely determined by price. Many other factors determine the trade patterns for our ports. The geographical location of a port is clearly an important factor. The switch of our trade to the east is clearly evident in all our port performances. Ports such as Liverpool, London and other down-estuary ports are at a disadvantage compared with those immediately opposite the Continent, such as Felixstowe and, to a certain extent, Hull. That pattern is clearly shown in the numerous reports on why ports differ from one area to another. It is not necessarily because of a lack of investment or because of a price that is determined solely by labour costs. The port of Tilbury is pointed to as a success for the Port of London Authority, but that port has financial difficulties, and it is important for the Parliamentary Secretary to understand why.

The massive investments called for and encouraged by the State in that area were put into containerisation. The shipowners moved from the London area to Southampton, and, for a number of reasons, they are now being encouraged to move to Felixstowe. We have an over-capacity in investment in containerisation equipment. If it is not fully utilised, it has an adverse effect on the cost structure of the port. Those are the factors that determine trade outflow, and to a certain extent it may be determined by separate contracts of agreement by shipowners who can play one port off against another. The ports that are facing those difficulties are desperate to obtain trade. They sometimes choose to get trade at a price that is far lower than that dictated by good commercial sense. The factors that I have mentioned have created a number of financial problems for our ports.

What was the Labour Government's position on the provision of an upper docks facility? The Minister responsible at that time, my right hon. Friend the Member for Stockton (Mr. Rodgers), referred to different time limits. There can be no doubt that the Port of London Authority said that it would close the Royal docks. That was seen as a solution to the financial difficulties of the authority, which was facing bankruptcy; hence the reason for the financial arrangements of 1978.

The condition of the then Labour Government was that the money should be used for manpower reductions. It is admitted in the joint union report that there is room for improvement in that area, although it observes, as did Price Waterhouse, that between 1966 and 1978 the labour force of registered dock workers declined from 25,000 to 8,000. That is a tremendous reduction by anybody's standards.

My right hon. Friend argued that the then Government were not prepared to accept the consequences of the closure of the upper docks. That led to Sir John Cuckney's concentrated alternative. That proposed a certain concentration in the upper, Millwall and India docks and a certain concentration in the Royal group of docks. The Labour Government intervened actively. The Government made it a condition, albeit for only a few months, or a few years, that there should not be a closure of the upper docks' capacity in view of the consequences that would flow. It may be argued that over five years trade had declined to such an extent that the capacity could not be maintained. However, that is not an argument to undermine the Labour Government's position—namely, the expression of a preference that there should be the maintenance of an upper docks' capacity. That does not seem to be in doubt, although there would be some argument about how long that would mean and what it would mean in practice. The fact remains that the Labour Government made a condition before issuing money. That condition applied largely to manpower reductions plus loans to assist in the development of commercial activity. That may be said to be the basis of the Bill.

There is a basic insecurity felt by the docks' labour force that is reflected in the amendment. There has been a massive decline in the labour force, and all the time different plans have been emerging. The Port of London Authority has prepared five different plans within 14 months. They have all presented different arguments, fresh evidence and different conclusions. At one stage it was closing the Royals. The next stage saw it closing the uppers. It then turned its attention elsewhere. That background does not instil confidence.

There have been five different plans in five years for the upper docks alone. That does not include the Maplin development, the development at Tilbury, the transfer arguments, the concentration arguments and other radical plans that have been produced by accountants. I shall refer to the Waterhouse-Fowler plan in due course. There has been considerable insecurity. That has been brought about by the various plans. That has led to confusion and considerable change. The inevitable result is that the docks have moved further and further downstream. That is what causes concern and that is why the Opposition say through the amendment that at some stage the Government should say " Stop ". Stability must be brought to the industry to encourage the best possible atmosphere, to bring about the further changes that have the agreement of all parties and to secure a further reduction in manpower.

I am sorry that the Minister could not be here to deal with the amendment regarding the Royal docks. The workers are further concerned by a matter arising from a statement of his, which I mentioned on Second Reading. When he made the statement the Minister was in opposition. People can read the Price Waterhouse report and the Minister's statements to the effect that we must all stand on our own feet, Government would not intervene and commercial policy would be the determining factor. If the policy is left solely to commercial pressure, the workers will probably interpret the closure of the upper docks—Millwall and India—as a step towards the closure of the Royals. They will believe that if they co-operate in this proposal they will be faced with similar arguments in a few months' time, and time is limited due to the cash limits. They will believe, that, after that short period has elapsed, they will be asked to co-operate in the closure of the Royal docks.

On 8 May 1978 the Minister questioned my right hon. Friend the then Secretary of State for Transport about the financial agreement being brought forward for the Port of London Authority. He said: 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?"—[Official Report, 8 May 1978; Vol. 949, c. 772.] We try to understand what is in the Minister's mind when he argues for cash limits and assistance. If it is a slimmed-down version of the docks based on Tilburay, I am bound to tell him that that will cause considerable resentment and a great deal of trouble in the docks. It will create the wrong atmosphere for the maximum co-operation that will be needed even for this half-way solution, with the Royal docks run in the manner expressed

by the management and the maintenance of Tilbury. All that must be taken into account, and also the financial restructuring, which I shall deal with later.

Surely the Minister does not really believe that the Bill does not affect policy. The chairman of the British Transport Docks Board certainly feels that it does. He feels that giving subsidies to the Port of London Authority will undermine BTBD ports such as Southampton. Presumably the commercial solution would be to allow the PLA to collapse, as in 1978. The commercial solution would be simply Tilbury, in the way that the Tory Government dealt with the Merseyside development in 1972. That is the reality of a commercial policy. I do not advocate such a policy, but by providing the money, albeit by endorsing what the Labour Government started, the Bill is a policy. It is a policy to retain the London authority partly in its present form. It is a more positive policy than a commercial solution. The policy should be to maintain a presence in the upper docks, and we shall therefore press our amendment.

Question put, That the amendment be made:—

The Committee divided: Ayes 83, Noes 130.

Division No. 283]AYES[9.15 pm
Alton, DavidForrester, JohnPark, George
Ashley, Rt Hon JackFoulkes, GeorgeParker, John
Beith, A. J.Freud, ClementParry, Robert
Bennett, Andrew (Stockport N)Hamilton, W. W. (Central Fife)Pavitt, Laurie
Bidwell, SydneyHarrison, Rt Hon WalterPenhallgon, David
Booth, Rt Hon AlbertHaynes, FrankPowell, Raymond (Ogmore)
Brown, Hugh D. (Provan)Home Robertson, JohnPrescott, John
Callaghan, Jim (Middleton & P)Homewood, WilliamRichardson, Jc
Campbell-Savours, DaleHughes, Robert (Aberdeen North)Roberts, Ernest (Hackney North)
Canavan, DennisJanner, Hon GrevilleRobinson, Geoffrey (Coventry NW)
Carmichael, NellJohnson, James (Hull West)Rooker, J. W.
Carter-Jones, LewisJohnston, Russell (Inverness)Ross, Stephen (Isle of Wight)
Clark, Dr David (South Shields)Jones, Rt Hon Alec (Rhondda)Rowlands, Ted
Cocks, Rt Hon Michael (Bristol S)Jones, Dan (Burnley)Shore, Rt Hon Peter (Step and Pop)
Concannon, Rt Hon J. D.Leadbitter, TedSilkin, Rt Hon John (Deptford)
Cryer, BobLeighton, RonaldSoley, Clive
Dalyell, TamLewis, Arthur (Newham North West)Spearing, Nigel
Davis, Terry (B'rm'ham, Stechford)Litherland, RobertSpriggs, Leslie
Dempsey, JamesLofthouse, GeoffreySloddart, David
Dixon, DonaldMcCartney, HughTinn, James
Dobson, FrankMcDonald, Dr OonaghWainwright, Edwin (Dearne Valley)
Dormand, JackMcGuire, Michael (Ince)Wainwright, Richard (Colne Valley)
Duffy, A. E. P.Maynard, Miss JoanWelsh, Michael
Dunn, James A. (Liverpool, Kirkdale)Millan, Rt Hon BruceWinnick, David
Eadie, AlexMorris, Rt Hon Alfred (Wythenshawe)Young, David (Bolton East)
Eastham, KanMorton, George
English, MichaelOakes, Rt Hon GordonTELLERS FOR THE AYES:
Evans, John (Newton)Ogden, EricMr. Ted Graham and
Ford, BenPalmer, ArthurMr. James Hamilton.
NOES
Adley, RobertGarel-Jones, TristanParris, Matthew
Alexander, RichardGlyn, Dr AlanPatten, John (Oxford)
Ancram, MichaelGow, IanPattie, Geoffrey
Aspinwall, JackGreenway, HarryPawsey, James
Atkinson, David (B'mouth, East)Griffiths, Eldon (Bury St Edmunds)Pollock, Alexander
Bell, Sir RonaldGriffiths, Peter (Portsmouth N)Porter, George
Bennett, Sir Frederic (Torbay)Hannam, JohnPrice, David (Eastleigh)
Benyon, Thomas (Abingdon)Hawkins, PaulProctor, K. Harvey
Berry, Hon AnthonyHawksley, WarrenRenton, Tim
Bevan, David GilroyHenderson, BarryRhodes James, Robert
Biggs-Davison, JohnHicks, RobertRhys Williams, Sir Brandon
Blackburn, JohnHogg, Hon Douglas (Grantham)Roberts, Michael (Cardiff NW)
Boscawen, Hon RobertJopling, Rt Hon MichaelSainsbury, Hon Timothy
Bright, GrahamKnight, Mrs JillShepherd, Richard (Aldridge-Br'hills)
Brinton, TimKnox, DavidSims, Roger
Brotherton, MichaelLang, IanSkeet, T. H. H.
Brown, Michael (Brigg & Sc'thorpe)Lawrence, IvanSpeller, Tony
Browne, John (Winchester)Lee, JohnStanbrook, Ivor
Bruce-Gardyne, JohnLe Marchant, SpencerStradling Thomas, J.
Bryan, Sir PaulLloyd, Peter (Fareham)Taylor, Teddy (Southend East)
Bulmer, EsmondLoveridge, JohnTebbit, Norman
Burden, F. A.Lyell, NicholasTemple-Morris, Peter
Cadbury, JocelynMacfarlane, NeilThompson, Donald
Carlisle, John (Luton West)MacGregor, JohnThornton Malcolm
Carlisle, Kenneth (Lincoln)McNair-Wilson, Michael (Newbury)Viggers, Peter
Chalker, Mrs LyndaMajor, JohnWaddington, David
Chapman, SydneyMarlow, TonyWakeham, John
Clark, Sir William (Croydon South)Maude, Rt Hon AngusWaldegrave, Hon William
Clarke, Kenneth (Rushcliffe)Maxwell-Hyslop, RobinWalker, Bill (Perth & E Perthshire)
Cockeram, EricMeyer, Sir Anthony
Colvin, MichaelMiller, Hal (Bromsgrove & Redditch)Wall, Patrick
Cope, JohnMills, lain (Meriden)Waller, Gary
Costain, A. P.Mills, Peter (West Devon)Ward, John
Cranborne, ViscountMontgomery, FergusWarren, Kenneth
Critchley, JulianMorgan, GeraintWatson, John
Dean, Paul (North Somerset)Morrison, Hon Peter (City of Chester)Wheeler, John
Dover, DenshoreMudd, DavidWilkinson, John
Dunlop, JohnMyles, DavidWilliams, Delwyn (Montgomery)
Dunn, Robert (Dartford)Nelson, AnthonyWolfson, Mark
Eggar, TimothyNeubert, MichaelYoung, Sir George (Acton)
Fairgrieve, RussellNewton, TonyYounger, Rt Hon George
Farr, JohnOnslow, Cranley
Fenner, Mrs PeggyPage, John (Harrow, West)TELLERS FOR THE NOES:
Fletcher-Cooke, CharlesPage, Rt Hon Sir R. GrahamLord James Douglas-Hamilton and Mr. Peter Brooke.
Fookes, Miss JanetPage, Richard (SW Hertfordshire)

Question accordingly negatived.

Photo of Mr Eric Ogden Mr Eric Ogden , Liverpool, West Derby

I beg to move amendment No. 2, in page 1, line 5, leave out with the consent of the Treasury'.

The First Deputy Chairman (Mr. Bryant Godman Irvine):

With this we may take amendment No. 17, in page 1, line 21, leave out: 'with the consent of the Treasury'.

Photo of Mr Eric Ogden Mr Eric Ogden , Liverpool, West Derby

This is a proposition which should appeal to all hon. Members. A few moments ago in his winding-up speech on our earlier debate the Parliamentary Secretary referred to the fact that the Bill had attracted the attention and interest of Merseyside Members on both sides of the Committee. It is not merely that we are interested in the possibilities of a later amendment. I cannot speak for the hon. Member for Liverpool, Garston (Mr. Thornton), who will no doubt explain his presence. We have exchanged a few words on this matter. We may not be in cahoots or in collaboration. We are marching perhaps in a parallel.

My purpose is to support my London colleagues in trying to improve the Bill within the narrow terms of the long title. My right hon. and hon. Friends on the Front Bench were more successful in getting their amendments selected than I was in getting mine selected. I should not like to say that the reason is that they possess more skilful or more devious minds. On 17 April, the day after Second Reading, I placed on the Notice Paper seven amendments and one new clause, all of which were intended to support my hon. Friends. The sole survivor of those eight items, compiled with some burning of the midnight oil, are amendments Nos. 2 and 17 to leave out: with the consent of the Treasury". It is possible that, with consent, the Treasury has been trying to leave itself out. The Parliamentary Secretary is a competent Minister. I shall not spoil his chances of promotion above Parliamentary Secretary. The hon. and learned Gentleman is nice, helpful and charming within limits, but he has been left alone to fight the good fight, or perhaps the bad fight, on the Government Front bench. Perhaps he can explain why the Minister of Transport, who is bringing forward a Bill entailing proposed expenditure of about £70 million—no small amount of money—is not able to be present.

Photo of Kenneth Clarke Kenneth Clarke Parliamentary Secretary (Ministry of Transport)

As the Opposition Front Bench know, my right hon. Friend is addressing an important transport gathering elsewhere in London and is not able to be here. It is a longstanding commitment. My right hon. Friend will appear at a later stage of the debate. I apologise for his non-appearance and for the fact that he was not able to write to every hon. Member who might put in an appearance during the Committee stage. I speak, needless to say, in these debates with his full authority.

Photo of Mr Eric Ogden Mr Eric Ogden , Liverpool, West Derby

I do not expect the Minister of Transport to write to every hon. Member. I want to keep Government expenditure down, but a mention might have been made of the reason for his absence. This is an important transport debate. The hon. and learned Gentleman has explained the situation, and we now await the end of the second act, or the interval, when the Minister of Transport will appear.

The Bill is presented and supported by a selection of Ministers—I almost said " a goodly company " but that applied only under the previous Government—whose names appear on the back of the Bill. One is the Financial Secretary to the Treasury. The only Treasury Minister that I can see—this is a technical point—is a Lords Commissioner of the Treasury. His role is not to speak on Treasury affairs, or to speak at all, but simply to see that hon. Members turn up at the right time. A Minister from the Department of Employment appeared but he since has departed, perhaps to address a meeting somewhere. As the part of the Bill to which I refer deals with Treasury consent, a more obvious interest by the Treasury would have been welcome. There may be among the advisers to the Parliamentary Secretary those who represent the Treasury. There may be among that unseen group, whom I shall not describe as angels, a Treasury mole. They do not look it. They look much too nice.

There are few Bills containing specific terms whereby The Minister of Transport may, with the consent of the Treasury ", as stated in clause 1, give financial assistance. Again, under subsection (3), the Secretary of State has to get the consent of the Treasury. The purpose of my amendment is to obtain an explanation of why the Minister must have Treasury consent to hand over sums of money approved by Parliament for a purpose. That seems unnecessary. If the House is willing to support a Minister, we should not have to argue with a Treasury Minister. If there is to be a Treasury veto, the Bill should have been introduced as a Treasury Bill. All Ministers must obtain consent for, or at least not have opposition to, what they wish to do. We must be told why the words should be included in the Bill.

Photo of Kenneth Clarke Kenneth Clarke Parliamentary Secretary (Ministry of Transport) 9:30 pm, 6th May 1980

I do not often accuse the hon. Member for Liverpool, West Derby (Mr. Ogden) of inconsistency. However, this evening I detected notes of inconsistency in his argument. He claimed that he wished to improve the Bill's provisions for the benefit of the Port of London Authority. On Second Reading, I understood that he protested vehemently at assistance being given to the PLA unless that assistance was matched by assistance to the port of Liverpool. I understand that Merseyside Members, along with representatives of other port areas, object to assistance being given to the PLA because that will result in its being able to compete more favourably.

Photo of Mr Eric Ogden Mr Eric Ogden , Liverpool, West Derby

My position is simple. I supported the proposition by the Labour Government to provide money for the PLA. I simply wanted something—not as much—for Merseyside. I do not want to block the Bill just because I cannot persuade the Government to give money to Merseyside.

The First Deputy Chairman:

I hope that the Minister will not follow that argument too far.

Photo of Kenneth Clarke Kenneth Clarke Parliamentary Secretary (Ministry of Transport)

I am sure that that theme will be developed later.

I thought that the purpose of the amendment was to protect the Minister of Transport and the Secretary of State for Employment against the excessive interference of Treasury Ministers. However, the hon. Member for West Derby asked why a Minister from the Treasury was not in the Chamber to vet what I say in reply to the amendment. The hon. Gentleman cannot have it both ways. He cannot seek to exclude the Treasury from the Bill and demand the presence of a Treasury Minister to listen to what I say.

The Bill, and what is said by the Government about it, represents Government policy. The requirement for Treasury consent is virtually standard form in Bills which give Ministers power to provide financial assistance. The provision is well precedented in legislation proposed by Governments of both parties, particularly in the Industry Act, which gives wide powers to the Secretary of State for Industry to make grants. It is always regarded as a precaution to include in statutes which enable Ministers to dispense finance in that way an express statutory requirement that Treasury consent should be obtained.

I defend the inclusion of the words, but not through clenched teeth. The policy in the Bill is that of the whole Government, including the Treasury. My right hon. Friend the Minister of Transport has made clear at every stage the precise extent of the disbursements that he is prepared to make to the PLA, the nature of them and the basis on which further commitments will be made. As that is the policy of the Government, there is no reason to imagine that either present or future Treasury Ministers will suddenly retreat from that position. It is a perfectly prudent precaution that sponsoring and spending Department Ministers should have the consent of the Treasury before they make specific commitments of public funds towards the purpose of the Bill.

That precaution was not removed from legislation by the previous Government, and I do not think that any useful purpose would be served by removing it now. It does not have any novel or sinister implications for the policy of the Bill.

Amendment negatived.

Photo of John Prescott John Prescott , Kingston upon Hull East

I beg to move amendment No. 6, in page 1, line 14, after 'may', insert 'after consultation with the National Ports Council'.

The First Deputy Chairman:

With this it will be convenient to take amendment No. 8, in page 1, line 16, after ' may ' insert 'subject to the provisions of sub-section 2(a) below.' No. 13, in page 1, line 20, at end insert: ' 2(a) Prior to the imposition by the Minister of any conditions, as described and empowered by Section 12 of this Act, it shall be the duty of the Minister to have regard to the evidence given to, and any conclusions reached by, any Committee or Enquiry, which it shall be his duty to establish, to consider and report on the best means of attaining the purposes of this Act. Any such Committee or Enquiry shall also consider and report to the Minister on:

  1. (i) those parts of the statutory obligations and other operations of the Port of London Authority which in their opinion have a potential for making a commercial profit and the numbers of persons necessarily employed to attain such ends;
  2. (ii) means of reducing the numbers of persons employed by the Port of London Authority in respect of their statutory obligations which they regard as not being generally capable of producing commercial profits; and
  3. (iii) any other matter which in their opinion may assist to attain the objectives of this Act.'.
No. 15, in page 1, line 20, at end insert: ' (3) Any such conditions relating to management services and facilities referred to in subsection (2) above, shall be the subject of prior consultation by the Minister with any local authority, or any other body which may appear to him to be concerned with, or affected by, these conditions and who represent interests concerned with the operation, progress and profitability of the whole or any part of the Port of London, as defined in Schedule 1 of the Port of London Act 1968; or the conservation or navigation of the River Thames within the limits defined therein.'. No. 16, in page 1, line 20, at end insert: ' (3) Any such assistance and associated conditions made by the Minister in respect of subsection (2) above shall be made by Order in Council and shall be published in the relevant Annual Report of the Port of London Authority.'.

Photo of John Prescott John Prescott , Kingston upon Hull East

This amendment makes clear that any moneys provided under clause (2) should be granted only after consultation with the National Ports Council. The amendment is designed to make it a statutory requirement to consult the National Ports Council before financial assistance is given under the section. That is in line with the present role of the National Ports Council as envisaged for it in the Harbours Act 1964. Its role is advisory. The function of the National Ports Council is to advise the Minister under certain conditions specified in sections 9 and 11.

In this amendment we are saying that any consideration of financial aid under the Bill should require consultation with the National Ports Council. The Government do not, clearly, disagree with that advisory function. They have received, and extensively quoted, the Price Waterhouse report. That firm of accountants was appointed by the previous Government and a second report was asked for by this Government. The report we have before us—and we are grateful for the insight it affords of an accountant's view of these problems—was commissioned by the present Minister of Transport.

In appointing the firm of Price Water-house the Labour Minister did not solely rely on the report the firm produced. He also requested a number of joint industrial studies which he had to take into account. We debated, in the previous amendment, the requirement upon a Labour Government to consider, for whatever period of time was necessary, the retention of an upper docks presence.

The Price Waterhouse report reveals an accountant's view of the problem. It exposes a financial problem and proposes a financial solution. The report does not take into account those social considerations which the Opposition believe are absolutely vital and which are bound up with the development of ports policy.

To be fair to the Price Waterhouse report, it makes clear on page 2: In reviewing the PLA's general strategy there are wider issues than the detailed financial analysis. These wider issues, which we have not considered, include the relationship to the Port of London and the PLA to Dockland's redevelopment, the economic role of the PLA, competition policy between ports and the social consequences of the various courses of action. The report makes clear that its assessment is solely a financial assessment of a financial problem and properly gives a disclaimer as to those other considerations which we believe are extremely important and which should be considered before making judgments in this context and in relation to the PLA.

We reject the policy that purely commercial criteria should govern decisions in this area. Indeed, that has been the view of previous Tory Governments. Those Governments have taken account of the report of the committee of inquiry into the major ports of Great Britain in 1963, which recommended an active interventionist policy in ports development and which advocated a ports plan. We discussed that in previous debates. The result of the recommendations of the Rochdale inquiry can be seen in the Harbours Act, 1964.

If one looks at the debate that took place in the House of Commons on 10 July 1963 one will see the remarkable statement by the then Tory Transport Minister, the late Lord Marples: We have already taken some action. We have set up this central agency which will be known as the National Ports Council.The decision to assume central control of major port investment is fundamental to the whole issue. This is essential to ensure that particular developments fall into their proper place as components of the national plan. One of the chief functions of the National Ports Council will be to prepare the plan itself and also to encourage and advise port authorities on all works which appear to be in the national as well as the local interest. All that we have accepted. To be fair to him, I should continue the quotation: That is in paragraph 218, which recommended that powers should be taken to direct ports to undertake schemes which were considered by the central planning agency to be essential. The Government are not prepared to go so far as this."—[Official Report, 10 July 1963; Vol. 680, c. 1251.] The Government were prepared to see that a plan was formulated and the agency for intervention and recommendation was to be the National Ports Council. We endorse that as a philosophy, but we go much further. We believe in the National Ports Authority, again as outlined on Second Reading; but in this sense I seek only to make the point that the National Ports Council was the creation of Tory policy, based admittedly on Lord Rochdale's recommendations, and prevailed in the period which I now hear claimed as the 13 golden years of Tory rule, but a period, clearly, of active interventionist policy.

This type of policy is even more relevant today—17 years on. In our amendment we have called for the National Ports Council, as the existing institution, to be considered. As I have made clear, we feel that a body with no teeth, as is the role of the National Ports Council, is better replaced by a national ports authority, but, keeping within the institutions that we have, the National Ports Council is the one that is available.

I think that the whole Committee would want to give due credit to the National Ports Council for the valuable work that it has done. We are aware that the Government have stated that this body is to be abolished. Nevertheless, we note that the industry—representing road transportation, the ports industry and the shipping industry—is protesting at the proposed axing of the National Ports Council. Perhaps I was wrong to mention the ports industry as a ports authority. As the industry involved, it has actively campaigned for the axing of the National Ports Council. However, it is interesting to note that the industry's consumers are extremely concerned at the Government's proposals to axe this body. Indeed, one assumes that some role will have to be found for advisory ports policy in the Civil Service or in the appeals system. I do not think that the Minister has any such intention, but perhaps we can call on him to indicate what he intends to do with the appeals procedures as regards consumers who feel that they are being exploited by port authorities that dominate most of the port investment in a particular area.

Hull is a classic example, as the Parliamentary Secretary knows, with the British Transport Docks Board and the fish ports of Hull and Grimsby dominated by a monopolist—in this case, a nationalised industry, which gives me no great comfort, except that the man who chairs the industry is no great Socialist, in common with the chairmen of other nationalised industries.

The point that we make is that all Governments have used the National Ports Council. For example, let us consider the valuable report that it made on the non-scheme ports, which was commissioned in 1972 by a Tory Government. Indeed, the Minister has referred to the Liverpool crisis or has recommended a report into its present financial problems, of which we shall no doubt hear more later.

Price Waterhouse correctly refers to and credits the National Ports Council as receiving independent advice on the problems of the Port of London Authority. In this sense, the National Ports Council is an interventionist agency, albeit marginally. Nevertheless, it takes into account other criteria than those which have conditioned the thinking of the accountant in the financial solution that he has provided in his report. Nevertheless, as I said in the earlier debate, the Bill is, in a way, interventionist. It prevents the occurrence of a kind of bankruptcy by providing money. It provides money for severance. Indeed, the argument on Second Reading, for which there is some justification, is that London is being treated as if it were in a somewhat privileged position.

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I cannot see how the Government will be able to stand aside next year, for example, if one takes into account the present Liverpool claims that were made on Second Reading, and if one bears in mind the considerable financial difficulties that have been experienced this year, directly due to severance problems, and bearing in mind that another 700 people are being considered for possible redundancy in Liverpool, when the financial circumstances of the port of Liverpool may be similar next year. If the National Ports Council were to come to the conclusion that financial aid was needed from the State, in the way that we have treated the PLA, what would be the Government's position if the National Ports Council were to make that kind of recommendation on the same grounds?

The Government will not be able simply to stand aside and say that that was one exceptional case. They probably could say that if they wished, and they may well do so. However, they are, nevertheless, expressing a preference in regard to one port rather than another. The argument about non-intervention is that they are favourably disposed to neither one nor the other. I do not know whether another Liverpool-type solution would be sought, where help would be refused if the port got into financial difficulties, such as with the bankruptcy of the port of London in 1972.

Therefore, in the amendment we advocate that the National Ports Council should be regarded as an important body for consideration of these sorts of problems—not only, as we have mentioned, problems of investment and of excess capacity and, as I have tried to indicate, problems of container investment—illustrating the Tilbury, Felixstowe, Southampton situation—but certainly taking into account the tremendous amount of social costs involved in these decisions.

Indeed, we could call in aid a further useful Tory precedent in regard to consultation with the National Ports Council. After the collapse of the Mersey Docks and Harbour Board, we saw the introduction of the Harbours (Loans) Act 1972, which was primarily designed to assist with problems of redeeming debt arising out of the lack of confidence in private investment in ports as a result of the Liverpool situation. As I understand it, that was an Act to grant loans to authorities to deal with these problems In the legislation of 1972 in regard to giving loans, there was the qualification that the National Ports Council should be consulted about such loans. But perhaps we are in a new era of non-intervention. Perhaps we are not even prepared to follow the traditional approach of previous Conservative and Labour Administrations in regard to financial help and investment considerations given to various port authorities.

It would certainly be a fair point to say that in this Bill it is not loans that we are giving to the PLA but direct grants—initiated admittedly by a Labour Government. There is no such requirement in the Bill, which has been produced as a Conservative Bill, for consultations about the giving of direct grants. That is distinctly different from the policy pursued in regard to loans under the Harbours (Loans) Act 1972. Therefore, we believe that these are indications of a certain intervention, and we are advocating that it should be a considered possibility in this legislation.

We would require that matters other than the financial solution should be considered. There have been numerous PLA reports, as we have mentioned, with conflicting conclusions. There have been other bodies calling for independent re- views. The latest can be seen in the utterances of the South-East Economic Planning Council—which I presume is another body up for the chop. In one of its last press statements, of 5 March 1979, it was concerned about the future of London's upper docks and it recommended an independent study of London's future port needs. Indeed, my hon Friend the Member for Newham, South (Mr. Spearing) and others have tabled an amendment calling for an inquiry by the House. There are increasing demands for assessments, other than those of the accountants and the PLA, of the problem.

Our amendment is the least that is necessary for a proper overall judgment to be taken, as has been the practice of previous Governments. The Government's policy, as reflected in the Bill and in statements, is not a port policy and falls short of the alternative of a national port authority recommended by the Rochdale committee and supported by the Opposition.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

This group of amendments is about inquiries, consultation and reports. My hon. Friend the Member for Thurrock (Dr. McDonald) and I have tabled four amendments, and I shall speak to those. I shall be as brief as possible and if my delivery is somewhat staccato, it will at least get the point home without taking too much time.

The Parliamentary Secretary has made clear that the purpose of the Bill is to restore financial profitability to the PLA. We said on Second Reading that we did not think that was possible, because we think that the problem is more deep-seated than the hon. and learned Gentleman supposes.

Amendment No. 8 is a paving amendment for No. 13, which makes it a duty of the Minister to set up an inquiry before any conditions are issued. It requires that the inquiry should report on the parts of the port's activities that are commercially profitable, together with those that are not, and the action that must be taken on both to achieve commercial profits or reduce manpower and to report on any other matter which in their opinion may assist to attain the objectives of this Act.

This matter is also related to the interests of the community. The East End community will be the big loser if something goes wrong. The port management may have " top hat " pensions and the dock labour may have the docks scheme, but the community has nothing. It therefore has a right to call both groups to account for their actions.

I do not pretend that there is not some clearing up to be done in relation to labour, just as there is in terms of management, but I believe that that can be achieved only by opening out the issues and by having consultation and a full inquiry.

The Minister said earlier that there must be change. He said that the Government wanted efficiency and changes in working practices and that they wished the PLA success. If he really wants that, an inquiry on the lines that we have indicated in the amendment is necessary. If he indicates that that is what he wants, we shall believe that he seeks success, but if he says that there have been enough inquiries we shall doubt the sincerity of his good wishes.

There has been considerable criticism and questioning of the PLA management. I shall not go into details and repeat what has been said, but there has been long-term criticism. I am not referring to the chairman or necessarily to the board members, but questions have been asked about recruitment policy, key operational jobs and how people are selected to fill them, promotions policy, particularly internal promotions policy, the policy in respect of those with operational experience and so on.

On the question of labour practices, it is quite clear that there have been traditions which have been built up on the custom of putting in what amounted to a substitute ship's crew to discharge or stow cargo. The craft of the stevedore is not what it was at one time, but the customs and practices which have been built up over time remain, and I can well understand why, because in an operation such as the PLA's, unless we keep what we have when there is constant bargaining going on, we are giving away unnecessarily our side of the bargain.

That is why we have said to the Minister that unless the PLA shows some signs of faith and real initiative people cannot be expected to give up labour practices which may well be outdated in the light of an inquiry but which to them are bargaining counters in relation to their livelihood and that of those who come after.

So the whole question of labour relations, of whites and blues, of this job or that job or of overside conditions or ship and quay space conditions, which are vital to the future success of the port, is related not just to labour but to management practices and attitudes.

My own local authority has, in relation to its own attitudes to the urban development corporation mentioned earlier, passed a resolution calling for an inquiry into the operations of the PLA. With the Royal docks as a major industrial asset of that authority, I think that the Minister ought to take account of the support for an inquiry of this sort which has been expressed by them.

I believe that there are very good reasons for this. The PLA, together with associated bodies, set up in 1975 a joint port trade development committee under the chairmanship of the right hon. Frank Cousins. The committee published a report in 1976. It was published in Port of London, the PLA's own journal, and was entitled " A Vital First Step ". Very little has been heard of it since. One or two things have been talked about, but I believe that that committee set an example which ought to have been followed and I should like to know, as would a lot of people, why the PLA did not invest, as it were, in the activities of that committee. Maybe its conclusions were not entirely practical at that stage, but the drive and effort were not followed through.

There is the drama of the Nellan crane, a very expensive piece of equipment bought under a harbour dock loan, approved for the West India dock but, for various reasons—labour and management blame each other—not used. There ought to be an inquiry into that. It was public money, authorised, no doubt, on a recommendation from the National Ports Council, and no doubt sanctioned by the Treasury. Now the West India docks are to be closed. What were the circumstances, in detail, which led to the authorisation, which I supported, because it was recommended by the Cousins committee, and everybody wanted? They said it was a good thing and then that it could not be used. There ought to be an inquiry into that.

One of the matters which have faced us continually is the question of the labour force, and the Price Waterhouse report emphasised this. The rundown, of course, has been massive: 31,000 registered dock workers in 1955, 16,000 in 1970 and now, in 1980, the London Dock Labour Board tells me that there are 6,526. That is a massive rundown by any standard, but what is not generally realised is that of that 6,526 only 3,681 are employed by the PLA.

There are PLA staff as well. Many people will want to know the basis on which they have been employed recently. I tell the Minister and those who support the Bill, as we do, in principle that we cannot go on saying " We shall have profitability by shedding labour ", when there are only 3,681 registered men employed at present. The PLA always had small numbers. Those 31,000 were employed not by the PLA but by private wharfingers and private labour contractors.

I turn to the question of handling profits. We think of losses. Massive figures are quoted, but the PLA report for 1978 shows that in cargo handling, that very important area where the PLA is thought to be at a disadvantage—

It being Ten o'clock, The Chairman left the Chair to report Progress and ask leave to sit again.

Committee report Progress.