Ports (Forth and Clyde)

Nusrat Ghani Excerpts

Tuesday 7th June 2022 Westminster Hall

[Ms Nusrat Ghani (in the Chair)]

I will call Kenny MacAskill to move the motion and I will then call the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates.

[Kenny MacAskill (East Lothian) (Alba)]

I beg to move,

That this House has considered regulation of ports and maximising economic and maritime potential on the Forth and the Clyde.

It is a pleasure to serve under your chairmanship, Ms Ghani. As post-Brexit chaos has all too vividly shown, ports are a vital part of a nation’s infrastructure. Scottish and UK exports have been hindered and harmed by Brexit itself, but also by blockage at key ports. Commercial harbours are fundamental for trade and the health of the economy. Indeed, the UK Government even sought to reopen a port as the crisis loomed and at significant cost—albeit failure. Meanwhile, Ireland has seen ferry and container services to the continent greatly increase, allowing for both outbound exports and inbound tourism. Scotland, though, remains devoid of even one direct ferry service to Europe. There have been past debates about that issue and the continued problem, so today I wish to focus my remarks on another aspect of maritime policy, one that equally constrains Scottish economic growth and the potential for Scottish tourism. It is related and inextricably linked, as ferries and ships ply their trade and take their goods to harbours. The issue is port ownership and regulation.

Ports were privatised in 1992, and that lies at the heart of the problem and remains a serious concern for Scotland today. Hence, although transport is largely devolved and much to do with ports and harbours rests within the domain of the Scottish Government, a debate in this Parliament remains hugely relevant and, indeed, vital. As well as being caused by the UK Government’s actions in privatisation, it also affects their current reserved powers, as it has created a monopoly situation, which I believe is harmful to local needs and to Scotland’s national interests. Trust in municipal ports still exists and they mostly perform well for their communities. I have many in my constituency and others, such as Aberdeen, can be even bigger. However, there are critical areas in Scotland where what should be municipal, indeed national, assets are instead owned and operated for private profit, and where the wants of other communities and even countries dominate.

Scotland has many estuaries, but industrialisation and population have ensured that the two most critical are the firths of Forth and Clyde. They teem with people and businesses, as well as being redolent of Scottish history. They are vital for access, not just to the east and west coasts of Britain but for trade beyond with Europe, America and the rest of the world. Who owns them and what effect does that have on our nation?

Let me start on the east coast. I was born in Leith, for long the principal port on the Forth, if not in Scotland, until trade moved west. Nowadays, I can see the river from my flat in Dunbar and therefore know the estuary well. Ask anyone in either of those communities or, indeed, anywhere on the banks on the river who owns Forth Ports and they will say perhaps the council or the Scottish Government or maybe even a wealthy Scottish industrialist. But no, they would be wrong and they would be gobsmacked to know that Forth Ports is owned by the Public Sector Pension Investment Board, a Canadian Crown corporation.

The fundamental duty of that organisation is to maximise revenue for the pensions of Canadian public sector workers, current or retired—a laudable aim that I do not criticise in the least, as they are no doubt pensions well earned through hard work and endeavour. However, the duty of the Canadian Public Sector Pension Investment Board is not to ensure the maximisation of the port asset for the local community, let alone ensure the growth of the Scottish economy. No wonder many residents in Leith and even some employees view it more as a property developer than as a port operator, or that Forth Ports sees the construction of a wharf allowing cruise liners to dock as being the responsibility of the Scottish Government, rather than its own, despite the name and ownership of the asset. That is how it is: it is not Canadian pensioners to blame but port policy, or the lack of it, in Scotland and the UK.

It gets worse. Not only is Forth Ports owned by the equivalent of an absentee landlord—Scotland knows how harmful they can be—it is worsened by other ports that Forth Ports plc owns and operates. Forth Ports becomes the equivalent of a branch factory and, once again, Scotland knows how harmful that position is.

Who is Forth Ports plc? For sure, it owns Grangemouth, which is Scotland’s principal container port, as well as the ports of Leith, Rosyth, Methil and Burntisland, the other major ports on the Forth. It also owns the port of Dundee on the Firth of Tay, the next firth or estuary up the coast. All fine and well, one might think, but it is what else it owns and operates, despite the name Forth Ports plc, which causes a conflict of interest. It also owns and operates the Port of Tilbury, which is part of the Port of London, situated on the River Thames, not the River Forth or any firth in Scotland.

We might ask, “So what?” But it is when we realise, not just where ownership lies, but where the major source of operation is sited that the problem appears. Tilbury carries more traffic than all the Scottish ports combined. Forth Ports corporate website last year indicated that 16 million tonnes of cargo went out of Tilbury, but only 9 million from Grangemouth, which is by far the largest Scottish port. Tilbury, as well as dominating in trade, dominates in passenger numbers. The cruise liner turnaround hub at Rosyth, mentioned on the corporate website, is dwarfed by the London international cruise terminal boasted of at Tilbury on the same corporate site.

In a nutshell, what does that mean? It means that what should be Scotland’s major east coast port area is owned for the benefit of pensioners across the Atlantic, and where the strategic focus of management is on the Thames not the Forth. The interests of the Forth in Scotland are swamped by those of a Canadian pension fund and a competitor estuary. That is the issue on Scotland’s east coast but what is it like on the west?

The west coast remains vital to Scotland, even if much focus has once again returned to the North sea and away from the Atlantic. It is rooted in the Scottish psyche and soul, from the tears of emigration, through ships that were built and sailed the world, to songs still loved and sung today. The Clyde remains Scotland’s largest urban concentration, still has a manufacturing base, provides world-class food and drink exports and possesses scenic sights that many round the world long to visit—the basis for a vibrant port, or even ports, one would think.

The major ports on the river Clyde—Glasgow, Greenock and Hunterston—as well as Ardrossan down the Ayrshire coast, are owned and operated by Clydeport, but since 2003, ownership of them has moved from the firth, as with the Forth. Ask a resident on the Clyde who owns the major harbours on the river, and a similar response of government, local or national, or a local worthy, will be forthcoming. But now the owners of the major harbours on the River Clyde are Peel Ports plc, part of Peel Properties, one of the largest property investment companies in the UK.

Peel Ports is based in Manchester and the majority shareholder is John Whittaker, a billionaire who lives on the Isle of Man. Again reflecting the situation on the east coast and the River Forth, the interests are not those of the local communities or even the nation’s economy. Instead, as well as owning other harbours, which I will come to shortly, it has an extensive property portfolio, including John Lennon airport in Liverpool and the Manchester Ship Canal. It also owns Cammell Laird shipyard and Tranmere oil terminal on the Mersey.

I have nothing against any of those operations and wish them well. I have no doubt they try to do the best for their workforce and customers, but their interests are not similar to the interests, and certainly not the needs, of the Clyde or Scotland. Moreover, the principal beneficiaries are not Clyde communities or the Scottish economy. Instead, it is for the benefit of a Manchester-based company and an Isle of Man billionaire.

Once again, as with the Forth, the situation of ownership is worsened by the operation of the ports by what in many instances should be competitor harbours. So much for the free market extolling and liberating competition. Peel Ports plc also owns the Mersey Docks and Harbour Company, which in turn operates the port of Liverpool. Indeed, it also owns Heysham, Great Yarmouth and London Medway, and described the last as its “flagship port”.

It is not just in praise from the principal owners where the Clyde loses out in trade. In terms of tonnage of trade, according to Department for Transport data for 2020, the Mersey dominates with 31 million tonnes in and out; Medway has 9 million tonnes, leaving the Clyde trailing in their wake at under 7 million tonnes. As with the Forth, ownership and operation of the Clyde have neither the local community nor the national interest at their heart or as their focus.

There are additional issues in the Clyde that worsen those conflicts of interest. While they could also arise on the Forth given the circumstances, they are certainly live on the Clyde. First, as a consequence of harbour ownership, Peel Ports is in charge of Inchgreen dock in Greenock. That dock is potentially critical to reviving shipbuilding on the Clyde and to securing the future of the last remaining yard on the lower Clyde, Ferguson Marine in Port Glasgow. There are other issues there with ownership and construction of ferries that I do not have time to go into: the wrong ferries ordered, incompetence by the procurement agency CMAL and rush and failure by the Scottish Government.

What remains clear is that Scottish island communities have a desperate need for new vessels, and Ferguson Marine is the yard to build them. When work is required and an industrial future sought, it is there, not Turkey, where orders should go. Moreover, the workforce has not just the history but the current skills to build them. In doing so, and given the needs of island communities, future expansion may well be needed. That is where Inchgreen dock comes in. Rather than ensuring it can be used for shipyard expansion, Peel Ports has sought to lease it as a breakers yard. The skilled jobs are fewer and the work less profitable.

In any event, the breakers yard has not opened yet. Would that have anything to do with Peel Ports plc also owning Cammell Laird shipyard on the Mersey, which competes with Ferguson for orders? It is not just Turkish ports competing for orders; Cammell Laird also wants orders that should be going to Ferguson Marine on the Clyde. It certainly does not look right. Where is the free market competition so extolled by this Government when the interests of a Clyde shipyard, as well as those of Clyde communities and the Scottish economy, are drowned by those of the Mersey?

Dredging is an additional issue following privatisation. Clydeport, as with Forth Ports, has become the statutory harbour authority, and is therefore responsible for dredging in the river. But on the Clyde there has been no recent dredging upstream beyond the BAE Systems site. Govan docks has recently been taken over, and the new owners have ambitious plans. How can they ensure that dredging takes place when it is carried out by a rival port owner, and one who may have no interest whatever in its success?

Ports are critical to our communities and our economy. Key harbours and estuaries are vital for trade, tourism and employment. Yet in Scotland, the two major firths have owners whose interests are not those of the local communities or, indeed, the nation, and whose operations actually conflict with the needs and wants of the Forth and the Clyde. There is no way that Canada would allow the port of Montreal to be owned by New York or that the USA would allow Los Angeles to be run by Vancouver. Neither Belfast nor Dublin would benefit by being run by the other. It is, perhaps, unsurprising that the island of Ireland’s two major ports are thriving—they are municipally or nationally owned and focus on their own national interests, not those of someone else.

This unhealthy monopoly is damaging Scottish interests. It should be broken up, with the Government seeking action from the Competition and Markets Authority to ensure Scotland’s interests are both protected and promoted. If not, compulsory purchase or the creation of new ports should be pursued by the Scottish Government. The Forth and the Clyde cannot be drowned by the interests of the Thames and the Mersey.

[The Parliamentary Under-Secretary of State for Scotland (Iain Stewart)]

It is a pleasure to serve under your chairmanship for, I believe, the first time, Ms Ghani—a very great honour. I congratulate the hon. Member for East Lothian (Kenny MacAskill) on securing the debate, although I take issue with the rather gloomy picture he paints of ports and the wider maritime sector in Scotland. I shall address why I take a different view in a moment.

Ports are the heartbeat of our global goods exports. We expect that global maritime trade volumes could treble by 2050 and we will be ready to play our part, including by reforming our ports regulations to ensure we support our ports to continue to grow and excel in a competitive global environment. The economic opportunities in the maritime sector are huge, including driving up exports and creating high-paying jobs across the country, with specific benefit to coastal communities.

The goal is for the UK to cement its already strong position and thrive as a world-leading maritime nation at the cutting edge of technology, innovation and maritime services, underpinned by effective, responsive and best-in-class regulation. Our policies on levelling up, building back better and our transition to net zero are crucial to gain the economic benefits for our ports and increase the prosperity of our country. Those policies provide successful examples of the engagement between the Government and the private sector. It is encouraging to see how successful Scottish businesses, ports and academic institutions have been in the recent clean maritime demonstration competition—a clear signal of Scotland’s drive and ambition to innovate.

I do not accept the hon. Gentleman’s assertion that there is somehow a conflict of interest in the owners of Forth and Clyde ports also owning other ports in the UK. One thing we are keen to see is the extension of—a very difficult phrase to say—short sea shipping. Do not say that in a hurry.

[Ms Nusrat Ghani (in the Chair)]

I would say to the Minister that, as the previous maritime Minister, all those words used to flow quite easily for me. He may continue.

[Iain Stewart]

I am very grateful for your sage advice, Ms Ghani. The transportation of goods around the UK shoreline will be an increasingly important part of transport connectivity in this country.

I would also point to the investments that are being made to increase our port capacity. The hon. Member for East Lothian may be aware that, as part of the Glasgow city deal programme, considerable investment will go into Greenock to upgrade the ocean liner facilities and make sure that the port remains a key destination for international and domestic cruises.

The hon. Gentleman touched on shipbuilding in Scotland, which is renowned for its rich shipbuilding heritage, spanning centuries. It remains the location of a significant proportion of the UK’s shipbuilding capacity. The refreshed national shipbuilding strategy, published in March, was an important milestone for the industry. Scotland will benefit from the Government’s shipbuilding spend—£4 billion across the UK over the next three years—and the renewed focus on this industry. The shipbuilding pipeline in the strategy provides industry with certainty and a clear setting out of the Government’s policy and procurement ambitions. Looking at the Royal Navy alone, in the short term for Scotland, the shipbuilding pipeline sees eight Type 26 frigates being built by BAE Systems on the Clyde, sustaining some 1,700 jobs, and five Type 31 frigates being built at Rosyth by Babcock, supporting around 1,250 jobs. There are of course many other opportunities for Scottish shipyards and suppliers, and this clarity on the Government’s future requirements should provide confidence for industry’s order books. It should also create enough volume to encourage industry to invest in facilities, infrastructure and innovation, which will bring ever-increasing rewards.

The refresh is wider than defence; it is about systems and subsystems, ports, offshore wind and more. By broadening the scope of the strategy, more companies across Scotland will benefit. The focus on improving skills should be welcomed, as this is an area where we all recognise the importance of getting it right. We fully support the ongoing engagement between Whitehall and the devolved Administrations on how to make a meaningful difference in the area, which will ensure that the initiatives already under way, including with local universities and apprenticeships, can thrive.

Alongside the refresh, the Maritime Capability Campaign Office, which unites the defence export and civil maritime capabilities in one unit, will help to build on Scotland’s export success in military ships and designs. It will champion exports and investments, unlocking opportunities for our world-class shipbuilding industry to export its innovative technologies, services and designs around the globe. The export variant classes of the Type 26 and Type 31 have already been successfully marketed and sold overseas, including to Australia, Canada, Indonesia and Poland.

The hon. Member for East Lothian tempted me to go down the path of commenting on the Ferguson Marine shipyard. I will resist the temptation to make political points, but it is one area where we might agree on the analysis of the situation.

Let me turn specifically to port regulation. The Government are currently consulting on the repeal of the EU port services regulation and associated statutory instruments. This retained law was designed and implemented with EU public sector ports in mind. It is the Government’s view that the provisions in the PSR are sufficiently covered in the UK by commercial practice within the framework of domestic law. Now that we have left the EU, we have the opportunity to review the regulation and to consider what is appropriate for the highly competitive UK ports sector, and I look forward to seeing the outcomes of that consultation this summer.

One area of UK-wide policy that I have not touched on yet, and which will be of enormous benefit in Scotland, is freeports. We are delighted to see the expansion of the freeport programme across the UK. In Scotland, we have seen the landmark agreement between the two Governments on the establishment of two green freeports, with up to £52 million of funding from the UK Government. I cannot go into any specifics at the moment, as there is a competitive process under way, but I am confident that the expansion of the UK freeport scheme in Scotland will bring great benefits, including regeneration of communities, the creation of high-quality jobs and support in the transition to a net zero economy.

In closing, I would like to reflect on the importance of ports to the heritage, economy and people of Scotland. From our historic industrial past to the thriving sector of today, ports have a leading role in the defence of the nation by developing world-class technology and innovation, and providing high-quality jobs. Now we look to the promise of tomorrow and the opportunities to be realised for our workers, for exports, for our communities and for our green future. I think we can all agree that our ports have been, and will continue to be, essential to the fabric of the nation and the success of the economy. The Government want to ensure that we maximise our capabilities across the sector through effective regulation, innovative practices and a focus on spreading economic benefits to all corners of the United Kingdom.

Question put and agreed to.