Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence


Examination of Witnesses (Questions 243 - 259)

WEDNESDAY 14 MARCH 2001

CAPTAIN DUNCAN GLASS AND MR KEITH CLARKE

Chairman

  243. Good afternoon gentlemen. May I ask you to identify yourselves for the record?
  (Captain Glass) Good afternoon. I am Duncan Glass.
  (Mr Clarke) I am Keith Clarke. I am Director of Finance for Trinity House.

  244. What is the role of major ports in the economy of the United Kingdom?
  (Captain Glass) Our involvement in ports is really focused on local aids to navigation and the interface between general navigation aids under our jurisdiction and those provided by local lighthouse authorities and the harbour authorities themselves. We do have the statutory duty of inspecting all the local aids to navigation in all ports and harbours, rivers and estuaries in England and Wales and during that inspection regime we do liaise closely with the port authorities on how they assess the risk and provide the aids.

  245. A very careful reply, Captain Glass, but of course it was not quite what I asked you. I do have a vague idea of what you do. What I was asking you for was your opinion of the role of major ports in the economy of the United Kingdom.
  (Captain Glass) A vital role with regard to the economy, I am sure. Our exports and imports are a great percentage of our trade and the economy in general.

  246. Would you think that they are facing particular major challenges?
  (Captain Glass) Efficiencies are always under terrific pressure. We are in very stiff competition with the European ports of similar nature.

  247. What opportunities do you think there are for our major ports?
  (Captain Glass) Improving efficiencies, building new and greater infrastructure, competing on a more level playing field with the Europeans.

  248. In what sense?
  (Captain Glass) Port facilities, deep draught ports, access for bigger and bigger ships, more efficient port operations.

  249. To what do you attribute the difference in physical provision between our major ports and those you regard as their competitors on the European mainland?
  (Captain Glass) There is not that much of a difference. It is keeping pace with the developments elsewhere.

  250. Have we kept pace with the developments elsewhere?
  (Captain Glass) Yes, I believe so.

  251. In all of our major ports or only some of our major ports?
  (Captain Glass) Most of our major ports.

Miss McIntosh

  252. May I ask a question I am sure I should know the answer to but I do not? Do the light dues which Trinity House collect go into the operational running of the port in total or do they go into the Exchequer?
  (Mr Clarke) No, the light dues are collected and are then remitted to a fund which is under the control of the Secretary of State. He acts as quasi trustee of that fund. Under the 1995 Merchant Shipping Act that fund can only be used for the provision of aids to navigation around our coast. In other words, it has no means by which it can get into the ports structure. It is purely for aids to navigation and is dispensed to the three lighthouse authorities for that purpose.

  253. How does this compare with the situation faced by ports in other European countries?
  (Mr Clarke) Some European countries, particularly France and I suppose Germany, two good examples, have no similar system whatsoever. They are totally funded from the Exchequer. Some other European ports have a mixture. Greece has a simplified light dues system. I am not particularly familiar with it, but it has one. Sweden has a similar type of system which I think is called fairway dues, which I believe is different to ours to the extent that it is based on how far you go up their estuaries. The Dutch have a system which is involved with their pilotage dues. It is wrapped up in their pilotage dues. Here again I am not sure how much is dispersed out to the light dues facility, but it certainly is wrapped up. I think Denmark is 80 per cent tax and 20 per cent light dues. There are other countries such as Canada, Australia and those sorts of places, which have a light dues system something along the lines of ours. I would say there is a lot of interest in our system throughout the world. In the last few months we have had enquiries from India and from Korea and about a year ago we had a delegation from China come to see how we did it because they were very interested.

  254. Are you convinced that aids, for want of a better word, given to European ports are as transparent as they might be?
  (Mr Clarke) They are not as transparent as they might be as far as we are concerned. Whether the Europeans would consider them transparent is probably a different question. Certainly it does cause a certain amount of confusion in many of the payers here.

  255. You might have heard my question to the last set of witnesses. What impact do you think the way that light dues are charged at the moment has on coastal shipping as it currently operates and possibly its future development?
  (Mr Clarke) It depends what you mean by coastal shipping. If you mean coasters which are going round the coast going to one port after the other, they pay light dues but it is maximised at seven voyages. Once they have paid the seven, they are exempt for the rest of the year. You might argue that is no different to the ferries which are coming back on a daily basis. They pay seven a year, so there is perhaps some slight imbalance with those sorts of vessels as compared with the very big container ships, for instance, which come in to Felixstowe or that sort of place, which may only come four or five times a year. That is a comparison which has to be made.

  256. Do you think that there would be some merit in having light dues and port charges brought together in a single charge, possibly to cover such issues as waste disposal?
  (Mr Clarke) It is probably a situation in which it would be difficult to put together a general levy such as the light dues which is consistent throughout the UK, and indeed Ireland because it is an intergovernmental agreement, and the port dues which are set by each of the ports on their own as a commercial undertaking. I see some conflict between the scope of each port to set its own dues and a regulatory charge. My guess is that it would probably cause them administrative difficulties to do that. They have always resisted it in the past.

Chairman

  257. Are light dues available to anybody? Can anyone check whether they are being charged the correct amount? Is that information in the public sector?
  (Mr Clarke) Yes and it has to be displayed at each collector's office under the Act.

  258. It is a completely different type of information and charge because it is a standardised charge.
  (Mr Clarke) Yes, there is a statutory instrument which produces all the rules and regulations. It is certainly in the public domain.

Miss McIntosh

  259. Are you at all concerned at the way light dues are currently charged and the potential effect on the competitiveness of the UK ports, particularly vis-a"-vis their European counterparts?
  (Mr Clarke) I personally do not have a major problem with this to the extent that I believe the user-pays system is right and proper and it does have some benefits as far as I am concerned. Particular benefits would be the fact that if the user is paying us, we have to be responsive to the user's requirements, more so than if it were Exchequer funded. On the converse of that it might be argued that as the user is also the payer he is probably more responsible in making requests for additional aids. As regards the competition angle, yes, it is an argument which is often put to us that it makes our ports—Felixstowe is a good example—uncompetitive with those across the Channel such as Rotterdam. I would suggest, however, that the actual light dues figure is a very minimal part of the total freight costs of a ship operation. I do not know the percentage but my guess is that it is probably pretty insignificant at the end of the day. Some of the major ship owners, however, do pay large amounts and they would argue against that.


 
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