Orders of the Day — Ports (Financial Assistance) Bill

Part of the debate – in the House of Commons at 7:10 pm on 25th March 1981.

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Photo of Mr Norman Fowler Mr Norman Fowler The Secretary of State for Transport 7:10 pm, 25th March 1981

The hon. Gentleman says that I am storing up a great deal of trouble, but I ask him to address himself to the problem. There is no doubt about the financial crisis that the two ports face. The hon. Gentleman may generalise, but the particular problem is that unless we get a Second Reading for the Bill and provide the aid, the two ports will run out of money next week. That is why we are making a particular case of them.

I am sure that hon. Members will want to make the case for an extension to other ports. We shall listen to that case, but I hope that they will bear in mind the immediate crisis facing the ports of London and Liverpool.

The supplementary severence scheme is an exceptional measure for a limited period. Naturally, there has been concern in some other ports about the implications of these payments for their own operations. I recognise that the recession is having its effect on other British ports, and that in many of them a surplus of registered dock workers is one of their problems. But in no other port is the size of the surplus manpower problem as serious as in London or Liverpool. Nowhere else is it clear that massive severences are immediately needed for the port's survival. In no other ports is it the case that the only way of obtaining these severances is by means of additional payments funded by Government.

I am glad to be able to tell the House that when the National Association of Port Employers wrote to me recently following my meeting with its representatives about the special scheme, it expressed the reservations that have been mentioned but it also recognised the nature of the problems in London and Liverpool and hoped that the manpower reductions needed would be achieved.

The Bill involves the expenditure of £87 million of new money. The other £70 million is the money from last year's Bill and a £3 million overdraft guarantee for Mersey authorised in December. A major purpose of the new money is to pay for severances, in the first place, to pay for the special supplementary payments for registered dock workers, and secondly, to pay for about 1,000 severances of other employees in the two ports. The total provision for severances of all kinds within the £87 million is over £40 million, about half of the total of new money.

A further £13 million or so of the new money will be for necessary capital investment, much of which would have been financed in the normal way by loans under the Harbours Act 1964 but which, in the present financial circumstances of both ports, I would need for the time being to finance by repayable grants rather than by loans. The remaining sum is largely for contingencies, although a relatively small part—in the region of 10 per cent. of the total new money—is to enable the two ports to keep operating while the manpower rundown and other measures are going on.