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Maritime Sector (Liverpool)

Volume 458: debated on Tuesday 13 March 2007

The maritime sector in Liverpool is recognised as being an important economic driver for the country, region and locality. That is acknowledged by the Department for Transport, the Northwest Development Agency, the North West regional assembly, “The Northern Way” and the Merseyside local authorities. In this short debate, I want to draw attention to some important issues, the recognition of which is essential if the sector is to develop its potential.

Mersey ports processed more than 42 million tonnes of cargo in 2005, making it the fourth largest port operation in the United Kingdom. A 350 per cent. increase over the past 20 years is part of the growing success story, and more than 87 per cent. of all north-west port cargo tonnage is handled on the River Mersey or the Manchester ship canal. The regional implications are clearly significant.

With more than 100 global destinations, the port is the key gateway for UK trade with north America and a global gateway for UK industry. It leads the way in deep-sea carrier-operated feeder services hubbing to Liverpool from European ports. In 2005, it handled containers from more than 100 non-EU countries, which led to three new deep-sea-direct container services calling at the port.

More than 5 million tonnes of cargo passes annually between Liverpool and Ireland, as well as an increasing number of passengers. Welcome investment by Norfolkline has increased Liverpool-Belfast and Liverpool-Dublin business. The port’s hinterland has the highest concentration of cargo-generating activity outside London, and more than 60 per cent. of the UK’s manufacturing capacity lies within a 200 km radius. The average distance covered by road vehicles operating from Liverpool is substantially less than from the south-east ports, which is important environmentally as well as economically.

The port of Liverpool is a strong economic driver, creating a maritime sector that is the largest outside London according to the recent economic impact survey carried out by Mersey Maritime. In 2004-05, the sector generated 20,500 full-time jobs in Merseyside, rising to more than 26,500 when indirect impact is taken into account. The sector’s output reached £2.5 billion, adding £698 million to household incomes and creating the highest gross value-added of any port in the UK. It is likely that the maritime sector accounts for at least 5 per cent. of gross value-added in Merseyside. Employment in the maritime sector is diverse, and includes ship repairs, logistics. engineering, transport, warehousing, professional services and training. Three major companies’ head offices and Maersk’s main regional office are in the city centre. The port of Liverpool currently shows increasing activity, increasing business and increasing numbers of diverse jobs with local and regional impact.

I want to draw attention to two important new developments that are bringing additional opportunities to Liverpool, and I want to ask whether current developments and decisions will allow those new opportunities to be grasped fully for the benefit of local people, for the region and for the country. First, the acquisition of the port by Peel Holdings creates a unique situation. It means that Liverpool port, the very successful John Lennon airport—the fastest-growing airport in the country—and the Manchester ship canal are under common ownership. That creates a unique, integrated port complex that has led to the concept of a super-port, and the possibility of transferring a substantial amount of container trade from road to water via the canal to port Salford with significant environmental benefits. The super-port concept has arisen from the new ownership, and includes the possibility of a new port complex.

Secondly, I want to draw attention to the setting up of Mersey Maritime in 2003 with Jim Teasdale as chief executive. That private sector-led initiative is working with the public sector and has brought new vigour and focus to the maritime cluster. It works with local businesses, companies, the maritime sector, shipping companies and transport. It is about showing the importance of a cluster of maritime excellence, and about developing the possibilities of that cluster for the economy, as well as promoting shipping. The initiative is innovative, full of enthusiasm and doing excellent work.

I have some key questions about whether the greatest possible opportunities presented by that situation are being taken up. Will the Department for Transport recognise the port of Liverpool’s importance in its national ports review, or will it, as many fear, concentrate on further development of south-east ports? That is not just a regional question; it is a national question about developing the potential of all regions in the United Kingdom. The issue is highlighted in the Transport Committee’s recent report on the ports review, which draws attention to the importance of supporting ports outside the greater south-east to enable both national and regional development to be maximised.

Recognising the port of Liverpool’s importance means investing in infrastructure to facilitate freight and passenger access by road, rail, and water. When will the Olive Mount Chord rail project be delivered? When will the issue of inadequate rail loading gauge be addressed? When will road access be improved?

I have raised those issues in written questions, and a reply on 15 January confirmed that the Highways Agency believes that the existing road network is inadequate to cater for the port’s expected growth. When will that inadequacy be dealt with, and when will changes be made?

The £10 million cruise liner facility currently under construction is vital and welcome, but further major investment is required. Will the Government back Mersey Maritime’s ports growth strategy?

Will the Government approve the post-Panamax terminal application, which is essential if we are to attract trade with the far east? The terminal would enable shipping services to call at Liverpool to service the north-west and the northern regions, thus increasing regional competitiveness, so it is an issue not only for Liverpool, but for the wider region. I raised the issue in a written parliamentary question, and I received a reply today, stating:

“A decision on the application for the Seaforth River Terminal Harbour Revision Order will be announced as soon as all the necessary statutory procedures have been completed.”—[Official Report, 13 March 2007; Vol. 458, c. 20W.]

I should be pleased if my hon. Friend could indicate when that completion might be.

Will the Government, the regional development agency and local authorities back the super-port concept in order to maximise the benefits of the airport, port and ship canals being under single ownership, while working with regional distribution centres near Warrington? The super-port would require the post-Panamax facility, and in the long term, a world cargo centre at John Lennon airport.

Will there be continued support for the innovative and successful Mersey Maritime initiative, which focuses on developing maritime clusters as centres of excellence? That energetic body has achieved significant success, working with 820 local companies and 19,000 employees. It has succeeded in a great deal of its work, which included the initiation of much-needed skills training and the commencement of apprenticeships. It has promoted innovative ICT projects to make businesses more efficient, of which Liverpool university’s advanced internet methods and emergent systems—AIMES—project to improve the tracking of goods is just one example. I recognise that the Government are not solely responsible for the sector, and I recognise the support that they have already given to the port of Liverpool and the maritime sector. Locally, Mersey Docks and Harbour Company has to provide a replacement landing platform for Merseytravel’s successful cross-river ferries, because it has been absent for more than a year following an accident on the previous landing stage.

Other players include the Learning and Skills Council and the Department of Trade and Industry, and I hope that they will continue to work with Mersey Maritime and with others. The Northwest Development Agency has already played an important role, recognising the maritime sector in its regional economic strategy, and the North West regional assembly continues to work very hard on transport policy development.

At this time of change, I ask my hon. Friend to assure me that regional policy will not only continue, but strengthen. It means developing policies that reach beyond the city regions, and backing the Northwest Development Agency, the North West regional assembly and “The Northern Way”, which is inter-regional. Transport decisions must follow regional strategies; Network Rail and the Highways Agency should be required—as part of their remits—to invest in regional policies, and Government investment decisions must back regional policy.

Liverpool’s maritime sector has a proud history. Indeed, efforts are under way to restore HMS Whimbrel, the only surviving escort ship from Captain Walker’s second world war north Atlantic hunting group, transport it from its location in Egypt to Liverpool and use it as a tourist and educational facility. Similarly, plans are being assessed to bring SS Manxman, the last steamship operating between the Isle of Man and Liverpool, from its berth in Sunderland to Liverpool. I hope that the Government-backed agencies will support both projects.

Today’s debate focuses on the potential of the port of Liverpool as an increasingly important economic driver for the locality, region and country. The report by the Transport Committee, “The Ports Industry in England and Wales”, concluded:

“A national framework for port development will stand or fail on the strength of its ability to bring port development and traffic to the regions. Within the national policy, each individual area should be allowed to develop those aspects of the industry that are best fitting to their unique geographical advantages and access to markets.”

I hope that my hon. Friend can assure me that the Government will continue to assist Liverpool in achieving that ambition.

I congratulate my hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman) on securing this debate. I know that we always congratulate Members on securing these Adjournment debates, but on this occasion, I genuinely mean it, because although I have the pleasure of representing a Kent, channel port with its own maritime tradition, I am of course from Liverpool, and I am well aware of the maritime tradition on the Mersey. Indeed, I spent six months working for the Ministry of Agriculture inspecting the ships that called into the Mersey back in the early ’70s, and I suspect that I serviced one of the very last ships to enter the Albert dock in its guise as a working berth before it became a tourist attraction.

I am delighted that my hon. Friend has raised such issues, that she has brought the Mersey’s proud maritime tradition to the attention of the House, and that she continues to make such a strong case for our support. Given my background, I hope she accepts that in the Government, she has a willing ally who is only too keen to see the Mersey prosper.

The maritime sector faces exciting and busy times, and the Government are working hard to deliver a new wide-ranging UK ports policy, to which my hon. Friend has referred, and to which I shall return to it in a moment. At a European level, the European Commission is simultaneously working on a new wide-ranging European ports policy, and I am delighted that Liverpool is playing its part in that work, too. The port of Liverpool gave a presentation on port financing at one of the Commission’s consultation workshops in February, and in the European Union’s maritime green paper, which is now out to consultation, the Commission rightly recognised the importance of maritime clusters such as Liverpool in developing a modern, dynamic and sustainable maritime economy. The Government and the Commission recognise the lead that Mersey Maritime has taken in promoting that vision.

As my hon. Friend said, the expansion of trade—particularly containerised trade—has been very strong. She also pointed out that from 2000 to 2005, the port of Liverpool grew by 10 per cent. overall, and by 17 per cent. in containers. There are many difficult issues associated with distributing increased volumes of goods on our small island, so against that background and through the new ports policy, we are seeking to provide a better framework for sustainable port development until 2030. Consultation took place last year, and since then we have had the benefit of a report by the Select Committee on Transport, as my hon. Friend pointed out. I am grateful to the Committee on which she sits for expediting its inquiry in order to allow the findings to be considered in the context of our ports policy review.

My hon. Friend asked several times during her contribution whether I would take into account the Committee’s findings, and all I can say is that, if I had not wanted to take them seriously, I should not have asked the Committee to expedite its report so that I received them before I made the decision. Although the report will not be completed until the summer, I hope that she accepts that I genuinely intend to consider all its findings closely.

My hon. Friend mentioned the extremely interesting and exciting concept of the Merseyside super port, and I can envisage the way in which it will attempt to exploit the synergies of the different transport modalities; the airport, the sea port and the canal. The Government and Europe will watch its development with interest, and I wish it well. The Merseyside super port gives the opportunity not only for economic development and the successful growth of business on Merseyside, but to expand considerably the sustainable transport of goods by allowing different modalities for transporting goods to genuinely interact, so that people can take the most sustainable route. I certainly wish the super port concept well.

I also wish Mersey Maritime well, which my hon. Friend mentioned. My understanding is that it has been formed by the commitment of private and public sector partners throughout Merseyside and has the shared vision to create a world-class cluster of maritime businesses. Mersey Maritime represents a cluster of more than 500 businesses employing 6,000 people in Merseyside, with an annual turnover of £1.3 billion. It aims to promote and develop excellence in all maritime-related activities in Merseyside and to represent the interests of existing and new cluster members. In the European Union maritime green paper, the Commission rightly recognised the importance of maritime clusters such as Liverpool in delivering a modern, dynamic and sustainable maritime economy.

I applaud the way in which Liverpool has responded to that challenge, integrating its rich maritime past with a modern, forward-looking maritime sector. I wish it well and hope that it succeeds, from the point of view of both the maritime sector in this country and Merseyside. The fact that Mersey Maritime represents 6,000 people and 500 businesses in just one maritime city shows just how important the maritime sector is to the UK economy in general. I fear that the maritime sector is a part of the economy that is often overlooked by the media. In fact, it has become the third biggest export earner in the UK, having overtaken aviation. The significant growth in the maritime sector—in terms of the UK-owned fleet, the number of ships registered to the red ensign, the amount of money that the sector earns for the UK and the number of people it employs—is one of the Government’s unsung success stories. Anything that Mersey Maritime can do to continue to contribute to that will certainly have my full support.

Another aspect of what Mersey Maritime is trying to achieve concerns training, as my hon. Friend said. It is vital that we make big investments in the skills of people who work in the maritime sector. That does not mean just the skills of people who go to sea, but the skills of people who work in our ports and the other industries that support our seagoing and portside activities. I am aware that £1.75 million of funding was secured last month for an initiative to promote and enhance maritime training on Merseyside, through a Mersey maritime institute. I congratulate Mersey Maritime on pulling that together with the support of Wirral council. The funding has come from a range of sources, including £656,000 from the single regeneration budget, which is funded by the Northwest Development Agency and administered by Wirral Waterfront, and £656,000 of European funding. I also understand that the private sector has committed nearly £450,000 in support of the project, so well done to all concerned.

So far as the timing and the subject matter of the ports policy review are concerned, I hope to have the review available in the summer. I would not have asked the Transport Committee to expedite its findings were I not to take them into account. Peel Ports has also made a significant contribution to the consultation document, which will be taken into account. I assure my hon. Friend that I intend the port policy review to set a framework for the successful growth of the ports industry throughout the United Kingdom. The review will not focus simply on the south-east or southern ports. Rather, it will genuinely consider all the ports, what is needed to make them all successful and what support each of them needs. The review will also take into account the findings of the Eddington report, which made significant comments about how we link our ports and airports into the strategic network, as well as other decisions that the Government are committed to making on the planning regime and how we respond to the Stern report on climate change.

I refer to my entry in the Register of Members’ Interests. As the Minister knows, the National Union of Rail, Maritime and Transport Workers holds its maritime seminar this afternoon, at which he will be speaking. Everybody welcomes the investment in training in the maritime industry in Liverpool, but will he address the continuing decline in the number of British seafarers being employed on ships based in Liverpool? Will he also address the low pay among foreign nationals on those ships, because of the non-application of the Race Relations Act 1976, minimum wage regulations and so on, and say what action the Government are taking on those matters?

I am indeed speaking at that seminar this afternoon. One of the things that I was going to say was there for the first time—but which I will now tell the Chamber instead—is that we are today launching the consultation on how we should reform the Race Relations Act to deal with that issue.

Broadly speaking, there are three options. First, we can stay as we are now, although that is not much of an option, since it would lead to us infracting European Union rules. Secondly, we can change the Act so that everybody from the European Union or at least the European Economic Community will have to be paid the same rates. Thirdly, we can change the Act so that everybody who serves on a British ship will have to be paid the same rates. One likely consequence of the latter option would be that a lot of ships currently under the red ensign might flag out of the country. That must be factored into our considerations. At the request of the maritime unions and the Chamber of Shipping, I am allowing a six-month consultation. They believe that if they are given six months to work together, they can come up with a solution that is acceptable to everybody. I have acceded to that request for that very reason.

We get everywhere, I am delighted to say.

My hon. Friend the Member for Liverpool, Riverside talked about rail and road access. She made a plea for the Olive Mount Chord, which is one of the schemes that was identified in December’s announcement on the productivity transport innovation fund. We are working with Network Rail to take forward work on the detailed case for TIF funding, although it will not surprise my hon. Friend that I am will not make an announcement today. We will continue to place heavy weight on the recommendations of the region about how much ought to be spent on road access through the regional funding allocation. It is important to us that we take a strong lead from the regions.

My hon. Friend also asked about the Seaforth river container terminal, which concerns the decision about the post-Panamax berth, and asked some questions about other harbour revision orders. Again, I am afraid that I am not in a position to give her any information about that. It is important that harbour revision orders are made after the proper due process. For that reason, as the policy Minister in respect of shipping, I am not allowed to be involved with the harbour revision orders. One of the other Ministers takes responsibility for that. Such matters are kept completely secret from me, so that I am free to comment on policy matters without being seen to have influenced planning decisions. However, my hon. Friend will hear those decisions just as soon as they have been through due process and can be made properly.

These are exciting times for the Mersey, I am delighted to say, and I very much wish it luck. So long as Liverpool goes on to win the European champions league and such developments continue apace, there will nobody happier than I—or, I suspect, most other scousers as well.

Question put and agreed to.

Adjourned accordingly at one minute to Two o’clock.