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EU Access to Ports Directive

– in Westminster Hall at 2:30 pm on 20th July 2005.

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Photo of John Denham John Denham Chair, Home Affairs Committee 2:30 pm, 20th July 2005

I am grateful to Mr. Speaker for selecting this debate and also for the interest and support that has been shown by colleagues on both sides of the House. I know that my hon. Friend the Minister will want to reflect carefully on the points made. As a Minister, she does not have much choice about being here, but it is at some personal cost to her and I am grateful.

I am, by inclination, a supporter of the European Union and have been saddened by the turn against it that has been manifest in a number of European countries in the past few weeks and months. I am also one of the first to recognise that one of its problems is its ability to inflict damage needlessly on itself. On occasion, we need to step in to prevent EU institutions from doing that. We are in such a situation with the directive today.

We are told that we are in a period of reflection, following the various referendums. Among other things, it is directives, such as this one, on which we should reflect. As far as I can see, the EU access to ports directive is not wanted by the people who own the ports in this country, those who manage them, or those who work in them. If those things are true, it is difficult to understand why we should have such a directive and why, given its long and chequered history, anyone should press ahead with it. Has someone made a convincing case that the resistance from the owners, managers and workers represents a close-knit and self-serving cartel? If such evidence exists, the EU Commission has not yet produced it or said that the directive would be the right response.

The Commission appears to be pursuing the directive with a single-minded bloody-mindedness, introducing a new directive without real consultation, after the failure of the first version at the hands of the European Parliament. If ever there was a case of a solution looking for a problem, this would be it.

It is no secret that I was initially prompted to seek the debate by members of the Transport and General Workers Union, which supplies the labour in many of our ports. However, I start by quoting not the TGWU, but the briefing produced in June by the UK Major Ports Group, which represents the owners and managers of the ports. The group stated:

"It is striking that Europe's most liberalised ports oppose a directive that aims to liberalise Europe's ports. The problem is that far from liberalising Europe's ports, this Directive will impose a regulatory burden that will diminish investment and threaten jobs. In terms of ports, surely the Commission should be addressing the more pressing challenges of globalisation and growth and the need to create a level playing field".

The union has a different focus. Its briefing to me and to other hon. Members states:

"ports are dangerous places to work . . . The last thing we need is another Simon Jones."

That is a reference to the young man whose death has done so much to prompt the call for corporate manslaughter legislation. Everyone is brought together by the fear that the directive will undermine the long-term investment on which the success of all the ports, and therefore the jobs that go with them, depends.

In setting the scene, I may be getting a little ahead of myself, because it is worth setting out briefly what the directive is supposed to do and why there are good reasons for saying that it will not achieve that. It aims to open up greater competition in the provision of port services by, under certain conditions, requiring port services such as cargo handling to be put out to tender, enforcing the requirement to allow additional entrants into the market for port services, and extending the range of workers who can handle cargo.

A more far-reaching version of the directive was first introduced in January 2001. The cornerstone of a communication to the European Parliament and the European Council called "Reinforcing Quality Services in Sea Ports: A Key for European Transport" was a proposal for a directive on market access to port services. The Commission hoped, quite reasonably, to shift passenger and goods traffic towards maritime transport, which is a relatively environmentally friendly mode of transport. There was a wide-ranging debate between the Council and the Parliament, as well as with the ports industry.

The directive was initially adopted by the European Parliament in November 2001, but some key issues were still outstanding. The most controversial was cargo handling, a sector in which thousands of the Community's dockers are employed to load and unload cargo. Delegations from the Parliament and the Council negotiated hard under a conciliation procedure and appeared to have reached agreement in September 2003. However, the deal had still to be approved by the full Parliament, and its plenary narrowly rejected the text on 20 November 2003. The main sticking point was cargo handling. A majority of the Members of the European Parliament took the view that the definition of self-handling by the shipowner would still allow workers from boats to carry out unrestricted loading in European ports, which would have significantly downgraded safety.

The new draft directive was introduced in October 2004. The main change involved keeping the idea of self-handling, but restricting it to land-based staff. The European Parliament is now considering the directive. It held a hearing in June, and a report is due to be discussed at the November-December plenary session. It is clear, however, that opposition has not diminished: owners, operators and trade unions maintain their opposition to the directive.

The EU rapporteur, Mr. Jarzembowski, has so far said that it is "debatable" whether the proposals will be acceptable to the transport committee and the Parliament. Those hearings involved many different organisations, including the port owners, the European Boatmens Association, the European Tugowners Association, the European Transport Federation and the European Maritime Pilots Organisation, all of which criticised the directive, in whole or in part.

That is where we are today. The question for my hon. Friend the Minister is whether, given the United Kingdom's presidency of the EU, our Government should tell the Commission quietly to drop the draft directive because it does not serve the purposes for which it was introduced.

The first of the major arguments about the directive relates to health and safety issues, and that case has been put with great strength by the Transport and General Workers Union. We would all recognise that ports today are not the highly regulated and protected workplaces that they were 20 or more years ago. There is substantial competition.

Although I will not go into this today, I have written that the competitive gains made by UK ports have been derived, at least in part, from reduced wages, diminished or abolished pension provisions, and tougher working conditions for those who work at those ports. That is not the industry that would have been recognised in the years immediately after the dock labour legislation. Indeed, as the United Kingdom Major Ports Group says in its briefing, there is already significant competition in UK ports. It states that there is self-handling in UK ports, but adds:

"we believe that arrangements should be a matter for the port and not governed by prescriptive rules."

The union view, which I share, is that the forced introduction of unskilled or poorly supervised labour into a dangerous working environment can only make things worse. Markets and competition can be powerful, and sometimes positive, forces for change, but not at the high cost of human life and lasting injury. The majority of accidents to a dock's work force are caused by falls from heights, slips and trips, and workplace transport, while musculoskeletal disorders are a significant occupational health problem.

It is probably not widely recognised that the ports industry is, person for person, far more dangerous than construction. Compared with the national average, a person employed in dock work—"supporting water transport activities" is the Government's official definition—is 24 times more likely to be killed at work. A dock worker is three times more likely to be killed than someone employed in the construction, building or civil engineering industries. The likelihood of a major injury is similar to that of construction, but the chances of an injury that would keep someone off work for more than three days is nearly twice as high in ports as in construction. A genuine fear about the directive is a reduction in health and safety, which, as I have made clear, is already a significant problem for people working in the industry.

Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith

Will my right hon. Friend comment on the safety implications not just for people directly involved in loading and unloading activities, but elsewhere in ports and their vicinities? The port in my constituency does not have the commercial business that it once did, but a similar amount of other industrial activity, including retail activity, often goes on nearby. Does he agree that there are safety implications for those involved in other activities within the vicinity of ports?

Photo of John Denham John Denham Chair, Home Affairs Committee

My hon. Friend makes a good point, and I hope that he expands on it. Although I do not want to paint too rosy a picture of how things are structured at the moment, it is fairly clear where responsibility for health and safety matters lies with regard to employers and others. The directive introduces, in effect, artificial and bureaucratic arrangements for changing those structures and responsibilities. That is bound to lead to unclear lines of accountability and responsibility, and increased dangers in lots of different ways.

The second argument relates to the threat to investment. Port development in this country is largely a private sector activity. Before it was blocked by a decision taken by the Department for Transport—I do not wish to re-open old wounds—the proposed expansion of the port of Southampton to Dibden bay was an entirely private sector proposal, depending on no public investment whatever. The investment was planned to the tune of at least £600 million. Even much smaller schemes can run into tens of millions of pounds, for which the private investor takes the total risk. In practice, investment in UK ports does not come from independent developers. The concept of the speculative ports development has yet to take off in a big way in this country. Ports tend to be developed by those who are planning to develop and operate them, and who want to provide port services.

The effect of the directive is that, in a relatively short period of time—perhaps 10 or 15 years after development—the company that has taken the risk and made the investment may, in effect, be required to pass their assets over to another operator, which can compete to provide the service without ever having taken the risk on the investment.

In a preamble to a brief provided for this debate, P&O points out the contradiction between that effect of the directive and its stated aim. It says:

"It is important to ensure that the development of new ports and port facilities is encouraged by this directive."

It goes on to talk about the different circumstances in which current investment might be endangered, but those circumstances primarily involve cases in which a private sector company has taken the risk of investing in acquiring land and taking risky and uncertain business decisions to develop new port capacity. The directive appears to put such investments and decisions at risk.

We often debate the private finance initiative. I do not want to do that now, but merely point out that a company that invests, say, £2 million to build a school is generally protected for 30 years under the standards contract before it has to open up to competition to provide facilities management. Under the directive, significantly greater investments would be protected for a much shorter time. It does not take much insight to realise that the effect is likely to be a reduction in investment, not increased competition in the ports industry, and a cut in essential competition between UK ports, because of the possible reduction in their capacity.

As a port MP, I am concerned about the management of the ports, their managers and those who work there. The loss of the expansion of the port at Dibden bay was a huge blow, and I am afraid that the Department for Transport deserves little credit for its failure to develop a coherent port strategy. The port of Southampton remains vital to our economy, and change and expansion are still necessary in some form, but the directive does nothing to make that expansion more likely. Nor does it do anything to secure the necessary investment. It certainly does nothing for the people who work day in, day out to provide port services.

I end as I began by telling the Minister that we can view the directive as a test of the Prime Minister's determination to reform EU institutions to make them concentrate on the essential issues and to be more effective. At the moment, the directive seems to be driven by nothing more than institutional inertia. It is almost a case of, "We have started, so we will finish." I hope that the Government and my hon. Friend have the will to recognise that and to step in and stop the process.

Photo of John Gummer John Gummer Conservative, Suffolk Coastal 2:47 pm, 20th July 2005

I much agree with what has just been said, and I begin by making the same sort of comment with which Mr. Denham began his remarks.

A mature approach to the European Union is one that accepts, and with pleasure, our membership and our centrality to it. The EU is perhaps the most important step that has been taken in peace time for 100 years. I am proud that Britain is part of it, and I want us to be an active, lively and leading member of it. I look for closer relationships with our neighbours because I am sure that that enables us to have a greater say in the world and to have considerably more influence.

The trouble is that our attitude to the EU is rather juvenile, which means that one cannot criticise it without appearing to criticise the whole institution. I am pretty rude about the Government, but that does not mean that I do not want a Government. I am pretty rude about the Prime Minister, but that does not mean that I do not want to have a Prime Minister. I am pretty rude about the way in which the Government do many things, but that does not mean that I am opposed to democracy or that I do not want the Government of Britain to be elected in the way in which they are.

My job is to try to make the Government better. I take the same view about the EU. I am a committed enthusiast for Europe, which means that I have a greater duty to try to make it do things right than those who want to pull it down and diminish it, as, I fear, do so many short-sighted members of the press and some politicians who do not understand just how remarkable the ability of 25 nations is to work together for our common future. When we make a thorough muck-up—I was going to say something rather rude instead—of it, it is we, the enthusiasts, who really should be the first to say that something is wrong and does not work, and that we want something different.

I represent the port of Felixstowe, which is Britain's premier container port—indeed, Britain's premier port. It is we who managed to get rid of Britain's out-of-date and unacceptable practices under the dock labour scheme, and we who lead the ports of Britain with a companionable management-work force relationship. From time to time, I am approached by a trade union saying that management has got it wrong, or the other way about, but, in general, the port has a remarkable history of labour relations and success, so it should be encouraged by the legislation proposed by the EU. It sets an example that I would like the rest of Europe to follow more widely, but, unfortunately, the port's management and work force would be universally disadvantaged by the proposals, which the right hon. Gentleman has rightly brought to the attention of the House with this debate.

Clearly, all is not well in the European ports industry. The issue could be addressed with more enterprise, less national and municipal interference in the system and less distortion. I am constantly asked by trade unions and employers in the port of Felixstowe to complain that some of their competitors are unfairly supported with light dues, for example, and right across the scale to the way in which so many of the costs that fall on British ports are taken on by the Community as a whole rather than paid for in port dues.

We want to end such uncompetitive practices. Were we looking for a directive, it would be one that does just that: one that says that Antwerp, Rotterdam and other ports in mainland Europe should carry the same costs as we do in the British ports system. If we are to have a directive, it should carry that message. It should help our competitive system to compete more effectively with ports in countries that use all sorts of protectionist measures to ensure that their ports do better than they should. However, the directive does not do that. Instead, it makes it more difficult for leading European ports to do the job as they would wish.

I have been the Minister with responsibility for health and safety in this sector, and I declare an interest, as I have just written a book on health and safety. I help people, I hope, to improve their health and safety provision. It is widely known that there are many serious accidents in the construction industry, but accidents in the port industry are greater in number and severity, so health and safety in the port industry is not yet at the level that it should be. Some suggest that the case has been presented from a point of view that is parti pris, but I do not think that one can be parti pris about health and safety. It is an absolute issue that must be at the top of the list of important issues. I wholly agree with the right hon. Gentleman's comments on that.

A healthy ports industry is one in which a successful management is able to expand the port that it runs. Those of us who represent ports will know that that is not easy, because the moment one wants to expand a port, one finds that there is a rare plant immediately next door to where one wants to expand. I have often thought that we should find more unusual plants in the world if we threatened every area of the coast with a port, because it is surprising how rapidly the lesser spotted trefoil is discovered in those circumstances. I speak as a dedicated environmentalist.

I have been involved in Felixstowe in all sorts of discussions arising from the need to carry out much expensive work—particularly the replacement of the bird habitat—to get the necessary expansion of the port. The redevelopments that I am so pleased about in Felixstowe, which will redevelop the old part of the port, are just as difficult environmentally. The lighting, the fact that people cannot watch their television sets, and the things going on across the water in Bathgate create considerable difficulties for the port owners. The Dibden bay example is another way of saying that we already have strict containment of competition, deriving from the proper view of the environment. Let us not think that the business is an easy one to expand.

I think that the management has an important case to make: if we are to compete effectively, we need to remove the disadvantages—partly by reducing protectionism in the EU and partly by making it possible to continue, both here and elsewhere, the good processes that are available in Britain. I do not mind competing on a fair basis, and I should like the rest of the ports of Europe to enjoy the same regime as this country. I do not want things to get worse because of the directive.

I know that the Minister is new to the job and has gone to great trouble to be here today, and I thank her for that. I should like to feel that the Government were more completely and publicly direct about their position. I should like the Minister to be precise about what she intends to do, how she intends to do it, who is on her side, how many meetings she and her colleagues have had with our colleagues in the rest of Europe, whom she has on board and how what she intends will happen.

I think that I have negotiated longer, and on more occasions, in the EU than any Minister. In 16 years my experience was that working hard with one's colleagues means that they will reciprocate. Someone who spends real time with them, getting them to understand that we are on their side, that we want the EU to work but that the matter in question is bad for them and for us, will get support. I should like today to hear the Minister say, "I am not going to let this happen. I am going to be out there. I will win supporters and show that we can win the argument and win the vote." It is not just a question of the presidency getting the Commission to drop something; it is a question of the presidency getting colleagues to understand why the idea is nonsense.

I have no doubt that in the new Europe, where there are so many new partners, the Minister could get exactly the sort of support that I have described. If I may dare to give her a little advice, I think that her debut in such a debate will be hugely successful if she is able to make us all feel that she will be a feisty battler for Britain—no: a feisty battler for a sensible port system for the whole of Europe.

It may sound slightly odd coming from a Conservative Member, but although we may not always agree with the decisions of the Secretary of State for Environment, Food and Rural Affairs, and although we often feel that she is pretty distant from agricultural constituencies such as mine, the one thing that we know about her is that if there is a battle in Europe she is a feisty fighter. I suppose that 40 years of watching one's back in the Labour party makes a person a pretty good fighter in that way; she is extremely good at that.

I wonder whether someone rather younger may prove to us today that she will be precisely as feisty and tough as that, so that we know that the Government are on the side not only of Britain but of a sensible ports industry. That is part of the enterprise economy that we want to make Europe have. It is the only way that Europe will compete effectively and provide the world with a friendly alternative to some of the more extreme versions of capitalism on the other side of the Atlantic.

Photo of Anthony D Wright Anthony D Wright Labour, Great Yarmouth 3:00 pm, 20th July 2005

I congratulate my right hon. Friend Mr. Denham on securing the debate, which is certainly timely. I have been approached on several occasions by many people who work in the port of Great Yarmouth regarding ports packages 1 and 2 proposed by the European Commission. In addition, I hosted a meeting at Westminster nine months or so ago with some of my constituents and many people from the Transport and General Workers Union, who raised the subject, so I am particularly pleased that the debate is taking place.

I fully endorse early-day motion 476, tabled by my hon. Friend Gwyn Prosser and entitled "Access to Port Services Directive", which calls on the Government to withdraw their support for the directive. It is essential that we provide the safest working environment possible for those employed at UK ports and that we keep our port services at the highest professional level. British ports are, on the whole, the most effective in the world, but the proposed directive will threaten their commercial viability while, more seriously, risking the lives of those who work in them and use them.

The European Commission's drive systematically to promote liberalisation and competition in port services across Europe stemmed from the 1997 Green Paper "Sea Ports and Maritime Infrastructure". That was followed on 13 February 2001 by the Commission's adoption of ports package 1, the cornerstone of which was the draft directive on market access to port services. The need underlying that package of port liberalisation measures was to incorporate new member states in a successful and liberalised European ports system and to establish an effective trans-European ports network to reduce demand on other transport routes and stimulate business and employment prospects.

Port workers who provide services locally in Great Yarmouth have no problem in accepting those laudable concepts, especially when promoted as part of a package that holds safety and security in equal measure. However, it has become increasingly transparent through the evolution of the directive, which was rejected by the European Parliament in November 2003 and has now been reincarnated as ports package 2, that safety is being sacrificed in favour of measures that will, in their effort to achieve the goals of a package for the whole of Europe, stifle the individual competitiveness of UK ports.

The UK heads up an EU port infrastructure that is among the most productive in the world. The cost to unload a 40 ft container is, on average, $100, compared with $200 in North America and $300 in Asia. I am delighted that in Great Yarmouth the outer harbour development is nearing its final stages after receiving Government assistance based on the area's unique needs. However, on the whole, UK ports are distinct within the EU in that almost all investment in them is privately financed, with limited peripheral support from central or local government.

The UK has the largest port industry in Europe, with 120 ports handling about 560 million tonnes of cargo annually and 68 million passengers. It does that and does it well. It has been outlined in detail why imposing measures under the directive—such as mandatory authorisation for port services, reducing durations of authorisation and introducing new tendering requirements—will directly undermine the competitive edge of the UK's ports through inadequate regulation and over-regulation. Furthermore, transitional arrangements surrounding current port authorisations, compensation for companies affected by the arrangements and concerns about state aid guidelines will prove immensely challenging to the practical implementation of a directive which will provide a field day for lawyers.

Even more pressing for me are the serious health and safety concerns. Ports are dangerous places to work. My right hon. Friend said this, but it is worth repeating: someone employed in supporting water transport activities is 24 times more likely to be killed compared with the national average, and three times more likely to be killed than someone employed in the construction of buildings and civil engineering work. Despite that, ports package 2 has proposed self-handling by customers, reintroduces technical nautical services as a port service open to competitive tendering and forces compulsory competitive tendering on ports. All those measures to create intra-port competition will instead create what has commonly been described as ports of convenience across Europe, dramatically undermining safety.

On self-handling in cargo-handling operations, including loading and unloading, stevedoring, stowage, transhipment and other intra-terminal transport, there is simply no need for regulation under the directive to increase competition, given the already adequate terms of competition that exist in the UK. More dangerously, however, the proposed introduction of self-handling risks safety by the casualisation of jobs that only qualified professional dockers can carry out to high safety levels.

I have already illustrated the safety hazards associated with the work, with 3,000 accidents per 100,000 workers. If the work were to be carried out by land-based personnel of user companies, often contracted on a short-term basis, it is inevitable that safety will suffer and that the appalling safety record will get worse. The reintroduction of technical nautical services, including pilotage, towing and mooring, into the debate on competitive tendering—wisely withdrawn in 2001—will take what has always been an effective in-house service and create a service in which standards are undermined by commercial pressures.

The services are based on public safety. The most hazardous period of a shipping vessel's voyage is when it enters or exits a port, or when it navigates within a harbour, often within restricted or dangerous water. That presents a series of risks not only to the vessel, but to surrounding vessels and to the local environment. Indeed, many view those services as a maritime safety public service. It is madness to open such vital services to compulsory competition.

Under UK law, the provision of pilotage services is a matter for port authorities and all pilots are either employees or de facto employees. The service has worked well. For example, rather than having competition between pilot service providers, the port of the Humber and its operators have benefited from the increased co-ordination in pilot services. Only similar local authorities, including the one in my constituency, have the necessary experience to do what is best. Regulations should be left to the member states and not subject to all-encompassing EU legislation. Assurances that necessary safeguards will be put in place do not hold true, and to create a competitive market in such a safety-critical sector is absurd.

The general concept and ill effects of compulsory competitive tendering as proposed by ports package 2 will not stop there and will affect passenger services and ports in a similar way. Lack of safety management, lack of control of contractors and lack of training in all such matters will inevitably become serious issues for workers. Even under the current system, the increasing casualisation of many port services is a serious matter and the directive would open the floodgates. Indeed, it offers no additional safety and security protection for dock work other than those already used by the individual member states.

It is essential that the Government pursue greater health and safety measures nationally and internationally to reduce the unacceptable level of accidents in UK ports and across Europe. They should not increase those numbers by supporting an unworkable and impractical European directive.

The UK has not signed up to International Labour Organisation convention 152 on occupational safety and health for dock work, yet it is essential that the Government recognise the convention if they are to demonstrate their commitment to the international health and safety issues relating to dock work. Other ILO conventions on such issues, which the Government must also sign, are C137 and C145. I would welcome the Minister's comments on the Government's position. If she is unable to inform me of that today because of time constraints, I will be happy if she writes to me.

Other important issues that could be resolved without the need for the directive, or through a reduced directive, are those on inter-port competition as opposed to intra-port competition, and the establishment of greater transparency in state funding for ports. It is also essential that any future directive does not exclude ports other than those deemed category A so that they might also benefit from legislation under a new and significantly reduced directive along the lines that I have outlined.

It is unacceptable to adapt and change legislation that is fundamentally flawed. In their presidency of the EU, the Government have time to ensure that ports package 2 is defeated in the European Commission and the European Parliament. The new directive will not achieve their aim of successful, sustainable and safe ports in the UK, as outlined in their recently published policy paper "Modern Ports: A UK policy". Therefore, the directive should be dropped.

Photo of Gwyn Prosser Gwyn Prosser Labour, Dover 3:09 pm, 20th July 2005

During my sea-going career on deep-sea and coastal vessels and on cross-channel ferries, I spent much of my time negotiating and arguing the case for the workers with various shipping companies and shipowners.

Since leaving the sea I have settled in Dover, near the busiest ferry port in the world. It is one of the premier ports. We all have generous things to say about our own ports, but Dover is particularly special to me, not least because Her Majesty the Queen opened two brand new berths there four hours ago. During my time ashore in Dover I have spent quite a lot of time making representations on behalf of port workers, members of the Transport and General Workers Union and members of the GMB over various grievances when the trade union system did not quite deliver the goods or it wanted a little bit more help. I cannot remember one instance when a new rule, regulation or piece of legislation has not caused quite dramatic differences in view across the negotiating table.

As my right hon. Friend Mr. Denham said, the extraordinary thing about the directive is that it has succeeded in uniting us all: the port industry, both the ports associations, the shipowners, the terminal operators and all the trade unions. They are united in their condemnation of the European Commissioner's new directive. We are calling it mark 2. It seems from the flavour of the debate today that it is also uniting the political parties. We are building up a strong bow wave of opposition to this unnecessary directive.

It is gratifying to see so many members of the distinguished and influential all-party ports and merchant navy group present this afternoon. In the previous Parliament the group considered this issue and wanted to reject the directive. I have taken some soundings and have listened to the contributions this afternoon, and it is clear that when we consider it formally in this current Parliament the group will oppose it again. When the Transport Committee looks again at the new directive and all that it entails, it will undoubtedly produce a robust response. All the arrows point in the same direction.

The terminal operators are concerned about having to re-tender for services that they have provided for many years. They are not afraid of competition, but they are afraid of being outbid by powerful, cash-rich interests, and perhaps by interests whose long-term objectives are not the running of ports and the sailing of ships, but the selling of land, the building of houses and the making of money. That has to be borne in mind.

The issue of investment has been raised. One of the great problems that we are starting to face, and which we will be facing even more in future, is port and infrastructure congestion. We are told that freight through UK ports will probably double in the next 10 years. That is great for the expansion of some of our ports, especially on the south coast, but it is a challenge in terms of providing the infrastructure and keeping the traffic moving. However, investment in the berths must be continued, as Mr. Gummer pointed out. Currently concessions are allowed over a period of 46 years, so at least we can say that for nearly 50 years, no matter which way the tide is flowing, we can invest big money and get returns in the future to meet the increasing demands. We are told that the directive reduces that to 30 years. That is another unnecessary limitation.

We know that the International Transport Workers Federation has pointed to the growing problem of being unable to expand and compete without the encumbrance of third parties being involved. However, the main problem in the directive—the one that caused so much anguish and grief during the first directive—is the vexed question of self-handling, especially by the ship's crew. There is talk of pressure for that text to be dropped, and that it will not be part of the final text, but it is early days yet.

We have already heard about the accident rate in ports—it is higher than that of the construction industry, and was higher than that of the mining industry when that industry was thriving—but the accident rate at sea is still a major issue. Moreover, we know that 90 per cent. of accidents at sea can be related to fatigue. In a sea-going career, the worst scenario in the world would be for sailors to come from a deep-sea passage to prepare for stand-by—preparing the lines and berthing the vessel—and then for those sailors to have to turn out on deck, not just to tie up the ship, which is part of their function, but to start discharging the cargo, with all the extra risks that that entails. That scenario would be particularly bad in today's environment, in which crews are getting smaller and the demands greater.

Even if that text is dropped, the directive will still give an incentive to ship operators and ports to bring in casual labour. The right hon. Member for Suffolk, Coastal mentioned the dock labour scheme. I grew up in Swansea, and am old enough to remember my grandfather, who was a Swansea docker, leaving the house at 6 am or 7 am to walk down to Swansea docks to stand in a great mass of people and wait to be picked out from that crowd—by luck or by other means—to get a few hours' work on that day. The decision to select people was not to do with their commitment, energy or previous work history, but more to do with who they knew. That was not the free market; it was worse than a flea market. Those were the bad old days of organising ports.

Although we have lost that entirely unregulated scurrilous scheme—we have not quite gone back to the way that things were all those years ago—the directive would still put pressure on the port operator to take the lowest bidder. That could mean a build-up of agencies that might recruit in the back streets, and might even take on illegal workers, or people with no history in port work, with no feeling for safety or the proper procedures. That would increase the danger.

In the port of Dover—my constituency—I have been approached and lobbied by my friends Gary Punton, who represents the TGWU, and David Clements, who represents the GMB. Both the seafarers' unions have also lobbied me: the officers' union, the National Union of Marine, Aviation and Shipping Transport Officers, in which I declare an interest, because I am still a member; and the National Union of Rail, Maritime and Transport Workers, in which I also have to declare a registrable interest, because that union supported my campaign in the last election. Those unions are saying much the same things as hon. Members are saying in today's debate.

Another issue that the directive causes problems with is the International Labour Organisation conventions on registered dock workers. Many people, especially the trade unions, look on the directive as a means of undermining not only the specific conventions, but the entire structure of union membership in our ports, which would be a bad thing.

I will be in danger of repeating many of the issues that other hon. Members have raised if I continue too far along that track. I shall finish by saying that if we can convince the Minister of the need to support us in opposing the directive—I am sure that we are getting there—she will be on the side of that growing constituency of people who say that it is unnecessary and that it will do more damage than good. The only winners will be the solicitors and lawyers, who will make a great deal of money from all the claims and counter claims. I hope that the Minister will join us in opposing this unnecessary directive.

Photo of Hugh Bayley Hugh Bayley NATO Parliamentary Assembly UK Delegation

Order. I need to call the Front-Bench speakers to make their winding-up speeches at 3.30 pm, and I see that two further Members wish to speak. I hope that they can calculate the time allocation.

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test 3:21 pm, 20th July 2005

I will attempt carefully to calculate my time allocation.

I have followed the progress of the directive for some time, and I am delighted that my right hon. Friend Mr. Denham has secured a debate on the matter. I also submitted a request for a debate to the Speaker's Office in my indecipherable handwriting. I think that the Speaker's Clerk may have concluded that we did not need a debate on the excess of pork surfaces and thrown my proposal in the bin.

Nevertheless, we have secured this debate and it is important that the issues relating to the port directive are made clear. The Minister must be equally clear on the matter and I hope that she will be able to assist whatever needs to be done to secure an EU port directive that makes sense in relation to the original suggestions of what a port directive should consist of, instead of the directive currently before the European Parliament. The existing directive displays a misunderstanding of what is meant by a level playing field in the context of what it claims to do.

Creating a level playing field is a question not just of not building it on the side of a mountain, but of what people do on that level playing field. We expect two sides to turn up and that there should be the same rules for both. There should be a referee and the game should proceed in an orderly fashion. The rules should protect the players from being injured or killed. Contrary to that, the directive appears to suggest that the rules can change during the game. For example, the manager might recruit someone from the crowd during the game to play in the match or, during half time, a player might be sold and come out during the second half for the opposite side.

The directive concentrates on inter-port competition in a way, as my right hon. Friend set out clearly, that does not do anything either for investment in ports or for health and safety matters relating to the running of ports. In the directive's second incarnation, it claims to begin considering the question of transparency of competition between ports, but in my view it does not significantly address that. It is important that the UK considers that area carefully in addressing the directive.

It is certainly the case that ports throughout Europe have different definitions of what constitutes a port. In Germany, for example, ports are treated as part of the transport system. In France, there is substantial investment in port infrastructure, dredging, buoys, lighting systems and so on through regional and national assistance, which varies in different parts of France.

In elements of the directive, the assumption is made that ports somehow exist independent of the trade that goes on in them, so that the trade can be deregulated in the way suggested by the directive without harming the infrastructure. If we are to have an infrastructure directive that produces a level playing field, the issue of who funds what in relation to ports must be addressed. In the UK, ports are regarded as commercial entities in their own right and, as hon. Members have already mentioned, they must pay their own way in terms of all infrastructure.

Even so, there are clearly issues of definition, for example, in relation to the infrastructure to and from the port on its landward side. Hon. Members have already made some mention of that. For example, what about rail links to and from ports? In the port of Southampton, a key issue is whether the freight rail link from Southampton to the midlands should be upgraded to deal with the new high box containers. That might be outwith the infrastructure and investment handled by the port itself.

That is what the directive ought to consider. That would be a directive that those who are interested in ports could sign up to. As it stands, the directive does the opposite of most of those things, and it is significant that every speaker in the debate and every party representative in this Chamber agrees that, without those substantial changes, the directive can only harm the interests of British and indeed European ports, rather than advance them as it claims to do.

Photo of Andrew MacKinlay Andrew MacKinlay Labour, Thurrock 3:26 pm, 20th July 2005

I shall be mindful of the time constraints, but even in the main Chamber the speeches from the two Front-Bench spokesmen sometimes take less than half an hour. Also, I have something new to say: there will be no more Mr. Nice Guy, because we are sometimes far too polite in relation to the Government. Even my hon. Friend Dr. Whitehead seems to accept the concept of a directive. I say that it is not necessary at all, and I want to elaborate on that. My mandate for being here is that I represent the port of Tilbury—the last working part of the historic port of London—and also 18 miles of river frontage, which includes wharfs that will not be covered by the directive. If the directive were put into practice, it would create some distortion and unfairness in relation to the enterprise of the port of Tilbury and those smaller wharfs. That needs to be spelt out. The port of Tilbury is owned by the Forth Ports group, which is a significant player when it comes to ports in the United Kingdom. Its headquarters are in Leith.

Assuming that the Minister will not accept everything that I say this afternoon, I invite her at least to give some idea of the logic behind the directive. Who is driving it? Is she mindful of the fact that the European Parliament basically rejected it? I know that it has been resuscitated and had some fine tuning, but basically it is the same animal. I want to be reassured that there is not a scintilla of truth in the rumour that our Ministries used leverage to try to get Labour MEPs to support the directive initially. This is my hon. Friend's opportunity to repudiate that charge.

Employing some dexterity, I am a socialist who believes in the market economy. There should be a free market, even for labour, subject to the fact that there must be regulation of health and safety standards, proper means for reviewing service conditions, and free negotiations. In relation to that, it is time that the Government enacted the International Labour Organisation conventions, to which reference has been made. When I said that there would be no more Mr. Nice Guy, my hon. Friend Mr. Wright said from sedentary position that the Minister could write to me. It is time that a Labour Government implemented the conventions. The Minister's brief no doubt says, "If someone mentions ILO, pretend you haven't noticed." I want her to respond to my point about the ILO conventions, because the issue has been raised time and again since I have been a Member, and certainly since 1997. We need to look at that.

The driver—the so-called Lisbon agenda—said, "Let's open up the markets, particularly in the services area." In principle, I do not lie awake at night anxious about the Lisbon agenda of the European Union, but I do not see how the directive translates into a way of fulfilling the Lisbon agenda. Indeed, I see it as the opposite of the market approach. In the United Kingdom, we have a good market in the ports sector. We are an island. It is worth drawing the Chamber's attention to the fact that the cost to shipping lines of handling containers in UK ports is about $100 or £68. That compares with an average of about $134 or £91 in north Europe and $200 on the east coast of north America.

The important comparison is between the UK, which has a really good market in terms of port handling, and the rest of northern Europe. I suspect that there is protectionism of the national ports in all those areas, and many countries in the European Union are up rivers. The Danube covers several European Union countries, and the prescription does not fit all of them. The UK can legitimately say, "Don't wreck our highly competitive market"—because the figures that I have before me stand up—"to address high prices elsewhere in northern European ports."

The Commission consultation has been parlous. Originally the directive did not include, for instance, cargo handling; it related only to some of the technical services. They should not be covered by the directive, but it has been extended to cover stevedore functions and cargo handling. The fact must be flagged up that the Commission cannot pretend that there has been adequate consultation about that matter.

The directive will encourage greater use of poorly trained or casual staff, as a consequence of the reduction in safety standards. It will deprive people, companies and corporations that have invested in UK ports and made them very competitive, and it could jeopardise further investment in UK ports. The directive will also mean that customers and port owners cannot benefit from economies of scale. For that reason, if the directive were allowed to go through, it would do the opposite of promoting the market.

Photo of Hugh Bayley Hugh Bayley NATO Parliamentary Assembly UK Delegation

Order. I ask the hon. Gentleman to draw his speech to a conclusion.

Photo of Andrew MacKinlay Andrew MacKinlay Labour, Thurrock

I shall, Mr. Bayley. As well as providing a response on the ILO issue, I hope that the Minister will tell the Minister of State, Department for Transport, and the Secretary of State for Transport what has been said today. It is fair to remind the Minister that the Foreign Secretary has repeatedly said in the House in relation to European legislation that he wants to be sensitive to what the House says. I do not think that there is a person in the House who supports the directive. If there is, hands up he or she.

The message must be conveyed that the directive must not pass. During our presidency and during the presidency of Austria, which does not have an abundance of ports, except on the Danube, the matter should be deemed to be dead.

We are exercised by security; I certainly am. One of the benefits of the port of Tilbury is that it is self-contained. It is the nearest thing to a walled port, which will become the trend in ports. It is literally walled, in the sense that it is protected to combat crime, theft and so on; and also, when a small number of employers are based in a port, they can be controlled and identified. The great investment can be spent on knowing precisely who those people are, where they have been and where they have come from. If we create a multiplicity of employers in those ports, the objective will be diminished.

For all those reasons, I hope that the Minister will be bold and say that she takes the mood of the House and that she will use her best endeavours and offices to frustrate and eventually kill this crackpot directive.

Photo of John Pugh John Pugh Shadow Minister (Transport) 3:33 pm, 20th July 2005

I shall be brief. I congratulate Mr. Denham on having raised the subject, and all the Members who have spoken. The debate has been an education for me. I must admit that I would not be comfortable dealing with this topic on "Mastermind", but after the debate, I think that I would cope a little better.

The right hon. Member for Southampton, Itchen asked what problem the directive is meant to address. Fundamentally, the problem is fair trade in one form or another. There have always been conflicts of interest concerned with merchant shipping, going right back to conflicts between ports and port owners and shipowners. If we go right back to the days of ancient Greece and to the unfortunate affair of Troy, we see that the problem has existed for a very long time.

In the old days, ships essentially took what deal they could at the port, and if they did not like the deal, they simply went elsewhere. None the less, ports have always been interested in attracting more and more trade, and in forcing down their costs. The ports' disputes with which we are familiar are normally those between the dock owners and the dock workers. I know about that, sadly, because I was involved in a rather futile effort at conciliation during the dock workers' strike in Liverpool, an historic dispute of many years ago, because I was a leader on the council. I remember discussing with both sides their relative fears about the industry. The dock owners voiced their fear of union exploitation and the stranglehold exercised by the unions. They would start by saying, "Can I take you back to 1954?" The unions would express their fear of casualisation and say precisely the same thing. Those fears were genuine and real.

There was a brutal battle about the various interests. The word used by Mr. Gummer to describe arrangements at Felixstowe was "companionable". That word certainly did not apply in the case to which I refer. It must have taken a special genius for the EU directive to have united forces that have normally been at one another's throats.

As far as I can see, the only supporters of the directive will be big shipowners, who might relish competition on issues such as pilotage, the possibility of self-handling and the erosion of, and some attacks on, what they see as vested interests. I dare say that some of them would argue for a further degree of liberalisation—for a financially transparent regime, in which there are underlying rules related to safety and ensuring that everyone involved in the enterprise has adequate and appropriate expertise to conduct themselves properly and an environment in which no one is held to ransom and bargains are free and fair. That is the theory of liberalisation.

Whether it is called the Lisbon agenda or whatever, that theory sounds all right. In this case, the practice appears to be different. We must accept that ports are vital to a nation in a way in which other service industries are not. Ports are vital because they affect a much wider economy than themselves, because use of the ports, rather than of the roads, is vital to the environmental imperatives that dominate our agenda, and because they are related to national security, although to a lesser extent than formerly.

Any Government ought to be, and most are, uncomfortable about leaving ports to the free market. That is why the issue is so difficult. It sets some tricky dilemmas for the Government. Transport policy, whether port or road policy, is essentially a form of economic intervention. In the context of Europe, that always raises complicated issues about state aid.

The Government also have overriding imperatives to do not with transport but with the environment. The right hon. Member for Suffolk, Coastal mentioned wild flowers. Environmental arguments cut both ways. We may save a few wild flowers, but if the net effect is that we put more lorries on the road, the effect on the environment is not to the better.

As I see it, the directive is about having the benefits of the market without the pitfalls. The pitfalls have been well analysed. They are poor safety, environmental damage and economic uncertainty. We would all accept that that is the consensus about the directive. It is too prescriptive. It makes things mandatory that should be optional. It is insensitive to the economic investment needs of ports. The right hon. Member for Southampton, Itchen analysed that well. It is also, as other Members said, unmindful of the dangers of casualisation and the health and security issues attaining to that.

It seems to me that there is good commercial practice in the ports industry. Good commercial practice needs no further recommendation. It does not need a set of imperatives from Europe to bind and establish it further. To endeavour to do that restricts the market or leads to an undesirable form of Euro-fudge.

In a nutshell, I appreciate the concerns of both Europe and the Minister, but however those concerns are addressed, the directive does not seem to be the most appropriate way of addressing and furthering them.

Photo of Greg Knight Greg Knight Shadow Minister (Transport) 3:39 pm, 20th July 2005

We have had a good debate. I congratulate Mr. Denham not only on securing it but on his forceful and common-sense contribution to it.

When considering the directive, the most striking feature is the wide opposition that it has created. I have rarely encountered such unanimity. That is clearly a view shared by the right hon. Gentleman and by most other speakers who have contributed. Members of all parties, the Transport and General Workers Union, representatives of the major ports and the European Parliament are all united against the proposal.

I pay tribute to Timothy Kirkhope, MEP, the leader of the delegation of Conservative MEPs, and his colleagues, who have led the opposition to the proposal. Perhaps Andrew Mackinlay should go to the European Parliament and have a quiet—or, in his case, noisy—word with his Labour MEP colleagues. At one point, even the UK Government seemed to have joined the opposition. In February this year, they stated:

"The UK Government is less certain that the impact of these new proposals on the UK ports sector would be realistic or proportionate."

Had they stuck with that line, they could have included the official Opposition among their fellows. However, despite all the Prime Minister's fine words in Brussels, it seems that there may be yet another climb down by the Government on an important issue. I hope that I am wrong and that the Minister will reassure us that that is not the case.

We all ought to be able to criticise the European Union when it gets something wrong. I entirely agree with what my right hon. Friend Mr. Gummer said. One problem with the EU is that it does not like to be rebuffed. If the people of a nation state reject one of its schemes, they are asked about it again and again until they give what is considered to be the right answer. If one of the major players in Europe throws out a proposal such as the constitution, many in the EU act as if nothing has happened. Now we see what happens if one of its own institutions, the Parliament, rejects a directive. Does the Commission respect the decision and drop the proposal? No, it proposes it again. The right hon. Member for Southampton, Itchen is right in saying that that is exactly the type of behaviour that has alienated many of the Union's citizens from its institutions.

During Britain's presidency of the EU, the Prime Minister has a perfect opportunity to refuse to be a party to such an insult to democracy, and to encourage our partners to drop the proposal. However, despite that golden opportunity to put a stop to unsatisfactory legislation that nobody wants, there are signs that the Government may acquiesce in yet another dose of Commission-inspired bureaucracy. Even if the proposal had not been rejected by the European Parliament, there are good reasons to drop it on its own merits, as we have heard this afternoon.

It is fair to say that the directive is not really aimed at British ports. That came out in the flavour of the contributions today. Its aim is to inject some much-needed liberalisation into the ports of mainland Europe, many of which currently sit under the heavy hand of state control. In many respects, such ports lag way behind ours. As Michael Everard, the former president of the Chamber of Shipping and chairman of its ports and pilotage policy committee, said to the Transport Committee:

"I have been going to Sweden for the last 30 years. I used to say when I went there that I wished our ports in the UK were as efficient as Sweden. Now things have totally turned round. We are far more efficient than they are."

My right hon. Friend the Member for Suffolk, Coastal made an excellent case. He referred to his book but did not tell us what it is called. Perhaps he should send a copy to every member of the European Commission. The proposal—even the amended one—will introduce a formal framework of competition to the provision of commercial port services. As I have said, that may be very well for some parts of Europe, but it is not necessary in Britain, mainly because British ports underwent liberalisation in the 1980s as a result of the policies of the trail-blazing Government led by Lady Thatcher, of whom my right hon. Friend was a distinguished member. Consequently, for this country, the directive is not a liberating experience but a straitjacket.

Take, for example, the forced tendering of contracts for cargo handling. That may be necessary in other parts of Europe, where the ports do not deal with that side of the business—they farm it out to other contractors—but UK ports normally handle it themselves. Forced tendering will result in fragmentation of the companies that run our harbours and could lead to increased use of casual labour. I agree with the comment that one likely consequence is a deterioration in the quality of work and, therefore, increased health and safety risks. Those risks cannot be exaggerated.

No one is happy about the directive—not the unions, not the ports and not the European Parliament, which cited the proposal as its main objection to the original directive. Even the Government have conceded that the directive will change Britain's ports to a more European model, although Ministers have alleged that the changes will take place over a couple of generations.

If the proposal is approved, there will be an increase in regulation and paperwork across the board. That will, as the TGWU argued,

"discourage much needed investment in the UK port industry and make it harder for UK ports to offer an efficient service to their customers".

That argument was echoed by several hon. Members during the debate.

The directive will force British ports to back-pedal in the name of liberalisation, and there seems to be some doubt whether it will help the ports of our European neighbours. The chairman of the European Sea Ports Organisation was dismissive and said:

"I am afraid that the proposal we now have on the table is not going to help ports in facing their common challenges. Instead of creating an attractive climate for much needed investments in ports, it will probably scare potential investors away."

The pilotage sector of the industry has also expressed deep concern about the directive's impact. The European Maritime Pilots Association said that

"under no circumstances should pilot services come under the scope of the proposed directive".

One of the main arguments for throwing the directive out of the European Parliament in November 2003 was fears about the employment of casual labourers. Changes have been made to the directive, but it looks highly unlikely that the European Parliament's committee on transport and tourism will deem them to be sufficient. I hope that Members of the European Parliament will continue to block the measure.

I understand that no fewer than 220 trade unions throughout the EU are gearing up to oppose the measure because they believe—I agree—that it will undermine safety standards in harbours throughout the EU. We have manifold reasons for rejecting the directive, even in its slightly amended form. It serves neither the interests of mainland European ports, nor our British ports. It has been rejected once by the British Parliament and has not had the amendments necessary to merit its approval. It will jeopardise safety in the name of liberalisation and it will jeopardise our liberal UK regime by imposing additional red tape.

I hope that the Minister will give a robust response to the debate. The essence of the answer was touched on by Gwyn Prosser when he said that the issue should be deemed to be one of national competence. If the EU accepted that, it would be the answer to the problem. Let the British Government go their own way because the matter should be one of national competence. I hope that the Minister will say that she takes the same view and do what she can to persuade her fellow Ministers in the EU to abandon the proposal or, at the very least, argue for the principle of subsidiarity.

The hon. Member for Dover rightly said that a large bow wave of opposition is facing the measure, and I hope that the Minister agrees with him. She should do her best to ensure that that bow wave sinks this unwanted vessel.

Photo of Karen Buck Karen Buck Parliamentary Under-Secretary (Department for Transport) 3:50 pm, 20th July 2005

I also congratulate my right hon. Friend Mr. Denham on this timely debate, which focuses the House's attention on the challenging proposal for legislation throughout the EU on the market for port services. I congratulate him on not only obtaining the debate, but on the characteristic cogency and power with which he delivered his contribution. It has been a debate characterised by excellent contributions from hon. Members representing ports authorities, bringing a great deal of expertise and local knowledge. It has been characterised also by a high degree of cross-party unanimity, which represents, through hon. Members' contributions, what I hear as a high degree of cross-sectoral concern, spanning business and the trade unions. I assure hon. Members that I have heard that message. The Minister of State, Department for Transport, my hon. Friend Dr. Ladyman, will be the lead Minister on the issue, but I assure hon. Members that I shall report back to him fully on what has been said today.

As everyone in Westminster Hall knows, the UK currently holds the presidency of the European Council, so our role in the next six months is to act as a fair and neutral broker, taking forward the Council's agenda. We act as an advocate for common EU policies and are responsible for brokering agreements and delivering results. I am therefore reluctant to dive too deeply into the controversy of the proposal from a national perspective, as the presidency's role is impartially to take forward the agenda of the EU, which the UK has helped to shape.

Within that agenda, some things are clearly more important to us than others. Presidencies that are perceived to focus exclusively on national interests soon lose credibility and undermine their capacity to deliver. That said, the proposal clearly matters to us. The Commission has said that the whole thrust of the directive is to introduce a permissive rather than a mandatory regime. It also argues that its aim is to ensure that the market is aware of the opportunity for the provision of competitive services in the port sector. The Commission believes that the directive will allow for market access, providing that there are suppliers seeking to enter the market. Those are admirable intentions.

It is clear from listening to today's contributions, however, that hon. Members share the concerns of a wide cross-section of their colleagues in the European Parliament that those aspirations have not been translated into a realistic or proportionate proposal. My right hon. Friend's concerns, and those expressed highly consistently—albeit with different local illustrations—by Mr. Gummer, and my hon. Friends the Members for Great Yarmouth (Mr. Wright), for Dover (Gwyn Prosser), for Southampton, Test (Dr. Whitehead), and for Thurrock (Andrew Mackinlay), set out some of the apparent shortcomings of the proposed directive. They expressed crucial concerns about the impact on future port investment, the impact of levels of potential uncertainty, and the impact of work force casualisation on health and safety. Such concerns have also been raised by a significant majority of member states. The clear view, strongly expressed at last December's Transport Council, was that the current text could be regarded only as a starting point for long and hard negotiation.

As hon. Members will be aware, one of the Government's overarching objectives is better regulation across the board. That will be a major theme running through our presidency of the European Union. Following extensive consultation across the UK ports sector and its users, we have already carried out a thorough regulatory impact assessment of the proposed directive, which is being submitted to the European Scrutiny Committee of this House. As my right hon. Friend pointed out, our assessment amply confirms that there is a greater level of market discipline at work in the UK than elsewhere in Europe. The UK ports sector in general already provides port users and service providers with the market freedoms proposed by the directive—several hon. Members emphasised that point.

We do not expect that the intended consequence of the directive would have a significant impact on the fully liberalised, commercially independent UK ports sector or its stakeholders. However, we accept that there is a real possibility of serious unintended consequences, which would have an adverse effect on the continued efficiency and effectiveness of the sector. We do not so far see that those would be adequately balanced by any compensatory advantage. Clearly, this is not a satisfactory situation.

Our ports are vital to the continued economic well-being of the UK. The directive would have an impact on the 45 UK ports, which have an average annual throughput of more than 1.5 million tonnes, and 200,000 passenger movements per annum, if calculated on currently available data for 2002–03. These ports handle 95 per cent. of the UK's trade by tonnage, and it is vital that any regulation that impacts on them is of net overall benefit.

As many hon. Members have recognised, the directive has a long and contentious history. In his opening remarks, my right hon. Friend the Member for Southampton, Itchen made it clear that the European Parliament rejected the original proposal at the conciliation stage in 2003. The revised proposal was issued in October 2004, and initial deliberations were taken forward under the Luxembourg presidency. The published Luxembourg-UK presidency programme commits us to progressing that dossier.

The UK took a leading role in steering the original proposal into what was generally regarded as a reasonable and proportionate measure by member states, but not, in the end, the European Parliament. If there is to be a directive on opening up port services, our European partners now look to the UK, as a major maritime player in the Community, to grasp the nettle once more. They want us to move towards a workable and workmanlike proposal that delivers market liberalisation where it is required, but with full regard to the commercial realities of the European port sector.

I assure hon. Members that we intend to rise to that challenge in Europe. Departmental officials are taking an active role in discussion with colleagues in other member states, sharing our assessment of the directive's impact on the port sector and soliciting their views and ideas. We have built up significant support in the Commission and among other member states. We are consulting widely at home and abroad with the various parties involved, as we did on the previous directive. I assure my hon. Friend the Member for Thurrock that there is no truth in the allegation that we are pressurising Members of the European Parliament to take a contrary view.

Photo of Andrew MacKinlay Andrew MacKinlay Labour, Thurrock

I never believed it anyway.

Photo of Karen Buck Karen Buck Parliamentary Under-Secretary (Department for Transport)

It is a bit late to mention that.

The Government have also taken the lead in persuading the Commission to undertake an impact assessment of its proposal, and it has now been accepted that the Council cannot resume discussion of the proposal until that assessment is available, which is expected to be in the autumn. The assessment should be able to demonstrate that there will be an overall net benefit from the proposal for port users across the Community.

During our presidency, we intend to continue to work with other member states, comparing their national impact assessments with that produced by the Commission. In doing so, we hope to develop sufficient consensus to formulate the substantial revisions that are clearly needed to the proposal.

We are well aware that, as has been reconfirmed this afternoon, uncertainties surrounding the directive are already having a significant impact on UK port investment plans. There is therefore a clear need to resolve the position as soon as possible. Even if the Council or the European Parliament eventually rejected the text, however, the Commission would be obliged to return to the subject in the years to come. We have a good opportunity now to achieve a sensible outcome, which would be preferable to allowing uncertainty to remain, with its potentially debilitating impact on the port sector's continuing effectiveness.

As the UK holds the presidency, we have to act on the consensus among member states. So far, that consensus is to achieve a significant outcome through substantial revision of the proposal.

In summary, the Government have indicated from the outset that the proposals must be realistic and proportionate in their impact on UK port sector interests. In addition, the directive must clearly recognise the diversity of the European port sector and the opportunities already provided. Our RIA clearly supports the view that significant improvements are needed to many aspects of the proposal if it is to meet those requirements. During our presidency, we are in a good position to begin work to deliver those improvements for the benefit of the European port sector and its customers.