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


Examination of Witnesses (Questions 300 - 319)

WEDNESDAY 14 MARCH 2001

MR MICHAEL EVERARD, CAPTAIN STEPHEN BLIGH, MR DAVID ASTBURY, MR JOHN A GOOD AND MR JONATHAN WILLIAMS

  300. Thank you. Mr Good?
  (Mr Good) No, I do not think so.

  301. How important are major ports to the economy of the United Kingdom?
  (Mr Everard) Absolutely vital. The UK is about the fifth or sixth largest trading country in the world and our goods mostly go in and out by sea. Our ports are absolutely vital to the future of the nation. Also the ports are vital in terms of safe navigation and making sure that things do not go wrong. Very important indeed.

  302. What are the biggest challenges and opportunities which are faced by the major ports?
  (Mr Everard) To make sure that they can reach the increasing cargo which is bound to come. World trade is increasing, hopefully the UK will have a good share of that and they have to make sure they meet those opportunities both economically and safely.

Miss McIntosh

  303. Do you have a view on the impact of the way that we charge light dues in this country on coastal short sea shipping? How in your view could we improve in the future adequate potential increases in coastal shipping?
  (Mr Everard) I must admit on coastal shipping I think light dues do not actually stop anything moving. We only pay seven times a year once a month and it is not an enormous amount. The people who really suffer from paying light dues are actually the large ships who pay an enormous amount. Basically light dues are a tax on trade and we are a trading nation and to put a tax on trade is not very clever. Any increases or decreases one way or another affect movements in one way. I cannot say that in themselves light dues on coastal shipping make too much difference to movements.

Chairman

  304. You have not given any percentages; just large, small ...
  (Mr Everard) I would say a couple of percent, two or three percent on port charges over a year, would be the cost of light dues for my sort of ship.
  (Captain Bligh) We presently operate a fleet of about 143 large ships operating worldwide, 20 of which come into UK ports. The burden for us of light dues paid during the last financial reporting year for light dues was £2.2 million.

  305. On what?
  (Captain Bligh) On light dues.

  306. Yes, I understand those were light dues but what proportion is that?
  (Captain Bligh) It is 110 calls into four major ports in the UK.

  307. Can you give us a percentage?
  (Captain Bligh) A percentage of ...?

  308. What effect is that in terms of your overheads for example?
  (Captain Bligh) I could not give you an accurate figure for the percentage.

  309. One hundred and ten.
  (Captain Bligh) One hundred and ten calls of ships in UK ports and we pay on average £20,000 a call and light dues charged April to April were £2.239 million.
  (Mr Good) The Institute do collect the light dues on behalf of Trinity House as their agent. Having said that, we do not argue with the user-pays policy as long as it is the same throughout Europe. On the basis of the amount paid by shipping lines, one shipping line has calculated that it is equivalent to about £10 per container handled every time they load or discharge a container.

  310. The Committee have a problem with this. Captain Bligh, what would be the total worth of the goods being carried? The amount of money you are talking about is very large and the Committee would naturally take a considerable interest. But in order to put that into some kind of perspective, we need to know what that represents, do we not, in terms of the total cargo?
  (Captain Bligh) First of all, we pay light dues on all the cargo we move through the United Kingdom and out, because it is a tonnage based tax, regardless of whether we actually discharge that cargo.

  311. Yes, I understand that but that is part of the business.
  (Captain Bligh) Yes, but the figure which has just been quoted, which was approximately £10 per container—we charge our freight rates on a container not on the actual load inside it—is an approximate figure of what it amounts to. Throughput of containers through the—

  312. What is the charge for each container?
  (Captain Bligh) There is no flat rate charged per container in the sense that different trades and different routes have vastly different container rates.

  313. So we cannot really say that this is an unfair percentage because we cannot tell, can we?
  (Mr Everard) I am not sure that we are actually saying necessarily what the percentage is. The fact is that callers in UK ports are paying £64 million a year in light dues which are not being paid in ports abroad and the lights are not on the whole being used by the merchant ships as much as they are by other people. Even if they are being used by other people, a lot of the ships which use lights are ships which never touch this country. You only have to look at the oil pollution caused, apart from the Sea Empress which was a port accident in Milford Haven, by the Torre Canyon, the Amoco Cadiz, the Brer, which were all ships passing the UK, which in theory would be using UK lights, but it still did not stop them having their problems, which were for different reasons. Passing traffic does not pay anything. It is a tax on ships using the UK, to the benefit of lots of other people, including yachtsmen as well as passing ships.

  314. Yes, but one could, if one were being awkward about it, argue that if the passing traffic were pushed further out that would be a simple way of dealing with it: they would not get the benefit of the lights but it would not in any way impinge upon their overheads.
  (Mr Everard) If you go up the Channel you have to go in a certain place. We are not arguing against lights at all. We are not saying the lights should be shut out. What we are saying is that we do not think we should have to pay the amount we are paying towards light dues. It is quite true that with the sort of ships which we are operating today you could in theory actually do without lights. We are not saying we do not want them, we are not suggesting that.

  315. It might not be altogether wise.
  (Mr Everard) What I am saying is that there are many other people who use lights who are paying absolutely nothing.

Miss McIntosh

  316. For the record, is it fair to say that for the most part we are fairly unique in this country in having a number of privately owned ports?
  (Mr Everard) We are unique. We would start off by saying that in this country, we are a bit different from, say, the European Community, if you compare with Rotterdam, say, we have a lot of private ports. Actually from the ship owners' point of view we would say they have done pretty well over the last 15 years. I have been going to Sweden for the last 30 years. I used to say when I went there that I wished our ports in the UK were as efficient as Sweden. Now things have totally turned round. We are far more efficient than they are and the big thing the ports have done is not only invested in cargo handling and other equipment, but it is so much easier to get a ship worked in the UK at any time of day, night or at weekends. I and not saying everything is rosy, because I am sure it is not, and I am sure that will come out later on. On the whole I would actually say that UK ports are efficient.

  317. We will not go into the reasons why because I might be called out of order. Are you convinced that state aids in other European ports are as transparent as they might be? Are you convinced that they are not a form of unfair competition?
  (Mr Everard) There is no doubt that they are a form of unfair competition and they are not transparent. We in the shipping industry do not mind subsidies to ports because they reduce our costs. We are not going to come out and say do not do it.

  318. You do not get any and you are not likely to get any.
  (Mr Everard) No, but the fact is that it does help to reduce port costs and hopefully the charges are less to us. What I would say is that I do not actually think that is a very good way for Government to use their resources. You mentioned coastal trading. I think it would be a much better target to use the money to persuade those cargoes which are currently going by road to come back to sea, not just by giving a general subsidy, which in many ways treats different people in different ways and does not always achieve what is wanted. I think targeting is a much better idea.

  319. I am obviously very familiar with Harwich, representing it for ten years in the European Parliament, and I am full of admiration for what they have done with the cruise ships and the ferry boats generally out of Harwich, but it is those last eight miles of road. You are not going to get people to use UK ports if you do not have the infrastructure to get the traffic, either goods or passenger, to the ports.
  (Mr Everard) The present Government has helped us with the 44-tonne lorries because that does help us move things. Also they have announced that they are going to extend the freight facilities grant. We are very grateful and we believe those are the sorts of things which will help us. Of course there has to be some investment in roads. You can argue whether roads fully pay their amount or not but the fact is that the Government's policy does seem to be to try to help to get cargo back to water, particularly with their new planning advice where they said water was something which must be taken into account to take cargo off the road.


 
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