Moved by Lord Berkeley
That this House regrets that the Merchant Shipping (Light Dues) (Amendment) Regulations 2009 (SI 2009/1371) do not prevent Her Majesty's Government subsidising Irish Lights and thereby increasing light dues payable by ships entering United Kingdom ports.
Relevant Document: 21st Report from the Merits Committee.
My Lords, first, I must declare an interest as a harbour commissioner for the port of Fowey in Cornwall, which operates its own lights and receives revenue from ships entering the port. I am also president of the United Kingdom Maritime Pilots' Association, but I should tell the House that both interests are unpaid and there is no financial arrangement of any kind binding me to a particular point of view on behalf of a body outside Parliament.
It is worth pointing out that this is not a fatal Motion. It is designed to express regret, and I hope that the debate will flag up the urgent need for the Government to resolve the question of the lights and the funding for lights going to the Irish Republic, which I shall explain. The light dues system works on ships entering UK ports. They pay light dues set by the Government, and this statutory instrument is the latest increase, which I shall come on to. The light dues are used to fund the main navigation aids around the UK coast. They are paid into the General Lighthouse Fund, which in turn funds the three general lighthouse authorities—Trinity House, the Northern Lighthouse Board and the Commissioners of Irish Lights, which provide services to Northern Ireland and the Irish Republic.
The issue that I want to raise this afternoon is that dues paid by ships entering UK ports contribute some £15 million a year to the maintenance of lights in the Republic, which is rather unfair on ships coming into UK ports.
It is not surprising that the Irish lights question goes back some 100 years and that there has been much parliamentary scrutiny of it. I have found some interesting historical comments in the debate on the Merchant Shipping (Mercantile Marine Fund) Bill on
"I can remember in this House frequent occasions on which the conduct of the Northern Lights Commissioners has been brought before the House and overhauled by it; but I am bound to say that a more disgraceful exhibition than that presented by these accounts I have never heard in the course of my membership. The Irish Board is admittedly even worse than the Scotch ... The administration of the Irish Board is a disgrace to the United Kingdom".—[Hansard, Commons, 17/3/1898; col. 171.]
In the same debate, Mr J Bryce, MP for Aberdeen, South, reserved his criticisms for the Commissioners of Irish Lights. He said:
"I am bound to say that"— the Irish Lights Board—
"has given much less satisfaction than the other two Boards, and I do not think anybody can come forward here and defend the constitution of the Irish Board".—[Hansard, Commons, 17/3/1898; col. 167.]
Little has changed in 100 years because, 85 years after independence for the Republic, the UK Government in effect control and fund the Irish lights, and no shipping interests that provide funding have any say in how that funding is spent.
More recently, other noble Lords and I have been raising this issue in this House for six or seven years. When my noble friend Lady Crawley was the Minister responsible for this, I tabled a Question asking why the British Government had not made more progress in their negotiations with the Irish Government. Her reply was, "They're not very keen to negotiate". My response was, "Well, they wouldn't be, would they?".
The key issue is that the increases are being proposed to make good a £20 million forecast deficit in the general lighthouse fund, but the bulk of the deficit would be removed if the Republic of Ireland was asked to meet the full cost of the provision of its aids to navigation, which is about £15 million. If the Government of Ireland took responsibility for financing the maintenance of lights around their coast, the increase in light dues to ships coming into UK ports would be virtually zero.
More than five years ago, in January 2004, Alistair Darling, who was then the Secretary of State for Transport, committed the Government in their response to the Transport Committee's report on ports to stop this subsidy to the Republic. This was reinforced on
I am not suggesting that navigation aids are not vital to shipping, of course they are, and no one would want to see any problem about that. But I believe that the subsidy from the British Government to the Irish Government should cease and the Irish Government should be responsible for the maintenance of their own lights, just like the French, German, Dutch and all other Governments. I was in Dublin last week and I talked to a number of port operators and shipping line representatives. I mentioned the issue of the subsidy of Irish Lights and the general response was, "We've had it good for 85 years, so why should we stop now?", and they were rubbing their hands. I have some sympathy with that.
The Government recently commissioned yet more studies to consider efficiency, management and so on from the General Lighthouse Authorities, but the fact remains that a cut in what I call the Irish subsidy would mean that efficiency could be looked at taking a bit more time and with a bit more vigour than has been the case up to now. The increase is a disaster for UK shipping and it is unnecessary. I would also say that it is anti-competitive in that ships going into Irish ports pay lower dues because of the subsidy they gain from ships coming into UK ports.
In conclusion, when my noble friend responds, can he give me an assurance that at the end of this financial year the subsidy for Irish Lights will be finished completely? It is quite possible to do and it would make all the shipping lines happy. They could then turn to the important things in life—ensuring that everything is done in the most cost-effective way so that they can deliver what their customers want. I beg to move.
My Lords, I thank the noble Lord, Lord Berkeley, for initiating this debate on a Motion to resolve. I listened carefully to his words and I wish to intervene only briefly to support him. This is a most extraordinary state of affairs. As the noble Lord explained, it is a unique situation where a solemn promise was first given some years ago by Alastair Darling that this would be put right, and then subsequently by the Parliamentary Under-Secretary of State. I am glad that the noble Lord not only has a reputation as an expert on transport matters in general, particularly rail and rail freight, but also because he will frequently have a go at following things up. It is easy for Members of this House to be beset by too many matters and therefore to let things lie when there is no response. But this is a glaring anomaly and surely it must be put right. The Minister has an opportunity to begin to do so by making a few putative announcements of a change in these financial arrangements.
I have not had time to do a 100 per cent, thorough research into this, but my own trawl—if that is the appropriate word in this context—of other EU member states with coastal areas shows that no other EU member state pays these dues on behalf of a neighbouring country. While we all understand the historical background for the arrangement, that is no excuse for it to continue in the future. Like many others, I warmly welcomed Ireland as a republic joining the EU in 1973, at the same time as we did, along with Denmark. Ireland was saved from deep poverty by becoming a member of the European Community as it then was because its income and capital were very low in those days. Shortly before joining, Ireland had taken the step of detaching itself from sterling and floating the Irish punt separately. That marked the first stage of its economic development. As a low income country, it received quite large amounts of European Community money. Ireland was extremely successful and became known as a tiger economy with a strong entrepreneurial reputation until, like the rest of us, it was beset by the economic and financial difficulties brought about by the global financial crisis of the last two years.
None the less, despite that, Ireland is a prosperous country on any measurements. I am sure that, despite the fact that the Government in Dublin are being attacked severely for their budget deficit, which everyone says is too high, they will find what are modest resources in comparison with other demands on the Irish national exchequer and pay that which they owe. It is, as I say, a modest amount, and yet it would save the United Kingdom Exchequer much in terms of the various urgent necessities to put this matter right and to return to a zero deficit if at all possible. It is therefore very important for the Minister to respond properly to this brief debate and put the matter right.
My Lords, before my noble friend Lord Glentoran comes steaming in from the opposite direction, which I am sure he is about to do, I support the noble Lord, Lord Berkeley, most strongly. I, too, have raised this question in this House on more than one occasion—by dint of an Oral Question, I seem to recall, on the last occasion. Other than for historic reasons—which are now long gone, as the noble Lord, Lord Berkeley, said—there is no rationale whatever to continue to support the Irish Lights for shipping coming into the United Kingdom; it simply does not make any sense. I hope the Minister will not say, as his predecessors have, "We will try to persuade the Irish to come round to our way of thinking". That time has long since gone.
My Lords, the noble Lord, Lord Geddes, is clearly so worried about what I am about to say that he wanted to jump in first.
I was interested in the rather distorted and imaginative comments of the noble Lord, Lord Berkeley. I know that he has been chasing Ireland for a small amount of money for a very long time, but an integrated collection system for light dues is in place in which revenue collected from shipping goes to the central fund, irrespective of the country in which the vessel actually pays its light dues. That is an important issue. It is a user pays system and no Government are going to pay; so, no pay by the user, no lights.
I should point out to my noble friend that no funding is provided by the British Exchequer but, importantly, the Irish Government do pay an agreed portion of the costs of Irish Lights within the country of Ireland. To get matters into perspective, the total costs this year for the General Lighthouse Fund is £90 million. The GLAs have achieved a 50 per cent reduction in light dues in the past 10 years. I wonder how many shipping companies can own up to that. I doubt if any. The latest cut was a 10 per cent reduction in 2006. This has been achieved through a mix of automation, redundancies, massive rationalisation, sale of surplus property and constant use of technology.
However, only so many dynamic economies can be made without compromising safety standards. Three years ago, the GLAs warned the shipping Minister that by 2009 the DfT would need to sanction a rise in the levy as revenues could no longer match the necessary costs in providing navigation safety—and this is all about safety. In January, the DfT warned the shipping industry that light dues would need to rise in the region of 24 per cent to meet the real cost of navigation safety. There has been a predictable outcry from ship owners—we have heard it from the noble Lord, Lord Berkeley—who have threatened to alter their trading patterns to avoid the new charges, and from port operators, who would feel the effect of such a move.
The GLAs dispute these claims as light dues are a minor element of costs—1 per cent to 15 per cent depending on size and frequency after this rise. In total costs, it represents one penny in every £100 of any goods imported into this country by sea. Gosh, it is a big, big deal, is it not? The role of the GLAs is to provide such aids to navigation as the volume of traffic justifies and the degree of risk requires and, in so doing, discharge the UK and Irish Governments' obligation for aids to navigation provision under the SOLAS convention. The aids to navigation provided include lighthouses, light vessels, buoys and beacons including an AIS—automatic identification system—as an aid to navigation, together with an integrated differential GPS service. In total, the GLAs provide some 1,200 aids to navigation and inspect more than 12,000 of them.
Some light due payers have called for the amalgamation of the GLAs, implying that bureaucratic overmanning and duplication are in place and that amalgamation would make significant savings. It would not. The major savings have largely already been realised, but it would generate considerable additional cost with a very long payback period. The GLAs cover 20,000 miles of coast, covering some of the most complex waters in the world. This demands local knowledge and experience.
All GLA activities are focusing on one common goal: the maintenance of marine safety as cost-effectively as possible. Everything from ship management to stock purchase is co-ordinated between the three services to meet this goal. A report on inter-GLA co-operation efficiencies is reviewed and accepted by the ship owners annually. Where appropriate, functions are combined. There would be significant costs to setting up a single GLA or separate UK and Ireland GLAs, particularly in relation to pensions, redundancy, relocation, retraining and new infrastructure. Those costs are estimated to be between £25 million and £70 million, or 12.5p to 35p on light dues, which I am sure the ship owners would love but would have to bear. There would also be a significant risk to navigational safety and the environment in replacing the current cost-effective system with a new untested arrangement. I do not think we want that either.
The GLAs co-operate closely to minimise overlap in the provision of aids to navigation and to ensure that there is a consistent level of service. The tried GLA model is based on giving the mariner a seamless and integrated safety service around the British Isles, ensuring that all the coastline dangers are covered. This integrated service brings significant cost and efficiency benefits. Light dues are raised at ports, thus Trinity House raises 87 per cent of all revenue because of the large ports in the UK area, but the revenue must go towards supporting NLB and CIL in protecting the less frequented areas of Scotland. Ship owners can choose, if they call into various ports, which port they wish to pay their dues in.
A complaint by some elements within the shipping industry is that light dues raised in England support Ireland—we have heard this from the noble Lord, Lord Berkeley—to the amount of £16 million, out of a budget of £90 million. They say that this is a subsidy from their dues to a foreign country and that cutting that subsidy would solve the funding gap, as we have heard from the noble Lord, which is also rubbish. There is an international agreement between the UK and Irish Governments that the Irish Government make a direct exchequer contribution into the GLF amounting to a proportion of CIL costs incurred in the Republic. This contribution from the Republic of Ireland and the light dues collected at Irish ports comprises about 50 per cent of the costs in Ireland.
The Government, together with the Irish Minister for Transport, have indicated their commitment to consider this further—I have been involved with this—and discussions are ongoing between the respective Ministers. Many vessels use the aids to navigation in Ireland but actually pay their light dues in the UK. This was always the case and it is a firm argument for an integrated system. The position of the GLAs is that the size of the Irish contribution is a matter for the UK and Irish Governments while the GLAs focus on their statutory duty to protect the safety of the mariner.
In a recent announcement, the respective Ministers for Transport in the UK and Ireland have indicated that an overall assessment of the provision of the integrated aids-to-navigation service to all regions of the UK and Ireland will be carried out and it is understood that terms of reference for this review are being written. Light due charges are raised by a formula that includes tonnage, voyage frequency and a flat rate. The statutory instrument raises all three elements.
The shipping industry has made misleading claims to defend its position. The DfT commissioned an independent report to review the claims which concluded that the impact of the light dues increase was negligible. Light dues were between 1 per cent and 11 per cent of total port charges, rising to between 1 per cent and 15 per cent after the light dues increases were taken into account.
Generally, stevedoring and port and tug costs are 90 to 95 per cent of the costs of calling at a UK port. Trans-shipment costs far outweigh the light dues increase. Dropping UK calls is not a viable economic option for shipping companies. Light dues remain a very small proportion of shipping costs, so the increase in them will not affect shipping calls to the United Kingdom. This increase has to be seen in the context of consistent and significant reductions over 16 years.
The General Lighthouse Fund is also a quasi-pension fund—pensions raise their head again—as payments to existing GLA pensioners, of whom there are some 2,000—are made directly from that source under a pay-as-you-go arrangement. They are therefore reliant solely on the General Lighthouse Fund for the payment of their ongoing pensions.
Current GLF reserves include an amount of £44 million, which represents the value of pension contributions made by GLA employees—in other words, it belongs to them—as determined by the fund's actuaries. It is therefore essential that the level of the reserve fund is not diminished to fund the GLAs' day-to-day operations. The Department for Transport and the GLAs have legislation in place, which is awaiting parliamentary time, to change the arrangement to a fully funded scheme. The pension reserve is an important element in the requirement for increased income for the GLF. A General Lighthouse Fund minimum level has been agreed, and now is the time to increase light dues to ensure that it is not breached.
The method of paying for navigational safety around the British Isles is based on a "user pays" system. Consequent to safe navigation is protection of the marine environment. The GLAs fully support the department's proposal to change the charging regime to recover the cost of the provision of our services to the maritime community. The GLAs operate an integrated safety service that is vital to mariners around the coasts of the UK and Ireland. Sufficient funds and stable financial arrangements are required to ensure that it can be delivered to the required international standards.
Before I sit down, I declare my interest—I thank my noble friend Lady Wilcox for reminding me—as having been an unpaid commissioner for the Irish Lighthouse Service for 22 years.
Follow that, my Lords. The noble Lord, Lord Glentoran, has covered the whole matter from the GLAs' point of view in great detail. Like him, I must declare an interest as a non-pecuniary Elder Brother of Trinity House.
This takes me back some 20 years to the days when the noble Earl, Lord Caithness, and others were Shipping Ministers in this House and when light dues regularly came up for debate when a relevant statutory instrument came forward. Ship owners were just as vociferous then in disliking what was put before them, because, in those days, light dues were still rising.
As we have heard, they have not risen since 1993 and have been reduced five times since then, culminating in the previous 10 per cent reduction three years ago. With hindsight, I think that we could agree that it was possibly a poor decision to reduce light dues then. As was put forward by the general lighthouse authorities, if they were increased slightly then, we would not be faced with this problem today, where ship owners are greatly affronted by what they see as exorbitant rises. The fact remains that the General Lighthouse Fund would run out of money in the next year if this statutory instrument was not agreed. Safety would begin to suffer because certain lights would have to be put out. That is completely unacceptable. We are talking about maintaining the safety of navigation for all ships, which is of vital importance.
I shall pick up a few points that the noble Lord, Lord Glentoran, made, and elaborate on them. It has to be remembered about the General Lighthouse Fund that the general lighthouse authorities also lease their ships out for commercial work. In the course of the year, that brings in something like £3 million to the lighthouse fund. It was agreed in this House to allow the lighthouse authorities to do that outside commercial work, in the days when the noble Viscount, Lord Goschen, was Shipping Minister. That was a move forward, which has enabled the lighthouse authorities to generate extra income for the fund.
Since the late 1970s, I have had an association with Trinity House, and I speak for Trinity House specifically now. I have seen for myself the enormous changes that have taken place since then; in those days, we had manned lighthouses and light vessels and a reasonable sized fleet. That has been cut drastically and we now have a very efficient, slimmed-down organisation; all the lights and buoys are controlled by one person sitting in a control room at Harwich. It is all automated and great use is made of solar power. In the old days, there were gas cylinders involved. I remember one particular lighthouse that generated its own gas in large cylinders. During an annual inspection, the inspecting Elder Brother used to flick the mantle off with his pen and the wonderful Emmet-like machinery clicked into action, clicked round and a new mantle dropped down and lit with a plop. That was the old days; we are now a very different, modern, outward-thinking organisation.
There is another aspect to what Trinity House and the lighthouse authorities do that has not been mentioned. Ships generally use global positioning satellites for their navigation these days; the system is supplied by the Americans, who are quite at liberty to cut it off at will at any time. It has had its glitches from time to time and the EU, mindful of this, has set in motion its own alternative system, called Galileo, which is several years behind schedule and grossly over budget. I think that only two satellites have been put up so far. Also, there is the underlying intention, as I understand, that it will be used more for charging us to drive on our roads in Europe than by mariners. The cost at the moment is £3 billion. The lighthouse authorities have been working on another system—a much cheaper, alternative system—which is eLoran. It is a low-frequency, long-range, terrestrial navigation system; trials have been going on for three years, and it seems to produce 10 metres of accuracy, which is very good. That has cost £1 million a year, which we can place against £3 billion, with no result out of Galileo as yet.
Another worrying thing about the present level-position satellite system is that a test was done last year using a very simple portable handheld device like a mobile phone, which can be bought on the internet and run by a couple of torch batteries. It could be used to jam the GPS signal for 20 miles out to sea. So there are all sorts of worries with the present system, and the lighthouse authorities are trying to set up this alternative, which must be supported.
As has been said, we are talking about very small figures for this increase. A large modern container ship costs in the order of $150 million, and we are talking about a few thousand pounds. Seen overall, it is a very small sum, although I understand in these straitened times that ship owners are upset. They are trying to cut their costs. However, the downturn has followed three or four exceptional years in shipping where a lot of people have made an extraordinary amount of money—although not all. Some, in order to maintain their market share, have either absorbed other companies or, as often happens in good times—it has happened throughout history in shipping—they have rushed to order new and bigger ships. A lot of large companies have a large number of very expensive ships on order, so one can understand that they are in difficulties. The sums are astronomical compared with this comparatively small rise in light dues. Ship owners say, "We don't need lights". They may say that, but any navigator or mariner worth his salt would disagree entirely. A fixed navigational source is worth its weight in gold. Technology is wonderful, but it goes wrong more frequently than one likes to admit.
Our light dues are transparent, as has been said. We are not the only ones to have them: roughly a third of countries charge a levy like us, including Belgium, Greece, Malaysia, South Africa, Panama, Australia, Sudan and others, so we are not alone in having our charges up front. The "user pays" principle is supported by the EU, the present Government and the previous Administration. Another third of countries have a mix—a levy and part Exchequer paid—and in the remaining third, payment is from the Exchequer.
The ship owners have had a holiday on light dues over the past three years and the time has come when they must pay more. I know that they do not like it. I understand that the Irish question is still under discussion between the Governments. It would be nice to think that something will come out of that, although the agreement is under an international treaty and one does not walk away from international treaties. I am sure that an answer can be found. In summing up, I return to the fact that we cannot compromise safety at sea. The General Lighthouse Fund must be sufficient to meet the needs of our navigation aids. I support the order.
My Lords, it is a pleasure to follow the noble Lord, Lord Greenway, particularly given his association with Trinity House. It is many years since I became a member of the Institute of Chartered Shipbrokers, but strangely enough the reference to the Irish question in this debate reminded me of when I took its exam. There was a particular question saying, "list the slow Irish ports", which I understood at the time was a technical expression. Alas, I was quite unable to list the slow Irish ports. Fortunately, there were other questions which apparently I succeeded in answering correctly.
None the less, it is important for us to have this opportunity and I congratulate the noble Lord, Lord Berkeley, on obtaining time for it. I also congratulate the noble Lord, Lord Faulkner, who I understand is to reply to this debate, on the first occasion that I have seen him in action on the Front Bench, together with what one of his new colleagues described yesterday as the "wacky world of the Whips' Office"—a description I presume applies only to the present Government. Be that as it may, this is important. We have a helpful attachment to the order itself, consisting of an Evidence Base (for summary sheets). I will not quote from it at length, but some paragraphs are totally incomprehensible. The evidence base states:
"Government intervention is necessary given the market failure that results from the public good aspects of aids to navigation, i.e. the provision of aids to navigation such as lighthouses are 'non-rival' in consumption as use by a given ship does not detract from that of other vessels".
Perhaps the Minister should go back to his department, find out who is producing this gobbledegook and see if something can be done to improve it.
More interestingly in the document is a summary that lists what policy options have been considered, along with a request to justify any preferred option. Five options are given, but there is no option 6 to eliminate the subsidy as far as concerns the Irish arrangement. However, I understand from the position that has already been mentioned that, in 2004, Mr Darling —then the relevant Secretary of State—gave an assurance that the matter would be dealt with. I gather that the extent of the subsidy would be virtually sufficient to eliminate the present deficit. Will the Minister clarify what that deficit is forecast to be? It is described in the papers as a "forecast deficit". Will the proposed increase in fees be sufficient to eliminate the deficit, or will it merely maintain the present situation with the deficit continuing into the indefinite future?
Another thing worthy of comment is that we were helped by a memorandum from the Merits Committee on the matter, which it felt ought to be debated. It referred to increases in the levy of 11 to 43 per cent. The noble Lord, Lord Berkeley, suggested that in some cases the increases may be as much as 80 per cent. If that is so, we should ask the Minister to clarify the exact increase. Clearly, this increases costs to the shipping industry, particularly the cost of exports from and imports to this country, at a time when we all recognise that financial circumstances are very stringent. I hope that the Minister will reply to those points. Once again, I congratulate the noble Lord on securing the debate.
My Lords, I start by declaring my interest. The noble Lords, Lord Sterling and Lord Greenway, the noble and learned Lord, Lord Mackay of Clashfern, and I are all distinguished Elder Brethren of Trinity House—unpaid, of course, but proud and pleased to be part of an organisation that has saved the taxpayer very considerable amounts of money, has been efficient and effective and goes back to the days of King Henry VIII. I am probably the only Member of the House who has a lighthouse on his coat of arms. I was born in the police station in Port Ellen on the Isle of Islay, which was about six feet away from the Atlantic Ocean. That gave me a unique qualification to be Secretary-General of the North Atlantic Treaty Organisation, and also a keen appreciation of the dangers, problems and difficulties of those who live and work around the coasts of the British Isles. The 20,000 miles that the three general lighthouse authorities have to look after—the Northern Lighthouse Authority where I was born, Trinity House and the Irish authority—are extremely dangerous, highly unpredictable and in considerable need of the maritime aids that are provided.
I commend my noble friend for securing the debate. Although I disagree with what he is arguing for, the debate has allowed us to highlight a subject with which not many people are conversant. It also highlights the importance of the issue both to the shipping industry and to those who use the coasts of our country.
The problem with the debate is that my noble friend is using it to highlight a problem between Governments which can only be addressed by the Governments of the United Kingdom and the Republic of Ireland. He is applying a method to object to what is a justifiable increase in the light dues, which would have a direct and considerable impact on the operations of the lighthouse authorities as well. I hope that we can try to put a division between those two objectives.
My noble friend may or may not be right about the Irish subsidy but that is a matter that can only be resolved between the two Governments. I dare say that the Minister and those in charge at the new omnibus business department which has been created will pay careful attention to the points that have been made. However, the issue cannot be resolved through this statutory instrument. This instrument is essential given the shortfall in funding for the GLAs. It must therefore be passed so that we can continue the major benefits that come from the lighthouses and navigation aids.
It is interesting that the ship owners are now making the case that with modern shipping, modern techniques and satellite aids, there is not the same necessity for the navigation aids that exist at present. However, I think that the management of Trinity House would say that the current number of collisions with buoys and navigation aids amply illustrates and gives evidence to the fact that they are still required. Although the ship owners appear to have a very strong view about the impact of the light dues, it appears that the captains and masters are unanimous in their view that the physical navigation aids should remain.
The noble Lord, Lord Greenway, made a point about GPS—the global positioning system—and its European successor, as yet untested, Galileo. I have a little knowledge about both those systems. The global positional system, organised by the United States of America, is a military system that is lent on a free basis to the rest of the world. However, it is obviously commanded by the American authorities, which at any point can turn it off. All these systems are vulnerable to what the Government pointed out in last week's national security strategy is a substantial threat of cyber attack. This week alone three departments of state in the United States of America came under a sustained and very considerable attack on their computer capabilities. So this is not something that we can easily dismiss. As the noble Lord, Lord Greenway, said, tests done with very simple over-the-counter pieces of equipment have shown that today's high-technology, high-cost ships can be rendered into relying on some of the oldest means of navigation aid available.
Of course any organisation involved in supplying services to industry must clearly give a good and efficient service. However, no one can doubt that the general lighthouse authorities have made a huge contribution to efficiency savings. I simply underline what the noble Lord, Lord Glentoran, and others have said: there has been no increase in light dues since 1993, but there has been a 50 per cent reduction in light dues over 10 years. My noble friend was able to say that this was the biggest increase in 10 years. That is thanks to the efficiencies of the GLAs over that decade and a three-year holiday in the past three years. Inevitably that £21 million gap has to be made up. You can go so far with efficiencies, and we have probably now reached the limit. These navigation aids are still required. This mechanism gives relief to the taxpayer, who pays absolutely nothing to the maintenance of these aids. It imposes a small and proportionate burden on those who conduct international trade by sea. This statutory instrument should be given a fair wind.
My Lords, like other colleagues, I have been an Elder Brother of Trinity House for some 20 years. I am rather split because I have also owned ships, run P&O and Stena, and been heavily involved with ships at sea. I want to reiterate what others have already said, having seen it from the sharp end. I almost led the charge against increases in light dues in the early 1990s but, having been part of Trinity House, I can say that the changes on that front have been extraordinary. The conscientiousness of the executives of Trinity House has been quite amazing. From a management point of view, I could not find a more professional organisation. The idea that, somehow or other, another organisation should possibly take over the running of things would be totally wrong.
I am speaking because, as far as I am concerned, safety at sea is paramount. That is the key. I am not going to get involved in the cost factor. Although there has been talk of ships now leaving our shores and going to Rotterdam or Le Havre, we must remember that those countries include light dues in their port charges. Most of our debate arises because we are much more transparent.
Finally, I make the point that we have an enormous number of private marinas around our shores. Our shores are quite beautiful, but also quite inhospitable. You could say that the Government should consider that private yachtsmen—who are probably more reliant on many of these navigational aids—should in a small way contribute to some of these costs in the years to come, as in any other field of endeavour. I suggest this purely as something for the Minister to consider. I also have to say that I support the view that Ireland could perhaps pick up more of the tab. I wanted to make those observations, having been involved at the sharp end myself.
My Lords, I feel very much like the junior today. I declare that I have no financial interest as a Younger Brother of Trinity House. Going back a long time, I should, I suppose, also declare that for around 10 years, ending in the late 1960s, I was a master mariner. I was a navigator and therefore made use of the lighthouses and the lights emanating from them. We did not have GPS then, of course; we had not even heard of it. We had, however, heard of LORAN, which was an initial form of GPS.
Much has been said today but I would like to expand slightly on one aspect that was touched on by the noble Lord, Lord Glentoran. Of the 54 major maritime nations, 18 pay for navigational safety out of general taxation; they include the USA, France and Holland. Eighteen do it through light dues, including the UK, Greece and Australia; and 18 do it through a mix of both, including Spain, Japan and Finland. All are having to raise their prices. However, we are unique in having been able to reduce the charges over the past 16 years, as noble Lords have mentioned. That is something that no other country can match. It should be noted not only that, after the second increase in dues that is coming into force, the rate will still be 32 per cent lower in real terms, but that ship owners agreed in 2006, without proviso, to support a future rise in light dues in exchange for a 10 per cent reduction.
The tri-general lighthouse authority is based on giving the mariner a seamless and integrated safety service around the British Isles, ensuring that all the coastline dangers are covered. The majority of the dues for ship owners are not taxed; they come from the ship owners and cover the large number of ports in the area covered by Trinity House. Support must go to protecting the less frequented areas of Scotland and Ireland. We know about the agreement between the UK and the Irish Government, and the talks that are currently taking place. We must enable these talks to come to a satisfactory conclusion for everybody. The current system has worked well for many years, and the organisations in England, Wales, Scotland and Ireland have a very long history of bringing benefits to mariners and of operating efficiently. Safety is paramount at all times, and to change the arrangement to one that would potentially present all kinds of problems cannot go past.
My Lords, I declare an interest as a non-voting Elder Brother of Trinity House. Some considerable time before that I was a commissioner of Northern Lights. However, that was not as long ago as 1898, so I have no responsibility for the defective nature of the accounts which were apparently then produced. When I was a commissioner of Northern Lights the Irish Troubles were very much at their height and it was a great comfort to us that the arrangements for the lights between Ireland and the north of Ireland worked completely satisfactorily and harmoniously over that period when other arrangements between north and south were very difficult indeed.
As has been said, this is now a matter for negotiation on the part of the two Governments. I have no doubt that we will hear about progress in that regard in a moment. Subject to that, it seems to me that the record in relation to lighthouse dues and the economies effected by the general lighthouse authorities is exemplary. Therefore, these increases are eminently justified. I welcome the Minister to the Dispatch Box. I believe this is the first time that he has responded to this provision. We look forward to hearing his response.
My Lords, when I first received a note from the noble Lord, Lord Berkeley, I was quite cross as, having been a woman at sea—not a brother, younger or older—and having had a fishing fleet of my own, I too queried why we should pay somebody else's dues. However, if you sit in this House long enough and listen for long enough, you hear all sorts of explanations that make things seem much clearer. I thank the noble Lord, Lord Berkeley, for bringing forward this Motion of Regret as it has enabled me to refresh my memory about why safety at sea matters so much.
As a good, free-born English woman, I hate the idea of having to subsidise the Irish for something they should be paying for themselves. That is the way one feels when one does not hear all the facts. The truth of the matter is that it is not a great deal of money but whether it is a penny, a pound or a million pounds I am still not sure that I like the idea of having this continue to happen to us. I read that in 2004 Alistair Darling said that he would do something about it. That was reinforced by the Permanent Under-Secretary of State saying that he would do something about it. All I can assume is that the two Governments are still nattering and talking to each other and we shall not find out today how far they have got. I thank everyone who has clarified this matter for me. I also thank the noble Lord, Lord Berkeley, for making this debate possible. I wish the Minister great happiness on the Front Bench. He could not start his Front-Bench career with a better subject than this.
My Lords, I am grateful to the noble Lord, Lord Berkeley, for raising this issue today because it is a matter of considerable concern to all noble Lords who have taken part, and what a galaxy of experience they have.
Despite recent improvements many are still worried about the efficiency of the GLAs, especially at the centre rather than at the "front line". What is not in doubt is the skill, dedication, and indeed courage, of the men and women who do the physical work of installing, maintaining and repairing our navigational aids, not just the lights and beacons on land but the navigational buoys which have to be put in place or moved using the modern fleet of specialist ships. Another operation is the marking of wrecks. These tasks might be relatively easy to perform today on the south coast but I suggest that it is a rather different matter off the north-west coast of Scotland in the middle of winter. We and all the seafarers who rely on their efforts owe them a debt of gratitude. They need have nothing to fear from our deliberations today.
My noble friend Lord Glentoran has made his contribution from the Back Benches and is a commissioner of Irish Lights. Noble Lords should note that he and others do this commendable work unpaid. Our debate will be much more balanced as a result of his contributions and other noble Lords close to the GLAs.
The noble Lord, Lord Berkeley, has two main concerns. The secondary one is the efficiency of the GLAs and the need for the increase in light dues. There may well have been significant efficiency savings in recent years and we know that all the lighthouses have been automatic since 1998. However, this does not mean that all GLAs are 100 per cent efficient. I confess that I have no idea how they measure up, and I accept that I need to do further research. I easily found the Northern Lighthouse Board's annual report on the internet, but I did not manage to find the Trinity House report—but I will find it in due course.
Some have argued that light dues are a trifling amount compared to other shipping costs; but they are not trifling in absolute terms. After April next year, the cost will be 41 pence per net registered tonne. The capping of the chargeable tonnage will be increased to 50,000 tonnes, and the number of chargeable voyages increased from seven to nine. Fortunately, the charges will be capped at £17,200. Unless my sums are wrong, this means that a 10,000-tonne ship regularly coming to UK ports will pay just under £37,000 a year, which is not insignificant. The noble Lord, Lord Berkeley, warned of the dangers of reducing port business due to increases in light dues.
My noble friend Lord Glentoran and others skilfully sought to explain why no more major efficiencies are possible in the GLAs. He has suggested that it would cost between £25 million and £70 million to set up a single GLA. I do not find my noble friend's arguments persuasive, and he has increased my desire for knowledge of the organisation of the GLAs. I am sure that Trinity House will be very keen to help in educating me.
Noble Lords who claim that no further efficiency savings are possible will have to explain why we need two corporate centres. Why in the UK do we need two chief executives, two finance directors, two HR departments and two procurement departments? The list goes on. Perhaps the Minister can explain why we need two GLAs in the United Kingdom.
I have another question for the Minister which I hope he can answer. What is the total head count of Trinity House and what is the split between the corporate headquarters and the operational side? I can find very little information about that on the Trinity House website.
The primary concern of the noble Lord, Lord Berkeley, and the substantive point of his Motion, is the subsidy of the Irish Lights. I will not repeat his arguments, because he put them so well. However, I suspect that there is a lot of history involved. For a long time, it may have been desirable to subsidise the Irish Lights, but nowadays most of the UK's general public would be surprised to hear that we, through our light dues, are subsidising the transport infrastructure of another successful and important EU state. After all, we do not subsidise the French navigational aids in the same way, even though we make extensive use of them—a point well made by the noble Lord, Lord Dykes.
The noble Lord, Lord Greenway, made several important points, but perhaps one of the most important was about the dangers of relying on the US-operated GPS system and the slow progress of Galileo. We must keep the terrestrial aids supplied by the GLAs. The noble Lord said that they are worth their weight in gold; he is right. The noble Lord, Lord Robertson, amplified those points, and he also mentioned the dangers of a cyber-attack on a GPS-type system. He is absolutely right.
My noble friend Lord Sterling made his important contribution from the interesting position of having an interest in both the shipping industry and Trinity House. His most important assertion is that the operations of the GLAs are already very efficient. However, the concern is not the front-line operations, but the corporate centre. My noble friend also suggested that private yachts should pay dues. He will recognise that there are some practical difficulties in collecting what might be relatively small amounts of money. On the other hand, private yachts are just as dependent on navigational aids as commercial shipping.
It is important to understand the effect of the Motion of the noble Lord, Lord Berkeley. It does not stop the order, not least because, quite properly, the order is going through under the negative procedure, and of course the Motion does not oppose the order's contents. There is no question of the GLAs running out of money, so the noble Lords, Lord Greenway and Lord Robertson, need have no worries on that point. The light dues will increase no matter what your Lordships decide this afternoon.
There is concern about the efficiency of the GLAs but the Motion does not make a judgment on that. If it did, I would not be able to support it due to insufficient evidence. The noble Lord is asking your Lordships to take a view on whether the light dues raised in the UK should be used to subsidise the operation of the Irish Lights. If he is minded to test the opinion of the House, I shall support him.
My Lords, this has been a remarkable and interesting debate and I am grateful to my noble friend Lord Berkeley for initiating it. I suspect that he was not aware that he would draw into your Lordships' Chamber such an extraordinary galaxy of talent as is arrayed on all Benches this afternoon—a collection of Elder Brothers, Younger Brothers, ship owners and people with astonishing experience in this field, many of whom, I am delighted to say, have been supporting the Government's position and, I am afraid, opposing my noble friend's Motion.
I start by thanking those of your Lordships who were kind enough to welcome me to the Dispatch Box for my first substantive debate. I thank the noble Baroness, Lady Wilcox, the noble and learned Lord, Lord Mackay of Clashfern, and the noble Lord, Lord Higgins, in particular.
It seems that three strands have run through the debate. The first is the efficiency of the general lighthouse authorities, or GLAs. I shall try to avoid unnecessary and confusing use of initials and the incomprehensible jargon to which the noble Lord, Lord Higgins, objected. The second subject is the impact of the increases in light dues and the third is the difficulties in finding a satisfactory way of funding the Irish Lights.
I start with the General Lighthouse Fund. This was created by statute in 1898 to pay for the work of the GLAs in the United Kingdom and Ireland. The fund is maintained by a combination of light dues paid by ships that use ports in the UK and Ireland, the income from investments, a contribution from the Irish taxpayer and other funds generated by the use of the GLAs' assets.
I understand the concerns that exist about the costs of the lighthouse service but I cannot accept some of the more exaggerated claims that have been made about them. The GLAs have made substantial efficiencies over recent years, all without compromising the safety and navigational service that they provide. For example, Trinity House has closed half its depots and cut a third of its staff and a quarter of its fleet; the Northern Lighthouse Board has cut its waterfront bases from three to one, reduced its vessel crews and disposed of properties; and the Commissioners of Irish Lights have reduced staffing levels at sea and on land by around 30 per cent. Indeed, taken as a whole, the GLAs reduced their total headcount by more than 50 per cent between 1991 and 2007 without in any way compromising the safety of seafarers or the quality of the navigational service that they provide.
The noble Earl, Lord Attlee, asked about manning numbers. The numbers employed are as follows: Trinity House, 321; the Northern Lighthouse Board, 261; and the Commissioners of Irish Lights, 272. I do not have a precise figure for the number employed at the corporate centre but it is less than 20 per cent. The noble Earl also raised a question about the merging of the three GLAs. That would be a very difficult undertaking. It might be possible to encourage what one could call the back-office functions to work more closely together to save costs. Certainly the Department for Transport will do what it can to persuade them to make savings where it is practical to do so. With regard to the front-end services, the GLAs operate in differing and complex coastlines where regional knowledge and experience are required. It is unlikely that further savings in terms of depots and so on can be rationalised but, where possible, the Department for Transport will press for further action.
There is no evidence whatever of "bloated" administrations—a phrase that has been used more than once by a lobbyist on the other side of the argument, the chairman of the Independent Light Dues Forum, who, I believe, would support my noble friend's Motion this afternoon. He had a letter published in Lloyd's List last month, to which a former editor of Lloyd's List, Michael Grey, replied:
"Mark Bookham of the Independent Light Dues Forum now writes ... about the 'bloated' General Lighthouse Authorities, while ignoring the efforts made by these same authorities over several years to reduce their operating costs. He conveniently ignores the fact that they are an emergency service and must be staffed appropriately".
That is an entirely reasonable point of view, which is clearly shared by a number of noble Lords who have taken part in this debate.
The GLAs have taken advantage of the efficiencies that new technologies can provide, such as the use of LEDs—I apologise; I should say "light emitting diodes"—and solar panels, which have been able to reduce the number of lighthouses and light vessels that they employ. They also use more efficient ships for buoy and maintenance work. Overall, their operating costs have been reduced by 25 per cent over the past 10 years and, until this year, it had not been necessary to increase light dues at all since 1993, a point well made by the noble Lord, Lord Glentoran. Indeed, the Government were able to pass on those savings to the shipping industry in 2006-07 by reducing light dues from 39p to 35p per tonne. In a Written Statement in the other place on
"The Government remains committed to a cost recovery system, but is determined to minimise the cost burden on the shipping industry. The rate per tonne has fallen repeatedly since its 1993 peak of 43p. Reducing it now to 35p constitutes a further 10.2 per cent. fall. This is a remarkable achievement during a period of major capital investment by the General Lighthouse Authorities and against a background of general inflation. It is a credit to the commitment of the General Lighthouse Authorities—Trinity House Lighthouse Service, the Northern Lighthouse Board and the Commissioners of Irish Lights—to the delivery of an efficient and cost effective aids to navigation service. The strong performance of the underlying General Lighthouse Fund in the past year also makes a cut on this scale possible. The cut returns to the light dues payer the benefit of the growth in the Fund, for as long as this proves possible".—[Hansard, Commons, 10/3/06; col. 86WS.]
So, for more than 16 years, light dues have not been increased. In addition to 2006, there were three other years when they came down. Thus, there was a decrease of 40 per cent in real terms.
However, it was made absolutely clear in 2006 that the new rate could not be sustained in the longer term and the Government obtained the assurance of the Lights Advisory Committee, which represents the shipping industry, ports and cargo interests, that it was prepared to support a rise in light dues should that become necessary at some future date. That, too, was mentioned in Dr Ladyman's Written Statement of
As foreseen, an increase in light dues is now essential. What was not foreseen three years ago was today's global recession, one of the effects of which has been a reduction in trade so severe that shipping companies are laying up vessels, rationalising routes and concentrating on larger ships. That has led to a fall in found income but, as a number of your Lordships have said today, particularly the noble Lord, Lord Greenway, we cannot afford to let the GLAs take chances with their safety functions. We have asked them to make cuts, to put off non-essential expenditure and to search for further efficiencies. They have reduced costs by 5.6 per cent this year, but there is not such a close correlation between trade and spending in their case. Lighthouses must be lit, radio navigation signals broadcast, channels surveyed and buoys moved. We must maintain those safety-critical functions. Expenditure deferred now may well result in greater costs in a year or two.
The noble Lord, Lord Glentoran, referred to the pension fund. In a debate in the other place on
I hope that your Lordships will understand that the Government have had a difficult balancing act to perform. We received 47 responses to the consultation and my honourable friend Jim Fitzpatrick held four meetings with the representatives of those most affected. We do not underestimate the concerns that have been expressed by representatives of the shipping industry. We recognise that these are difficult times for them and that any increase is unwelcome.
The noble Lord, Lord Higgins, asked for details of the deficit. At the time of the consultation, it was forecast to be £21 million. Since then, there have been slight improvements in investment returns, which have reduced the forecast deficit, but without the increase in light dues it is still likely to be around £15 million. The increases that took effect on
Since the consultation, we have therefore looked carefully at our original proposals, which provided for a rise in the rate of light dues from 35p to 41p per net registered tonne from July this year. We also proposed raising the tonnage cap from 35,000 to 50,000 net registered tonnes, so that some of the very biggest vessels would pay more, and increasing the number of chargeable voyages from seven to nine per year. In response to the representations received, we decided to phase the increases over a two-year period, so that the rate would go up from 35p to 39p per net registered tonne, with a further increase from 39p to 43p from
I am pleased that the noble Lord, Lord Greenway, refuted the argument that has been put forward by some that large modern ships do not need navigational aids. It is precisely for their benefit that deep water channels have to be surveyed and marked and obstructions monitored and dealt with.
Neither do we believe that we should depart from the "user pays" principle and in some way hand over to the taxpayer the costs of these essential safety services. That would be particularly wrong bearing in mind the fact that the majority of commercial shipping services calling at British ports are owned by companies based outside the UK.
However, I agree that a fundamental look at how we should provide a lighthouse service and the structural form it might take is needed. I can tell the House that the Department for Transport, with its Irish counterparts, is to conduct an overall assessment of lighthouse services as a whole with the aim of achieving further increases in efficiency and improvements in their structure and financing. Following today's debate, I shall ask departmental officials, the GLAs and the Lights Advisory Committee to review the proposed expenditure for the coming financial year in addition to the scrutiny of the corporate plan that will take place in the autumn with an eye to keeping costs to a minimum.
I turn finally to the Irish question—the funding of the Commissioners of Irish Lights—the issue that has so vexed my noble friend Lord Berkeley, yea these many years. Unfortunately, I do not have time this afternoon to delve into the history, but it seems to be a piece of unfinished business left over from the partition of Ireland and the formation of the Irish Free State in 1922. I found a Hansard report of a Question asked in the other place on
Of course it is not satisfactory that light dues collected in the United Kingdom are being used in part to pay for lights in the Irish Republic. In 1985, the Irish Government agreed to make an additional contribution towards the cost on the basis that 70 per cent of the costs of the Commissioners of Irish Lights were to be treated as incurred in the Irish Republic and 30 per cent in Northern Ireland. Of that 70 per cent, half would be funded from Irish sources and half from the General Lighthouse Fund—in other words, UK light dues payers.
The GLF has provided an average of £7.25 million a year for the CIL over the past seven years, starting with £5.5 million in 2002-03 and rising to an estimated £11 million in 2008-09. That is not the figure of £15 million which my noble friend Lord Berkeley quoted and which would include the costs of lights in Northern Ireland, for which the UK would have to retain responsibility. The net financial saving of ending co-operation with Ireland is probably around £7 million, but we would lose the very large unquantifiable benefits of an integrated service if we cast Ireland adrift.
A review that was set up in 2007 and published in 2008 suggested that a more accurate split of the CIL's costs would be 85:15 rather than 70:30. This has been agreed by both Governments as the basis for the apportionment of funding for 2009-10. The two Governments also agreed to carry out an overall assessment of the provision of the integrated aids-to-navigation services to all regions in the UK and Ireland. All these matters were discussed in a meeting between Jim Fitzpatrick MP and the Irish Minister for Transport, Noel Dempsey, on
Let us be clear: the three General Lighthouse Authorities provide an efficient, co-ordinated service for the whole of the British Isles. That is undisputed. Indeed, many eloquent speakers have referred to that in the debate this afternoon. We must protect the GLAs' vital safety function for the sake of people who sail in ships around our coasts and we must maintain them to ensure that the environmental risks from shipping are minimised.
This has been an interesting and instructive debate. I hope that I have done justice to the vital safety work of the GLAs and have replied to the points made by noble Lords. If I have missed any, I will write to them. I trust, too, that I have given assurances that the Government are not complacent in managing the General Lighthouse Fund and overseeing the lighthouse service and that they are serious about achieving long-term and lasting reform of the financing arrangements for all parts of the British Isles. In the light of this, I hope that my noble friend will agree to withdraw his Motion.
My Lords, I hope that I will be allowed to correct an omission regarding a registrable interest that I did not declare. I am a non-executive director of Western Ferries (Clyde) Ltd, which operates ferries on the Clyde. Like the noble Lord, Lord Sterling, but at a much lower level, I am on both sides of the argument.
My Lords, I am deeply honoured by the number of colleagues who have spoken in the debate. They represent an enormous range of experience and we have had a very wide-ranging debate, possibly more wide-ranging than I thought that it would be when I put down the Motion. It has been useful to expose the various issues surrounding light dues.
I do not think that anyone was suggesting that navigational safety should be compromised—I certainly did not—but I believe that there is still room for further cost savings. In that connection, we have four board members at Trinity House who are paid more than 70 grand, three commissioners of the Northern Lighthouse Board who are paid more than 70 grand and, of the Commissioners of Irish Lights, two board members are paid more than 70 grand while three earn more than 100 grand. Some savings could be made by amalgamation and, since Trinity House collects most of the light dues, perhaps it should take the lead. I think that lots of savings could be made.
I am grateful to my noble friend the Minister for his response and I congratulate him on undertaking his first duty on the Front Bench in a debate. It is good that the department and the Irish Government are looking at an overall assessment of lighthouses and safety aspects and it is very good that they intend to renegotiate what I call the Irish subsidy. The key point is that ships going into Irish ports will pay for Irish Lights because the user pays, while ships going into British ports will pay for the maintenance of British lights. I am sure that both the Government and the industry will strive hard to continue to make cost savings, but given the time and the excellent debate that we have had, I beg leave to withdraw the Motion.