Access to Ports

Gordon Marsden Excerpts

Thursday 27th March 2014 Westminster Hall

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

It is a pleasure to follow the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw). My party affiliation in the report is spelled with a small “l”, but I was actually a member of the Transport Committee for at least part of the inquiry, so that is still unexplained.

I want to make a few brief comments on the Government’s response to some of the Select Committee’s recommendations. Point 1 of the response quotes the Select Committee as recommending that the

“DfT should act as an advocate for ports”.

I was somewhat disappointed by the response.

As I said in the previous debate, the road safety Minister, the hon. Member for Scarborough and Whitby (Mr Goodwill), is held in high regard; the shipping Minister, the hon. Member for Wimbledon (Stephen Hammond), is also held in high regard by the industry and those of us who take interest in such matters because of the work that he has done. He knows as well as I do the plethora of organisations involved in shipping—the UK Chamber of Shipping, the UK Major Ports Group, the British Ports Association, Hutchison Ports, Peel Ports, the London Gateway, the Port of London Authority, TfL, Maritime UK and others. The industry has really come together in the past five years to speak with one voice, which has given them much greater authority.

To the Minister’s credit, the Government have responded to that and created the joint Cabinet Committee; the Minister has been instrumental in ensuring that that Committee has been organised and that meetings are arranged. My disappointment is perhaps caused by the fact that the Government could have made a lot more of saying, “We are giving leadership.” Their response to the report does not say that they are doing anything. There is a little omission there; they missed a trick in terms of demonstrating just how committed to shipping they have been, and hopefully will continue to be.

I should say that I am in the middle of an Industry and Parliament Trust fellowship on logistics, and I would like to thank Associated British Ports for its assistance. I have visited Southampton, Immingham and other establishments in the course of my fellowship. It has been extremely useful for me to see what is happening on the ground.

I would like to make a couple more comments, if I may. I want to pick up on the points made by my hon. Friend the Chair of the Transport Committee and the hon. Member for Lancaster and Fleetwood about short-sea and coastal shipping. Point 6 of the Government response refers to the Select Committee’s disappointment that the waterborne freight grant has been so ineffective, and my hon. Friend asked what its successor is going to be. The Government response states:

“State Aid approval will be needed”—

blah, blah, blah—

“which limits the potential design of any scheme.”

Does that limit the UK’s ability to devise a new scheme? Or does it limit our ability to get the European Commission’s approval because of the 2015 re-start? Is it our responsibility or are we going to have to wait for the Commission?

The Minister knows that coastal shipping is a much-undervalued policy area. Look at the pressure on freight and our major road networks—how much more could be accomplished if we could use short-sea and coastal shipping to take heavy goods vehicles off our roads and transport their cargo by sea? That would be a win-win for everyone concerned, particularly shipping. It would perhaps not be as good for the road freight industry, but that already undertakes a large volume of business. As the Government keep telling us, the economy is picking up, so there should be more freight and more opportunity. Perhaps we should be looking at alternatives.

[Mrs Annette Brooke in the Chair]

I want to look at point 8 in the conclusion of the Government’s response, and return to the point I made at the start of my speech. Will the Minister spell out some more detail on the joint Committee on shipping, how much it has accomplished and what the Government are doing? Will he elaborate on the perennial conflict, raised in point 8, that we in Britain are not nationalistic enough when it comes to promoting our own industries and manufacturing? Look at what the French and German Governments do by way of investing in train companies and in manufacturing infrastructure.

British shipping and ports are proud of what they do. They look to the continent and see state subsidies and Government support, and ask, a little jealously, “Why are there two different rules?” Will the Minister therefore say a little more on the EU versus UK approach? The industry is of course worried about the prospect of a new EU directive, and I know that the Government are doing everything they can to protect our port interest in that respect. Perhaps the Minister would like to reinforce that sentiment.

It is nice to see you in the Chair, Mrs Brooke—I apologise for not noticing the personnel change earlier. My final point relates to what my hon. Friend the Chair of the Select Committee outlined in her speech. The significance and importance of shipping is all but invisible to the country, other than to those of us who are involved in one way or another. There is a great story to tell about a hugely successful British industry that directly or indirectly employs hundreds of thousands of people and makes a massive contribution to UK GDP.

Given how scarce Government business currently is in the House because of the lack of legislation—we have been criticised in the media for having extra holidays and so on—and the expectation that the legislative programme next year will be equally light, as the coalition partners divest themselves of such activity to reinforce their respective identities in the run-up to the general election, I suggest to the Minister that a debate on shipping in Government time, to promote shipping, ports, coastal shipping, maritime industry, the businesses, unions and personnel, would be supported by everyone. Such a debate would also be welcomed strongly by the industry.

[Mr Gordon Marsden (Blackpool South) (Lab)]

I am sorry to interrupt my hon. Friend, but he will be aware that last year there was the highly successful London shipping week, which was warmly praised by all sectors. Some of us hope that such events may go beyond London, with all due respect, but does he agree that that would be an admirable week in which to have such a debate?

[Jim Fitzpatrick]

My hon. Friend makes a good point. London shipping week was an animal created by the new unified voice of shipping, supported by the Government. It was a great showcase and very successful. I know that the plan is to ensure that next time it extends way beyond London to be celebrated in as many of our major ports as possible.

I strongly suggest to the Minister that the debate would be better timed if held in the autumn, six months ahead, so that it could be used as a springboard to promote next year’s UK shipping week. I am sure the Secretary of State for Transport, who I know is sometimes embarrassed by his attitude to aviation because of his aversion to flying, would have no such aversion to leading a shipping debate, and I know his hon. Friend, the shipping Minister, would do an excellent job of winding up such a debate. I am sure the Transport Committee would get behind such an initiative.

--- Later in debate ---

[Mr Gordon Marsden (Blackpool South) (Lab)]

It is a great pleasure to serve under your chairmanship, Mrs Brooke, and to take part in this debate today. Reference has been made to the number of Members present, but I am sure all colleagues here will believe that it is quality and not quantity that counts. The quality of all the contributions we have heard to date has been very good, and I hope my contribution will maintain that standard.

I give a substantial welcome to the Select Committee’s report on access to ports. It celebrates the importance and vigour of our ports, but it also has some sharp words about the Department for Transport’s lack of focus in certain areas. For example, in its summary it says:

“Government policy on who should pay for transport infrastructure relating to ports is…confused in practice and conceptually flawed.”

The report recognises the full economic value of our ports and the extent of their untapped potential for expansion, which are conceptual and strategic issues that we need to pay considerable attention to. It understands the role that Ministers can and should play in actively stimulating and supporting projects to expand ports, and then using those developments to drive within national strategy other policy goals, such as job creation and skills development—as well, of course, as the environmentally friendly movement of freight off our roads and on to the waters.

As my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) pointed out in her introduction to the debate, the Select Committee had earlier gently chided Ministers for the lack of activity on infrastructure. Having helped to get that ball moving, the Committee has now sent a second gentle salvo in the direction of Ministers.

My grandfather and my father both served in the merchant navy. Although I have not yet had a chance to delve into the service records that are now a feast for family genealogists, I know from what my father said in passing to me how familiar he was with some of the ports in the north-west, on both sides of the Irish sea and indeed off the west coast of Scotland. As a historian, I also know how crucial coastal traffic was to the economy of these isles right up until the industrial revolution. “Coals to Newcastle” has, of course, entered the language as a byword for superfluousness, but coals from Newcastle warmed the fires of Samuel Pepys and made the lords of the north-east in Tudor and Stuart times very rich. Of course, ports and the merchant navy also made vital contributions in both world wars, crucially in the battle of the Atlantic during world war two, when convoys carried precious cargo. That contribution should never be forgotten, and never will be. The Select Committee has done us a historical service as well as a contemporary one by reminding us of the great significance of the port sector.

In total, 95% of UK cargo is moved by water, which dwarves the contributions of other modes, such as road, rail and air. The sector employs 117,000 people. The excellent work commissioned by Maritime UK and carried out by Oxford Economics estimated that British ports contributed £7.9 billion to the economy in 2011 and £2 billion to the Exchequer. As with the aerospace industry, with which, as a north-west MP, I am of course familiar, it supports a significant supply chain. As Maritime UK has pointed out, it particularly supports industries that rely heavily on imported bulk raw materials and exporters of finished goods. When ports’ indirect effect is included, it is estimated that the sector supports 400,000 jobs.

All that makes the UK ports system a key element of industrial strategy. Yet there is demonstrable potential for ports to achieve even more. Planning permission has already been granted for projects that would allow the sector to more than double, but many of those works remain stalled because of the complexity of funding applications, and—this is a key theme of the debate this afternoon—lack of connectivity to the rest of the transport network. The cost to the economy if those projects were to remain uncompleted dictates that Ministers must rapidly raise their game and work hard to put ports on the agenda.

Hon. Members have given useful examples of and comments on their own circumstances. I particularly pay tribute to my near constituency neighbour, the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw), for highlighting the issue of smaller ports—a big issue, across the board—and for reminding us of the potential to keep them in good order, even when they are temporarily mothballed. The hon. Member for Suffolk Coastal (Dr Coffey) also talked about the great complexity of the situation in Felixstowe, and the importance of the area.

My hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) was my distinguished predecessor in my shadow role, but he was even more distinguished in government. He perfectly reasonably pointed out how the industry has come together over the past five years, for which it deserves praise. The Government should respond properly to the advocacy that my hon. Friend the Select Committee Chair said was needed.

Many existing ports, as we have heard, face operational difficulties that preclude their expansion. We have heard about the situation in Felixstowe, where the limitations of the local road network mean that only 3% of traffic heading north is freight traffic from the port. The hon. Member for Suffolk Coastal mentioned blockages and highway problems. We all have such issues, but doubtless her in-tray, whether digital or actual, has been full of such things since she was elected.

The family of my colleague Russell Whiting, the Labour prospective parliamentary candidate for Suffolk Coastal, have worked in the port for generations. He is in no doubt of its importance to the area and the wider economy. He successfully campaigned with other members of the community against the plan to impose a toll on the road, which my hon. Friend the Chair of the Select Committee and the hon. Member for Suffolk Coastal mentioned. The initial inclination of Department for Transport officials was to put the burden of funding the improvements on to local people, rather than to use Government funds.

It seems to me, and to Russell Whiting and members of the community—the hon. Member for Suffolk Coastal also referred to this—that Felixstowe really needs Ministers to prioritise expanding the single rail line currently shared with passenger trains. What discussions have Ministers had with local bodies about making that a priority in local transport schemes? If Ministers, with the local enterprise partnership and other local bodies, put their shoulders to the wheel, we could have a solution that would expand the port business and bring relief and happiness to communities and freight providers.

In general, we all, including Ministers, need to direct laser-like attention on the potential for rail connectivity to ports. The consortium Freight on Rail, which includes ASLEF, the Transport Salaried Staffs Association, Unite, the National Union of Rail, Maritime and Transport Workers, the Campaign for Better Transport and many others, made some key submissions to the Select Committee inquiry. It explained that, as well as the traditional bulk markets, rail has an expanding role in consumer rail freight in relation to ports:

“The industry predicts that rail freight overall will have doubled by 2030 with intermodal traffic”.

It added:

“Rail freight…has a much better environmental record than road…UK rail freight produces 70% less Carbon dioxide emissions than the equivalent road journey.”

So the issue affects not only roads but rail, and it is an issue in other places, as we have heard. The Select Committee identified a three-mile bottleneck that limits freight traffic in and out of the port of Liverpool, and referred to similar problems in Heysham. Heysham port also relies on a single route in and out, running through the historic city of Lancaster represented by the hon. Member for Lancaster and Fleetwood. That is not fit for use by heavy goods vehicles either. Everyone locally, not least my colleague Amina Lone, has been working alongside the chamber of commerce, local businesses, haulage companies and residents, to make a reality of the much needed Heysham to M6 link road.

The issue has existed for a long time, so I am glad that the road was approved earlier in the year, and that, in the words of the hon. Member for Lancaster and Fleetwood, the diggers are in. However, given concerns that it may not be completed by 2016 it is essential that there should be no further delays. The broader point is the need to expedite planning processes for ports and prevent years of economic growth from going to waste.

Despite the obstacles sometimes presented, as the Select Committee report illuminates, by lack of joined-up Government policy and limited connectivity, there are great examples of ports that continue to expand. In the coming weeks, DP World Southampton will open a new £100 million container-handling facility. That port is a great asset to the local economy and is considered the UK’s best performing terminal for turning around vessels. It contributes about £1 billion to the economy and supports almost 15,000 jobs. Associated British Ports is right to be proud that it will handle the largest and deepest vessels in the world—to a potential depth of 17 metres—and that our iconic Olympic sailor, Sir Ben Ainslie, will open the facility officially on Monday.

I pay tribute to my right hon. Friend the Member for Southampton, Itchen (Mr Denham) for the work that he did for ports nationally as a Minister, and for what he and my hon. Friend the Member for Southampton, Test (Dr Whitehead) did to ensure that Southampton’s port received the support it needed to expand. The previous Labour Government invested £40 million in the Southampton to east midlands rail line, and that investment has paid dividends. Ministers must now follow suit and ensure that other ports receive the backing that they need to compete internationally.

A super-port, London Gateway in Thurrock, has also opened in recent months. There again, that means 28,000 jobs in the region, and £2.4 billion to the economy. The developers, DP World, also privately funded works to the local road and motorway infrastructure, widening lanes and upgrading junctions and traffic lights.

The campaign conducted in Dover, involving among others my colleague the Labour candidate Clair Hawkins, demonstrates how important it is that local people should be genuinely involved in ports, instead of valuable local assets just being handed to unaccountable groups that purport to represent the community. There has been a campaign in Dover against further privatisation and for the inclusion of local workers, residents and businesses on the Dover harbour board.

The board has, of course, already established a strongly independent port and community forum, but many people believe that the port also needs changes to the law, so that it can raise the funds it needs. Has a decision been taken—and, if not, when will it be taken—about the future structure of the ownership of the port? I understand that local media reported that it was intended that that should happen earlier this year.

The Select Committee report found that although some ports, such as DP Gateway, could fund their expansion and expected to, others did not. The Government’s blunt response was that

“promoters whose developments would otherwise cause significant detriment to existing network users should be expected to avoid or mitigate such detriment, through traffic management and/or developer contributions to infrastructure improvement, as appropriate.”

That way of looking at the issue is telling, is it not? Is it not a curmudgeonly way of looking at it? Does it not demonstrate a certain mindset that would look at a port’s expansion in a negative light, regarding it as something that must be compensated for and potentially taxed, with no suggestion of what the Government might do to expand and benefit it?

The Department for Transport should act as an enabler, engage proactively with developers and work itself to identify benefits that could be brought to areas by the expansion of ports. That is particularly important, given the new local structures that we now have, based around the LEPs. More must be done to promote the value that ports bring to our economy.

Will the Minister comment on the Committee’s identifying a problem about whether there are enough private investments for port owners to invest? Are the Government correct when they say that ports are now in an excellent position to facilitate and promote growth?

As we heard from my hon. Friend the Member for Liverpool, Riverside, the Committee has asked the Government to be an advocate for ports. She was somewhat disappointed, as was my hon. Friend the Member for Poplar and Limehouse, that the Government’s response was to encourage ports simply to engage with their LEP. Will the Minister and his colleagues go further and investigate the number of LEPs with ports represented on their board and ask them directly to play their parts in forging links as well? Many LEPs recognise the importance of ports to their local economy, but some do not and those regions should not suffer as a result. Not only do ports provide jobs and support local businesses; they can also stimulate work to expand the local transport network and improve connectivity.

The Government said in their response that they would be happy to challenge those LEPs that do not sufficiently include port development in their plans, but I should like to hear—and other hon. Members would, too—about work that is already being done, specifically, to monitor that.

Ministers have cited the creation of a working group and help to develop a local debate on port master plans, but can we hear something about what concrete successes will emerge from those plans? The Government have said that they will develop new guidance on developer funding. Can they tell us how they are going to do that in practice and who will be consulted? Will the voices of local councillors, trade unions and maritime staff be heard? What is the time frame of the guidance?

Ministers said that the guidance will take account of recent changes to local structures, such as the establishment of the LEPs. It is true that £1.1 billion or £1.2 billion will be granted to the LEPs annually from 2016 to 2020. Of course, that money will be top-sliced from the DFT’s budget. There is no ring fence to ensure that that money will be used for transport projects.

The DFT is being forced to pay the piper—presumably, it found itself without a chair when the Chancellor’s music stopped—but why is it not calling the tune? With such an enormous amount of the Government’s budget being lost, surely Ministers should be taking more of an interest now in how they will be able to oversee the new fund, to make sure it maintains support for transport priorities, such as ports.

Only this week, the Minister’s colleague, the right hon. Member for Tunbridge Wells (Greg Clark), the Cabinet Office Minister, was expressing doubts about the quality of LEP plans, with fears that the fund is being misappropriated to fund vanity projects. [Interruption.] The Minister might wish to listen to this. He said:

“I am not in the business of funding so-called ‘iconic projects’ that have been hanging about like a bad smell for many years.”

LEPs need to be specific about what they need to deliver—be that more jobs, transport or support for skills. I ask the Minister to heed the words of his colleague and ensure that his own Department is far more proactive and vigorous, when it comes to ports, in establishing just what is being done on the ground with existing funding and the reach of the LEPs. Surely, substantial guidance for port developers navigating the LEP system must be a high priority for Ministers, given that more than £1 billion a year will be going into the single growth fund and on to the LEPs.

In the Transport Ministers’ response to the Committee, they promise to seek clearer guidance at European level on state aid laws. Although the UK Government seem to interpret those rules strictly, we have already heard that other European countries do not seem to do that and seem to provide money more freely. That was one of the subjects I discussed recently when I was in Brussels talking to officials from the European Commission. I am aware that this is a knotty, complex issue, but I would like to know, as my hon. Friend the Member for Poplar and Limehouse mentioned, what specific steps Ministers have taken to get answers about the issue from the European Commission.

Among all the discussion of port strategic partnership plans and national policy statements, surely the key imperative is a practical plan to work more closely across Government. It is not just a question of Ministers collaborating with colleagues in the Department for Communities and Local Government and the Department for Business, Innovation and Skills, to help ports engage with LEPs; their senior and middle-ranking officials need to, too. Together they must help ports access the funding streams they need and navigate the complex system of planning applications. With the structure of local support for ports changing fundamentally, a unified approach from Departments is more essential.

The coastal and international dimensions of freight provide a valuable service to the economy. The Committee’s report commented on the small take-up of the waterborne freight grant scheme, and my colleague the Committee Chair repeated that. Will the Minister provide the latest figures on take-up and whether these are genuinely new or existing routes that have been supported?

There are several dimensions when it comes to the value of moving freight from road to water. Emissions will be much lower, for example, because of the amount of freight that is shipped rather than delivered by road. However, the intention of the waterborne freight grant scheme could also be affected by the unintended consequences of the regulations on sulphur emissions, due to be imposed on the shipping industry at the start of next year. Several Members of Parliament, particularly those from the east coast, have already raised concern that the regulations will place too great a burden on the industry. Some groups in the industry are concerned that the regulations appear to be an unnecessary step at this stage, when the International Maritime Organisation had already established a reasonable target to be met in the next decade.

When in Brussels recently, I was told that a number of member states had actively supported the new regulations. What position did the British Government, its Transport Ministers and officials, take when the policy was being developed? The cost of complying with the maritime regulations may, as we have heard, leave road or air freight as more affordable options, making carrying the UK flag unaffordable.

The reference to the UK flag is important, as shipping and ports are a key unifying factor in the UK. The fact that Scotland contributes more than a quarter of total GDP and employment in the UK ports sector adds a powerful dimension to the debate taking place about independence.

In conclusion, we welcome the focus placed on the economic importance of ports as a result of the Select Committee’s report. We urge Ministers to heed its call for a more dynamic, active and intelligent Government who will act as a true advocate for ports. The development of skills must be put at the heart of initiatives developed, as the Committee’s report on shipping strategy, which has just appeared, emphasises in a different context. We need to see transport and the contribution of ports not in a separate box, but as part of an ambitious and integrated industrial partnership that will confer benefits—not just on local communities, but on the whole country—as ports spur international trade and sustainable economic growth.

The Government who fail to deliver connectivity and decent access to our ports will not be able to utilise the full potential of those ports to deliver skills, jobs and economic growth.

[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—

[Mr Marsden]

Sorry. You said “finally”.

[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.