Port of London (Financial Assistance) Bill

Business of the House – in the House of Commons at 9:30 pm on 6th May 1980.

Alert me about debates like this

Again considered in Committee.

Mr. Bryant Godman Irvine:

Mr. Bryant Godman Irvine in the Chair

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

When the business motion was moved I was explaining that there were many reasons why there should be an inquiry, and I had reached the point of quoting cargo handling. The 1978 annual report stated that revenue from cargo handling was £41·993 million, whereas expenditure on handling was £41·871 million. That shows that it is almost in balance. Yet we are constantly told that cargo handling in the enclosed docks by the PLA is running at a considerable loss.

We are often told that the PLA is the port of London. The PLA annual report for 1978 shows that out of approximately 50 million tonnes of cargo in the port of London the PLA handles less than 10 million tonnes. The exact figures in the table are 8·2 million tonnes at PLA dock premises and 41 million tonnes river. That includes the PLA's bulk grain facilities in the river. We have to decide how much the PLA is a dock authority and a cargo-handling authority, and how much it is a conservancy authority, because £10 million comes in port dues.

Here the Touche Ross report, which the Minister dismissed rather airily, is of great significance. The PLA document on Touche Ross dated 1 June 1978 points out that there have been savings amounting to millions of pounds, and using Rotterdam conditions the PLA would be relieved of £296,000 on dredging, £2·7 million on rate costs and £6·2 million in police costs. On Hamburg conditions the rates relief would be about the same. I would expect the inquiry to look into these matters. Touche Ross is not just to be dismissed in the way the Minister did earlier.

The proposals contained in the PLA five-year plan have been commented upon in the Price Waterhouse report, but throughout the plan the PLA appears to make no distinction between its statutory functions and the facilities for which it is responsible, and the overall projections of port activity. There are complex tables relating to base A suppositions, target suppositions, low estimates, base B and other such management techniques, but there is little appreciation of the fixed physical assets of the PLA and how each can either be used or changed to make the whole operation financially viable. The five-year plan needs to be looked at in its assumptions, in the way it is set out and the way in which an analysis is made.

Many of us on the Opposition Benches and in East London believe that there should be an inquiry into the PLA. The inquiry might make no recommendations, but as a result of the openness of an inquiry the sort of industrial relations which we want to achieve may stand a much better chance of being introduced, and suspicions may be blown away. Without such an inquiry, it is not possible, despite the open policy of the past, and I am sure the present, chairman of the PLA.

The other amendments relate to consultation. Amendment No. 15 requires the Minister to consult 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. If the Minister will not accept an inquiry—I hope that he will accept it in broader terms, if not for the purposes of the Bill—he should consider his reply carefully in relation to amendment No. 15. Under the Act he has powers to make conditions. I have already explained the interest of local authorities, and he should consult them before making any conditions under this Bill.

The, private wharfingers handle far more traffic than the PLA. The PLA believes that the future of the Port of London is more in wharves in the river than in some of its older installations. If the Port of London Authority believes that, and if four-fifths of the trade is already in the river in one form or another, the Minister should consult the wharfingers.

He should also consult the waterside manufacturers, many of whom have ships which come alongside the jetty and discharge raw material and pick up cargo direct from the manufacturers' facilities and base. Tate and Lyle, in my constituency, which handles 1 million tons of sugar, is a case in point. Therefore, the waterside manufacturers have an important part to play in the operations of the port of London.

The lighterage interests also have an important part to play in terms of mobility of cargo—transfer from warehouse to ship, ship to ship, and ship to shore, particularly in respect of bulk cargoes. Towage concerns are also involved. It is argued that it costs a great deal of money to bring ships up the river because of the use of tugs. There have been reductions in the numbers of tugs required, and that is important. It is also important to the ship owner, because he will have to pay different costs to different groups of people on different occasions. He will have to pay lighterage dues, tug dues, pilotage charges, docks dues and dues on cargo.

At present, it is a complicated procedure for a shipowner to bring a ship into London, because of the host of different authorities to which he has to pay charges. It is not so of many Continental ports. The Minister should therefore consult the London General Shipowners Association or the General Council of Shipping. They do not wish the port of London to be further reduced in size, and they are concerned with the operations and facilities of the port.

Even if the Minister cannot accept the amendments, an undertaking by him that he will make such consultations before giving any directions under the Bill will set at nought many suspicions and anxieties. If he does not give an undertaking, the anxiety regarding the future of the port can only be increased, and I am sure that he does not want that to happen.

Amendment No. 16 requires the direction given by the Minister in the course of the preceding year to be included in the relevant Annual Report of the Port of London Authority.

The Minister should make public the directions that he is empowered to make by the Bill. I hope that he will issue a press release or a statement, or that someone will be inspired to ask him a question so that he may make these matters clear. Even if that is done, I hope that the Minister will accept the amendment. At present, we are supplied with a list of directions made by the Minister on finance. The list appears in an annual report. That report should include directions of the Minister on any actions of the PLA in respect of the Bill.

I have gone rapidly through a list of requests. However, I can assure the Minister that if he does not accept the amendments the way in which he takes account of them in his future actions will be important in terms of the attitude and reaction of those who work in the port. The Minister should remember that the port is not only the PLA. It is a sensitive and complex organism of many groups providing many different types of service on land and water. He must be aware of the effects of his directions. His directions may be good for the accounts but bad for the port. The latter effect should be taken into consideration before directions are made.

Photo of Dr Oonagh McDonald Dr Oonagh McDonald , Thurrock

I support amendments Nos. 13 and 15. My hon. Friend the Member for Newham, South (Mr. Spearing) has listed the various bodies which the Minister should consult on the proposals to give financial assistance to the Port of London Authority. I do not wish further to list the bodies that should be consulted, except to refer to the local authorities that will bear the brunt of the social and unemployment problems that could arise not only from the closure of the upper docks but if Tilbury docks should face difficulties in future.

I referred on Second Reading to the possible problems faced by the decline in New Zealand trade as a result of the decisions of the EEC. Such problems could also arise as the result of a future decision by the authority to push for new docks at Maplin. That would drive trade further down the river and would in the process, in my view, destroy Tilbury. I am aware that that is not the view of the authority.

I, like my hon. Friend the Member for Newham, South, stress the need for consultation with local authorities because of the problems of unemployment and the related social problems that could arise from the closure of the upper docks and the possible decline of trade at Tilbury.

The extent of such problems may be seen by taking into account recent surveys of the importance of docks for employment. It is suggested that the number of dock-related jobs arising from one dock job is 3:1 or 4:1. The closure of a dock is important not only for the loss of jobs within it but because of the implications for dock-related industries. It is also important, but more indirectly, for other services both private and public.

It is vital for consultations with organisations such as local authorities to take place on the nature of the financial assistance that is to be given, in this instance, to the Port of London Authority, and certainly to docks generally. That is not the argument that I wish to pursue. I wish to stress that such consultation would have to be wider ranging than the report that was produced by Price Water-house.

I referred on Second Reading to the narrowness of that report. The authors indicate that they are aware of its narrowness. That has been stressed again in the debate. It is not enough to consider only the financial considerations that are set out in the Price Waterhouse report. It is not enough to assume that a reduction in manpower, important though that is, especially in relation to the category B men, will solve the problems of the authority.

It is interesting to look at a Port of London Authority's comments on the joint docklands action group analysis. In those comments there is an implicit recognition of the need for wider consultation. The PLA expresses unease over the implications for the community of the decisions to close part or, indeed, the whole of the upper docks. It recognises that in any decision it makes there are major environmental and social problems to be considered. However, it accepts that the original Act of Parliament setting up the PLA indicates clearly that it has no formal responsibility to the community. There is unease in those comments. The PLA recognises the impact of its decisions on unemployment and reducing the amount of industry in the area surrounding the docks, yet is aware that it has no formal responsibility. Our amendment would ensure that the Minister more definitely took account of the need for the PLA to be responsible and accountable to the communities and other bodies that its decision affects.

In some of its comments the PLA recognises that the issues involved in seeking viability are wider than those contained in the Price Waterhouse report. It refers to the fact that a ship going to berth in the docks has to pay PLA dock charges and dock pilotage over and above charges payable at riverside berths. It recognises that that is a difficulty which presents the PLA with serious problems of competition with other United Kingdom and European ports.

That should raise questions about the way that the PLA has to operate and about the other bodies that it has to deal with. It should raise the whole issue of subsidies for port charges. None of those issues is covered in the Price Water-house report or in the Bill, which implicitly accepts the conclusions of Price Waterhouse by suggesting that the PLA will become viable if the Government provide the sums outlined and thus enable the PLA to reduce its excessive manpower.

The PLA has made efforts to obtain additional business for the upper docks and for Tilbury, but it blames industrial problems for the failure. That issue should be examined further. The PLA's conclusion that industrial problems and excess manpower have led to the difficulties is too easily accepted by the Minister and brought to a conclusion in this Bill. The Minister should consult the other relevant bodies, which would give him a broader picture of the problems faced by the PLA. He would then see that the decisions of the PLA to cut back in the West India docks are not taken in a vacuum but have important implications for the surrounding community.

Any decision about the financing of the PLA can properly be made only by consulting local authorities and other bodies, as suggested in our amendments. Only by so doing can the PLA become a viable concern. From time to time, the Parliamentary Secretary has admitted that. However, he has not done so in an entirely consistent manner. Towards the end of his speech, he seemed to veer round towards the Price Waterhouse analysis and interpretation of the Port of London Authority's difficulties.

Some of the issues that should be examined have been covered by " London's Docks: An Alternative Strategy ". The document was produced by the joint docklands action group and by the Tower Hamlets action committee on jobs. I do not wish to suggest that I necessarily support every part of that analysis, or every option proposed. However, the document raises some important issues that should be carefully examined. For example, it stresses that the PLA should change its marketing activities. It points out that a major recommendation of the joint port trade development committee was that the Port of London Authority should restructure its marketing activities and adopt, where appropriate, a functional marketing structure. It suggests that facilities should be marketed by type rather than by geographical location, as at present.

My hon. Friend the Member for New-ham, South pointed out weaknesses in the management structure of the Port of London Authority. He also pointed out weaknesses in its activities. Those are important weaknesses that should be examined by those who wish to ensure that the Port of London Authority becomes a viable concern. The analysis points out that there has been a lack of investment. The authors point out that general investment is badly needed in plant, equipment, buildings, and, in particular, the provision of roads. Such investment is needed to make up for lack of investment in the past.

Tilbury is the largest container dock in the United Kingdom. As yet, it has no major motorway into it. The roads that lead directly to Tilbury docks are for the most part old, ordinary, narrow surburban roads. They carry heavy traffic and are subject to great congestion. Tilbury docks is in urgent need of a proper road connection. We are only beginning to see part of that network. That is being provided by the M25 and by improvements to the A13. The provision of adequate road connections should be examined if Tilbury and the Port of London Authority are to be made profitable and successful concerns. Such investment is sorely needed.

The Price Waterhouse report does not consider the past lack of investment and its implications for the viability of the PLA. The analysis suggests that specialised facilities should be developed to capture particular trades. The figures of the National Ports Council show that specialised trade in forest products, iron and steel, chemicals, animal and vegetable oils and cement will rise dramatically in the next few years. They show that such trade will amount to 26 million tonnes by 1985. That is another important area of possible expansion.

However, those options have not been examined in the report that the Minister has considered. There has been a lack of consultation with bodies such as the National Ports Council. Such bodies could provide the necessary information and could push for that type of development. I do not believe that the Bill will achieve that objective. It will help; that is why we are not opposing it. But that is not enough. To accept the conclusions of the report, to sit back and have no further inquiry or consultations and to expect the PLA suddenly to become a viable concern in the years to 1983 is to live in cloud-cuckoo-land. The PLA has much deeper and much more serious problems than those covered by that superficial report.

Photo of Kenneth Clarke Kenneth Clarke Parliamentary Secretary (Ministry of Transport) 10:30 pm, 6th May 1980

The amendments have a common theme. They require that there is consultation with various bodies, or inquiries of various kinds, before any assistance is paid or any conditions are imposed. Two general observations argue against imposing such statutory obligations at this stage. First, the sum of money is limited to £70 million and a substantial part of it has already been committed and spent, largely by the Labour Government at a time when no conditions were imposed. We are more than halfway through a policy.

No less than £42 million of the £70 million of Government assistance provided under the Bill has already been taken up. Our predecessors disbursed those sums, in grants for severance and backing for commercial loans, on the authority of the Estimates backed up by Appropriation Acts. They made a footnote, undertaking that they would legislate in due course to give themselves authority to disburse those sums.

As a Member rather than a Minister, may I say that that procedure is novel. It is a further startling example of the inadequacy of control by the House over Government expenditure. I am assured that the procedure is proper. It was followed by the previous Government. We seek full constitutional legitimacy for the expenditure of the £42 million spent under the previous Government's policy. We are dealing only with the remaining £28 million of Government assistance. Tight statutory obligations to consult and inquire before the disbursement of the remaining £28 million are proposed.

Secondly, everybody appears to be satisfied that we should, in circumstances such as those set out by my right hon. Friend last year, disburse assistance to a limit of £70 million to the Port of London Authority. That assistance is needed if the port is to continue to trade when it is running down its manpower to the levels necessary to achieve viability. One effect of the statutory consultation and inquiry process canvassed by the Opposition Members is endless delay before further sums can be disbursed. The PLA's problems are such that if we launch now on a wide-ranging public inquiry or detailed consultation with every public body which has a legitimate interest in the future of the port or the associated parts of East London, there is a serious danger that the PLA will be no longer trading.

Perhaps the Committee would be content with more straightforward consultation, although the question of the suggested subject matter and the people whom we might consult has taken up considerable debating time. What is being urged upon the Government is that a process that is bound to cause delay should now be introduced into this policy before the final £28 million worth of assistance is available, on the right conditions, to the Port of London Authority.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

Does the Parliamentary Secretary agree that on these amendments we are speaking of inquiries and /or consultations prior to the imposition of conditions? That is rather different from the release of the £28 million. Does not the hon. and learned Gentleman agree that the money could be paid?

While we are on the issue of control by the House, how else does the Minister think that hon. Members can seek to ensure that money is well spent other than by suggesting inquiries at the point at which the money is authorised by the House?

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

The House can normally scrutinise expenditure when it is put before the House in the form of a Bill such as this seeking authority for a Minister to disburse assistance. What happened, no doubt for very good reasons which we do not dispute, under the last Labour Government in relation to this policy was that no debate of any kind on the disbursement of the moneys appears to have taken place. The undertaking to legislate was tucked away as a footnote in the Estimates. In fact, £42 million worth of money has already either been given by way of grant or committed by way of backing to loans in that way. We are putting that right. This is the procedure, in this Bill, by which Parliament is sanctioning that expenditure and the remaining £28 million.

It is true that the amendments ask for a wide-ranging inquiry and for an Order in Council procedure before any conditions are imposed. As we made clear on Second Reading, and as we made clear in the debate on a subsequent group of amendments, also tabled in the names of the hon. Members for Thurrock (Dr. McDonald) and Newham, South (Mr. Spearing), we have no intention of imposing detailed managerial conditions upon the Port of London Authority.

The full conditions upon which this assistance is to be given were clearly set out in my right hon. Friend's statement to the House in December last year. They set out clearly the way in which assistance would be given, partly by grant and partly by backing to loans, the basic condition being that this is to reinforce a policy of reducing manpower to the necessary levels to achieve viability for 1983.

There are no new detailed conditions of a managerial kind—which the hon. Members clearly anticipate—to be made which need give rise to inquiries and Orders in Council. If hon. Members do not accept my assurance—if we were contemplating conditions before disbursement of further assistance—the need to have a wide-ranging inquiry before we could impose those conditions would lead to delay before any assistance could be given on the conditions which were objected to or inquired into. Therefore, one way or another, it seems to me that all the amendments give rise to the risk of delay in giving further assistance.

The amendments also give rise to an unnecessary level of discussion and debate on essentially managerial and industrial relations problems which probably are not likely to be assisted by too much public debate and discussion. Let me make it clear that, when I say that we do not need a wide-ranging inquiry and discussion—I shall develop this argument shortly—the Government are not closing their ears to any views on the future of the Port of London Authority. We are quite prepared to study reports from interested groups such as local authorities and other bodies which wish to make submissions.

But the idea that we now need an organised public inquiry to which everyone can make submissions on managerial problems, or a process of statutory consultations which, of necessity, would involve months of discussions with local authorities and everybody referred to, seems to me not to be in the interests of the Port of London Authority which needs now to get on with the decisions that have to be taken.

Photo of Mr Leslie Spriggs Mr Leslie Spriggs , St Helens

I do not wish to extend the period of consultation, to which my hon. Friends have rightly drawn attention, but will the Minister inform the Committee whether the Port of London Authority would qualify for section 8 grants for the Royal docks, which took the rail links out some time ago, in the event of redeveloping the Royal docks? If section 8 grants were applied for, would the PLA qualify for such grants?

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

That is section 8 grants for railway equipment and sidings. It is possible that some aid could have been given under section 8 of the Industry Act, but we did not follow that method as that would merely involve an Order in Council, not a full Act of the kind that we are now proposing.

As regards new rail facilities in the ports, I shall write to the hon. Gentleman to confirm my off-the-cuff judgment. If any customer who uses Port of London Authority land sought assistance to put on to rail traffic that would otherwise go by road and the normal criteria were satisfied that there were environmental reasons for doing so, but that the traffic would not go by rail unless some assistance were given to the customer with the rolling stock, sidings or equipment of that kind, my belief is that such an application would be eligible for section 8 grant. Section 8 grants are dealt with sympathetically by the Government. They have had occasion to turn down only one since they came into office and they have given approval to a considerable number.

I return to the various amendments and consultations that are proposed and deal with the form of consultation or the body involved as set out in each of the amendments.

The hon. Member for Kingston upon Hull, East (Mr. Prescott), on behalf of the official Opposition, moved an amendment seeking consultation with the National Ports Council. Inevitably, the hon. Gentleman. strayed into general policy on the future of the National Ports Council. He knows that my right hon. Friend has already announced his intention to legislate to abolish the National Ports Council. That, as the hon. Gentleman conceded, has the full approval of the ports industry. But it certainly gives rise to various questions about how the functions carried out by the National Ports Council can be carried out in future where it is essential in everybody's interests, including the consumers, that they should be carried out.

As the hon. Gentleman probably knows, the Government are heavily engaged in consultations with the NPC, the British Ports Association and consumer representatives of various kinds on the arrangements which will supersede the National Ports Council. Plainly it is important that various of the functions of the NPC should be continued by some body, and it is desirable that that body should represent fully the interests of the ports industry, the Government and the users of ports who are entitled to look for efficiency and good service from the ports.

However, the hon. Gentleman will know that this is not the time to start announcing policy conclusions. In any event, none has yet been reached. In due course, my right hon. Friend will make clear the precise nature of the legislation which will be introduced to abolish the National Ports Council and the policy which will deal with the future of those functions which the Government are satisfied will have to be carried out by some body to serve the ports industry.

Meanwhile, we have the National Ports Council. I join the hon. Gentleman in paying tribute to the way in which it carries out its work. He was right in saying that we are asking it to study with the Mersey Docks and Harbour Company the future arrangements for that port. But I suggest that it is inappropriate to involve the National Ports Council at this stage in statutory consultations on the future form of assistance to the PLA.

The position here is not the same as the position on the Mersey where uncertainties have arisen about the precise financial position and where steps have to be taken to explore possible future policies to get that port back to financial health. Here we have a clear policy statement first declared by the right hon. Member for Stockton (Mr. Rodgers) and amplified and expanded by my right hon. Friend in December last year. There is no basis upon which my right hon. Friend, having set out a clear policy, can now start consulting the National Ports Council before deciding whether to take it through to fruition.

10.45 pm

Similarly in the case of the request in amendment No. 13 and the need for an inquiry prior to the imposition of any conditions, as requested by the hon. Members for Thurrock and Newham, South, we have a perfectly clear policy upon which no inquiry can really bite, and there will not be further detailed conditions or controls over the management of the port which an inquiry could examine. I do not think that it would improve the morale of those in the PLA, either the management or the work force, if we now plunged them into a prolonged period of uncertainty whilst a wide-ranging public inquiry went over the sort of matters that have been explored by the two hon. Members.

I pay tribute to the encyclopaedic knowledge of the hon. Member for New-ham, South about the details of the port operation, with which he is very familiar, right in the heart of his constituency. The hon. Member for Thurrock raised many detailed points. Some are questions of history about management decisions in the port. Some are questions of tactics about the present handling of its problems. Some are broad-ranging inquiries about how the estuary and its trade might develop in the future.

But most of those matters, if examined in the depth which the two hon. Members have requested would involve us in taking a very long time to come to any conclusion. Utter uncertainty would reign, with the whole policy in suspense whilst this inquiry was going on. We would consult many bodies if we sought consultation with local authorities, which by no means agree with one another.

There is no unanimity of advice. There is no lack of advice on what to do about the PLA. But I very much doubt whether consultation would produce a simple clarification of the issues. There is also a danger that it would involve politicians in the House, in local authorities, in action groups and so on, in an attempt to involve themselves in questions which in the end are essentially those for management—management in consultation with its trade unions, and management and the work force—but are not really matters about which a public body, be it Ministers or local authorities, can take executive decisions.

There is no point in our pretending that any public inquiry or any Minister or local authority is the best body to decide why a particular crane was installed in a particular dock at a particular time. I cannot believe that the future prospects of the PLA would improve if people were led to expect that that would be so.

I quite accept, as the hon. Member for Thurrock pointed out yet again, that of course the problems of the PLA are not only those of manpower. I have stated clearly on a number of occasions the large number of other factors which are involved. But most of the other factors involve management decisions now, and they do not involve further inquiries, further reports or study of the kind advocated.

When one talks about the other problems of the port and goes over the decisions and the steps that have been taken over the years, one realises that one must not do so in any way which seeks to get away from the nub of the problem. The nub of the problem concerning the financial position of the port is where the Government come in—in assisting the finances of the port during this difficult period, whilst the port deals with all the other problems with which it must deal to get itself back on to a sound footing.

Price Waterhouse, clearly dealing with the financial problems, says: The nub of the PLA's present financial problem is a combination of the uneconomic use of manpower and its inability to divest itself of manpower which is already surplus even on the basis of present uneconomic working practices. The PLA will not return to viability until it has improved its working practices and shed its surplus manpower. That is the basis of the financial problem. It is the financial problem which the previous Government stepped in to solve. It is the financial problem in respect of which the present Government are offering the assistance that gives the chance to the port of getting back to viability by 1983 if the port deals with all these other matters and now follows a clear and consistent policy, gets the management de- cisions right and gets the right cooperation from the work force. That is what must be done. We must not introduce steps that would delay that.

We have had three Price Waterhouse reports, many debates in the House and advice from local authorities, but there comes a stage in such a serious problem, which affects East London in so many ways, when we must stop having a continuous debating society, with chops and changes in direction and constant conflict between competing policy options, and reach clear policy decisions and pursue them as the best chance of getting the port back to health.

My right hon. Friend announced in December a clear policy decision that the Government would give the necessary financial assistance, at the least cost to the taxpayer, to enable the port to shed manpower and thereby to get back to viability by 1983. All the other options have been considered, but our proposal is also the policy of the PLA, which accepts the cash limits imposed by my right hon. Friend. It has set out the way in which it intends to make use of the opportunity that my right hon. Friend has provided—the transfer option with the closure of the India and Millwall docks and hoping to win a future for the Royals and Tilbury and to get back to a sound financial footing by 1983 in order to give secure jobs to those who work there.

The PLA must be allowed to get on with it. At a time when the last tranches of the assistance are to be given, the imposition of a plethora of consultation, inquiries and discussions would cloud the issues and merely continue the uncertainties and delays in the port of London.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

Will the Parliamentary Secretary distinguish between investigations into the PLA—we had to use the vehicle of the Bill to express our views—and the relationship of the PLA to the port as a whole? The hon. and learned Gentleman referred to the financial viability of the port, meaning that of the PLA. Even if he does not accept the amendments, will he consider that there might be a place for an inquiry into the function of the PLA within the port of London, because four-fifths of the tonnage is not dealt with by the PLA?

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

I accept the validity of that point, which the hon. Gentleman made on Second Reading and earlier in Committee. The PLA is not the port of London. Many other operators are involved. I am not moved to offer an inquiry, but the points made by the hon. Gentleman do not fall on deaf ears. He had to use the Bill as a vehicle, but he has used it to a considerable extent to put forward many suggestions and criticisms in relation to the PLA. They are studied, and the fact that we are shutting out statutory consultation and a normal public inquiry does not mean that my right hon. Friend and the Government are deaf to advice. There is plenty of that, but the Government have to make a decision and give the PLA a chance to get on with it.

Photo of John Prescott John Prescott , Kingston upon Hull East

When the Parliamentary Secretary says that it is time for the debate to stop, I wonder whether he thinks that nothing has been happening in the port of London. Thousands of workers have been made redundant, wharves and docks have been closed and there is a general drift downstream. That is what causes uncertainty.

Five or six reports by the PLA over the past 14 months have drawn different conclusions. That does not help to create certainty. There has been a clamour, as reflected by my hon. Friends, for an independent inquiry.

The basis of the Minister's argument includes the fact that the money provided for in the Labour Government's 1978 Bill—he mentioned £42 million—has already been spent, and that the then Govern-men imposed no consultation requirement on the National Ports Council in the granting of that money. That is true, but we used other authorities to give assessments and reports. We had reports from the joint trade union study and local authorities, and the Government, on the basis of those reports, decided that the Royals must be maintained. We intervened on advice from bodies other than the PLA. Indeed, we went against the advice of the PLA, which was to close the Royals—a view that seemed to be endorsed by the Minister when he was the Opposition spokesman on transport. The other important consideration is that we were not proposing to abolish the National Ports Council. Therefore, we envisaged a role for it.

The Minister argues that delays will cause a further crisis. As he has made clear, however, the money has already been spent, and we are not arguing against further money being spent in this area. But all the National Ports Council can do—we have said that we think that this is one of its weaknesses—is recommend to the Minister. So it is not a tight control; it can make its recommendations and the Minister can ignore such recommendations. But it is the view of hon. Members closely involved in the PLA area that it needs to have somebody closely involved in decisions at present being made in the giving of the grants so that they can assess what they fear may be the further consequences of pursuing the Price Waterhouse logic. The arguments used to justify what happened to the upper Millwall and India docks well be used for closing the Royal docks. My hon. Friends argue that there should be another body to give an independent assessment of that.

Even in the Price Waterhouse terms, with which we greatly disagree, it is recognised that there was possibly a case, after the manpower reductions, for a financial reconstruction. If there is to be a financial reconstruction as an essential element in returning this port to viability, clearly there must be assessments by other authorities—the National Ports Council is an obvious one—and it is best to involve them as early as possible in this reconstruction.

The decision to close the upper docks, the Millwall and India, has been forced by the Government's decisions in regard to cash limits. To present this Bill as not interfering with managerial decisions flies in the face of the evidence as to what cash limits mean to policy, not only for the ports but in every other area.

Again, to take the Price Waterhouse example, looking at the various options given, ranging through the terms "concentration", "transfer" and "radical", it is no coincidence that the one chosen, namely, the transfer policy, is the cheapest in public expenditure terms. We might not have a port policy influenced by cash limits but we have a monetary port policy. It is the one that does not give the best commercial viability prospects on Price Waterhouse's considerations but it is the cheapest to the Exchequer. That has nothing necessarily to do with port policy but more to do with the financial policy of the Government.

In regard to the National Ports Council, when we were asking how it was to be dealt with in the future it sounded to me like "The National Ports Council is dead: long live the National Ports Council". It will be another separate set of civil servants carrying out exactly the same functions. But we will await the Bill to see what happens. Clearly somebody will have to carry out the functions, and I have a sneaking feeling that in one way or another civil servants will be involved.

When I referred to the Harbours (Loan) Act 1972 and the collapse of the Mersey Docks and Harbour Board I was talking not solely of the debt problems of the Mersey Docks and Harbour Board but of the redeeming debt problems of other port authorities, and I think that was one of the reasons for that Bill. The loans were designed to give help to other port authorities,

not the Mersey Docks and Harbour Board. I said then that the National Ports Council had been used by the previous Tory Administration as a requirement for consideration and consultation in regard to loans. In this Bill, it is a question of direct grants, so in that sense there would seem to be an even better case.

Nevertheless, our argument is that, with the increasing uncertainty over the future of the PLA docks, the possible decline of the Royal docks if commercial criteria are allowed to determine the dock structure in the PLA area, and the crucial issues involved, it is absolutely right that the National Ports Council be considered for consultation in these measures and all future measures, including financial reconstruction, which we think is essential to the solving of the problems in the PLA area.

Question put, That the amendment be made:—

The Committee divided: Ayes 66, Noes 119.

Division No. 284]AVES[11pm
Alton, DavidHamilton, James (Bothwell)Parry, Robert
Ashton, JoeHamilton, W. W. (Central Fife)Pavitt, Laurie
Atkinson, Norman (H'gey, Tott'ham)Harrison, Rt Hon WalterPenhaligon, David
Beith, A. J.Haynes, FrankPowell, Raymond (Ogmore)
Bennett, Andrew (Stockport N)Home Robertson, JohnPrescott, John
Bidwell, SydneyHomewood, WilliamRichardson, Jo
Booth, Rt Hon AlbertHughes, Robert (Aberdeen North)Roberts, Ernest (Hackney North)
Callaghan, Jim (Middleton ft P)Janner, Hon GrevilleRooker, J. W.
Campbell-Savours, DaleJones, Rt Hon Alec (Rhondda)Ross, Stephen (Isle of Wight)
Canavan, DennisJones, Dan (Burnley)Rowlands, Ted
Clark, Dr David (South Shields)Leadbitter, TedShore, Rt Hon Peter (Step and Pop)
Cocks, Rt Hon Michael (Bristol S)Leighton, RonaldSilkin, Rt Hon John (Deptford)
Cryer, BobLewis, Arthur (Newham North West)Soley, Clive
Daylell, TamLitherland, RobertSpearing, Nigel
Dixon, DonaldMcCartney, HughSpriggs, Leslie
Dobson, FrankMcDonald, Dr OonaghSteel, Rt Hon David
Dormand, JackMcGuire, Michael (Ince)Tinn, James
Duffy, A. E. P.Miller, Dr M. S. (East Kilbride)Welsh, Michael
Eadie, AlexMorris, Rt Hon Charles (Openshaw)Winnick, David
Eastham, KenOakes, Rt Hon Gordon
Evans, John (Newton)Ogden, EricTELLERS FOR THE AYES:
Forrester, JohnPalmer, ArthurMr. Terry Davis and
Foulkes, GeorgePark, GeorgeMr. George Morton.
Graham, Ted
NOES
Alexander, RichardBruce-Gardyne, JohnDean, Paul (North Somerset)
Aspinwall, JackBryan, Sir PaulDover, Denshore
Atkinson, David (B'mouth, East)Bulmer, EsmondDunn, Robert (Dartford)
Bennett, Sir Frederic (Torbay)Cadbury, JocelynEggar, Timothy
Benyon, Thomas (Abingdon)Carlisle, John (Luton West)Fairgrieve, Russell
Berry, Hon AnthonyCarlisle, Kenneth (Lincoln)Farr, John
Bevan, David GilroyChalker, Mrs LyndaFenner, Mrs Peggy
Biggs-Davison, JohnChapman, SydneyFletcher-Cooke, Charles
Blackburn, JohnClarke, Kenneth (Rushcliffe)Fookes, Miss Janet
Boscawen, Hon RobertCockeram, EricFowler, Rt Hon Norman
Bright, GrahamColvin, MichaelGarel-Jones, Tristan
Brinton, TimCope, JohnGow, Ian
Brooke, Hon PeterCostain, A. P.Griffiths, Eldon (Bury St Edmunds)
Brotherton, MichaelCranborne, ViscountGriffiths, Peter (Portsmouth N)
Brown, Michael (Brigg & Sc'thorpe)Critchley, JulianHannam, John
Hawkins, PaulMorrison, Hon Peter (City of Chester)Stanbrook, Ivor
Hawksley, WarrenMudd, DavidStevens, Martin
Heddle, JohnMyles, DavidStradling Thomas, J.
Hicks, RobertNelson, AnthonyTaylor, Teddy (Southend East)
Hordern, PeterNeubert, MichaelTebbit, Norman
Jopling, Rt Hon MichaelNewton, TonyTemple-Morris, Peter
Knight, Mrs JillOnslow, CranleyThompson, Donald
Knox, DavidPage, John (Harrow, West)Thorne, Neil (Ilford South)
Lang, IanPage, Rt Hon Sir R. GrahamWaddington, David
Lee, JohnPage, Richard (SW Hertfordshire)Waldegrave, Hon William
Le Marchant, SpencerParris, MatthewWalker, Bill (Perth & E Perthshire)
Lester, Jim (Beeston)Patten, John (Oxford)Waller, Gary
Lloyd, Peter (Fareham)Pattie, GeoffreyWard, John
Loveridge, JohnPawsey, JamesWarren, Kenneth
Lyell, NicholasPollock, AlexanderWatson, John
Macfarlane, NeilPorter, GeorgeWells, Bowen (Hert'rd & Stev'nage)
MacGregor, JohnProctor, K. HarveyWheeler, John
McNair-Wilson, Michael (Newbury)Renton, TimWilkinson, John
Major, JohnRhodes James, RobertWilliams, Delwyn (Montgomery)
Marlow, AntonyRhys Williams, Sir BrandonWolfson, Mark
Maude, Rt Hon AngusRoberts, Michael (Cardiff NW)Young, Sir George (Acton)
Maxwell-Hyslop, RobinSainsbury, Hon TimothyYounger, Rt Hon George
Meyer, Sir AnthonyShepherd, Richard (Aldridge-Br'hills)
Miller, Hal (Bromsgrove & Redditch)Sims, RogerTELLERS FOR THE NOES:
Mills, lain (Meriden)Skeet, T. H. H.Mr. John Wakeham and
Mills, Peter (West Devon)Speller, TonyLord James Douglas-Hamilton

Question accordingly negatived.

Photo of Mr Albert Booth Mr Albert Booth , Barrow-in-Furness

I beg to move amendment No. 7, in page 1, line 16, after 'may', insert 'by order'.

Photo of Lieut-Colonel Dick Crawshaw Lieut-Colonel Dick Crawshaw , Liverpool Toxteth

With this we may take amendment No. 14, in page 1, line 20, at end insert— '(2A) No order shall be made under subsection (2) above unless a draft thereof has been laid before, and been approved by, both Houses of Parliament.'.

Photo of Mr Albert Booth Mr Albert Booth , Barrow-in-Furness

The part of the Bill to which this amendment is addressed gives the Minister the power to impose any conditions which he considers necessary on any grant or loan to the Port of London Authority. The Bill makes clear that they are not only conditions as to when and how a grant is to be repaid in such circumstances as the Minister might specify, but conditions as to the future management of the PLA's undertaking and as to the services and the facilities provided by the authority.

The drafting of the Bill reflects a certain schizophrenia in the instructions given by the Minister to the parliamentary draftsmen. It is clear that the Minister wants to take the line that, having laid down limits as to how much financial aid the Government will provide to the Port of London Authority, they want the management to get on with managing and do not want to be bothered any further. Yet this part of the Bill contains a massive power to intervene in a manner which was obviously written under the banner "All power to the Executive". There is no indication of how the House may control that intervention or say whether the conditions are appropriate.

It was significant that in replying to the debate on the previous amendment the Parliamentary Secretary said that it was most inappropriate at this stage to start consulting about conditions because a large part of the money had already been spent or committed. We agree that the money has been spent or committed. However, surely it is a double-edged argument to say that that is a reason for not consulting, and then to include a provision in the Bill that gives power to apply all sorts of conditions without such consultation or without any further sanction of the House. Therefore, if the conditions which the Minister seeks to apply have already been spelt out in the ministerial statement on the issue, there is no reason whatsoever why those conditions should not have been included in the Bill. We could then have agreed or disagreed with them.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

The right hon. Gentleman is making a point about the need to consult Parliament and the need to give greater opportunities for Parliament to take an active part in such matters. However, he has not answered one general point. His Government committed £42 million by way of expenditure or backing up a loan, and no parliamentary process whatsoever was granted. That money was conceded under the Appropriation Acts. It is a bit thick for him to say that the present Government, who have brought legislation before the House, should give far more consultation than his Government ever allowed.

Photo of Mr Albert Booth Mr Albert Booth , Barrow-in-Furness

It is not at all unreasonable for me to put a proposition whereby, if the Minister wishes to attach conditions which will affect the way in which the port will be managed and the way in which services are to be provided, the House will have a right to ask which conditions the Minister wants to apply and will have the right to say "Yes" or "No".

The Labour Government were faced with the problem of the Port of London Authority saying that to stay within a certain financial framework the decision must be taken to do away with the upper docks. The hon. Member for Faversham (Mr. Moate) has made the fair point that that was done by means of the Appropriation Acts. The then Labour Government said "We shall provide money for severance on the condition that the upper docks are not closed." That was a straightforward decision hat was made subject to the cover of the Appropriation Acts and now that of the Bill.

11.15 pm

There comes a time when a decision has to be made. There is a time when the responsible Minister requires the power to apply various conditions. That is the time when the House has to decide whether such power is appropriate. I suggest that it is not the appropriate time for the Minister to be saying "I want these powers to decide." I say that partly for reasons that have already been given—for instance, that the money is already committed and that the Minister is refusing to apply the condition that I sought to write into the Bill, that of maintaining the Royals. As the Minister has announced the conditions, it would be far better to write them into the Bill.

I accept that the Government will not necessarily be persuaded that those are the limitations within which they should work. I understand that the Government may say "Although we have stated what the conditions are, we may want to make changes in the light of developments." I understand that argument if that is the one that is forthcoming. If they say that that is the nature of the problem that is confronting the authority and that circumstances may change be- fore all of the £70 million has gone, I contend that it is appropriate in those circumstances to consult the House.

The amendment gives the House of Commons precisely the power to control the situation that I have described. It provides that if the Minister wants to impose such a condition and if he wants to set conditions on how the future mangement of the authority is to be undertaken, how it is to be run and how its services and facilities are to be varied, he should lay an affirmative order. If the House of Commons wants to challenge the order, it may do so. If it does not, it can accept it on the nod. However, such a system would create the opportunity for challenge. Surely it is highly appropriate for the House of Commons to have that opportunity in all the circumstances. That is the purpose of the amendment, and I hope that it will win the support of the Committtee.

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

The right hon. Member for Barrow-in-Furness (Mr. Booth) had no effective answer to the intervention of my hon. Friend the Member for Faversham (Mr. Moate). The Labour Government, of whom the right hon. Gentleman was a member, committed £42 million worth of assistance to the industry without any parliamentary debate and with such conditions as they at the time thought fit. That was done merely on the promise that eventually they would legislate to give themselves power to spend the money, and presumably give themselves the power to impose the conditions that they had already imposed.

Against that background, it is absurd for the right hon. Gentleman to say that the final instalment of Government assistance should be subject to the tightest parliamentary scrutiny and that we should require an order to be approved by both Houses of Parliament before we can impose any further conditions upon the payment of final sums, although we are all agreed that the final sums have probably to be committed to help the authority out of its difficulties.

Although that is a slightly startling position for the right hon. Gentleman to adopt, I can offer him a reply that he may find reassuring. I accept that there is force in his remarks about the wording of the Bill, which gives a fairly sweeping power to impose conditions on the future management of the undertaking and the service and facilities to be provided. My right hon. Friend and I have given repeated assurances that the Government have no intention of imposing management decisions on the PLA. We are leaving decisions about future facilities, for example, to the authority's judgment. We shall leave it to deal with its own problems.

Having given thought to that point, raised by Opposition Members on Second Reading, we intend to accept amendment No. 12 standing in the names of the hon. Members for Newham, South (Mr. Spearing) and for Thurrock (Dr. McDonald).

The provision will include only those conditions that require a grant to be repaid in specified circumstances. Obviously, we must insist on that. If the right hon. Member for Barrow-in-Furness fears that detailed conditions will be imposed by my right hon. Friend before further assistance is made available, his mind can be set at rest. We propose to accept his hon. Friends' amendment. That amendment will take such a power from my right hon. Friend. Indeed, he had no intention of using it.

In addition, we have no intention of being secretive. My right hon. Friend has fully disclosed the basis of his policy. The whole policy was set out in a statement made in response to a question raised by my hon. Friend the Member for Faversham on 7 December 1979. It set out the conditions and policy behind the grants and financial support. There has been no attempt to avoid questions about the basis of our policy. We are not keeping some new policy tack secret until the House has agreed to further financial assistance. We shall continue fully to disclose events at the Port of London Authority, the rate at which money is disbursed, and the basis upon which that is being done. There is no need to make an order. There is certainly no need for further parliamentary procedures that would require the consent of both Houses whenever any conditions were contemplated on further assistance.

Photo of Mr Albert Booth Mr Albert Booth , Barrow-in-Furness

The Parliamentary Secretary has been very helpful. He has removed the major prop of my argument. I should be less than responsive if I did not admit that my argument about the future management of the authority's undertaking and about the impact of this provision on services and facilities will be fully met by the Government in other amendments. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

I beg to move amendment No. 10, in page 1, line 17, after 'fit', insert 'other than closure of any enclosed dock.'.

Photo of Lieut-Colonel Dick Crawshaw Lieut-Colonel Dick Crawshaw , Liverpool Toxteth

With this, it will be convenient to take the following amendments:

No. 11, in page 1, line 17, after 'fit', insert 'other than disposal of land.'. No. 12, in page, 1, line 18, leave out from ' circumstances ' to end of line 20.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

The amendment relates to closure of a dock. I am grateful to the Minister for his remarks about amendment No. 12. Perhaps he will also consider this amendment. The amendment should be considered in relation to my previous remarks on the Royal docks. I sought to draw a distinction between the withdrawal of PLA cargo handling facilities, and the filling in and selling off of a dock, to the extent that it is no longer accessible to ships.

The West India dock has been incorrectly described as "closed". Ships still go into that dock. I hope that the Port of London Authority will lease some of the quay space so that dock work and related activity can continue. I accept that the PLA may not choose to operate any of those facilities.

My amendment deals with complete closure and not merely the withdrawal of PLA operations. Complete closure would involve filling in, the lock going out of use and access for shipping being made impossible. The Minister may point to the jobs that may result from activities on the land reclaimed from water. However, there are already large areas of land in East London, the remainder of London and throughout the country awaiting development. It is an oft-repeated cry that surplus land is available which is not productively used. Although it would afford a large acreage, if ships were not able to go alongside the quays the use of adjacent land might be reduced. I hope that my argument will commend itself to the Minister. I suggest that land adjacent to water where large ships can go alongside, is likely to retain its value for that reason alone. In terms of good planning and civic use, that land could be used for processing and manufacturing related to the presence of ships.

If such land is disposed of, it is not necessarily the Minister's function to do that. It may be that of the local authority or the urban development corporation, if that animal ever gets off the ground. It is not necessarily the function of the Minister responsible for the statutory undertaking who therefore happens to have the land—although in this case it is not land; it is water. It is inappropriate for such directions to be given, and the prohibition should be made in the Bill.

Amendment No. 11 relates to the disposal of land. One criticism of the PLA, which I did not embark on at length in my previous speech, is that in the past it has been more interested in land development than in ships and shipping. Recent figures demonstrate that it owns no fewer than 4,000 acres in and around the Port of London and its estuary. That figure has been reduced by sales, specifically to local authorities—and I am pleased about that for the London borough of Newham and the Beckton redevelopment. However, the PLA still has considerable property, some of it not associated with dock work. There are industrial estates at Cliffe in Kent, which conceivably could be very valuable, especially as they are adjacent to the deep water channel. Although the deep water does not go right up against the land, wharves or offshore pontoons could make that land industrially significant.

Again I doubt whether the disposal of land is the function of the Minister of Transport. The Secretary of State for the Environment, for instance, is taking powers to require statutory undertakings to sell off land if he believes that they should. That is against my better judgment, but at least that Secretary of State has planning functions, and he may be supervising the urban development corporation. I suggest that the function of selling off land should not be given to the Minister in terms of direction.

I understand that what I have had to say on these amendments may look different in view of the announcement which the Minister has just made to the effect that he accepts amendment No. 12 to delete all the words after " circumstances " on page 1, which will mean that the words and conditions as to the future management of the Authority's undertaking and the services and facilities to be provided by the Authority"

will be removed from the Bill.

I am glad that the Minister has agreed to make this alteration. It brings the Bill more into line with the policies which he and the Minister of Transport, whom we welcomed to the debate, have already expressed. If our amendment had not been accepted, the Minister would have been in trouble from me on the question of an inquiry on the "clause stand part" debate because he was saying that he did not intend to use these functions, yet quite clearly powers were being given to another Minister who could exercise them in a way detrimental to the port as a whole.

I hope that the phrase the future management of the Authority's undertaking

includes closure of docks and disposal of land and comes within that part of the Bill which the Minister has graciously agreed to delete. Therefore, I suggest that the other qualifications might also be added to that part of the Bill which still stands.

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

I support my hon. Friend the Member for Newham, South (Mr. Spearing) and wish to speak specifically to amendment No. 11, dealing with the phrase: other than disposal of land. I wish to make one comment and one suggestion and to ask for more information about the attitude of the Department towards the disposal of land.

Does the Minister appreciate that one of the major changes in nearly all ports over the past 10 years has been the change in the relationship between the amount of wharfage, or berthage—the total distance available up against which a ship could come—and the storing and docking faci- lities at the side of those berths? In the past we had piers inside enclosed spaces in our ports and the distance of wharfage against which a ship could come compared with the amount of space at the side was much the same. Ships required storage and handling facilities, cargo sheds and so on, but they were comparatively close together. One of the results of containerisation has been that the amount of space against which ships are allowed to berth needs to be much less because the turnround of ships is much greater. At the same time, the amount of land needed at the side of the berths has increased greatly.

We have seen the infilling of some docks to provide standing space for containers and for handling facilities. Land use has changed considerably within the dock structure. Even though the Minister is not willing to intervene directly in day-to-day management, I should like to know what is the Department's policy about land disposal. I put this point to him, which should be entirely in accordance with good, wholehearted, old-fashioned Tory Party philosophy. There is a finite amount of land in these islands. There is very little variation as between one part of the country and another. We have no great Zuider Zee to call upon. Land is scarce. I hope that it is departmental policy, while it may lease, and encourage people to go into partnership, to discourage the sale of land by public authorities. That it should be used by others, and under the control of others to a degree, is permissible, but I hope that the Minister will agree that the ultimate ownership of land ought to be within public authorities so that there is some public responsibility. I should appreciate it if the Minister would tell me what his policies are.

Photo of Mr Norman Fowler Mr Norman Fowler Minister of State (Department for Transport)

We are dealing with three amendments, and perhaps I might start with the good news. We are grateful to the hon. Member for Newham, South (Mr. Spearing) for the point that he made on Second Reading, when he said that he could not reconcile this aspect of subsection (2) with the Government's policy, that is, that there should be a condition about the future management of the PLA's undertaking and the services and facilities that it provides. On examination, I think that he is right. We believe that this would be contrary to our policy of leaving management decisions to the PL A, and the amendment therefore meets the policy that is set out in the Bill. It is our policy, as I have said before, to leave the management of the undertaking and decisions on its services and facilities in the hands of the PLA, I am glad to accept amendment No. 12 and to offer the hon. Gentleman our thanks for having spotted that one.

I cannot be as forthcoming on the other two amendments. The purpose of amendment No. 10 is to prevent the Minister from making any financial assistance provided under the Bill conditional upon the closure of any of the enclosed docks. The effect would be that the Minister could not make it a condition of his financial assistance that the PLA should close the Royal docks, even though those docks might be making a loss and preventing the PLA from recovering profitability.

I understand the hon. Gentleman's concern that the Royal docks should remain open. Indeed, he and other Members for some of the constituencies affected in London have been to see me. I have had a meeting and talks with them, and I understand their concern. I know that, if they do not agree with the Government, they understand the Government's attitude. As I made clear on Second Reading, we do not think that the Government should be involved in management decisions. Decisions on options such as the retention or closure of docks are for the PLA board and not for the Government. In saying that I accepted amendment No. 12, I made it clear that we had no intention of intervening in management decisions. We therefore have no intention of requiring the PLA to close or to keep open any part of its undertaking, and I hope that the Committee will not accept amendment No. 10.

Perhaps I should add that the PLA management recently told its work force that its aim was to make the Royal docks succeed; and it will be improving facilities at the Royals to accommodate traffic diverted from the India and Mill-wall docks. We hope that that will take place, but I am convinced that that is a decision for the PLA board and not for the Government.

I fear that I have to disagree with the hon. Member for Liverpool, West Derby (Mr. Ogden) about amendment No. 11 and land disposal policy. It is no part of the Government's policy to discourage the sale of surplus land—quite the contrary. I believe that this policy should be pursued in the way that the Government are pursuing it. This takes us into the further reaches of a debate that is rather narrower than the amendment.

The purpose of amendment No. 11 is to prevent the Minister from making any financial assistance that he might give to the PLA conditional upon the disposal of any of its land. As I said on the two previous amendments, we have no intention of intervening in matters that are for the PLA to decide. This applies as much to its land disposal as to its services and facilities. Management matters are for the PLA board and not for the Government. I therefore accept amendment No. 12, but, on the same logic, I reject the other two.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

It seems that my success with amendment No. 12 carries with it a certain amount of logic in relation to the safeguarding of the area of

enclosed dock and the disposal of land. I do not necessarily think that the amendment would exclude that because the Bill could be conditional. I accept what the Minister says about the Government's philosophy. The House could say that the money should be given to the PLA provided that it does not close a dock or sell any land. We might have different views about the wisdom of that on a political basis but the Bill has been of non-party controversy, to some extent, and I can see that to pursue that line would not be fruitful.

However, 127 acres of water space in the Millwall and West India docks and about 220 acres of water space in the Royal docks are important and have the qualities which I have described. The Minister did not dissent from that. I shall not seek to withdraw amendment No. 10. I prefer the Committee to take its decision in the light of the Minister's recommendation. However, I shall seek to move amendment No. 12 formally.

Question put, That the amendment be made:—

The Committee divided: Ayes 0, Noes 113.

Division No. 285]AYES[11.42 pm
NIL
TELLERS FOR THE AYES:
Mr. Andrew F. Bennett and
Mr. Bob Cryer.
NOES
Alexander, RichardDean, Paul (North Somerset)Loveridge, John
Alton, DavidDouglas-Hamilton, Lord JamesLyell, Nicholas
Ancram, MichaelDover, DenshoreMacfarlane, Neil
Aspinwall, JackDunn, Robert (Dartford)MacGregor, John
Bennett, Sir Frederic (Torbay)Eggar, TimothyMcNair-Wilson, Michael (Newbury)
Benyon, Thomas (Abingdon)Fairgrieve, RussellMajor, John
Berry, Hon AnthonyFarr, JohnMaude, Rt Hon Angus
Bevan, David GilroyFenner, Mrs PeggyMaxwell-Hyslop, Robin
Biggs-Davison, JohnFletcher-Cooke, CharlesMeyer, Sir Anthony
Blackburn, JohnFowler, Rt Hon NormanMiller, Hal (Bromsgrove & Redditch)
Bright, GrahamGarel-Jones, TristanMills, lain (Meriden)
Brinton, TimGow, IanMills, Peter (West Devon)
Brooke, Hon PeterGriffiths, Eldon (Bury St Edmunds)Morrison, Hon Peter (City of Chester)
Brotherton, MichaelGriffiths, Peter (Portsmouth N)Mudd, David
Brown, Michael (Brigg & Sc'thorpe)Hannam, JohnMyles, David
Bruce-Gardyne, JohnHawkins, PaulNelson, Anthony
Bryan, Sir PaulHawksley, WarrenNeubert, Michael
Bulmer, EsmondHeddle, JohnNewton, Tony
Cadbury, JocelynHicks, RobertOnslow, Cranley
Carlisle, Kenneth (Lincoln)Hordern, PeterPage, Rt Hon Sir R. Graham
Chalker, Mrs. LyndaJopling, Rt Hon MichaelPage, Richard (SW Hertfordshire)
Chapman, SydneyKnight, Mrs JillParris, Matthew
Clarke, Kenneth (Rushcliffe)Knox, DavidPatten, John (Oxford)
Cockeram, EricLang, IanPattie, Geoffrey
Colvin, MichaelLee, JohnPawsey, James
Cope, JohnLe Marchant, SpencerPenhaligon, David
Costain, A. P.Lester, Jim (Beeston)Pollock, Alexander
Cranborne, ViscountLloyd, Peter (Fareham)Proctor, K. Harvey
Rhodes James, RobertTebbit, NormanWells, Bowen (Hert'rd & Stev'nage)
Rhys Williams, Sir BrandonTemple-Morris, PeterWheeler, John
Roberts, Michael (Cardiff NW)Thompson, DonaldWilkinson, John
Sainsbury, Hon TimothyThorne, Neil (Ilford South)Williams, Delwyn (Montgomery)
Shepherd, Richard(Aldridge-Br'hills)Wakeham, JohnWolfson, Mark
Sims, RogerWaldegrave, Hon WilliamYoung, Sir George (Acton)
Speller, TonyWalker, Bill (Perth & E Perthshire)Younger, Rt Hon George
Steel, Rt Hon DavidWaller, Gary
Stevens, MartinWard, JohnTELLERS FOR THE NOES
Stradling Thomas, J.Warren, KennethMr. David Waddington and
Taylor, Teddy (Southend East)Watson, JohnMr. Robert Boscawen.

Question accordingly negatived.

Amendment made: No. 12, in page 1, line 18, leave out from 'circumstances' to end of line 20.—[Mr. Spearing.]

Photo of John Prescott John Prescott , Kingston upon Hull East

I beg to move amendment No. 18, in page 1, line 22, leave out 'and on such conditions as he thinks fit'. This is basically a probing amendment to attempt to understand the Government's use of these words in this clause.

I am in some difficulty because the reference in subsection (2) is to the Minister of Transport, whereas the one relating to the dock labour scheme is to the Secretary of State. I presume that the distinction is that "Secretary of State" refers to the Department of Employment. However, in other legislation it has not seemed necessary to include these words.

We are here dealing with payments by the Government to the National Dock Labour Board to reimburse it for payments to the Port of London Authority's registered dock workers in the voluntary severance schemes. These matters are usually financed out of the normal levy funding arrangements, but certain moneys have been advanced for special payments for excessive surplus manpower requirements. I understand that the payments so far out of this money amount to approximately £11½ million, the last payment being in about February 1980.

The amendment is not concerned with questioning the consent of the Treasury about the conditions of the granting of such loans—for example, the financial requirements on loans, grants and so on, the interest payments and the periods of time in which they should be paid.

The Dock Work Regulation Act 1976 clearly says in section 3(3), dealing with the finances of the board: The Secretary of State may lend to the Board any sums which they have power to borrow, and any such loans shall be repaid by the Board at such times, and in such manner, and interest on the loans shall be paid at such rates and at such times as he may from time to time direct. Subsection (5) makes it clear that this is conditional on Treasury approval.

The point is that clearly all moneys given towards severance payments under the national dock labour scheme are conditional on and are directed solely to the financial requirements.

We take the view that the inclusion of the words and on such conditions as he thinks fit suggests that, in the light of what has been said in regard to policy and the reduction of manpower, other criteria may be introduced laying down conditions on how, to whom and on what criteria the severance payments will be made.

The Government have been involved in giving extra moneys, particularly to London, as in this financial measure, but there have also been payments to Liverpool, which had excessive manpower requirements and faced considerable severance problems. Money has also been provided by Government outside that financed by levies for the abolition of the temporary unattached pool, which was again a recommendation arising out of the dock problems in 1972, and particularly the Jones-Aldington recommendations. The Government made about £30 million available as a contribution to the reduction of the dock labour force by a considerable amount particularly in those areas in which for that payment it was laid down that preference should be given to dockers who were unfit. I shall come to that point shortly in regard to Price Waterhouse, which refers to the B-type docker in severance situations—that is, those who cannot carry out the full duties of a docker and are restricted for medical reasons to doing certain light duties.

Generally, there is agreement that the money given to the National Dock Labour Board covering severance payments and financed out of levies is normally covered by the voluntary scheme administered by the board under conditions agreed in the industry and laid down in the Acts. We question this wording because the construction could be placed upon it that we are departing from the voluntary scheme as it is presently applied under the national dock labour scheme. Here we are referring obviously to money that is given for extraordinary amounts of redundancies and severance payments.

Governments have intervened to a certain extent, with some exceptions—for example, in the PLA area. In the early 1970s money was given to the PLA primarily to deal with the special problems of the unattached pool. Since we are now talking about the surplus manpower problems of the PLA, it is well to bear in mind—it is recognised in the Price Waterhouse report—that the PLA had to take on an extraordinary share of the redundancies that occured from other employers going into bankruptcy. In agreements arrived at to reduce the unattached pool, and primarily because the PLA was the largest employer, the PLA took more than its share of the surplus labour to reduce the temporary unattached pool requirements.

That is why Price Waterhouse points out that, while the redundancies of 2,700 between 1975 and 1978 of the regular PLA labour force took place, the net effect in reducing its labour force was considerably less because it was taking on the labour from bankrupt dock operators. That is one of the extra burdens that the PLA had to take. Incidentally, it was not borne by private companies, which did not take anywhere near the same share as the PLA in sharing out the surplus labour from the temporary unattached pool, which in itself was an accumulation of surplus labour from a number of bankrupt private companies.

The other area in which Governments have intervened is in regard to able-bodied men. Here we draw particular attention to the A-type docker who is available and fully fit to do any kind of dock labour. But a number of dockers are registered as less fit and are available only for B-list working. They are commonly referred to, as in the Price Water-house report, as B-type dockers. Here the Government have normally requested in formation to make sure that the money is going to certain areas where the voluntary scheme applies but does not direct how the money should be used.

Therefore, there are two relevant issues in this debate. The first is that this financial measure makes it absolutely clear that it is the Government's view, and the judgement of the Bill, that profitability of the PLA can be brought into being simply by reducing manpower. We reject that conclusion, but it is in the Government's mind—and in the Bill—that reduction of labour is the way to bring profitability to the PLA. We have explained in previous debates why we reject that approach.

12 midnight

The second area of concern is the heavy emphasis placed by the Price Waterhouse report on the manpower solution as the way to viability of the authority. In the manpower strategy identified by the Price Waterhouse report, the three options vary, in terms of the reduction in manpower requirements, from 2,100 to 4,700.

The report also deals with the age structure and points out that 72 per cent. of the work force are over 40, with most aged about 50 or 55. That is set out as though it is a particular problem of the PLA, but the National Dock Labour Board reports show that throughout the country an average of 68 per cent. of the dock labour force are over 40. I do not say that that is ideal. I hope that we can improve on it. The ideal would be to have younger people who are fit, and that consideration may be in the minds of port authorities.

The Price Waterhouse report also points out that there is a surplus of 230 B-registered men, those who are severely restricted on medical grounds, in the PLA.

The structure of the labour force, which has some over age, as Price Waterhouse would see it, and sick, is explained in the report: This situation has arisen as a result of a continued policy not to recruit and the present severance arrangements which do not allow any discretion to refuse severance applications from fit men with long service or to require the severance of old or unfit men. We do not say that any dock authority would not desire a younger and more able labour force; that is a desirable objective, But under present arrangements, decisions about voluntary severance are determined by the National Dock Labour Board. Recommendations are made about whether to give preference to less fit people when considering redundancy payments. Until now, it has been left to employers and employees, with recommendations from the NDLB on how the severance schemes will be implemented.

Is it the intention of the Ministry of Transport or the Department of Employment to intervene to bring about what they see as the desirable objective of a younger and fitter labour force? If so, that would be an intervention in the present arrangements and in management decisions. The Minister says that he has no desire to intervene in such decisions.

The Price Waterhouse report points to the manpower rundown as the solution, and in his press announcement on 7 December—one of many that I have received; I do not complain about that, because I read them all—the Minister stated: The Government can only agree to maintain the minimum level of financial assistance to the Authority that they will need to continue with the most rapid run-down of manpower". If that means that influence is to be exercised over the areas to which money for redundancy and severance pay is to be given, that will be a major departure from the present arrangements. We propose to leave the situation in line with other legislation, namely, that the Treasury may consent to the terms of the financial arrangements but not influence the nature of the severance arrangements for which the Government will be providing money.

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

As the hon. Gentleman has rightly said, we are now dealing with that part of the Bill which concerns the payments to registered dock workers who take voluntary severance under the scheme administered by the National Dock Labour Board. Ordinarily, throughout the country, in every port, those payments are financed by levies charged on the port at varying rates. But the rundown of manpower has sometimes been faster than expected. The board has therefore not had the resources to make payments out of the port levies and the Government have had to step in to assist. Indeed, in 1972 it was necessary to have a national scheme under which £30·5 million was disbursed to all ports in order to keep the National Dock Labour Board solvent to discharge its obligations.

What has happened, as we have said several times in the debate, is that there has been in recent years a particularly rapid rundown of registered dock workers in the PLA. The result is that since 1978 the Government have been reimbursing the National Dock Labour Board for severance payments to registered dock workers in London. The Secretary of State for Employment is responsible for the dock labour scheme and the National Dock Labour Board, and the practice has been that the Secretary of State has reimbursed the board for the payments it has made in London. On this basis, by the end of February 1980 £11·4 million had been paid to the National Dock Labour Board.

Those payments have already been made and the Port of London Authority now expects that future severance payments to registered dock workers can be met out of its port levy. So it is highly unlikely that any future payments will have to be made under this provision of the Bill. It is in the Bill only in case the situation recurs. What we are really doing here is legislating to give legitimacy to what has already been done, largely by the Labour Government.

The payments that have been made to the National Dock Labour Board have been subject to a number of conditions. I am not at all surprised to hear that the hon. Member for Kingston upon Hull, East (Mr. Prescott) would like clarification of the policy and would like to know exactly what those conditions are. I think I can reassure him entirely about their nature.

The main condition has been that severance should come within the terms of the national voluntary severance scheme. That is the scheme agreed between employers and employees' representatives whereby redundancy is voluntary for registered dock workers and no compulsory redundancy has been required. That is not a term of the agreement, but the port employers have undertaken that, and it has been made a condition of this reimbursement that the national voluntary severance scheme should be applied in London. That is exactly the condition that the hon. Gentleman would wish to have and the reverse of what he feared, which was that this might be suspended.

The other conditions were a ban on recruitment and the maintenance of the port levy in London of 8 per cent.—both for obvious reasons. While the Government were standing behind the National Dock Labour Board in making these payments, it was obviously right that that rather high rate of levy should be maintained so that the maximum finance could come from the board itself. Eight per cent. applies in Liverpool, which has similar problems.

Therefore, from now on it is highly unlikely that any further payments will be made under the Bill. We are putting into proper legislative form the basis upon which the reimbursements have been made in the past and giving legitimacy to perfectly acceptable conditions which have already been imposed. It remains in the Bill in case this form of reimbursement has to be taken up again, and we would expect to put the same sort of conditions upon it.

I can give an undertaking that there will be no question of using the Bill to try to require the PLA to go outside the national voluntary severance scheme, which has been accepted for so long by both sides of the industry.

I shall not again go into the arguments about the concentration on manpower. It seems to us that that is the basis of financial viability. Although it is not the only problem facing the port, or the only judgment that should be applied to the port, it is the main one, and the main one on which the Government step in. If the port returns to normality, payments to registered dock workers will be financed out of port levy. Only voluntary severance will be sought.

There remains an open invitation to men who have become unfit—so-called category B men—to apply for severance. Current arrangements provide for enhanced basic severance payments for unfit men, and new measures have been introduced for rehabilitation assistance of various kinds, to try to ensure that more men can return from category B to the fit category.

I accept that, unfortunately, in the port of London and a number of other scheme ports the age of the registered dock work- ers is very high. That inevitably reduces such ports' ability to handle their cargoes more efficiently and to improve their qualities of service for obvious natural physical reasons. That is an inevitable consequence of the national dock labour scheme.

If one relies on voluntary severance in particular, there is a tendency for younger and fitter men to take advantage of it, because they find it much easier to obtain alternative employment. The older men are therefore far less likely to seek voluntary severance, and it is almost impossible, within the scheme, for any employer to do anything to redress the balance of age and fitness of his work force. Many ports are left with an ageing work force and little opportunity to recruit new people to redress the balance.

However, that is a much wider issue than we need debate tonight. It is not one that the Government intend to seek to redress in this Bill by the back door. The scheme will be applied in the ordinary way in London. It will probably be financed in the ordinary way from now on. I hope that the conditions that have been applied in the past are wholly acceptable. That is the only kind of condition that we would impose in future if the occasion ever arose again.

Photo of John Prescott John Prescott , Kingston upon Hull East

I accept everything that the Minister has said. It is a matter of judgment why the younger and fitter workers leave. It costs less, and it is good for those having to finance such funds, if the younger ones leave, but that causes the problems of the ageing work force to which the hon. and learned Gentleman referred.

The levy schemes to which the hon. and learned Gentleman also referred maintain a standard of redundancy, health, training and treatment provision in the scheme ports that is a further penalty for them compared with non-scheme ports, as reports have shown. It is one of the penalties that the PLA, along with other scheme ports, has had to accept, and it affects the port's competitive position.

I note the Minister's point that most of the moneys have been paid. This reflects the conditions that were imposed, consistent with the National Dock Labour Board voluntary scheme. But the provision is in the Bill in case there may be further use of such a clause. Perhaps the hon. Gentleman had Liverpool in mind. We shall wait and see.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Mr Albert Booth Mr Albert Booth , Barrow-in-Furness

I beg to move amendment No. 21, in page 2, line 10, leave out '70' and insert '100'.

Photo of Lieut-Colonel Dick Crawshaw Lieut-Colonel Dick Crawshaw , Liverpool Toxteth

With this amendment we shall take amendment No. 20, in page 2, line 10, leave out '£70 million' and insert '£50 million'.

Photo of Mr Albert Booth Mr Albert Booth , Barrow-in-Furness

The purpose of the amendment is to question the extent to which the Bill is a false financial prospectus—that is, to question whether it is possible, given the financial limit, to achieve the purpose even as defined in the long title. That is to provide the financial assistance necessary to carry out the measures for reducing the number of persons employed by the Port of London Authority and—as the Bill recognises in clause 1(1)(b)— the carrying on of their undertaking while such measures are being taken. It was acknowledged earlier in the debate that there are other considerations besides the severance problem that prevent the PLA from operating on a firm financial basis. It was not acknowledged by the Minister that some of those other considerations are financial, and that there will be other costs than severance costs in carrying through the five-year strategic plan until 1983.

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It is agreed between us that, of the £70 million provided for in the Bill, £5 million is for the bank overdraft arrangement, £25 million is to continue support for the Lazard loan and £5 million is to cover inflation. Of the £35 million left for severance, £11·4 million has already been paid to the National Dock Labour Board, I believe that £7·6 million has already been paid to the PLA for non-registered staff who have left under severance arrangements and £16 million is left for remaining severance payments. I shall not argue whether that is adequate. I am prepared to accept the Minister's judgment if he says that it will cover the remaining severance during the period.

My serious point of argument is whether it is possible, given that that meets the severance requirements, for the PLA between now and 1983 to achieve the objectives of the strategic plan which are also the objectives of the Government, in that it will enable the PLA to operate without this form of public assistance.

From a study of the PLA's financial position, it seems to me that between now and 1983, no matter how it improves its operating performance as a port authority, it cannot earn enough to cover the repayment of debts and the increase in interest charges. The 1978 accounts show approximately £7 million interest.

Between now and 1983 loans will fall due for repayment. Even if the capital is not repaid and arrangements are made under the Bill for the loans to be extended, the much higher rate of interest of 19 per cent. which now applies would add almost £5 million a year to the interest charges just to meet the Lazard loan extension. Inevitably, PLA will have to find money either for increased interest charges to extend loans which would otherwise fall due, or for the repayment of the loans. Either way, a major financial gap is not covered by the Bill.

PLA's assessment in its five-year stategic plan that some form of restructuring is necessary to enable it to return to viable operation is borne out by what has happened since. The report which was presented in June last year shows that this is a basic element of the total strategy. Paragraph 1.3.11 states that there is no realistic prospect of achieving the minimum cash flow objective by 1983 without capital reconstruction. In both the transfer and concentration options it will be necessary to effect a reconstruction of the PLA's capital in order to achieve viability by 1983. There is no qualification. Whichever course was chosen, that financial reconstruction would have been necessary.

The report states some of the reasons for that. It points out that the PLA had no equity capital, so was not able to enjoy the flexibility of bodies which had a fair proportion of their capital represented by equity. It points out that that has led to certain deteriorations, and it concludes that some capital reconstruction is therefore a vital prerequisite for PLA to return to commercial viability. It states that unless the debt burden from past losses can be relieved, improvements in working practices will not bring about the financial objectives of the plan.

That is spelt out clearly in the report. The Minister could not have failed to notice it when he was considering the matter with a view to introducing the Bill. If I state the position briefly now, it is not because I do not attach importance to it. It may be the fundamental financial consideration on which the Bill will stand or fall in the test that history will apply. In two or three years someone will say either that the Bill was nonsense in the light of the known stated problems and objectives, or that the Government's judgment was right. I believe that the Minister realises that and that the Government rightly expect the PLA—the whole of its work force—to make a more efficient use of its improved port facilities, to bring about the best possible working practices, to indulge in first class marketing arrrangements of its port services, and to increase the earnings of the port.

The Government are right to expect that, and they are right to call upon the PLA to do that. However, they cannot expect that sort of response if they are setting an unrealistic and unrealisable financial target for the next three years of operation. Therefore, some arrangement must be made which will put before the PLA and its work force a realistic proposition—a way in which it can finance known debts or known increased interest charges. Provided that is done, the Minister will get the response he wants.

The Bill cannot rewrite the history of the Port of London Authority, and, in particular, it cannot rewrite that period in which there has been a fundamental change in the nature of dock work, which has had serious financial consequences for the authority. Those now working for the authority have learnt many of the lessons of this change, and they are capable of meeting the current needs of the port. By setting realistic and not impossible targets, and by facing known financial problems, the best result can be achieved—but only by doing it in that way.

Photo of Mr Teddy Taylor Mr Teddy Taylor , Southend East

It gives one an agreeable sense of power and influence to be able to decide at this time of night whether we should be committing £70 million or £100 million of taxpayers' money. I wish to ask the Minister one brief question about the figure of £70 million. Does it cover any expenditure involved in the reorganisation of or reduction in the Port of London police force? The police are employees of the Port of London, but they are not registered dockers under the scheme. The House will be aware that the Port of London police have a major role to play.

A small number of men are entirely responsible for security in the Port of London Authority area. The number in the force has declined substantially in recent years. In the light of the problems of the ports and the docks and the role that the force has to play in ensuring protection against the smuggling of arms and drugs and illegal immigration, there is clearly a big job to be done.

I ask my right hon. Friend three specific questions. First, does the cash limit include any payment of compensation for reductions in PLA police numbers that may stem from reorganisation plans? Secondly, does my right hon. Friend believe that after the reorganisation, which will be completed in 1983, a viable police force will remain? Thirdly, will he be willing to consider procedures to enable PLA policement who may become surplus to requirements if a number of docks are closed to be transferred to the civilian force?

I have an interest in the police, but some years ago, when I represented a Glasgow constituency, I had the pleasure of being the adviser to the PLA police. I met members of the force and I have a great admiration for them.

Although those links have long since been broken, it would be unfortunate if the debate were to proceed without some reference being made to the future of an important and successful police force.

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

I apologise to the hon. Member for Southend, East (Mr. Taylor) because I had ungenerous thoughts about him when he made his contribution and referred to the Port of London police. I thought that he would say that the next census will reveal that many port of London Policemen and women are living in Southend, near Southend or have friends and relatives in Southend.

I am tempted to think that the Minister will say that the money provided for in the Bill will not be able to help directly in the way that the hon. Gentleman wishes. The fact that we are providing aid for the port of London has implications for other parts of the Port of London Authority's finances and for other ports.

Has the Minister had time between attending road haulage debates and various meetings throughout the country, which keep him pretty busy, to consider the implications of the Bill for other ports, not least the ports of the Mersey? My purpose is to support London Members in urging that help be given to the authority. However, the next step is to say "If that support is to be provided, the Minister of the day should consider its effect on other areas."

It is no use a Minister saying" This is directly for severance. The assistance has nothing to do with modernisation, port facilities or advertising." If an organisation is in financial trouble and it is helped to overcome any part of its financial difficulties, there must be a relationship between its operational costs and its finances.

The Minister gave a written answer on 22 April to my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen). He asked for two sets of figures. He wanted to know what financial assistance had been given to the port of London from 1970 to 1980 and to the ports of the Mersey, including the Mersey Docks and Harbour board. The Minister supplied two sets of figures. It would be easy merely to add the figures and to say that the port of London has received roughly £20 million between 1970 and 1980 and that the ports of the Mersey—the port of Liverpool—have received £16 million in the same period.

With respect, the Minister is not comparing like with like. We all accept that no two ports are the same. The list brought out certain points. During those 10 years, grants towards the modernisation of the port of London were just over £1·5 million. Grants towards staff severance payments were £7·5 million. The grant towards the severance payments of registered dock workers were just over £11 million.

The £16 million for the port of Liverpool was made up in a totally different way. It received almost HUD million for port modernisation compared with London's £1·5 million. The port of Liverpool received an industry grant of £4·5 million. The port of London did not recieve that type of grant. The European Regional Development Fund gave £1·5 million to Liverpool, yet the port of London did not receive such a grant. Liverpool also receives a grant of £172,000 as a result of a railways provision. Any port authority with a railway is entitled to ask for such a grant. I do not know why the port of London does not receive one.

It is misleading to state that one authority gets £20 million while the other gets only £16 million. Like is not being compared with like.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South 12:30 am, 6th May 1980

It should be put on record that I forgot to include the strange affair of the railways and the Royal docks. The PLA ripped out between 50 and 80 miles of railway line. It did not even do a Beeching: it took out the whole line. An argument arose between the PLA and British Railways about who should be responsible for delivering cargoes to ships by road.

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

No doubt my hon. Friend could add other aspects to his list. Along with my right hon. and hon. Friends on the Front Bench, he is an expert on the PLA. I shall follow his advice. I hope that he will follow mine on ports on the Mersey.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

Several Members who represent Liverpool constituencies have fought a valiant battle in favour of giving a better deal to Mersey ports. They have argued that, compared with London, such ports have been hard done by. However. I understand that about £15 million or £16 million has been invested in Mersey ports. Most of the money given to the PLA has gone towards severance pay. Does not that prove that Liverpool has done rather well out of subsidies in the long term? The case that the hon. Gentleman seeks to make, along with other hon. Members, is not sustained by his statistics.

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

I would argue to the contrary. The Royal Seaforth docks are virtually new, and the majority of money was spent on modernisation. However, the port of Liverpool is losing about £7 million a year. It is spending that amount on severance payments. The money comes out of its coffers and from port levies. A new port receives money. However, Merseyside will not be receiving the amount of money that this Bill seeks to give to the PLA for severance payments.

The fact that Merseyside may receive £20 million or that Glasgow may receive £15 million has no relevance to the needs of particular ports. If such a severance payment is made to one area, it will inevitably affect other aspects.

My choice is between the two amendments. My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), is suggesting £70 million—and in transport terms this is an old model. The Labour Government's Bill was about two years in preparation. Those sums were designated or agreed three years ago. They should be increased. The Minister recognises that and includes £5 million for inflation. However, in true inflation terms it requires a great deal more. My hon. Friend suggests that that should be available for the port of London, and I am tempted to support him.

The hon. Member for Liverpool, Gars-ton (Mr. Thornton) appears to be suggesting that if there are promises of help for Merseyside London will get only half. His difficulty is that £65 million of the £70 million in the Bill is already committed. If we support the hon. Gentleman's amendment and reduce the £70 million to £50 million, where will the other £20 million come from? That is clawback with a vengeance.

Those are the alternatives. I hope that the Minister can give us similar assurances to those given by his predecessor. The port of London requires help and support. It is not only a regional asset; it is a national asset. The ports of Merseyside, Hull and Glasgow, until we sort out our port problems on a national basis, are also in need of help. The Minister must recognise the problems by intervening. It is an interventionist Bill, but it is a limited Bill of limited intervention. The Government may say that they inherited the Bill from the Labour Government, but they inherited many things, 99 per cent. of which they have discarded.

The Minister must recognise that this measure decreases the competitiveness of other ports. They will need help, too. Otherwise next year or the year after we shall require a Mersey Dock and Harbour Financial Assistance Bill, a Port of Manchester Ship Canal Financial Assistance Bill and so on. Unless we have rational support now, those measures will have to be undertaken piecemeal. I ask the Government not to bring forward proposals similar to those for the reorganisation of the old Mersey Docks and Harbour Board, which was an absolute disaster.

Photo of Mr David Alton Mr David Alton , Liverpool Edge Hill

On Second Reading I raised questions similar to those raised by the hon. Member for Liverpool, West Derby (Mr. Ogden).

I do not wish to detain the Committee long at this hour, but I listened patiently to the speeches. I, too, wish to make a point on behalf of Liverpool. Those of us who represent that city find it strange when the logic of intervention for the port of London is argued but that logic is not extended to Liverpool. Many hon. Members do not appreciate the seriousness of unemployment in Liverpool. In the first few months of this year several hundred redundancies occurred in the docks and associated industries. Since lanuary we have lost over 2,000 jobs in Liverpool, and 9,000 in each of the previous two years. That has created more unemployment in the conurbation than in the entire principality of Wales or, indeed, in Ulster. We therefore reiterate our concern at money being pumped into the port of London, which will reduce the competitiveness of the port of Liverpool and threaten yet more jobs.

It would be churlish of me to suggest that aid should be withdrawn from the port of London. Far from it. I would be in difficulty in deciding which amendment to support if it came to a vote. The hon. Member for Liverpool, Garston (Mr. Thornlon) seems to suggest that the amount made available to the port of London should be reduced by £20 million, which would not solve any of our problems. The amendment has been moved almost on a think-of-a-figure basis. I have heard little justification for the sum of £100 million rather than £70 million.

I hope that the Government will accept the sincerity of hon. Members representing Liverpool constituents in putting their points of view on behalf of their port. We have not so far this year been given the opportunity to debate the problems of that port and tonight has given us that opportunity.

The Minister will remember that his hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) suggested, in a Private Member's Bill, that there was a need for free port status to be granted to the port of Liverpool. I remind him of that suggestion from the Government Benches and ask him whether any assistance is likely to be forthcoming from the Government for that suggestion in this Parliament. Equally, I also ask whether support is likely to be forthcoming—similar to that being given to the port of London—in the immediate future to dissipate some of the fears of those involved in industries associated with the port of Liverpool or the Mersey Docks and Harbour Company.

Photo of Mr Malcolm Thornton Mr Malcolm Thornton , Liverpool, Garston

It is not my intention to waste the time of the House by restating the points made by hon. Members on both sides during the debate on Second Reading. However, I ask the Committee to consider the implications of this Bill for other ports and its relevance to a national ports policy. The only indication of such a policy seems to be the statement made by my hon. and learned Friend the Parliamentary Secretary on Second Reading when he said: it is Government policy that ports in this country should compete freely with each other on the basis of price and service, without Government subsidy."—[Official Report, 16 April 1980; Vol. 982, c. 1380.] That is laudable, non-interventionist stuff. The proposition in this Bill, however, runs contrary to that statement.

The factors leading to the problems facing the PLA are not confined solely to that port. All ports, to a greater or lesser degree, have been affected and it is, therefore, patently unfair that taxpayers' money should be used to give to one port a financial advantage which will work to the detriment of other ports, especially ports such as Liverpool, facing substantially the same basic problem of redundancy payments to registered dock workers.

Why do I say "to the detriment"? Leaving aside the issue of how subsidised Contintental competition affects our ports, let us look at the British ports scene. For all the reasons enunciated by the Minister, trade patterns have changed and the number of ships has gone down. I can tell the Committee that I have experienced at first hand the dramatic changes that have taken place in the port of Liverpool.

Sad though this change is, it is a fact of life, and one with which all ports have had to come to terms. As shipping stands today, there is only a limited number of ships to go round. So one port's gain is another port's loss. This undeniably encourages ports to sharpen their competitive edge. Excellent internal transportation facilities enable shippers and ship owners to opt for temporary advantage at a particular port. This is particularly important when one considers the heavy costs that unnecessary delays or higher port charges bring.

In the present climate of "non-policy" towards our ports, individual ports accept the realities of life. But introduce a rogue element, an unfair advantage to one port, and immediately every other port is put at a grave disadvantage. Reference was made earlier to the statement by Sir Humphrey Browne in the British Transport Docks Board's report for 1979. Sir Humphrey said: The Board remain concerned about subsidies made available to other port authorities which enabled them to attract business on uneconomic terms. Subsidies undermine the basis of fair competition and lead to the retention of obsolete facilities which could not attract traffic at economic rates. It is for this straightforward reason that I am opposed to this Bill. My message to the Minister is a simple one. He should stick to the policy which he set out on Second Reading, when he said: the Government basically believe that the ports in this country should operate in full competition with one another and meet the normal tests of commercial viability."—[Official Report, 16 April 1980; Vol. 982, c. 1314.]

12. 45 am

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

Is the hon. Gentleman saying that he does not want any Government aid for the ports of the Mersey, or only that he does not want any aid for the ports of the Mersey if nobody else gets it—everybody out or nobody out, that kind of thing?

Photo of Mr Malcolm Thornton Mr Malcolm Thornton , Liverpool, Garston

If the hon. Gentleman waits until I finish my speech, he will hear what I have to say on that. On this question of financial aid, either give it to all, or do not give it at all. I think that that must be the message that I want to spell out.

I should like to conclude on the more general point that I mentioned earlier. There are much wider implications in the speeches of both my right hon. Friend and hon. Friends on Second Reading—implications that set alarm bells ringing. As well as the total inconsistency of the proposal in the Bill compared with their general view, the Government appear to have no long-term strategy for the ports of this island. I cannot accept that this is a sensible attitude for any British Government to take.

I conclude with the words of Mr. James Fitzpatrick, the managing director of the Mersey Docks and Harbour Company, in a recent speech at Rotterdam; To what degree should a nation accept responsibility for ensuring that their ports continue to provide those vital links with the rest the world?In my opinion the United Kingdom has failed—or refused—to acknowledge its ports as an integral part of the country's transport system.Irrespective of whether a Channel tunnel eventually links our island with the rest of Europe, bridges have already been built by the trade shipped between our ports. There will never be tunnels between the United Kingdom and the Americas or the People's Republic of China.In the 1980s the British Government must accept its responsibilities.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

The Bill proposes an expenditure in the form of a port subsidy of about £70 million, and the right hon. Member for Barrow-in-Furness (Mr. Booth) has moved an amendment that suggests that the figures should be increased to £100 million. It is a port subsidy, and I think we should acknowledge that this goes against the general philosophy outlined by my right hon. Friend and the general policy that the Government would wish to pursue.

To that extent, I have some sympathy with the point made by my hon. Friend the Member for Liverpool, Garston (Mr. Thonrnton). One sympathises very much with the point that he makes, that all ports should be treated in the same way. What is right for one is right for another, and that point has been made by Liverpool Members during a number of debates on this subject. The answer that we have to give is that this is an exception, and we have then to prove why it is an exception. But if it is an exception for this Government, equally one can point to the fact that it was an exception for the previous Government.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

The Labour Government believed in it as an exception, and that is fair enough. Nevertheless, it was an exception, because exceptional support was proposed by the previous Government for the port of London which they were not proposing to give to the Mersey or to other ports. That is a simple proposition.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

I will, but I cannot see anything particularly controversial in what I have said.

Photo of John Prescott John Prescott , Kingston upon Hull East

Except that there is a difference between the port of London's present financial crisis, or the one within the last 12 months, and the one that is coming for the port of Liverpool. It will be a matter for decision by the Government whether, when that crisis comes, they will treat both ports in the same way.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

All right, but my general proposition remains correct, that we had an exceptional situation before, and that is what exists today, and no doubt judgments can be made later. At the moment we are talking about an exceptional situation. It is not one that I find attractive.

I do not agree with the proposition that even more money should be put into the port of London because that would be grossly unfair to other ports. I speak of private enterprise ports, nationalised ports, and municipal ports. It would be unfair to pour subsidies into the PLA and thereby place other ports at a disadvantage.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

The hon. Gentleman has used the word " subsidy " on a number of occasions, as did the hon. Member for Liverpool, Garston (Mr. Thornton). I have in my hand a paper which shows that between 1967 and 1978 200 firms made 9,282 men redundant. The firms were private and all the men were eligible for severance pay under the dock labour scheme. The Bill provides money for that rather than a subsidy for an ongoing commercial concern, which the PLA is not.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

One can argue that social responsibilities are placed upon docks. Many docks have met and are meeting those responsibilities without any support. But the port of London has support. It is clear that London receives a subsidy which Merseyside does not receive. I am right to use the word " subsidy " in that context.

I dissent from the proposition that we should be led to the concept of a national port policy. It is suggested that there should be a long-term plan for the ports—a plan which would be devised by some powerful central body or worse, proposed by my right hon. Friend. He is a splendid Minister of Transport, but he cannot claim the wisdom of knowing what a ports policy should be. The consumer, customer and user of transport must, and will, decide the question of port and transport facilities.

My hon. Friend the Member for Gars-ton might see a long-term port strategy as benign, but the reverse might be true. We might have a strategy that is bureaucratic, reactionary and spendthrift—the reverse of what he would like to see in the long term for the ports. If we followed my hon. Frend's reasoning we should end up subsidising a great number of ports and we should not have the growth of highly efficent ports such as those at Southampton, Felixstowe and Medway. We must retain maximum flexibility and keep the Government out of ports policy as much as possible.

It is because of this general strategy—which I believe to be the right one—that I deeply regret the fact that we have before us a Bill that asks for £70 million worth of public money to support the port of London. I believe that other ports have a legitimate right of complaint.

This is exceptional because we know that the previous Government had already committed £42 million of that money without any specific parliamentary legislation. We know that that was done under the Appropriation Act—an undesirable procedure—and is something that the present Government inherited. They also inherited a social situation in London in which, one way or another, that money would be spent. I believe, therefore, that my right hon. and hon. Friends were absolutely right to do it in this way.

The right hon. Member for Barrow-in-Furness argued the case for a financial reconstruction. He believes, and I think that there is some strength in his argument, that it is becoming increasingly difficult for the Port of London Authority to have a long-term viable economic future without some kind of financial reconstruction. He has a case, but it is premature to argue that case because we are in a difficult trial period. Until we know whether the experiement with the Royal docks will work I do not think that we should go into the question of financial reconstruction.

If the right hon. Gentleman was really keen on a financial reconstruction perhaps the best way to achieve it would be to have no Bill at all and that the Port of London Authority should not have the £70 million. The result of that, of course, would be that the PLA would go into bankruptcy.

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

It happened to Liverpool.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

The hon. Gentleman makes my point. Look what happened to Liverpool. But the net result of that would be that the PLA would have to write off its capital debt. That would achieve a financial reconstruction. Bankruptcies and liquidations seldom mean the total elimination of a business, but they do mean a financial reconstruction. Some other system is then found to maintain the remains of that business as a going concern.

If that is really what right hon. and hon. Gentleman are arguing for, it is an interesting proposition. That could have been achieved. Had we arrived with a clean slate—without any of the inherited obligations and commitments of the past—perhaps that is what we would be doing today. That would be fairer to Liverpool and to the other ports of this country. It would not mean the end of the London docks, but it would mean that the system would be started up again in an attempt to recreate a viable, modern docks system from the structure of the past that was inherited by the Government. However, we are not faced with that situation.

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

Great play has been made by the Minister—and by the hon. Member for Faversham (Mr. Moate), to whom I am listening with great care—of the fact that this is an obligation inherited from the last Labour Administration. My understanding with my Government 12 months ago was that they would bring in a Bill to provide financial assistance to the port of London and that at some later stage there would be propert recog-notion by that Government of the needs of other ports.

It was much easier in those days for a half a dozen or a dozen stroppy hon. Members to put the squeeze on a Government who had no majority. Conservative Members would all have voted against the port of London legislation then. I could have put the squeeze on my hon. Friends representing London constituencies and said that we looked for a guarantee of help for our ports from our Government. We would have been making a simple point. The obligation inherited by this Government was not simply this Bill. They inherited the obligation to recognise the needs of the other ports and to offer them some help.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

That may have been the impression gained by the hon. Gentleman, but it was not the impression gained by those of us who were then listening to the right hon. Member for Stockton (Mr. Rodgers). I suspect that had he still been in office—thank goodness that he is not—he would have been introducing roughly the same Bill, pursuing exactly the same strategy and backing up the decision of the PLA on the closure of the West India and Millwall docks and the desire to maintain the Royal group of docks. The strategy would have been the same and I think that the hon. Gentleman would be fighting a forlorn battle still to get support for the docks of his constituency.

This is an inherited obligation and the Government are carrying it through, as I believe that they must. The funds that have been committed are sufficient. It may be tight and it may be difficult, but that is the way it has to be and that is the way it should be. I think that there is sufficient to make a go of the experiment with the Royal group of docks.

I am

I conclude with the point that I made on Second Reading. We are putting forward a terrible argument that this somehow is doomed to failure. We have talked over all the difficulties and problems. Yet I know that the hon. Member for New-ham, South (Mr. Spearing) would not want the message to go forth that Parliament thought that the Royals were doomed to close. This financial reconstruction is aimed at making a success of the Royals. None of us who were born and bred as Londoners want to see the enclosed docks disappear entirely. It would be a tragedy. One hopes that the Royals will succeed. The Government have adopted a certain strategy. We want to see that strategy succeed. I hope that the message will go out from this place that we see a fair chance of its succeeding and that is why £70 million—a large sum of public money—is being voted to this end.

Photo of Mr Norman Fowler Mr Norman Fowler Minister of State (Department for Transport)

It seems to me that my hon. Friend the Member for Faversham (Mr. Moate) has put his finger on a number of the important issues which we face. I should like to come back later to what he said.

I should like to deal with one matter simply to dispose of it as rapidly as I can. That is the issue raised by my hon. Friend the Member for Southend, East (Mr. Taylor) on the position of the PLA police. The cost of severance of ports police is eligible for grant under clause 1(1), which deals with assistance to the PLA for staff severance. We understand that the conditions for severance of ports police are similar to those applying to other PLA staff. The average payment made under the ports staff severance scheme is about £12,000, though the amount payable in a particular case will depend on the circumstances.

That is the generality of the reply to my hon. Friend. Perhaps he will allow me time to consider the detail and to give him a considered reply. However, I join him in paying tribute to the PLA police, with whom I have had a number of dealings and have met on several occasions. It is undoubtedly a first class, excellent force.

The Government are basically being attacked on two fronts. We are told, first, that the cash limit is too generous and, secondly, that it is not generous enough. The right hon. Member for Barrow-in-Furness (Mr. Booth) said that the policy is unrealistic and unrealisable.

I remind the Committee that we inherited this commitment from the previous Labour Government and we are using their figures. I shall come later to the interesting point raised by the hon. Member for Liverpool, West Derby (Mr. Ogden).

As I explained on Second Reading, our policy is to help the PLA to return to viability at least cost to the taxpayer. The financial limit that I announced on 7 December has therefore been set deliberately at the level of assistance promised by the previous Labour Government in July 1978, adjusted for inflation and the latest forecasts. Basically, I have told the PLA that it must achieve viability within this limit of £70 million. I have also made it clear that it is for the PLA, not the Government, to decide on the detailed steps required to achieve viability within this limit.

The assistance provided in the Bill is specifically directed towards the rundown of surplus manpower because that is the nub of the PLA's difficulties. I am not saying that it is the only difficulty from which the PLA suffers—that is clearly not the case—but it is certainly the major one. That was clearly recognised by the previous Labour Government because, as the right hon. Member for Stockton (Mr. Rodgers) told the House on 31 July 1978, the Labour Government were prepared to provide assistance towards severance costs, and then only provided that the PLA set in hand. measures... to secure the most rapid possible rundown of surplus manpower."—[Official Report, 31 July 1978; Vol. 955, c. 169.] They are not my words. They are the words—and, I assume, the policy—of the previous Government.

I recognise that some hon. Members would like to widen the scope of the Bill so that assistance can be given for purposes other than the rundown of surplus manpower, but there are two reasons why this is inappropriate. First, the £70 million in the Bill is the amount which is necessary to return the PLA to viability at least cost to the taxpayer. The PLA and hon. Members have been informed of the form of the assistance and the purpose for which it is being given, and that is what is spelt out in the Bill.

Secondly, it is necessary that assistance be directed at reducing surplus manpower, which is, I repeat, clearly the overriding obstacle to the recovery of the profitability of the PLA.

The right hon. Member for Barrow-in-Furness stated the breakdown of the £70 million financial limit—basically correctly. To the £35 million promised by the previous Government in 1978 we have added £5 million for inflation. Of that total, £19 million has been paid already—£11·4 million for registered dock workers and £7·6 million for staff. As for the £25 million backing for the commercial loan, the majority of that has already been taken up by the PLA. The previous Government undertook to stand behind both of these loans, and that is an obligation which, again, we have recognised. We have also backed the overdraft facility of £5 million, which has not yet been taken up by the PLA. This undertaking was given by the present Government in the light of the latest forecast.

Therefore, of the £70 million, £60 million was directly promised by the previous Government, and £42 million of the total of £70 million of Government assistance provided for in the Bill has already been taken up.

As to the amendments, I say to my hon. Friend the Member for Liverpool, Garston (Mr. Thornton)—I shall come shortly to his point about Liverpool and Mersey—that it seems to me that to suggest, as his amendment does, that £50 million is the right figure that we should put in the Bill would mean putting in a sum that would not be sufficient to meet the purposes for the recovery of the PLA. As I made clear in the statement on 7 December, the Government are honouring an obligation inherited from the Labour Government to provide £35 million in grants and backing for £25 million in commercial loans. That is what we are doing—no more and no less. My hon. Friend the Member for Faversham talks about an " inherited obligation " and he talks about this as being " exceptional." That is absolutely right—it is an inherited obligation.

I am attacked on the other side by the right hon. Member for Barrow-in-Furness, who seeks to change the limit of Government assistance at any one time from £70 million to £100 million. In other words, he wants to increase it very substantially. I have to say once more that we are picking up the obligation that we have been given. We are also saying that we can agree only to maintain the minimum level of financial assistance to the PLA that it will need to continue with the most rapid rundown of manpower and to plan for the quickest possible return to viability at least cost to the taxpayer. But I do not believe that we should be justified in going beyond the £70 million which we have had an obligation to meet.

The hon. Member for West Derby said that in addition to the £70 million obligation that we are recognising, the previous Government also stated that they were prepared to accept further obligations to other ports.

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

I did not say that they stated that. There was a clear understanding on the Labour Benches, and particularly among Merseyside Members, that assistance to the PLA would go through with no bother, but that if that did not carry with it an understanding that there would be further aid, in other ways, for the Mersey ports and others, the Port of London Bill would not go through.

Photo of Mr Norman Fowler Mr Norman Fowler Minister of State (Department for Transport)

I do not know where that understanding comes from. There may have been an understanding reached behind closed doors with the Labour Government, but it was never made public and the policy of the previous Government cannot be rewritten on the basis of understandings that were never made public, let alone announced to the House, by the then Secretary of State. If the hon. Member can point out to me any such public statement, I shall be obliged. I shall also be surprised.

I have known the hon. Member for West Derby for a long time and I respect him. I understand his concern and that of my hon. Friend the Member for Garston and the hon. Member for Liverpool, Edge Hill (Mr. Alton). The Mersey Docks and Harbour Company approached me last year for financial assistance to help to meet its severance costs, on the same lines as the aid being given to the PLA. I said that I was not prepared to make grants available towards severance costs but that I would continue, and indeed increase, the normal assistance by way of loans under the Harbours Act 1964 towards capital development. That was on the understanding that the company would take remedial action to reduce costs and to increase revenues.

Towards the end of last year, the company approached me again, saying that it was expecting a trading loss in 1979 of about £2 million and was concerned about the position in 1980. I therefore invited the National Ports Council to carry out a rapid study of the company's forecasts and that showed that there were a number of ways in which the company could improve its financial position, primarily by a faster rate of manpower rundown and by some increases in traffic.

The company has accepted that those improvements are feasible and has undertaken to put them into effect. It has also agreed to carry out a much more far-reaching study of all aspects of its business, with a view to drawing up a new profitability plan, again with the aid of the NPC.

The results of the study, which is still going on, should become available in the summer. As the chairman of the company recently announced in the press, the study will cover, among other things, the adequacy of the financial resources likely to be available for the future operations of the company. It will discuss that matter with me. The studies and the discussions that the company is to have with me do not involve any prior assumption on whether the company needs any additional external financial assistance in addition to that which is already available or on the source of that assistance.

I am sure that hon. Members will agree that it would not be helpful for me to speculate about the likely outcome of the current studies or about what attitude I shall take in discussions with the company. However, I have a good deal of faith in the ability of the company to continue actively with policies designed to improve its financial position. I was encouraged to read what the chairman said about the successes already achieved in reducing labour costs—he mentioned total savings from those and other economies of about £7 million a year—and about the continuing efforts that the company is making and which the chairman believes must have benefits for the future of the port.

1.15 am

I do not believe that it is helpful, however strongly hon. Members may feel, to talk the port of London into a crisis.

The Government believe that the essential basis for any decision about the future of Liverpool or indeed any other port is the best possible information about the future and what can be done by way of self-help to put things right. This is what we expect to get from the studies in the summer. Clearly we will continue to keep the situation under close and strict examination, but I say to my hon. Friend the Member for Faversham and to hon. Gentlemen that I think that at this stage their approaches are, not to put it any more strongly, premature.

As for the general policy of the Government on ports, let me make it absolutely clear that we believe in free and fair competition between ports. The issue as my hon. Friend the Member for Faversham has said, as far as the port of London is concerned is exceptional and I shall not seek to go over that again. But let us remember what the last Government said about this. I will quote what my predecessor, the right hon. Member for Stockton, 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 viable, stable and prosperous future. But the future of the port"— and this is what I think is important— 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.] I think that that is right.

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

We have heard that quotation before.

Photo of Mr Norman Fowler Mr Norman Fowler Minister of State (Department for Transport)

The hon. Gentleman may have heard it before, but it does not seem to have made much impression upon him.

Photo of Mr Norman Fowler Mr Norman Fowler Minister of State (Department for Transport)

The hon. Gentleman may have answered it, but I should be most surprised if he had answered anything as sensible as that on his own policy on ports.

That, it seems to me, expresses the kernel of the problem. It is, as I believe and the Government believe, not right to look to the Government continually for assistance and help. It seems to me that what the right hon. Gentleman and the Labour Government said on this matter is right. I do not believe that the Committee would be justified in taking the advice of the Opposition Front Bench and raising from £70 million to £100 million the cash limit for the port of London. Nor do I believe that we would be justified in going back on the commitment that we have inherited and reducing that £70 million to £50 million. I believe that the cash limit that we have set is a fair one, and it recognises the responsibilities of this Government. I ask the House to reject both the amendments.

Amendment negatived.

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

We were discussing two amendments and I thought that the hon. Member for Liverpool, Garston (Mr. Thornton) had asked leave to move his amendment.

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

The hon. Member has not asked for a separate Division upon it, and we have passed it anyway.

Clause 1, as amended, ordered to stand part of the Bill.