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The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
Mrs Brooke, it is a great pleasure to serve under your chairmanship this afternoon. I should like to put on the record that I apologise to you for not being here at the start of the debate. Through you, Mrs Brooke, I particularly wish to apologise to the Chairman of the Select Committee, the hon. Member for Liverpool, Riverside (Mrs Ellman). As she knows, the debate was due to start slightly later and I was coming back from the west country, where I was looking at other transport infrastructure this morning. I am pleased that the Under-Secretary of State for Transport, my hon. Friend the Member for Scarborough and Whitby, was able to make some detailed notes on the hon. Lady’s comments. I will try to deal with some of her comments now and I hope that she will forgive me if I miss any. My officials will certainly respond to her if there is anything we have left out.
We are grateful to the Committee for securing this debate on a subject of great importance, as a number of hon. Members who contributed to it attested. We welcomed the report and the inquiry on the basis that they presented everyone with the opportunity to take stock of the situation with ports in England and Wales. It is right to make the point that it is difficult to overestimate the huge economic importance of ports to our country. They are key.
I am pleased that the report recognises, as we all do, that the connectivity of major ports was a problem and that it welcomes some of the new infrastructure announcements. The hon. Lady is right that the final few miles to a port gate are often a problem, but much work has been done on rail network and road network infrastructure to address that key connectivity point. A number of Members, particularly the hon. Lady and my hon. Friend the Member for Suffolk Coastal (Dr Coffey), have talked about the A14 and welcomed its construction and the abandonment of tolling. To be clear, the statement on community consultation will be published in the next few weeks. The pre-application consultation will start in April 2014 for 10 weeks. That will explain the details of the scheme and why the improvements are needed. Construction work is still expected to start in December 2016 and to be completed by the end of the decade.
The hon. Member for Liverpool, Riverside raised some other points about private sector involvement and coastal shipping, and I will pick those up in some of my later remarks. I reassure her that this Government have, right from the outset, supported investment in ports and the connectivity and infrastructure around them. We set out our response to the Committee in some detail in writing. Although I will touch on a number of the subjects today, it is not appropriate for me to repeat the response at length. It recognised the responsibilities the Government have, and we have shown practical examples of working in partnership with the ports industry to ensure the complementarity of the infrastructure either side of the port gate. I will talk a little more about the review of the guidance on developer funding. In direct response to the hon. Lady’s question, the Department will review that guidance and is reviewing it this year. She also asked about freight grants, which were addressed at paragraph 6 of the Government’s response to her Committee.
There were some questions about the planning system. There has been some huge simplification through the national planning policy framework and the coastal concordat, and the advice that the Department for Environment, Food and Rural Affairs and its unit have given on habitats cases is helping to inform ports. I recognise that there were some problems in the beginning, particularly with the Marine Management Organisation and its lack of consultation with some of the ports. Harwich Haven had a problem that was brought to me, which I met the chief executive of the MMO to discuss. The MMO has recognised and addressed some of the failings in its consultation procedures. To ensure that those failings are addressed for the benefit of ports, I have a bi-monthly meeting with the MMO to ensure that it takes into account ports consultation, even though, as my hon. Friend the Member for Suffolk Coastal rightly pointed out, it is not absolutely in my direct jurisdiction, as it is under DEFRA’s. To conclude that point, we held a maritime round table on environmental requirements, particularly planning requirements, at the industry’s request last autumn. At that meeting, the chief executive of the MMO and officials and the Minister from DEFRA responded to a number of a criticisms of how the system had been working and how some of the changes had been made.
My hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw) made what I might describe as a predictably forceful contribution. He is absolutely right that all ports are a national asset. He is right to celebrate that, while for many years the port of Heysham lacked a road, the Government found the funding for the local authority scheme on the A6 Lancaster road. The road is now under construction and it is for the local authority to complete the scheme. I commend him on his campaign for that road, which would not have happened without him. He will, I am sure, continue to make the point forcefully to the Government. He rightly points out the need for road access to Glasson dock. He knows, as I do, that it is for Lancashire county council and the local enterprise partnership to prioritise that as a local major scheme. It could be funded through the growth deal scheme.
The shadow Minister made some comments about the growth fund, but he should be aware that a Transport Minister sits in on all the discussions and a Department for Transport representative or official has been on most of the visits. To believe that the Department is not taking what I can only describe as an active, full and comprehensive part in that process would be to misunderstand what is happening in government.
My hon. Friend the Member for Lancaster and Fleetwood was right to talk about the Mersey dredge. I know that a lot of people are concerned, but it was a truly exceptional grant. None the less, other major dredges are going on, and they have all been commercially funded. I encourage him to work with the local port to ensure that it sees the benefits of commercial funding. If he feels that there is a truly exceptional case, I am sure he will continue to make it.
I am grateful for the kind words of the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), who was the Minister responsible for shipping in the previous Government. He talked about what the Government should have said in our response. I will ensure that we do not miss a trick in blowing our own trumpet slightly more loudly. I will address the point about waterborne freight rates in a moment. He is right that the maritime roundtable we established has brought together parts of industry with senior Ministers and senior officials from all the relevant Departments: the Department for Transport, the Department for Business, Innovation and Skills, the Cabinet Office, the Treasury and DEFRA. Senior officials connected with that group are working all the time. He is absolutely right that we should perhaps be saying a lot more.
I am grateful for the hon. Gentleman’s contribution to London international shipping week, where he was almost as omnipresent as I appeared to be. Pretty much everywhere I went, I met him and the Select Committee Chair. It was a great success and will happen again in 2015. Perhaps it should be called UK shipping week. I have already had pitches from Felixstowe and a law firm in Ipswich to host a professional services conference during a future shipping week. Some 60 or 70 events took place during that week in London and more widely.
The hon. Member for Poplar and Limehouse is also right that we should set out much more clearly the huge amount of work that goes on to help the shipping and ports industry in practical ways. He will remember from when he was a Minister that one of the great advantages of being a member of a UK Government is that on international business one can talk about the benefits of the UK and what the UK does well. A month ago, I went to Singapore to address some of the maritime issues that we face there. One part of the visit was working with UK Trade & Investment to sell the benefits of the UK flag and the UK ship register. I was delighted that, a week before that visit, one of the Singaporean companies put eight flags back on the British register. As a result of that visit, we have nine expressions of interest from other shipping companies to put more flags back on the register. It is important that the Department for Transport work with UK Trade & Investment on visits such as those and remembers the whole access issue. People often recognise London as the global centre for maritime professional services. We needed to remind the Singaporeans of that, because they are catching up fast and working hard at that. None the less, it is hugely important that we stress the benefits of the UK flag and what UK shipping and UK maritime are doing.
The hon. Member for Poplar and Limehouse is quite right about state aid, which the hon. Member for Blackpool South (Mr Marsden) mentioned. It is indeed a knotty and thorny issue. State aid on ports and the port services directive is a live issue. It is absolutely crucial that the UK Government stand up for British interests on the port services directive, and we are doing so actively. We are working hard to ensure—as the Government have done twice previously, at least once on the watch of the hon. Member for Poplar and Limehouse—that elements detrimental to UK interests are not included. He will appreciate that the part in question of the port services directive would bring some financial transparency to ports for the first time ever. It may well be of interest to see what sort of state aid is provided, not always correctly, to certain international ports. Therefore, while the UK Government are keen to ensure that we exclude everything, we will be considering carefully whether it is beneficial.
The point about state aid is a live one in the UK. It is directly due to the pressure brought by this Government and the Dutch Government, in collaboration with several other Governments, that an active discussion is now going on within the Commission about how state aid is applied, what it is doing and whether it is being used to distort international positions. The hon. Member for Poplar and Limehouse was right to bring the issue up. At one point, I was about to say to him that flattery would get him almost everywhere. It almost did in this debate. I am grateful for his remarks about some of my work, in terms of what a Minister can and should do in this area. He obviously recognises that.
I welcome the support of my hon. Friend the Member for Suffolk Coastal for the A14. I hope she heard me say a few minutes ago that there is no delay to the project. I congratulate her, and my hon. Friends the Members for Bury St Edmunds (Mr Ruffley) and for South Suffolk (Mr Yeo), who were instrumental in asking the Government to change their mind and reconsider the tolling. I praise her campaign and that of other Suffolk MPs; it was why the Government had another look at the proposals. She was right to highlight some of the issues that would have been caused for her constituents, and potentially for those using the road from the port, and the Government have been right to listen.
My hon. Friend also discussed the resilience of the Orwell bridge. I particularly remember the onion incident. I know that transport is a serious matter, but sometimes one is allowed to smile. That incident gave a lot of amusement to broadcasters up and down the country as they announced it. The Highways Agency’s route-based strategy study programme is considering all future needs of both the A14 and the A12 corridors, and it will consider the Orwell bridge. The programme is due to report in March 2015. I heard her forceful case for the electrification of Felixstowe. She is right to welcome the opening of the Ipswich chord next week; it will bring huge benefit to the freight network around Felixstowe.
I heard what my hon. Friend said about dualling and level crossing improvements. I know that Hutchison Whampoa has had discussions with Network Rail about that, which it is obviously free to do. I will talk a little more about developer contribution in a moment, but she will understand that it is not about asking ports to contribute directly to the infrastructure; it is about situations in which development is going on around the ports and the usual planning process applies, some of which involves section 106 agreements. I know that Hutchison has been discussing, and is free to discuss, section 106 agreements on partial dualling or level crossing, but the last time I was in Felixstowe—I think it was late last spring—I was pleased to see work going on to make new improvements to rail access and facilities.
Finally, the hon. Member for Blackpool South started by saying that what mattered was the quality of contributions to this debate, not the quantity. That has been absolutely true. His speech had a consensual start, and then he pointed out that the Select Committee had done some gentle chiding of the Government. That is absolutely right. It is the Select Committee’s role to hold the Government to account, and it is the Government’s role to respond to it and, we hope, to address its recommendations.
I would say gently that I listened to the hon. Gentleman’s points initially. For many years, there has been an infrastructure deficit in terms of connectivity to ports, which the Government are seeking to redress. That is key. The Government were already addressing some of the Select Committee’s remarks and recommendations. On my watch, we have established the high-level maritime forum for the industry, Ministers and senior officials. We have now developed a ports strategy and a shipping strategy, which have been published and shared with the Select Committee. We have had high-level consultations with the industry about sulphur. It is clear that the EU will proceed with the regulations. One thing this Government have secured is a look at the new regulations that will take effect from 2020 and involve an even bigger cost to the industry.
Working with the International Maritime Organisation, we have also secured a review of the 2020 proposals. It is clearly key that that review should happen next year rather than in 2018. Otherwise, the availability of fuel and the implementation of the new legislation will have a huge impact on British shipping.
Mr Marsden
I am grateful to the Minister for laying out the detailed programme of Government activity in the area. I asked a specific question about the position of Her Majesty’s Government when the original regulations were introduced. I would be grateful for a response on that. Also, as he said he was drawing to a close, I raised the issue of the future structure of ownership for the Dover harbour board. Can he enlighten us further as to whether any progress has been made on that?
Stephen Hammond
I am afraid I am about to disappoint everybody. Far from drawing to a close—
Stephen Hammond
“Finally” in terms of the point about sulphur. There is so much to tackle on this fascinating subject that I must disappoint hon. Members. I probably have at least another five minutes yet to go, and perhaps more.
The Government’s position has been clear. We have sought to challenge the regulations, but we are now ensuring that we work with the whole industry to mitigate the cost to industry. Therefore, I—or my officials, to be more precise—have held detailed negotiations, and I chaired a roundtable with the abatement technology manufacturers, colloquially known as scrubbers, and the industry to ensure some progress. Clearly, for some, the cost of retrofitting is prohibitive, and the cost is unwelcome to a number in the industry, but the key point is that the 2015 regulation will happen. We have tried several times to secure agreement at EU level. We proposed several mitigation measures, but were not supported by other EU members on that matter. However, we have global support at the IMO to hold an early review of the availability of fuel in 2020, which I am currently actively pursuing.
I want to make a few remarks about some of the other important issues that have come up. We need to continue to support a multi-modal approach to distribution from ports, recognising the congestion issue and the benefits that road and coastal shipping can bring. In practice, most ports, in particular the smaller ones, are still, as several hon. Members have said, heavily reliant on road connections. Hauliers need to be able to access ports efficiently and need journeys to and from inland destinations to be as reliable as reasonably possible. Infrastructure and its maintenance—working with local authorities on local roads, but local highways authorities on strategic roads—are clearly important.
Ports themselves have an important role to play in local road connectivity. Several ro-ro and container ports have introduced advanced lorry-booking systems and contingency arrangements to deal with disruption, which has led to huge improvements in the delays that road hauliers used to experience. The Department for Transport has been assessing the benefit of such procedures in time savings and reliability for HGVs. Such schemes continue to offer benefits and it is possible to get more.
Bottlenecks still exist on links to important ports, however. There is an ongoing task for the DFT and ports in our strategic partnership to facilitate the growth in trade and a strong recovery in the wider economy by ensuring that we continue to put the right road links in place. Good access to ports from the strategic road network will be considered through the Highways Agency’s programme of route-based strategies and the Department’s programme of feasibility studies. Six such studies are in place and aim to identify and fund solutions to major congestion on the strategic road network. The studies will report in time for this year’s autumn statement. Several studies have direct relevance to the accessibility of ports, in particular the A47 to Great Yarmouth and Lowestoft study, and the A27 to Portsmouth, Shoreham and Newhaven corridor study.
The Government have announced plans to create a local growth fund from 2015-16 onwards. It will be a pot of £2 billion a year until 2021 and all LEPs will have the opportunity to bid for that funding through their strategic economic plans, which are due to be submitted to the Government at the end of the month. As I have said, the DFT is actively involved in those bids, has been working with the Minister responsible for cities to examine the bids and has encouraged bids that recognise the importance of transport and, where relevant, access to ports. The fund will allow local areas to prioritise infrastructure schemes that they deem essential for their economic growth. It is now for LEPs to get involved to agree what schemes they want to bid for through their strategic economic plan. It is a competitive process, with the strongest bids likely to receive a big, rather than proportionate, slice of funding.
Developer contributions for major schemes were set out in DFT circular 02/2013, which explains how the Highways Agency engages with communities and developers. It is primarily about responding to development proposals that affect existing trunk roads and seeks to support environmentally responsible development while safeguarding the primary function and purpose of the strategic road network. Where ports promote development that will affect the trunk road network, the principles set out in the circular will apply, including how development impact will be assessed and under what circumstances mitigation will be sought to ensure that the strategic road network is able to accommodate existing and development-generated traffic. Exactly what the Government are expecting has been set out pretty clearly for developers. As part of the ports strategic partnership, we will be reviewing developer guidance this year to ensure that it covers all the relevant points. If further specific clarity is needed, I anticipate that the review will lead to an addendum to the circular.
On rail access to ports, the past seven years have seen some significant rail freight infrastructure investment. A further £200 million has been ring-fenced for the strategic freight network in the next control period from 2014 to 2019. That money is being spent on projects identified by the rail freight industry as key to its needs. A significant proportion has been given to gauge clearance, facilitating the transport of shipping containers by rail from ports to inland distribution hubs.
The Felixstowe to Nuneaton route has been much mentioned. Through a combination of transport innovation fund and strategic freight network funding, gauge clearance out of Felixstowe to all major routes will be complete by the end of this year. Other major developments include the Nuneaton north chord, which opened in 2012, and the Ipswich chord, which I was delighted to visit last week. The Ipswich chord is a fantastic piece of engineering, with the tightest acceptable curve on the UK rail network. It will reduce a significant bottleneck for freight, saving between 45 minutes and 75 minutes, and will bring benefits to passengers at Ipswich and to the south and north, because the freight that previously had to go into Ipswich could hold up passenger trains. It is an important part of the Felixstowe to Nuneaton route enhancement. My hon. Friend the Member for Suffolk Coastal will know that it is one of the Government’s top 40 investment projects, and Network Rail is looking at several additional enhancements that could be taken forward on this route over the next control period and will be seeking the rail freight industry’s views on how they should be prioritised. I recognise the case being made for the electrification of the line out of Felixstowe, but it is important that we get the freight network right first.
Much good work has been done out of Southampton, and I am happy to acknowledge that some of it happened under the previous Administration. Gauge enhancement work between Southampton and the west coast main line was completed with funding under this Government, ensuring electrification out of Southampton, which is part of the “electric spine”. As part of huge investment in Southampton port and rail infrastructure, Freightliner has put in six extra lines into Southampton.
Network Rail works closely with the rail freight industry to establish priority areas for the allocation of strategic freight network funding. We are beginning to see a huge amount of freight travelling by rail. Only five years ago, Tesco told me that it did not anticipate moving much of its freight by rail; now, some 40% of Tesco goods are moved by rail.
The Government have always supported the transfer of freight from road to rail, and the Department provides freight grants to encourage that modal shift to rail, or water, where the cost of the alternative mode is higher than road and where there are environmental benefits. Freight grant schemes, where they are in place, are reckoned to remove some 800,000 lorry journeys from Britain’s roads annually and save some 120,000 tonnes of CO2 through the modal shift. The waterborne freight grant is designed to encourage the start-up of new services. It recognises the higher start-up costs for coastal shipping through a higher initial grant rate, declining thereafter. The service has to be viable at the end of the grant.
I have already made some comments about state aid, but state aid clearance for both grant schemes ends on 31 March next year, and the Department is reviewing freight grants. We are looking at stakeholder suggestions for a scheme similar to the mode shift revenue support scheme—it provides grant funding to rail and inland waterways—which would be better for coastal shipping than the current format. State aid approval would need to be secured for the scheme, the potential of which we are actively studying.
Much has been made of several ports around the country. I commend the work of the Highways Agency with London Gateway on the improvements to the M25 and its junction 30, including the A13 and on to the junction with the A126. That scheme has been key to reducing congestion by the non-London Gateway traffic. It also allows for the ability to work with London Gateway to ensure that the port and the freight coming out of it will no longer be a congestion concern, as was anticipated. In due course, there will need to be an amendment to the London Gateway Port Harbour Empowerment Order 2008. The deed of variation is being sought, and that will facilitate the mitigation and the contribution from London Gateway. The Highways Agency and London Gateway together are making some substantial progress.
The hon. Member for Blackpool South challenged me about Dover. I have to commend the excellent work of the revitalised and changed Dover harbour board since January 2013, when I changed the chairmanship. George Jenkins has done excellent work with the board, which has had three new non-executive directors appointed to it through the independent process over the past year. There has been a revitalisation of relationships with port operators and a willingness to communicate with community groups, to ensure, following the decision not to proceed with the privatisation scheme, a resolution that is acceptable to the harbour board, with its aspirations, and the community of Dover, which has regeneration aspirations. Foremost in that campaign has been my hon. Friend the Member for Dover (Charlie Elphicke), who has been a formidable campaigner to ensure that community interests are recognised in the port. He has stood up for what he believes is right for the port. I am pleased that there has been significant negotiation between the harbour board and community interests, as well as with the Department for Transport. To use that favourite phrase, I am anticipating making an announcement in the near future.
We have had the opportunity to speak about various ports this afternoon, but I am in danger of making my longest ever speech in this Chamber—or indeed in the House of Commons. I therefore again thank the Committee for its work on the report and for securing today’s debate. The quality of Members’ contributions have shown that shipping and ports in their constituencies are vital not only to this country’s regional interests but to our national interests. I assure the House that the Government have never been more aware of that essential contribution. I intend to continue to ensure that we have a coherent approach throughout Government to such a vital national industry.