Memorandum by the Department of the Environment,
Transport and the Regions (P 28)
OPPORTUNITIES AND DEVELOPMENT PROSPECTS AT
The Government welcomes the Committee's decision
to conduct an inquiry following publication of the ports policy
paper, Modern PortsA UK Policy,
and its invitation to submit this Memorandum. This Memorandum
is to be read with the policy paper. Alongside Modern Ports, DETR
has prepared a detailed statistical survey of the industry Focus
as a companion document to the policy paper, and intended to assist
discussion of the policy.
2. Modern Ports is the first comprehensive
policy survey of the ports industry for a long time. Ports policy
is directed to the public interest which port operations serve
or affect. Firstly, they provide the principal route for the international
movement of goods. They are used similarly for domestic transport
of goods for example between the various British Isles. Ports
support the major offshore industries, oil production and fishing.
Any revival of coastal and inland waterway traffic will depend
3. Port customers moved over 388 million
tonnes of international freight through UK ports in 199995
per cent of the UK's international freight tonnage movements and
75 per cent by value. Another 177 million tonnes of domestic freight
moved through UK ports. 32 million international passengers used
UK ports in 1999. Another 38 million use them for domestic journeys,
including river crossings.
4. The Committee has not defined "major
ports" in its terms of reference. About 100 UK ports are
commercially active. Of these, 36 handle over two million tonnes
per year and these are treated as the "major ports"
in Focus on Ports. The four biggest estuary portsLondon,
Tees and Hartlepool, Grimsby and Immingham and Forthhandle
over 200 million tonnes between them. Focus on Ports provides
a lot more detail on the tonnage through major ports. There are,
of course, other measures of port sizesuch as the number
of vessel movements and number of passengers. There are few, if
any, reliable and comprehensive measures of economic activity
in UK ports, such as value added or employment.
5. Ports are economically important to local
and wider communities and, even those no longer used commercially
are assets for recreation and tourism. Even though mass employment
in docks is history, ports remain major direct and indirect sources
of work. Harbour authorities are important managers of activities
on the coast, including many protected habitats. They have responsibilities
for the safety of harbour users, and for the conservation of the
port environment, which might be adversely affected both by port
development and port operations.
6. Ports policy must be developed in the
context ofand with an understanding ofall these
considerations, and of the need of those the people and industries
which use their services, as well the ports industry itself. The
Government sees ports as an important component in an integrated
transport policy linked to other policiesfor the national
economy, regional prosperity, planning and sustainable development.
7. Government's relationship with the ports
industry has been confined largely to the endowment of duties
and powers. There has been a strong recent emphasis on deregulation
in the industry, aiming to stimulate it by exposure to market
forces. Modern Ports aims to take a broader approach to ports
policy. The Government consulted widely before Modern Ports was
drafted. It is clear that there is widespread interest in such
an approachwell beyond the industry itself, but that understanding
of the context for ports policy needs development. Modern Ports
does not offer all the answers from the outset but provides a
basis for further workand plenty of discussion, not only
with the ports industry, but with other related interests on how
ports policy is taken forward and applied.
8. Government does not decide the ports
industry's commercial strategy, or direct or fund its investment;
nor does it manage port operations. These are matters which Parliament
has entrusted to local statutory authorities, who fund their investment
and operations from levies on users. Bearing this in mind, the
three key aims in Modern Ports are to promote
UK and regional competitiveness;
high nationally agreed safety standards;
the best environmental practice.
These aims are directly linked to the Committee's
terms of reference.
9. The Government's integrated transport
White Paper, A New Deal for Transport,
published in July 1998, set four key aims for policy on ports:
promote UK and regional competitiveness
by encouraging reliable and efficient distribution to markets;
enhance environmental and operational
performance by encouraging the provision of access to markets
by different forms of transport;
make the best use of existing infrastructure
in preference to expansion, wherever practicable; and
promote best environmental standards
in port design and operation, including where new development
10. In July 2000, Government published Transport
2010: The 10 Year Plan,
which set out plans for substantially increased spending of £180
billion over the next 10 years to modernise the transport system.
It does not cover the role of shipping, which was set out in a
separate paper British ShippingCharting a New Course.
Nor does it look in detail at private investment in the ports
industry. The Plan does, however, flag up the importance of major
ports as transport hubs within their regions and the need for
their integration into the wider transport network. The Plan,
and actions in the shipping and ports papers will be taken forward
11. Modern Ports explains that responsibility
for ports policy is now shared between the Department of the Environment,
Transport and the Regions (DETR), the Scottish Executive, the
National Assembly for Wales and the Department for Regional Development
in Northern Ireland. Chapter 2.2
describes the different divisions between devolved and reserved
matters in relation to each Administration. Modern Ports shows
that the boundary with the devolved administrations is clear;
the consistency of policy is a good example of the co-operation
with them. While Modern Ports represents a UK policy, shared with
the devolved administrations, the Memorandum relates directly
to the Department's interests.
12. DETR is responsible for policy on, and
regulation of, the ports industry in England and (apart from some
small fishery harbours) in Wales. It is about to assume some responsibilities
for fishery harbours in England now undertaken by the Ministry
for Agriculture, Fisheries and Food (see para 3.2.11.).
13. The Committee has said that it wishes
to consider, in relation to major ports in England and Wales,
their hinterlands, including land transport links, and their sea
what contribution such ports make
to the economy of the United Kingdom;
what problems and opportunities currently
face such ports, particularly with respect to co-operation with
each other, safety, the environment, and regulation;
whether the proposals contained in
the Government's document Modern Ports: A UK Policy are adequate
to address the difficulties and opportunities faced by such ports;
what other policies should be pursued
to benefit such ports.
This Memorandum assumes that the Committee will
identify "major ports" in a way similar to Focus on
Ports (see above).
14. It is in the national interest that
our ports remain able to handle current UK trade and its potential
development efficiently and sustainably. They must succeed not
only to meet the immediate demands of their customers, but also
to invest in new facilities, in safety, and to safeguard communities
and the environment. This applies to ports of all sizes. Very
many ports are vital to their local economies; others are also
regionally and nationally important. The national economy depends
upon thriving regions and local economies. It is in the national
interest that ports should contribute to this at all levels.
15. The Government aims to promote UK and
regional competitiveness by encouraging reliable and efficient
distribution to markets. Sustainable transport policy seeks to
make the most of the existing transport infrastructure (including
ports) and to ensure that it works effectively. The performance
of transport hubs, including ports, is vital to promoting greater
use of inland freight and the use of rail for trunk haulage. It
is equally vital to efficient trading links with continental neighbours.
16. Focus on Ports shows (page 35) that
a small group of major ports has always dominated overall port
tonnage, but membership of this group has changed over time as
trading patterns have evolved and as specific commodities or types
of business have come to the fore. Oil and oil products now dominate
tonnage figures, and are handled predominantly by a handful of
specialist facilities. Among the major ports, Sullom Voe, Milford
Haven and Flotta are effectively oil ports.
17. Modern Ports describes (para 2.1.3)
how containers and ro-ro trailers have taken the place of loose
cargo shipments. This accounts for the emergence as major ports
of Felixstowe and Dover, with leading shares in the deep and short-sea
sectors, with the Humber, Southampton, Liverpool and Thamesport,
as others with substantial shares. Rapid growth in these sectors
is linked to the globalisation of trade.
18. UK container ports are well served by
direct deliveries from international container lines. Shipping
companies also use them for transhipping goods to or from other
countries. Over 30 per cent of containers handled at Felixstowe
are in transhipment. This in turn increases the range of markets
available to UK customers, bringing competitive benefits to our
industry and maintaining our attractiveness for inward investment.
19. Government's role in relation to port
development is primarily regulatory. The planning and financing
of port capacity is a matter for the operatorsultimately,
it is paid for by the users. There is therefore no Government
port development plan as there is, for example, for publicly-funded
roads projects. Port developments have also not so far had the
impacts of major road scheme, or of airport projects. However,
Modern Ports recognises a need to understand better the demands
for additional capacity in order to issue properly informed planning
decisions, Regional Planning Guidance and Regional Transport Strategies.
Modern Ports identifies various pieces of new work being undertaken
to this end (see paras 2.4.10 to 13.). The Department is also
associated with a research project at Imperial College on modelling
the decision-making process in UK container transport.
20. The major ports have responded successfully
to recent changes in the industry, developing facilities for which
there has been new demand. A proven strength of the ports industry
is that capacity is flexible. The efficiency and intensity of
facility use and ship turnaround times can substantially influence
the throughput possible with the same infrastructure.
21. The ports industry needs to be able
to meet demand. One consequence if it does not is that shipping
lines may divert primary services to overseas ports. This would
make it harder to meet some objectives of integrated transport
policy. More UK trade would arrive in or depart from this country
on road trailers although the pattern of port use might alter
to be closer to the inland origin or destination. There would
be a significant effect on the cost of UK trade, and thus on competitiveness,
as well as on the volume and pattern of road traffic.
22. Modern Ports does not identify the ports
where expansion should be authorised. It recognises that the pressure
for expansion is greatest at ports handling container and roll-on
roll-off traffic and that the main players in these sectors feel
it most. Future demand may require substantial new port development
in a relatively small number of cases. The public interest does
not relate only to that needwhere it is established. The
impacts of developing new capacity, and alternatives, have to
be fully considered and sustainable solutions identified.
23. Where there is a clear need, therefore,
the Government will support sustainable port projects, but each
case must be looked at in detail on its merits. The approach to
these assessments is outlined in para 49 below. This Memorandum
does not discuss particular cases. The Committee will be aware
that formal planning applications have been made in respect of
projects at Southampton (Dibden Bay) and Felixstowe. Others are
reported under development at Bathside Bay (Harwich), Shellhaven
(Thames) and Thamesport (Medway). It would not be appropriate
for the Department to comment on schemes that are subject to formal
planning procedures; or on the details of others not yet public
which would be subject to those procedures if they are to proceed.
24. Major ports are in general well served
by the trunk road network, although port traffic is affected by
general congestion and will benefit from the current programme
of multi-modal studies and other measures set out in the 10 Year
Plan. Overall the strategic roads network has capacity to absorb
expected growth in port traffic. Particular schemes will be evaluated
using the NATA project appraisal criteria being developed by the
25. The Government wants to see more freight
moved by rail. Modern Ports says that rail operators must rise
to the same challenges that face portsproviding efficient,
reliable services to increasingly demanding customers. Transport
2010: The 10 Year Plan envisages an 80 per cent increase in rail
freight, over the next decade, giving it 10 per cent of the domestic
freight market, provided that the rail freight companies deliver
performance improvements. Winning port traffic will be a key to
this target. Prioritising individual schemes will be a matter
for the Strategic Rail Authority, but the 10 Year Plan specifically
envisages gauge and capacity enhancements on freight routes to
major ports such as Felixstowe, as well as the elimination of
strategic bottlenecks on the rail network and better integration
with other modes through investment in new freight terminals.
26. Shipping is one of the most environmentally
sustainable means of transport. Although port expansion is not
always straightforward, shipping is subject to fewer capacity
constraints. Freight grant can help tip the balance in favour
of waterborne freight, and the Transport Act 2000 allows these
grants to be extended to coastal and short sea shipping, and the
Government will consult on the details of the scheme. Some larger
canals and river navigations still carry some freight and might
be able to carry more. They are particularly suited to low value,
bulk cargoes whose origins and destinations are directly accessible
by water. Most of the freight carried on what are classified as
inland waterways travels on the major tidal rivers. The Government
is sponsoring an inland waterways freight study group to examine
cost-effective and practical ways to increase freight transport
on inland waterways.
27. Modern Ports discusses the need for
regional and other plans to address the needs of port users. It
is important that these plans are properly informed both about
the demands, and the consequences of meeting them. Modern Ports
and Focus on Ports aim to help here. Having published them, the
Government intends to promote discussion, and welcomes the Committee's
involvement. It is also planned to have a series of regional events
hosted by each of the Government Offices with its Regional Development
Agency. The aim is to establish good contacts with officials responsible
for ports and regional policy. The aim is also to attract a wide
attendance, including (but not limited to) local authorities and
28. The Government recognises that clear
statements of national policy can help to streamline the planning
process for major infrastructure projects. In drawing up Regional
Transport Strategies and draft Regional Planning Guidance (RPGs),
Regional Planning Bodies will need to consider whether expansion
of ports within their region should be encouraged and supported.
The Government will consider Regional Planning Bodies' proposals
against its overall assessment of the national picture when drawing
up revised RPGs for consultation.
29. The Committee propose to consider what
problems and opportunities currently face such ports with respect
to co-operation with each other. The Committee will find, if it
makes international comparisons, that the UK ports industry is
uniquely diverse. Modern Ports notes (para 1.1.6.) that, unlike
some of our European partners, the UK has a long tradition of
allowing free access to our shipping trade to vessels from all
nations. We benefit in return from a major historic role in shipping
trade between other countries, and in the shipping business itself.
As a counterpart, access to our ports is also open, subject to
payment of reasonable port tariffs.
30. Figures given in Focus on Ports demonstrate
that overall tonnage handled has grown slowly in recent years.
It explains (see page 6) that, as economies become highly developed,
structural changes tend to mean that gross domestic product (GDP)
tends to grow faster than tonnes of output or tonnes of trade,
reflecting a shift from primary products to trade in higher value
commodities. This effect is also related to the shift to containerised
cargoes which have replaced loose and break-bulk cargoes handled
by traditional ports; so there has also been a shift of trade
to major gateway ports handling container and ro-ro services.
31. One result is that much of the traffic
won at one port is likely to be at the expense of another. UK
ports therefore compete keenly with each other, as well as with
nearby continental ports and with other modes. There is a long-standing
principle that customers may choose which UK port they usenot
the other way round. So ports must compete by offering long-term
value, and must be allowed to do sodomestically and internationallyon
level terms. The aim is to ensure that our ports remain able to
handle UK trade and its potential development efficiently and
sustainably. Ports must serve the needs of their users. It is
Government policy to ensure that those operating port facilities,
and those using them, should be allowed to compete on level terms.
32. There has been some concentration of
port ownership in recent years. This has followed the programme
of privatisation of trust ports. Control of primary container
capacity is now highly concentrated with common ownership of Felixstowe,
Harwich (including the planned Bathside Bay development) and Thamesport.
The Government is not actively promoting further joint operations
between the major ports. The Competition Act 1998 requires the
Government to ensure that those who run ports, or provide services
in them, do not abuse any dominant position.
PROPOSED EC PORT
33. The European Commission are preparing
a draft Port Services Directive which may be published during
the Committee's work. Officials have kept in touch with the Commission's
thinking. Once proposals are public an Explanatory Memorandum
will be prepared for parliament in the usual way. The Government
will also consult widely, aiming to take account of the full range
of views on their possible impact, including port and terminal
operators, port service providers, port users and customers, trade
unions and other interests. There will also be opportunities for
discussions with other member states. A number of important issues
will need to be addressed and a balance may need to be sought
between varying responses. Modern Ports (in chapter 2.3) summarises
a general policy to support the broad principles of liberalisation
and competition in the provision of port services, subject to
appropriate safeguards and standards.
34. Ports policy emphasises the accountability
of harbour authorities entrusted with statutory powers, whatever
their particular constitution. There are still major ports in
the trust sector (London, Milford Haven and Dover). The Government
stopped the compulsory privatisation of Tyne in 1997 but it recognised
the need to modernise corporate governance in the trust port sector.
The trust ports have agreed national standards, published in January
2000 as Modernising Trust PortsA Guide to Good Governance.
This is now being implemented.
35. Commercial municipal ports compete with
private and trust ports. The largest municipal port in England
is Portsmouth. The Local Government Act 1999 in England and Wales
requires local authorities to carry out Best Value reviews of
all their functions over a five year period. A Best Value review
must look at all municipal port facilities. Modern Ports says
(para 3.1.13.) that the Government will review existing management
structures and practices to make sure that municipal ports are
playing a full and accountable part in the local and regional
economy. The Government will review how the form of management
for municipal ports compares with the standards being set for
36. Modern Ports says (para 3.1.20.) that
the Government will help trust and municipal ports to realise
their full potential. This may require significant changes to
their structure and status. Where the proposals involve new powers,
they will be considered on merit. Where a port's managers identify
sound commercial opportunities, they will be helped to introduce
public-private partnerships to develop the port. This may, for
example, take the form of concessions or long leases covering
all or part of the port's assets.
37. The Government attaches considerable
importance to the promotion of high, nationally agreed safety
standards in the ports industry, and to associated training. It
works closely with the Ports Safety Organisation (PSO) and British
Ports Industry Training (BPIT). BPIT, as a national training organisation
(NTO) also receives significant Government funding related to
the development of national occupational standards. PSO and BPIT
were formerly part of the British Ports Federation (BPF). There
is no longer a single trade association representing the ports
industry: PSO and BPIT have operated as free-standing entities
since BPF broke up.
38. All major ports subscribe to PSO, but
not all contribute to BPIT or support its role. The Government
aims to promote a greater awareness of, and commitment to, the
importance of raising safety standards and training in the industry
on the part of senior port management. Higher profile support
is needed to the national industry bodies concerned with safety
39. The Health & Safety Executive (HSE)
are making a separate submission to the Committee. The Government
and the Health and Safety Commission (HSC) have recently published
the Revitalising Health and Safety Strategy Statement.
Modern Ports describes the linkages to ports policy (chapter 4.1).
Work in docks is dangerous and the high accident rate is a concern.
The underlying causes are considered to be not only the inherent
danger of the work but inadequate management control, training
and risk assessments, compounded by the commercial pressures on
docks to load and unload ships quickly.
40. The Government has promoted a new approach
to safety management in port waters. Following the Sea Empress
grounding in Milford Haven in 1996, and the report on it from
the Marine Accident Investigation Branch (MAIB)
in July 1997, the Government developed a Port Marine Safety Code
with all sides of the industry. There has been welcome co-operation
and strong support for the Code from all round the industry. The
code is a national standard and a guide to best practice. It applies
the well-established principles of risk assessment and safety
management systems to port marine operations. It also offers a
framework for harbour authorities preparing policies and plans
in consultation with local users and other interest.
41. The Government believes that training
is a route to raising workplace safety standards throughout industry.
NTOs use Government funding to develop national occupational standards
within a national framework. Their primary aim is to develop job
competence. Many working in ports have no formal recognition of
their competence. There is also an imminent shortage of qualified
people for port positions that need marine skills. Modern Ports
links this issue (para 4.3.8.) with the Government's aim to promote
maritime careers. Ports, as major employers of former seafarers,
have a stronger interest in this then they have so far recognised.
It is not enough for ports to establish adequate internal training
arrangements: major ports especially must be encouraged to recognise
obligations to the industry as a whole, and the wider maritime
community, in relation to training and the development of incentives
such as formal qualifications.
42. The recently increased use of non-permanent
employees for dock work has revived concerns about adequacy of
training. PSO and the industry's trade associations are introducing
a national scheme with the support of the unions under which non-permanent
employees on dock work should carry proof of their identity, qualifications
and/or training. This is in effect, a health and safety "passport"
scheme. The scheme will only cover safety induction training and
is not a replacement for full-scale training and qualifications
throughout the ports industry. HSE supports this initiative but
would like to see it expanded so that it applies to all those
employed in dock work and their qualifications.
43. The Port Marine Safety Code project
includes the development and application of national occupational
standards for port marine professionals. MAIB's report on the
Sea Empress proposed national standards of pilot training and
examination. The Government has accepted and extended this recommendation
to other professionals such as harbour masters. Accredited national
qualifications for port marine professionals are a way of recognising
their special skills. In time, they could underpin harbour authorities'
recruitment, authorisation and pilotage exemption standards. The
Port Marine Safety Code includes requirements to use the national
occupational standards in this way.
44. A New Deal for Transport made it an
aim of ports policy to promote best environmental standards in
port design and operation, including where new development is
justified. Port development and port operations can affect both
the natural and historic environment, as well as other users and
local communities. Modern Ports explains (para 2.5.12.) that Parliament
has placed duties on harbour authorities to consider this in carrying
out their workwhether managing and maintaining a harbour,
or planning a new development. There are also specific duties
relating to sites designated for their international importance
under the EC Wild Birds and Habitats Directives.
45. Some ports have been created to take
advantage of deep water reaching far inland. These deep water
estuarial environments are often still of high importance to wildlife,
showing that port operations need not be incompatible with nature
conservation. The ports where there is most pressure on capacity,
and where there is demand for expansion, each have internationally
protected wildlife habitats in their area. The Government is committed
to safeguarding the integrity of these sites: sustainable development
policy aims to strike a balance without prejudice to the environment.
Para 2.4.13. of Modern Ports anticipates a framework for the appraisal
of cases (see also para 49 below) and para 2.4.19. describes
the special tests that will apply to any port development proposals
affecting designated sites. Sometimesas in the recent channel
deepening for Felixstowe, it will be agreed that an overriding
public interest may allow a development which will have an adverse
effect on nationally or internationally designated sites. The
Felixstowe project included sophisticated measures to compensate
for potential adverse effects, and there are other examples.
46. Harbour authorities are very experienced
in managing coastal activities and are primary regulators of some
uses of coastal waters. There is a wide variety of other interests
and a range of regulators in the coastal zone, including harbour
authorities. An integrated approach to estuary and coastal management
brings regulators together. Many harbour authorities are committed
to these partnerships. Harbour authorities can seek additional
environmental duties and powers, including powers to make environmental
47. The ports industry feels that new environmental
regulation, which has to be applied in often complex circumstances
where the science is under-developed, has become a burden, impeding
both port development and operations. It is accepted that regulatory
impact assessments need to be followed by the development of clear
practical guidance and standards. Para 2.5.29 describes some work
already undertaken here, and Modern Ports promises more.
48. Modern Ports explains (Chapter 3.2)
that Government regulates port operations in many ways. Ports
policy aims to maintain a modern and efficient system of regulation,
developed in consultation with all whom it affects. Government
must ensure that procedures for revising statutory powers work
efficiently so that they do not become a barrier to necessary
change and improvement.
49. The Government will work with all those
with interests in the industry to provide guidance on regulation
generally and to spread good practice and has assigned resource
specifically to making significant progress. In particular, Modern
Ports proposes (para 2.4.13.) to apply the concept of project
appraisal criteria developed for trunk roads (see para 24 above)
to provide a framework for the presentation for approval of port
development proposals. The success of this better-regulation exercise
will depend upon a contribution from the industry, identifying
not only the difficulties but the successful practice too.
50. Modern Ports notes (para 3.2.10.) that
port operators deal with a wide range of Government departments.
It promises that Government departments dealing with ports will
co-ordinate their activities and that the scope for streamlining
will be examined. This will be addressed as an important element
of work on better regulation to which the Government is committed.
51. The Committee proposes to consider whether
the proposals contained in Modern Ports: A UK Policy are adequate
to address the difficulties and opportunities faced by ports;
and what other policies should be pursued to benefit them.
52. Modern Ports comprises a comprehensive
package of measures to achieve the aims identified in the paper.
The Committee will note that many of the specific initiatives
listed in Annex 1 to Modern Ports relate to aspects of ports policy
where Government has not been active. Many are already in progress.
The Department expects to make an early start on all the others.
Some already have objectives for implementationfor example
the trust ports review and the Port Marine Safety Code. It is
proposed to undertake a general review, with the devolved administrations,
about three years after publication.
22 Published by DETR (November 2000) ISBN 1 85112
444 6. Back
Published by The Stationery Office (November 2000) ISBN 0 11
552216 6. Back
Cm 3950 published by DETR (July 1998) ISBN 0 10 139502 7. Back
Published by DETR (July 2000) ISBN 1 85112 413 6. Back
Published by DETR (December 1998) ISBN 1 85112 144 7. Back
Chapter and paragraph references in this Memorandum are to Modern
Ports-A UK Policy unless otherwise indicated. Back
See Annex B to A New Deal for Trunk Roads in England (published
by DETR (July 1988) ISBN 1 85112 096 3. Back
Published free by DETR (January 2000). Back
Published free by DETR (June 2000). Back
Published by The Stationery Office (July 1997) ISBN 0 11 551890
Published by DETR (March 2000) ISBN 1 85112 365 2. Back