Marine Navigation Aids Bill [HL]

Lord Prescott Excerpts

Friday 21st January 2011 Lords Chamber

[Lord Prescott]

My Lords, I start with an apology; I did not realise that the Bill of the noble Lord, Lord Berkeley, was before the House until I came in, switched on my television and heard him speaking. I declare an interest having spent 10 years as a merchant seaman and having been a Minister for merchant shipping in the previous Government.

Having heard the argument’s today, I should say that ship owners have always been concerned about cutting costs. But we are talking here about a very small part of their operating cost. Whether right or wrong, whether it should be paid by the taxpayer or the user, it has been subject to the user principle. As the Minister for shipping, I constantly had to deal with the problem that the noble Earl, Lord Caithness, raised, of how to deal with the Irish and how to get a proper agreement between us. I am pleased to hear that agreement apparently has been reached. The Bill proposed by the noble Lord, Lord Berkeley, is trying to bring greater efficiency and effectiveness into this operation and the payment of navigational aids. I am not too sure whether that is the right approach, but there is certainly a problem.

I want to address my remarks to whether the user cost, mentioned by the noble Baroness, Lady Scott, is a disincentive to British shipping. The facts are clear: more tonnage is coming into Britain by ship than ever before. We are roaring in trade. That is true not only in Britain but in most countries; it is the nature of the global economy. So I do not think that they have been put off by the cost in those circumstances. I have been concerned about the cost of the crews, however, to which the noble Lord, Lord MacKenzie, referred. Over the past few decades, the reduction of crews on ships has led to a reduction in navigational skills and the loss of ships. Crews have been reduced by more than 25 per cent. That is a real saving—there is no doubt about it. Most of our shipping was flagged out to what we call the flag-of-convenience countries, such as Liberia and Panama, which sold their flag. The ship owners, many of them British, were very happy to take advantage, because it was a reduction in costs. It was also a reduction in skills and navigational abilities. Having achieved that real advantage, they now talk about the costs of navigational aids.

I should point out to the noble Baroness, Lady Scott, that what happened to containers happened years ago. A decision was made on whether Britain was going to be the area for container centralisation and distribution to Europe. We lost it. The tidal advantages to Rotterdam and other places gave them an advantage. Therefore, there was a great deal of redistribution from Rotterdam and to the British ports. Nevertheless, the container trade has been considerable; there has been massive growth, even in the UK.

I shall return to the point about user tax. Is this a disincentive to the British industry? Does it wish to reduce its costs and have an advantage? Of course it does—I understand that—but should they be paid by the taxpayer or met in user payments? When I was Minister for shipping, I was faced with a decline, as the noble Earl, Lord Caithness, must know. The British navy as registered under the Red Ensign was 30 million tonnes in 1970; when I came in in 1997, it was down to 2 million tonnes, and it had flagged out to other countries. I introduced the tonnage tax, which was a user payment and a means by which the ship owner could have greater control over his costs and profits by paying a known tonnage tax rather than a profit tax, which might be changed by various Governments. By using the tonnage tax we had a transfer back to the British fleet, and from 2 million tonnes in 1997, we now have 17 million tonnes under the Red Ensign. I am delighted about that, although I do not think enough jobs came out of it.

[Baroness Garden of Frognal]

I remind the noble Lord that speakers in the gap should restrict their comments to four minutes and he is now in his fifth minute.

[Lord Prescott]

I bow to the noble Baroness’s knowledge, and I am sorry about that. I shall finish on this one point. User tax did not discourage the fleet—it actually encouraged it. So I am not convinced that the small amount of tax that we are talking about would be a disincentive to the British ship owner.

--- Later in debate ---

[Earl Attlee]

My Lords, I thank the noble Lord, Lord Berkeley, for once again bringing forward his Bill. As he has said, this is the second time that he has done so but he has initiated a very good debate. The noble Lord will know that it is normal practice for the Government not to support or oppose Private Members’ Bills and I do not propose to break with this convention. I do, however, hope to demonstrate that the need for the main thrust of his Bill has been overtaken by events, as many noble Lords pointed out. I am grateful for their contributions.

Since the noble Lord first introduced his Bill, the report by the Atkins consultancy, entitled Assessment of the Provision of Marine Aids to Navigation around the United Kingdom & Ireland, has been published. It is a particularly well researched and well received document, which has provided us with a blueprint on the governance of the general lighthouse authorities and the provision of marine aids to navigation around the UK and Ireland, without the need for immediate legislation to enable the implementation of its recommendations.

I recognise that many of the clauses in the noble Lord’s Bill are consistent with those contained in the previous Government’s draft Marine Navigation Aids Bill. I shall comment on some of those clauses. Clauses 1 to 5 provide for the creation of the commission and its regulator. As I stated in my speech in February 2010, I do not see the need for either. Indeed, the Atkins assessment did not see fit to recommend the creation of either of these two organisations which, if the noble Lord’s Bill were to progress, would effectively replace two existing bodies with two more.

I applaud the noble Lord for his versatility and ingenuity in attempting to achieve his aims, and note that he is seeking to achieve some of his goals by means of amendments to the Public Bodies Bill as well. However, I draw his attention to page 245 of the Atkins assessment, which concluded that there was “a weak case for” amalgamating the two UK-only lighthouse authorities into a single organisation such as the noble Lord’s Marine Navigation Aids Commission, because the estimated costs of doing so were likely to outweigh the potential benefits generated. Indeed, I addressed the matter of the illusory benefits of such a merger at last February’s Second Reading of his previous Bill.

Atkins did recommend the creation of a general lighthouse authority Joint Strategic Board, responsible for identifying synergies and driving through efficiencies. Last summer, with the Shipping Minister’s endorsement, such a Joint Strategic Board was set up at no cost to the General Lighthouse Fund. The board has since worked closely with the Department for Transport and the three GLAs to identify efficiency measures and drive down running costs—several noble Lords referred to that work. The Joint Strategic Board is still at an early stage of development but is achieving positive results. I believe that this continued, gradual evolution of integrated working, driven by the Joint Strategic Board, is far preferable to any of the radical, rapid and uncosted changes in marine aids to navigation provision that the noble Lord’s Bill would effect.

The General Lighthouse Authorities co-operate in the provision of marine aids to navigation around the UK and Ireland. Each authority carries out largely similar tasks; however, the regional skills and knowledge that each employs reflects a localism in the service delivered. The Commissioners of the Irish Lights have continued as an all-Ireland body since the establishment of the Republic of Ireland. However, the noble Lord, Lord Berkeley, is less concerned with the commissioners’ history than with their present funding. In his opening comments, the noble Lord mentioned that my honourable friend Mr Mike Penning, the Shipping Minister, has been in discussion with his Irish counterpart on the matter. It is to my honourable friend’s credit that he has reached an early understanding with the Irish Government on self-financing, which will nevertheless preserve the tri-GLA structure and the historic links of marine aids to navigation provision across both countries.

The stated goal of both the UK and Irish Governments is now that the Commissioners of the Irish Lights will become self-financing in their work in the Republic of Ireland by 2015-16, as relayed in my Written Ministerial Statement of 18 January. I hope that this understanding will go some way to reassuring the noble Lord that no undue financial burden will in future be borne by UK shipping, and that the continued cross-border co-operation of the UK and Ireland on this safety service is desirable and should therefore continue. The noble Lord, Lord Davies of Oldham, who touched on this point, called it a government subsidy to the Irish lights. It is of course not a government subsidy but a shipping industry subsidy, as many noble Lords mentioned. I am sure that was just a slip of the tongue by the noble Lord.

On Clause 7, the measure to clarify the extent of jurisdiction up to the outer limit of the pollution control zone will help to assist the providers of aids to navigation in operating an efficient safety regime in the seas around this country. That provision is therefore welcome. As I said last February, Clause 8 meets an important need, as the General Lighthouse Authorities are currently restricted in their ability to undertake commercial activities. For instance, those authorities may in some circumstances be unable to purchase the necessary tooling to carry out some evolutions that the industry might require.

The generation of income from commercial activities that maximises the utilisation of assets and resources is without doubt desirable and can only be of benefit to light-dues payers. It is inevitable that there has to be some spare capacity in a system that needs to be capable of rapid response to emergencies. However, it is important that the commercial activities of public sector bodies should not unduly impede the commercial activities and structure of the market.

Turning to Clause 9, the UK has many local marine aids to navigation in addition to those required for general navigation. The General Lighthouse Authorities seek to ensure local aids to navigation are established and maintained to internationally recognised standards through the discharge of their functions of superintendence and management, including their aids to navigation inspection regimes. Indeed, subject to the consent of the Secretary of State, the General Lighthouse Authorities may direct a local port or harbour to provide such aids to navigation as are appropriate. This alone is normally sufficient to ensure the appropriate provision of local aids to navigation, particularly when backed up by existing safety-related legislation.

On Clause 10, the noble Lord believes that as many users as possible of marine aids to navigation should pay for them, including the Royal Navy. However, I set out my position robustly in the debate on this Bill last year, and do not intend to do so again; my position has not changed on this matter.

On Clause 12, in the past, the General Lighthouse Authorities employed many more staff than they do now. The automation and de-manning of lighthouses and other technical advances have reduced staff levels substantially. Nevertheless, there remains a large number of former GLA employees who are now pensioners drawing their entitlement. This is not an unusual situation. Many other public bodies that have downsized due to efficiencies have exactly the same problem. The General Lighthouse Authorities’ pension liabilities are far from unique. As we are all aware, such legacies are not limited to the public sector, with many private organisations in a similar position. That said, as part of the Government’s wider public sector pension reform, we expect the General Lighthouse Authorities to review and modernise their pension arrangements, to keep them on a sustainable footing.

My noble friend Lord Caithness, in his well thought out contribution to the debate, dealt with the issue of GLA efficiencies far better than I could have done. I did not know that he was concerned about the approach of the noble Lord, Lord Berkeley. I am bound to say that I agree with everything that he said. He has certainly saved me much work.

My noble friend Lady Scott of Needham Market made a number of points in her excellent speech. She made her case very well, as usual, particularly when she queries our principle of light dues. However, in common with other transport modes in the UK, the Government believe that transport providers and not the general taxpayer should pay for the essential safety services needed for reliable operations. It would also be unfair for the Treasury to pay for the GLAs directly, as the majority of commercial shipping services calling at UK ports are owned by companies based outside the UK where beneficial tax regimes for those industries exist. Like any other form of revenue-raising activity, light dues remain unpopular with those asked to pay, regardless of how much they benefit. Many noble Lords have made that point.

The noble Lord, Lord MacKenzie of Culkein, also made an interesting and well delivered speech. Yet again, I find myself in strong agreement with the Benches opposite. I hope that this trend persists. The noble Lord talked about the vulnerability of GPS navigation systems. Last year, I attended the GPS jamming trials organised by Trinity House and my handheld GPS gave me some most peculiar results, telling me that I was somewhere in central Europe.

My noble friend Lord Newton of Braintree talked in the gap and touched upon the loss of trade to British ports. I have just explained the logic of the light dues policy. We were also joined by the noble Lord, Lord Prescott, and I was shocked to find myself in agreement with him as well.

[Lord Prescott]

It was a shock for me as well.

[Earl Attlee]

We had strong contributions from the noble and learned Lord, Lord Boyd of Duncansby, and the noble Lord, Lord Greenway. This is a great example of the House showing itself to be a source of expertise. I strongly agree with everything that both noble Lords said. On the query of the noble Lord, Lord Greenway, about the Wreck Removal Convention Bill, we of course support that piece of legislation.

I always enjoy listening to the noble Lord, Lord Davies of Oldham, and his contributions from the Front Bench. I am grateful for his whole approach to this matter.

When my noble friend Lady Garden intervened, she did so only to remind the House that it is customary to allow the mover of a Bill to lay out his stall without constant interruption. That is a much better way for the House to proceed.

I have already touched on the point of the noble Lord, Lord Davies of Oldham, about the Irish Lights.

I thank all noble Lords for their contributions. I have found them to be very helpful. I hope that I have gone some way to reassuring the noble Lord of the fitness for purpose of the General Lighthouse Authorities and the Department of Transport’s administration and governance of them in my comments today. I hope that the noble Lord will consider substantially scaling back should the Bill proceed into Committee. The noble Lord could also consider drafting a new Bill, as suggested by many noble Lords.