Cruise Market (Competition)

Julian Lewis Excerpts

Wednesday 4th July 2012 Westminster Hall

[Caroline Nokes]

The hon. Lady is correct. I commend her on the extensive work that she has done on the subject. She hits the nail on the head: state aid and fairness are what matter.

[Dr Julian Lewis (New Forest East) (Con)]

Before my hon. Friend gets back into her stride, does she agree that good faith, as well as fairness, should come into account? It was revealed, as a result of a freedom of information request, that Liverpool city council resisted pressing for a turnaround facility at the outset

“due to advice that there could be state aid complications which could prevent the terminal being built at all.”

The key words are:

“Their approach was to build as a port of call facility and address turnaround later.”

It seems that it was using a Trojan horse tactic and acting in very bad faith.

[Caroline Nokes]

My hon. Friend makes an excellent point. It is partly about good faith and trusting that the port of Liverpool and Liverpool city council will abide by conditions and rules that are set for them.

By 2008, Liverpool city council had launched its first attempt to lift the conditions, and the conclusion, after a detailed assessment by the Department for Transport, was that the change of use to turnaround cruises would have an

“unfair and adverse effect on competition between Liverpool and other cruise ports. It would be unfair to allow one port to benefit when competitors have found, or would have to find, private money to achieve the same objective.”

And so to today. The Government have decided, “based on independent advice”—even though that advice is from First Economics, a consultancy that freely admits it is not expert in either competition or the cruise industry—that they will withdraw their objection to removing the funding condition and Liverpool being used for turnaround calls, provided Liverpool repays either £8.8 million upfront or £12.6 million over 15 years. None of the European regional development fund money would have to be paid back, but—this is crucial and goes back to the good faith argument—state aid clearance from the European Commission would have to be secured.

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[The Parliamentary Under-Secretary of State for Transport (Mike Penning)]

It is a pleasure to be here, Mrs Brooke. I should like to get some facts on the record, not only for my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes), but to give the Government’s side.

Like my hon. Friend, I am keen on competition, because I am a free marketeer as well. I am also keen, as a Minister, to consider in detail a request made by anybody anywhere in the United Kingdom. That is not what happened in 2008. The right hon. Member for South Shields (David Miliband) knows full well that when a request was submitted in 2008, it was dismissed quickly. I have not seen any legal advice instructing the Government that it would be illegal for them to look at the matter. Certainly, my legal advice, when Liverpool city council said that it would like to start turnaround, was not that I could not look at that. As a free marketeer, the Minister for the whole United Kingdom, and a Tory MP, here I am defending Liverpool. That is an interesting anomaly. Lord Heseltine would be proud of me.

It is clear that we were open and transparent all the way through; I will come back to how we achieved that. I met the operators of Southampton port—and Members from across the House—on more than one occasion to explain things exactly. In a democratic society that believes in a free market, any request should be looked at fairly by a Minister of the Crown. I looked at the request made by Liverpool city council, and I asked my officials what the procedures would be, what powers I had, and what powers were not in my hands. It was obvious that I had the power to look at the request, so we consulted widely, and got submissions from all parts of the House and across the country on what should happen. The key thing that I got back from the submissions was the point about fairness; that needs to be in whatever we do.

I looked at what I could do about the two separate payments made to Liverpool when it got the grants. First, I asked whether I or anyone in the UK had the power to ask for the regional development grant to be repaid. The answer was no; it is a Commission issue, for the Commission alone to deal with.

[Dr Julian Lewis]

rose—

[Mike Penning]

I will continue for the moment, because I am conscious of the time, and I want to cover many of the points made. If I have time at the end, I shall come back to my hon. Friend.

The issue is being looked at by the Commission, and it is for it to decide. What was in my power was the ability look at whether Liverpool had to pay back the full UK part of the grant, whether there was any depreciation because of the length of time, and whether interest would be added. My Department made an evaluation, and Liverpool asked to pay £5.3 million as a lump sum, which I rejected. The assumptions of my officials were that the amount should be about £8 million —we ended up with a figure of £8.8 million. To ensure that I was seen to be impartial, I asked for some independent advice on how much money should be repaid. My hon. Friend the Member for Romsey and Southampton North came up with the right amount, which was £8.8 million, or £12.6 million if phased. That is almost identical to the figures that the modelling came up with, after consideration of how other repayments were made.

I made that decision, and put it to Liverpool that it would have to pay those moneys back. As yet, Liverpool has not indicated how it will pay that—in stages, or in one lump sum. The assumption—that is all it is—is that it will be a one-stage payment. As yet, Liverpool has not indicated to the Department for Communities and Local Government how it will pay the money, or when it intends to do so. My officials have been in touch with DCLG officials, who have been in touch with the city council to push it on the need for a decision.

It is absolutely the case that state aid has not been cleared yet, but I do not have any power to stop Liverpool while we wait for the Commission to act. The key to the situation is that my officials and I as the Minister, independently and with no vested interests, have looked at what can be done. I believe that competition is good, and that competition around the country will drive up the excellent cruise market. I was at the European Cruise Council conference in Brussels only last week, and even after the terrible Costa Concordia disaster, the market has picked itself up and is moving forward again.

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[Mike Penning]

Will the hon. Lady bear with me for a second, because two other colleagues have tried to intervene as well? I have been given only 10 minutes to sum up the debate and, with so many people present, we could have done with a little longer.

The key for me is whether the effect on other ports and other incomes around the country will be dramatic. I have seen no evidence for that yet. At the European cruise conference, I spoke to the representative of a cruise operator that does not operate here at the moment, but will put 22 cruises in next year. I asked, “Would you be doing this at any other port in the UK?” The answer was no. I had to take that at face value. Will there be such a dramatic effect? I do not honestly think so. The Government have been genuine and honest about how much pain there should be, and Liverpool city council will have to step up to that and be as honest and open with us, and with its own electorate, as we were with it on what will have to be paid back and when. Also, should it have gone ahead without state aid approval? No, it should not have done.

[Dr Julian Lewis]

With regard to the European money, are the Government in a position to make representations to the European Commission on the matter? If the Government think that the Commission is unlikely to ask for the money back, does that not suggest that the Commission acted in a distorting and anti-competitive way when making the money available in the first place?

[Mike Penning]

My hon. Friend is leading me down a path that I am probably quite happy to be led down. I understand from my legal advice that the Commission has never asked for any such funding back in other, similar cases. Looking around Europe at subsidies, the Commission would probably rather not open such a Pandora’s box.

Port of Southampton

Julian Lewis Excerpts

Wednesday 18th January 2012 Westminster Hall

[Dr Julian Lewis (New Forest East) (Con)]

This is the first time I have had the pleasure of participating in a Westminster Hall debate under your chairmanship, Mr Gray. I congratulate you on that, just as I congratulate the right hon. Member for Southampton, Itchen (Mr Denham) on securing this important debate.

So far, we have seen an interesting division of labour. The right hon. Gentleman concentrated in great detail, as he had to do, on the process of the application. My hon. Friends the Members for Isle of Wight (Mr Turner) and for Gosport (Caroline Dinenage) concentrated to a considerable extent on the importance of the port of Southampton to the wider region. The hon. Member for Southampton, Test (Dr Whitehead) and my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) emphasised the magnitude of the task of accommodating container ships that can carry as many as 13,000 units and of transporting those units, when offloaded, to the hinterland within our country.

My role, therefore, towards the end of the debate is to try to show why this issue—or, not to overstate the case, this dispute—is different from other disputes that have taken place in the past and particularly the dispute over the plans that Associated British Ports had for many years, and has not entirely abandoned, to build a huge container port at Dibden bay in my constituency, on the opposite side of Southampton water to the existing container terminal. Hon. Members from that part of the country will be well aware that there was a six-year campaign to resist the Dibden bay port development, culminating in a year-long planning inquiry, which finally decided to recommend—the Government of the day, to their credit, accepted this—that that development should not go ahead.

There is a complete difference between the situation in which we were fighting against the Dibden bay development, and the obstructiveness that has confronted ABP over the current development, which entirely conforms to what we said at the time. That is that the container terminal in Southampton, run by ABP, had the potential to be expanded, to have its capacity increased and to grow as the size and volume of container traffic continues to grow.

At the time of the earlier dispute, ranged against ABP were not just the MP for New Forest East, which is entirely to be expected, given an MP’s responsibility to his constituents, but all sorts of national, environmentally concerned bodies: Natural England or whatever it was called at the time, the Royal Society for the Protection of Birds—you name it; they were against it. Where is that cacophony of objection to the development of berths 101 and 102? Is it being suggested that great harm will be done to the natural environment or the habitat? As my hon. Friend the Member for Romsey and Southampton North emphasised, the main concern is about migratory salmon. That is not to do with the development having a destructive effect: it is simply a question of timing the development so that the salmon can migrate in the normal way, and the piling and the preparation of the quay wall can go ahead.

There is nothing like the same level, quality, type or scale of objection on environmental grounds to what is proposed. On the contrary, the port is doing what the port, with the greatest respect—I say that to the right hon. Member for Southampton, Itchen—should have done at the time when the extremely destructive proposal to build at Dibden bay was originally made. The port proposes to take its existing footprint, to modernise it, to do a modest dredge and to enable the larger generation of ships to dock there safely and securely. That is precisely the way in which an important port should be able to increase its capacity—without doing any harm whatever to the natural environment and without causing much concern, if any, to the people who live in the area.

The difference is, therefore, fuelled not by environmental objections but by commercial ones. ABP could similarly be accused of applying double standards regarding its commercial objections to cruises being allowed to start and end at the cruise terminal in Liverpool. However, there is no real comparison, because the objections from the city of Southampton and ABP to the proposals for Liverpool—to their credit, Liverpool MPs have been present in force today to defend the interests of their city—have been based on the fact not that there would be competition between Liverpool and Southampton for the cruise liner trade, but that Liverpool received £20 million of public money to develop a cruise terminal as a port of call, not a port at which cruises should start and end. That money was given specifically on the condition that the cruise terminal would be restricted to that purpose, and within a year of the cruise terminal’s being finished, the request was being made to tear up the condition without repaying all the money. I will not dwell on that, because we know that the argument is about to be settled one way or another, although we do not know which way.

[Mr Watts]

Was there not a great deal of public investment in Southampton before denationalisation? The port has enjoyed a lot of public investment over many years, so is it not a bit ironic that Members are complaining about public investment when Southampton has had so much?

[Dr Lewis]

That is a neat argument, but it would have a little more force if the port of Liverpool were not owned privately by Peel Ports. One should not compare what happened to Southampton before it was privately owned with what is happening to Liverpool when it is privately owned. It was a nice try, however, and I give the hon. Gentleman full credit for it.

In the spirit of consensus we have in the debate, I must acknowledge—I think ABP acknowledges this as well—that Hutchison Ports has had a bad deal. More than one local Member has ably made the point that Hutchison Ports feels that it was treated unfairly in comparison with other ports, so it has been making a point of saying that if it does not get fair treatment, it will put a spanner in the works so that other people do not get fair treatment either. I had some friendly and helpful interactions with Hutchison Ports at the time of the Dibden bay dispute, and I say to the company that it has made its point effectively, but it would be carrying things too far to try to make it again.

Time is of the essence, not only in this debate but in terms of the need to make a decision. I conclude by saying that if the debate has focused Ministers’ attention—and, through Ministers, the attention of the Marine Management Organisation—on the need to conclude this over-long process as soon as possible, it will have achieved its objective.

[Dr Thérèse Coffey]

rose—

High-speed Rail

Julian Lewis Excerpts

Tuesday 10th January 2012 Commons Chamber

[Dr Julian Lewis (New Forest East) (Con)]

The previous Secretary of State for Transport is now running Defence, where we are implementing major cuts in each of the armed services. Does this Secretary of State understand why those of us who are concerned about other areas of Government wonder whether these priorities are not rather perverse in the present economic situation?

[Justine Greening]

I absolutely want to see the investment in our armed forces that we need for our country, but we also have to make sure that we look to the future for our transport system and the role that it plays in helping our economy to prosper, grow and create jobs. That is what today’s announcement is all about.

National Policy Statements

Julian Lewis Excerpts

Tuesday 29th November 2011 Commons Chamber

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

I beg to move,

That this House takes note of and approves the National Policy Statement for Ports, which was laid before this House on 24 October.

It falls to me to introduce the motion because the Under-Secretary of State for Transport, my hon. Friend the Member for Hemel Hempstead (Mike Penning), the Minister with responsibility for shipping, is this evening hosting a reception on the occasion of the 27th assembly of the International Maritime Organisation.

The national policy statement sets out national policy which must be considered in determining whether development consent should be granted to port infrastructure projects that are examined by the Infrastructure Planning Commission or, with effect from next April, when it is intended that the Infrastructure Planning Commission will be abolished, the major infrastructure planning unit in the Planning Inspectorate. It is also intended that the national policy statement will stand as a material consideration for port developments below the capacity thresholds that are set out in section 24 of the Planning Act 2008, which fall to be considered by the Marine Management Organisation. The national policy statement applies to ports in England and Wales, but not in Scotland or Northern Ireland, where ports policy is devolved.

Members will know that the previous Administration consulted on a proposal for the national policy statement on ports between November 2009 and February 2010. Alongside and beyond this consultation, Parliament also undertook scrutiny of the draft national policy statement. Scrutiny in this House was undertaken by the Select Committee on Transport, which held three oral hearings, took written evidence and in March 2010 published a report of its findings with 22 recommendations and conclusions, to which the Government have responded. I would like to take this opportunity to thank members of the previous Transport Committee, including the then and present Chairman, the hon. Member for Liverpool, Riverside (Mrs Ellman), for the important work that they undertook, the thoroughness with which they approached it, and their readiness to do that within a relatively short period.

This debate is taking place because the Government have agreed with the House to anticipate, as we did earlier this year for the suite of energy national policy statements, the relevant requirements of the Localism Act 2011, which will not come into effect until next year. I will speak briefly about the Government’s planning reform agenda; the purpose of national policy statements; and the background to the Government’s ports policy and the need for new infrastructure, which is central to the national policy statement.

On the planning reform agenda, the Government are committed to making the planning system as a whole work better. “Better” means faster, fairer and easier to understand for all involved, including applicants and objectors, while of course giving due regard to environmental considerations. It most emphatically does not mean denying people a right to be heard. My ministerial colleagues at the Department for Communities and Local Government are satisfied that the system of engagement and consultation set up by the Planning Act 2008 fully secures that right, so we have not sought to modify that. Engagement with local people and their representatives from an early stage is crucial if applications are to come to the Infrastructure Planning Commission or Planning Inspectorate with the project as well defined as it can be, and with proposals for avoiding, mitigating and/or compensating for adverse impacts.

[Dr Julian Lewis (New Forest East) (Con)]

Is the Minister aware that after a year-long planning inquiry, a proposal for a massive container port at Dibden bay on the edge of the New Forest was turned down? I understand that there would not be provision for any such inquiry in the future. Can he assure me and my constituents that a streamlined planning process for such a proposal would be no more likely to be carried than it was under the previous, rather more detailed opportunities for challenging it?

[Norman Baker]

I do not believe that the change in arrangements makes that more likely, but obviously every application is considered on its merits and according to the circumstances that apply at the time.

The Government have set demanding targets for the consideration of what could be complex cases, but applicants and their consultees must contribute by thinking well ahead and ensuring that applications are fit for purpose. The Department recommends that ports should start in this spirit by consulting on port master plans. These are neither statutory documents, nor part of the formal Planning Act regime, but nevertheless they could help enormously to promote local understanding of what a port is trying to achieve and how best to avoid or mitigate adverse impacts. Master plans are not confined to large ports. Newhaven in my constituency is an excellent example of a port engaging thoroughly with its community in that way.

--- Later in debate ---

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

The Select Committee on Transport published its report on the national policy statement on ports when the last Government were in office. We reported in March 2010—indeed, it was the first national policy statement to be reported on. The cross-party Transport Committee is not influenced by which party is in power. We reported at the time of the previous Government and we registered several serious concerns, and concluded that, unless proper consideration was given to our recommendations, the national policy statement was not fit for purpose. We therefore made a very clear statement then.

Considerable time has elapsed and several changes have been made. We are now looking at the revised national policy statement, so my comments will refer to some of our criticisms and also to some of the changes that have been made since we produced our report.

The key change since that time is the decision to abolish the Infrastructure Planning Commission. It was decided that, following consideration by the infrastructure planning unit and the Planning Inspectorate, the Secretary of State would make the decisions. It was also decided to abolish regional economic strategies and regional planning strategies. Some of our criticisms were of the planning process and the lack of clarity. The changes bring more clarity to the system whereby decisions are made. The background against which the planning statement is being assessed is therefore now rather different.

Time has resolved another major criticism that we made. We were extremely concerned that the policy statement was made before the Marine Management Organisation, which was to examine port development below the threshold for the infrastructure commission, had actually been set up. The Marine Management Organisation has now been set up and consulted, so that major criticism and concern has been addressed.

We expressed several concerns about environmental issues, and the Government’s response states that our concerns have been considered in a different part of the statement—in the documents appended to it. We register the Government’s response. We still have some concerns, but we accept that the Government have pointed out another way of addressing them.

We were very worried that the Government were not providing an update on ports’ traffic forecasts, which are extremely important. There was some dissension about the forecasting of ports traffic that was proposed as a basis for the ports statement. The Government’s response has not been to accept the precise form in which we wanted those forecasts to be updated, but it states that they will provide

“new forecasts in the near future”.

In a spirit of reasonableness, we accept that that concern has been addressed. We will wait and see how those new forecasts are provided.

Those major concerns have therefore been addressed, at least in part. The changes go some way towards dealing with some of the major concerns that we, as a Committee in the previous Parliament, had when we stated that we did not think that the statement was fit for purpose.

It is very important that the ports policy statement is correct. As hon. Members have pointed out this evening, ports are extremely important: 90% of the UK’s trade by tonnage and 512 million tonnes of freight go through our ports, and ports traffic contributes £17.9 billion to GDP, taken together with the employment that it generates. Indeed, the direct employment is at least 132,000 jobs, with many more indirect jobs. The ports sector is extremely important and that is why having the correct ports policy matters.

I want to deal with some concerns to which we have not received a satisfactory response. I think it is important to register them. One is the absence of a definitive ports policy, other than to say that the Government’s policy on ports is market-led. The Committee in the last Parliament felt that that was not good enough, because ports are such an important part of a thriving economy. Little progress has been made since in defining a ports policy. In fact, the ports policy such as it is was defined in an interim policy set out in 2007, and the Government have now said that that interim policy, together with additional statements that have been made, is their definitive ports policy. I suppose that we could look at it that way, but it does not meet in full the point of concern that the Committee has raised, and I hope that we can see further progress on that.

The Committee also raised the concern that the policy statement on ports seemed to concentrate almost wholly on container traffic. While that is the basis of the ports’ trade, we are concerned that other developments, such as offshore wind, were not considered properly. I am still unclear where such additional developments feature in the Government’s statement.

I reiterate the concern that the Committee raised about the absence of national policy statements on national networks at the time that the ports policy statement was put forward. I accept that some progress is being made. We are now being told that the national network statements will be laid in January. That is progress, but it would have been better if it had been done before we approve the ports policy statement. At least we have had some assurances that those statements are coming.

It is important that we know the Government’s plans for other transport networks apart from ports, partly because of the economic importance of ports, but also because their impact on the economy, including the regional economies, is affected a great deal by how goods are transported to and from those ports. It is therefore necessary to look at road, rail and inland networks, and at the issue of multi-modal transport, and how that can be encouraged. It is important that we know how that will be addressed, and I hope that the Minister can give us some more information on that basis.

We heard evidence during our inquiry from the northern ports that they felt that southern ports were very much at an advantage because of the extensive public investment in road and rail networks around them. The Committee in the previous Parliament felt that that was a very important issue, and this Parliament's Committee is of the same view. I noted the comments made by my right hon. Friend the Member for Southampton, Itchen (Mr Denham) this evening about the application from Liverpool for a turnaround cruise facility at the port. The application has been made because the possibility of such a facility, and the return of the cruise ships to Liverpool, is so very important to the regeneration of the city. I hope that when a decision is made on this issue—and there has had to be a consultation, as is proper—a reasoned approach will be taken, and recognition given to the fact that Southampton currently has 65% of the market for the turnaround facility, while Liverpool has only 5%.

[Dr Julian Lewis]

The hon. Lady of course has a constituency interest in this matter, and I represent a constituency close to Southampton. Does she appreciate that what is really worrying is that Liverpool received a great deal of both European and public money in order to build its port of call facility, and it gave undertakings that it would not use that facility as a turnaround point to start and end cruises? It now appears that it never had any intention of sticking to those undertakings, so if it were—bizarrely—to achieve retrospective permission to do what it promised not to do, surely it should have to pay back all the money and not just a quarter of it over a very long period, as is proposed.

[Mrs Ellman]

As a constituency MP I recognise the supreme importance of the turnaround facility to Liverpool. However, I also recognise that a reasoned judgment has to be made on the proper way in which to go ahead. The statements that the hon. Gentleman made about Liverpool’s intentions are not accurate, but this is not the place in which to pursue the detail of that. I hope that a reasonable decision is made. Liverpool City council has made an offer to deal with the very point that the hon. Gentleman has made, but that is for somebody else in another place to address. I simply ask for reason to be applied to resolve the issue.

--- Later in debate ---

[Dr Julian Lewis (New Forest East) (Con)]

I understand that, for reasons that are slightly beyond my ken, people seem to be very anxious to finish at 7 o’clock this evening rather than at the normal time of 10 o’clock. I suppose that that is something to do with the fact that we are beginning to sit rather earlier.

The issue of Dibden bay, which I referred to in an intervention, is the single most important constituency issue in New Forest East in the 14 years that I have represented it. As my hon. Friend the Member for Dover (Charlie Elphicke) said, it was a long time before the considerations on whether a giant container port should be built at Dibden bay produced decisive outcomes. We had a year-long public inquiry, as I said in an intervention, but we also had, as he said, several years leading up to that public inquiry. If the new procedure, first through the Infrastructure Planning Commission put forward by the previous Government and then under the replacement arrangements proposed by this Government, allowed for public consultation—

High Speed 2

Julian Lewis Excerpts

Thursday 13th October 2011 Commons Chamber

[Mr Godsiff]

I am all in favour of infrastructure investment, but I can think of a whole host of infrastructure investment on which £32 billion could be spent in my constituency, my hon. Friend’s constituency and many other constituencies. This project is not good value for money, and it has not been thought through.

[Dr Julian Lewis (New Forest East) (Con)]

Surely it is a zero-sum game, as was said earlier, because, at a time when we in constituencies that are not directly affected by this railway project are nevertheless having to fight, for example, to save hospitals from closure due to cuts, it seems sheer madness to look at this level of investment instead of at saving our services.

[Mr Godsiff]

I am delighted that I gave way to the hon. Gentleman, because I agree.

Putting aside my views on the subject, I shall share with the House the views of a Manchester-based businessman who came to London on Tuesday for a meeting of the Surface Engineering Association, an excellent organisation that looks after the interests of companies operating in that segment of manufacturing industry. I asked him how long it had taken to travel down to London that day, and he said “Two hours, eight minutes.” He asked why I wanted to know and I told him about the upcoming debate on High Speed 2. He responded that getting to London from Manchester 50 minutes quicker did not really bother him because he used train time to work on his computer and to make calls. He ventured the opinion that if the Government had that sort of money to spend, they should do something about the bottlenecks on the M6, as well as improving the transport infrastructure in many of our cities.

Those views are similar to the majority of those expressed to me by business people in my constituency. Not one business person has come to me and said, “Thirty minutes is going to make the difference between my company succeeding or not.” It is a fallacy to believe otherwise. However, over the years, plenty of constituents have come to me and said that there should be better public transport facilities within Birmingham—an underground system such as the one in London, a tram system such as those that operate in European cites, improved bus services, or new or reopened train lines and stations within and around the city. Those are the types of improvements that the people of Birmingham want, not a vastly expensive link between London and Birmingham.

People have expressed a great deal of concern about the damage that this will cause in the Chilterns and Warwickshire. The impression has been given that only people who live there are concerned about those areas. In fact, many people living in Birmingham travel to the countryside, especially elderly people in my constituency who have enjoyed the benefits of the free or concessionary fares introduced by the Labour Government. They enjoy the countryside; they are certainly not part of the “carpet the countryside with concrete” brigade, and neither am I.

We have had many vanity projects in this country that have been a disaster. I hope the Minister will think again about this project, because I believe that if she goes ahead, it will be a disaster.