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Port Of London (Financial Assistance) Money

Volume 982: debated on Wednesday 16 April 1980

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Queen's Recommendation having been signified

Motion made, and Question proposed,

That, for the purposes of any Act of the present Session to provide financial assistance for and in connection with measures taken by the Port of London Authority to restore the profitability of their undertaking by reducing the number of persons employed by them, it is expedient to authorise—
  • (a) the payment out of moneys provided by Parliament of any sums required by any Minister—
  • (i) for giving financial assistance to the Authority for such measures and for the carrying on of their undertaking while such measures are being taken, and
  • (ii) for reimbursing the National Dock Labour Board for any payments made by them to dock workers who become entitled to compensation from the Board in consequence of measures for which financial assistance is provided under that Act and
  • (b) the payment of any sums into the Consolidated Fund.—[Mr. Newton.]
  • 11.30 pm

    There is one point about which I should like to ask the Minister, who was not able to give way for obvious and understandable reasons during his remarks. The hon. Gentleman and the Government are falling into possibly the worst of all situations. When there was a National Ports Council and money could be provided for severance for reductions in this narrow area to which the Bill is applied fairly across the country, at least there was a fair system nationally. No one complained that by subsidising severance in one area we were discriminating against another. By choosing the Port of London, which is in need, other areas are automatically disadvantaged. Perhaps the hon. Gentleman will look at this matter between now and Committee.

    It is no use arguing the second point made by the Minister—that the previous Labour Government's Bill was aimed exclusively at redundancies or severances. That was one of the principal purposes of the Labour Government's Bill, but there were many other purposes for which the Bill was proposed to reduce the need for redundancies.

    I ask the Minister to look at those two points and in Committee to try to give some clear explanation of the difference between redundancy payments, on the one hand, and severance and early retirement payments, on the other. They are vital to the progress of the Bill.

    11.32 pm

    On that point, which is relevant to the money resolution, I have to make it clear that there has not been any national system whereby all severance payments were paid across the board nationally. The National Ports Council still exists and has not been involved in the administration of the dock labour scheme. The National Dock Labour Board administers the dock labour scheme. My right hon. Friend the Secretary of State for Employment has some responsibility for that scheme. It is for that reason that he is cited in the Bill. Normally, the dock labour scheme works on the basis that the payments to registered dock workers are paid and financed out of levies imposed on the ports.

    There came a stage in March 1978 when the Port of London Authority was incurring liabilities to registered dock workers which exceeded its capacity to finance out of its own levy. It was on that basis that the sum to which I referred—£11½ million—was paid by the Government as a grant to the National Dock Labour Board to reimburse it for the costs of paying to London sums not covered by levy from London.

    The position now is that the NDLB expects that the rate of severance of registered dock workers—it has to be voluntary severance—will not exceed the capacity of London to finance out of levy. Therefore, the money that is not taken up now is likely to be used by the Port of London Authority for severance payments towards the other staff—the non-registered dock workers.

    We can go into that point in Committee, but that is the background to it. However, it supports what I said before. There is no precedent for a generalised continuing system of subsidy towards all redundancy payments in the docks industry. Certainly, for the reasons that I gave, the Government have no intention of slipping into such an obligation towards all docks. We believe that they are all capable of organising their business so that they can cover these costs out of revenue that they earn.

    Is my hon. Friend saying that the intervention in London is solely because of the likelihood of bankruptcy if there were no Government intervention? If so, if the Mersey Docks and Harbour Company were to go into bankruptcy, would he intervene on that basis?

    If I may treat that as an intervention, I am definitely not saying that. In our opinion, there is no reason why the Mersey Docks and Harbour Company should contemplate bankruptcy. We hope and expect that, as a result of the work going on by that company and the National Ports Council, it will be able to produce a plan which will get it back to a sound financial footing in the very near future.

    The basis for assistance to London is on quite different grounds. It is not bailing it out from bankruptcy. It is taking over what is left of this commitment to deal with the short-term problem of severance payments.

    With respect, it is most unfortunate when hon. Members from London and Liverpool—I do not say this too critically —keep reverting to the possibility of what happens if their port goes bankrupt. I hope that they do not allow that approach to life to affect the thinking of too many of their constituents who are concerned with the docks. Other ports do not go bankrupt and there is no reason why London or Liverpool should go bankrupt. They face difficult and dramatic changes to which they must adjust. The Government expect them to adjust to these changes and have every confidence that both ports are quite capable of returning to profitability.

    Question put and agreed to.