Cruise Market (Competition)

Debate between Caroline Nokes and David Miliband

Wednesday 4th July 2012 Westminster Hall

[Caroline Nokes]

I thank my hon. Friend for mentioning that. I was about to move on to that point.

Within one week of the Government’s making their announcement and prior to having even sought, let alone secured, European clearance under state aid rules, the port of Liverpool accepted its first turnaround cruise, which visited France, Guernsey and the Scilly Isles. A quick inspection of the cruises scheduled for the coming year reveals a number of cruises to the Canaries, a focus on the Baltic and various other destinations. Whatever else that was, it certainly was not playing by the rules of war so eloquently described by Thomas Carlyle; it was more like a massive two-fingered salute to the Government and to anyone’s idea of fair play.

[David Miliband (South Shields) (Lab)]

I cannot resist intervening in a debate that brackets South Shields and Venice in the same speech. I congratulate the hon. Lady on that. The addition of Trojan horses raises extraordinary prospects. I congratulate her on securing the debate.

Does the hon. Lady agree that the uncertainty of the current situation will blight a lot of the business development that is taking place around the country? The port that is of interest to me is the port of Tyne, which has a ferry terminal in North Shields and its headquarters in South Shields. It has doubled the number of cruise ships docking in the past year and there is concern that an elongated, uncertain process will damage the business investment planning that it is trying to do. Does the hon. Lady agree that we need some clarity from the Government to get the sequencing of decisions clear and right?

[Caroline Nokes]

The right hon. Gentleman is spot on. We want certainty and we want a level playing field for private investors, who might otherwise feel nervous and anxious about investing in a number of ports throughout the country. It is important that they have that certainty from the Government.

It is the Government’s responsibility to ensure that there is fair competition. The Minister will have heard that hon. Members wish to hear that state aid rules are not flouted and that original conditions and amended agreements are adhered to. As I said, within a week Liverpool had started turnaround calls without having made any effort to ensure that it had clearance to do so.

The European Commission is in contact with the United Kingdom authorities and has reminded them of their obligations to comply with EU rules. The Commission has written to the United Kingdom requesting information to assess the change in use of European regional development funding. Should the conditions of the original grant offer no longer be complied with, recovery of that grant may be necessary.

A letter dated 8 June 2012, from the head of the ERDF closure team at the Department for Communities and Local Government, states:

“DCLG recognises that the commencement of turnaround operations in advance of State Aid clearance from the Commission may result in financial penalties if the Commission concludes that there is unlawful State Aid.”

The most pertinent statement in the letter is that any penalties that are subsequently levied would fall upon Liverpool city council and will not be recovered from the Government.

As Andrew Carnegie once said:

“And while the law of competition may be sometimes hard for the individual, it is best for the race”.

Are any hon. Members suggesting that Liverpool would not survive if obliged to refund all the public moneys it has received? Not a bit of it. If the business model is good and if the figures stack up, the operators of the port of Liverpool should be prepared to do what every other port operator in the country has done and put their money where their mouth is. However, we are where we are. As free marketeers, we have to deal in the marketplace where we find ourselves—a marketplace that has become or has the potential to become distorted.

I call on the Minister to respond to three points. First, I should like him to justify the current inaction on the flouting of the conditions laid down for Liverpool with regard to the commencement of turnaround calls before state aid clearance was sought or received, and to use a suspension injunction to prevent further turnaround cruises until such time as the outstanding issues are resolved. Secondly, I should like him to support the calls by Members of the European Parliament throughout the country to the European Commission for Liverpool city council to repay the European regional development funding, and to work with his colleagues in the DCLG to ensure that that goal is achieved. Thirdly, I should like him to ensure that the apparent “anything goes” attitude to the use of taxpayers’ money is halted forthwith and that, in these difficult times, the private companies that we wish to see lead the economic recovery are not disadvantaged by unfair competition from a state-subsidised operation that appears to have no respect for the rules of competition that I mentioned at the start of the debate.