Cruise Market (Competition)

Mary Glindon Excerpts

Wednesday 4th July 2012 Westminster Hall

[Caroline Nokes]

Of course, the existing port strategy makes a very clear point about the need for fair competition and a level playing field.

When talking about ports that have invested their own money, I could mention Southampton again, but there are many other examples, such as the port of Tyne, where investment worth £100 million has been put in over the past 10 years, and Harwich, where there has been significant investment since 1998, when it joined the Hutchison Port Holdings Group. Throughout the country, as evidenced by hon. Members today, large private investment has been put into both freight and passenger-focused ports.

[Mrs Mary Glindon (North Tyneside) (Lab)]

Like my colleagues, I congratulate the hon. Member for Romsey and Southampton North on securing this important debate. Surely, fairness is an important consideration when talking about private investment. State aid clearance is crucial. We hope that the Minister will assure us that fairness will be the key in this matter.

[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.

--- Later in debate ---

[Mike Penning]

If the right hon. Gentleman could bear with me, I will give way in a moment.

Looking at the situation from my point of view, have we been open and completely honest about what we did and the process? I believe we have. Is Liverpool doing what I asked it to do? No, because it has not paid the money back and we do not yet have state aid clearance. Do I have the power to stop Liverpool? The answer is no. Would I really want to? If the European Commission declares the payment to be incorrectly done state aid—my legal advice is that it is not—Liverpool would have to pay the moneys back. Liverpool, however, has indicated that it will pay the money back. The words of the then leader of Liverpool city council, now the mayor, were, in effect: “We will pay back what you ask us to pay back.”

[Mrs Glindon]

Will the Minister give way?

[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.

--- Later in debate ---

[Mike Penning]

The right hon. Gentleman would be absolutely right if my legal advice was that I would be in breach, but my legal advice is that I will not be. He has had far more senior positions in government than me, so he knows that Ministers look at their legal advice and sometimes ignore it and sometimes accept it. In this case, I decided to accept the legal advice, as it came from those more qualified than me.

[Mrs Glindon]

I thank the Minister for giving way. In 2009, the Department for Transport specifically said that the port of Tyne would be adversely affected by the lifting of the restrictive conditions, and that remains the case, because as a port, we are in direct competition with Liverpool for some of the cruise destinations. Furthermore, if the Government do not enforce a suspension injunction, they could be failing to comply with their EU treaty obligations.

[Mike Penning]

I thank the hon. Lady for her intervention. I have visited the great port of Tyne, and there are great plans for it. I was not a Minister in the Department for Transport in 2009, so she will have to speak to her colleagues about not paying back the subsidy. The key is that there is a formula for how much should be paid back, because there is a discount for the period of time, and interest must be added. That formula produced the figure. The issue is difficult for hon. Members, especially those who represent other ports, and I would probably feel exactly the same if I represented a port. The issue is all about fairness and what is legal.

I have sought advice. Any former Minister in this Chamber knows that we would never have said how much must be paid back without obtaining legal advice on whether it would be in breach of anything. Based on the legal advice that I have received, we are not in breach, and that is why I gave Liverpool the option of paying back the £8-plus million, or £12 million over a period. That is what Liverpool must make up its mind about. It should have paid back earlier, and it should not have gone ahead as it did.

[Mrs Glindon]

rose—

[Mike Penning]

I need to come to my conclusion. It is useful that people understand that the process has been open. I have tried throughout to ensure that competition is fair. I know that some colleagues will not like the result, and that people in other ports think that there will be a huge adverse effect. As a Conservative, I passionately believe in competition, and that is what this is all about. If the legal advice is that under the formula £8.8 million should be paid back, subject to the Commission’s permission, that is only fair. If I had acted in any other way, I would have had a load of Liverpool MPs in this Chamber arguing the matter the other way around.

Instead of ignoring the situation, I looked at it carefully, and instead of dismissing it straight away, which is what happened in 2008, we considered whether we could increase capacity, create jobs and create more turnaround. That is what I hope we have done. This debate has been useful, but I do not think everyone will agree.