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Port of Dover

Volume 546: debated on Tuesday 12 June 2012

Motion made, and Question proposed, That this House do now adjourn.—(Mr Dunne.)

I am delighted to have secured this debate on the future of the port of Dover. In Dover and Deal in my constituency, the port of Dover is a cornerstone of the local economy. It dominates the seafront and is a key facility for the ferry industry, which employs around 5,000 people, and it serves as nationally important transport infrastructure. The port is a major asset of the town of Dover.

For all those reasons the future of the port is considered to be critical by people of my constituency, yet there is much concern about the port, which is more formally known as the Dover Harbour Board. The catalyst for the deep concern about the future of the port was its being put up for sale in the dying days of the Labour Government. That came as a shock to my electors, who do not want to see the port sold off to the French or anyone else. They see the port, nestled as it is at the foot of the white cliffs of Dover, as the English border. They feel that the port, every bit as much as Buckingham palace, Big Ben or Stonehenge, should remain for ever England. That view is shared by people up and down the country.

The privatisation move made people think more deeply about how things were going at the port. The more they thought about it, the more concerned they became. First, there is great concern that the harbour board has been in conflict with its key customers, the ferry companies. The board has been seeking to increase mooring fees by a third in a serious downturn. Moreover, the ferry companies feel that they have provided the harbour board with £60 million for investment in infrastructure, which they feel has not been made. The situation has resulted in litigation and has injected much acrimony and uncertainty into the local economy of a town that has more than its fair share of deprivation.

Secondly, the business at the port has not been doing very well in recent years. In 2008, the turnover of the harbour board was £60.774 million; by 2011, it had fallen by 10% to £54.74 million. In 2008, the operating profit was £15.53 million; by 2011, it had fallen to £9.868 million—a fall in profits of 34%. One might think that that was just down to a general reduction in traffic because of the economic downturn, but the figures give the lie to that notion. They show that more traffic has been going to the channel tunnel. In 2008, Dover accounted for 65% of cross-channel freight; by 2011, the figure was down to 62%. In 2008, 61% of cross-channel cars went through Dover; today, the figure is just 54%. In 2008, 64% of cross-channel coaches went through Dover; by 2011, the figure had fallen to 60%. Reflecting on those figures, people rightly feel that the harbour board should be working together with its key customers to win market share and beat the competition. It should certainly not find itself in conflict with its key customers.

There are also concerns about pay in the boardroom. In 2007, the compensation of the harbour board in total was £402,000. By 2011, it had risen to £546,000—a rise of 36%, at a time when wages across the country had barely risen at all and when operating profits had fallen by pretty much the same percentage. That concern has been increased because the port’s turnover and profits have fallen over the period, and the harbour board has been sacking hundreds of long-serving port workers. There are also concerns about infrastructure maintenance, as the Dolphin jetty recently collapsed.

Overall, my electors feel that the current situation at the port is simply not acceptable. They sense that there has been a record of failure and a promise of more. They feel that there is a lack of accountability, partnership and co-operation to deliver the best future for Dover. There has been a lack of partnership with the port’s stakeholders. My electors do not want to see the port sold off; they want it to be more of a success, and to see greater investment in the infrastructure and regeneration of the seafront. Regeneration is particularly needed in the western part of the port, around the now derelict harbour station. Regeneration is key to making the best of Dover. We are talking about a beautiful regency town that was lost in the cross-channel shelling of the second world war. Regenerating the seafront is overdue, and, if effected properly, could make Dover a jewel in the crown of the nation once again.

That was the situation that I was confronted with on my election to serve the people of Dover and Deal in 2010. My electors wanted to see investment, but no sell-off. The harbour board is a public body—it is a quango of the Department for Transport—so it has the ability to raise funds, albeit with great difficulty, because they come on to the national balance sheet. My electors wanted to see greater partnership and greater accountability to the residential and business community. They also wanted to bring forward regeneration and investment. As it was in 2010, so it is today. For that reason, it is clear to me that the community and businesses should get together and buy the port. The Prime Minister came into office promising the big society and a community right to buy. It is for that reason that the People’s Port Trust was set up: to take over the port. The People’s Port Trust was set up as a charitable mutual society, like a building society or trade union. Anyone living or working in the Dover district can join for just £10.

Funding was raised in the City of London to buy the port, in the same way that one would buy a house with a mortgage. The revenues would be underpinned by the ferry companies, ensuring the lowest possible cost of funds and the lowest possible mooring fees for the hard-pressed ferry operators, which have been suffering from predatory pricing by the state aid-backed channel tunnel. The People’s Port Trust directors are highly skilled, and include people such as Sir Patrick Sheehy, who ran British American Tobacco, the multi-billion pound cigarette combine, and Algy Cluff, the entrepreneur who opened up the North sea to oil exploration back in the 1970s. The funding commitments have been made by serious institutions in the City of London; this is a serious bid by a community that is serious about having greater control over its future.

Buying the port would ensure that it would remain forever England, and that it would be safeguarded by the community for the nation in perpetuity. Buying the port would ensure the accountability of its board to the community and businesses. It would reconnect the port with the community, and especially the ferry companies, which provide many thousands of local jobs and almost all the moneys that the port has. The People’s Port Trust would ensure that there would be a real focus on investment and regeneration under a costed plan for the long term, in contrast to the vague promises put forward by the harbour board in its plan to take forward the privatisation that Labour was so determined to see.

That Dover should become the people’s port and a landmark of the Prime Minister’s big society is the clear, settled will of the community—a will demonstrated by 98% voting in favour of the people’s port in a statutory local referendum, and a will and motivation underlined by the fact that the People’s Port Trust now has more than 1,000 members. The question is how the will of the community and local businesses can be implemented. The harbour board has remained determined in its desire to follow through the privatisation policy of the last Labour Government, but there is now a different Government. This Government do not need slavishly to follow the sell-off plan of the previous Government.

That brings me to a number of questions about the future. As the Government appoint the harbour board members, could they not exercise their control to enjoin the harbour board to work more closely with the community and businesses on the new big society plan that the community so clearly wishes to see? In the past, directors of the harbour board have been appointed by the Department under the old-style quango appointment system involving the great and the good. In some cases, it seems that the harbour board has largely been left to choose its own directors. That has led it to become provider-focused, and not sufficiently customer or community-focused.

Would it not be possible to have community and business involvement in making future appointments in an open and transparent appointment process in which the Department appoints the brightest and best through open competition? That would enable the port to become more customer and community-focused. There is an opportunity coming up to make that happen. The chairman of the harbour board retires at the end of this year, and its chief executive retires next year. Those appointments are key to how the harbour board operates and behaves, and they are made by the Department. Will the Department consider making the appointments under the new, open and competitive process that I am suggesting?

Moving to the privatisation process that is now under way, I understand that, once started, it is hard to stop. The Ports Act 1991 was aimed at selling off ports, rather than not selling them off. The process has dragged on, however. The harbour board has been slow to put proposals to Minsters for a decision to be made. It keeps changing its submission and seeking further bites of the cherry. It was meant to submit its final proposal earlier this year, but it has still not done so. It is claimed that the proposal will be tabled in July. Will Ministers ensure that if the proposal is not made in July, the process will be brought to an end? This matters, because the people of Dover need to know what the future of the port will be. The uncertainty is having a negative impact on the local economy.

There is, of course, an alternative to privatisation. It is for Ministers to use the new powers contained in the Public Bodies Act 2011. Those powers would enable the harbour board quango to be reformed. In that way, the community port proposal could be taken forward and implemented. I understand that Ministers do not believe that they can use those powers unless or until the privatisation process has been completed, whether it is accepted or rejected. I want to ask whether Ministers have taken independent legal advice on that matter, because it seems to me that, as the Public Bodies Act 2011 was passed after the Ports Act 1991, the Public Bodies Act can trump the Ports Act. Ministers could therefore start the process to reform the port under the Public Bodies Act, as Parliament has given them powers to do so more recently than it gave them powers to make a decision under the Ports Act.

That matters because, given the behaviour of the harbour board, few people in my constituency seriously believe that the harbour board should be allowed to make any decision on the future of the port of Dover. They feel that the Department should take direct control and work with the community and businesses to find a more positive way forward—ideally, the one involving the people’s port, because that is the people’s will and the mandate that I have received as the constituency Member of Parliament.

I hope the Minister will consider these matters and will be able at least to consider some of the points I have raised this evening. I hope that it is understood that, as the Member of Parliament for Dover, my aim is to deliver a stronger future for Dover, to see the long-desired regeneration of Dover and renewed economic success for a town that has not had its fair share of jobs and money in recent times, and to ensure that an asset that is important to the nation as a whole is managed more effectively in the future for the benefit of the community and of our country. If we get the right future for the port, Dover could be a town transformed into the jewel of the nation’s crown that it always used to be. That is the future that I and the community wish to see.

It is a pleasure to respond on behalf of Her Majesty’s Government to the debate of my hon. Friend the Member for Dover (Charlie Elphicke) on the future of Dover. It is a subject that we have discussed privately and publicly many times, and we will continue to do so. I unashamedly pay tribute to my hon. Friend’s tireless work on behalf of his constituents on the issue of the future of Dover. The town has a wonderful tradition and history, and its future is enormously important not just for Dover but for the future of the UK, which needs growth to get us out of the economic situation that we inherited.

I accept many of my hon. Friend’s points. He touched eloquently on the point that I am fairly restricted in what I am able to articulate from the Dispatch Box this evening—I know what he would love me to say—so I hope he will understand that I cannot fall into proverbial potholes, which might have serious consequences as we take the process forward following receipt of the further submission from the harbour board in the near future.

As my hon. Friend alluded to, Dover has been a vital artery into the UK for many years. To this day, this great nation of ours, being an island nation, still relies enormously on our ports and our maritime industry. We are going through a renaissance as a maritime nation, with more and more shipowners registering their ships under our flag. We in the UK are not a flag of convenience; we are very strict about what ships are under our flag, which is one reason why others are attracted to the UK.

More than 90% of our international trade is conducted through our ports. Many have not had the sort of investment that my hon. Friend and others would like to have seen over the years. I think the polite term is that maritime has been a bit of a “poor relation” in transport matters. That certainly does not apply during the two years in which I have had the support of two Secretaries of State and the Prime Minister for the maritime industry.

Port capacity at Dover, particularly roll-on, roll-off issues, has to be addressed because we expect the amount of roll-on, roll-off to double by 2030. My hon. Friend touched on recent issues concerning Sea France. If he does not mind, I shall not dwell much on the acquisition of Sea France by Eurotunnel, which has been agreed by the French courts over the last couple of days—not least because we are closely studying that decision to determine whether it might be detrimental to competition for both the other ferry operators in Dover. My hon. Friend knows that I have met them on more than one occasion. They are worried about their margins, particularly in the light of pressures from emissions legislation, which adversely affects their profits.

Since I have been the Minister, the Department has had to make three important quasi-judicial decisions. The harbour revision order to which my hon. Friend referred, involving the western docks—also known locally as terminal 2—was issued in 2009. Objections by the ferry operators to harbour dues for 2010 and 2011, and a transfer scheme under the Ports Act 1991, which was originally put forward in 2010 by Dover Harbour Board to permit the port to be sold off, also need to be considered. Two of the three quasi-judicial decisions have been made in the last two years.

I know that my hon. Friend was keen for the harbour revision order to proceed. I do not think that it came as an enormous surprise when, after an 11-day public inquiry, the inspector sided with the board rather than the ferry operators on the question of the harbour dues. That is the decision that has always been made, which worries the Secretary of State and me. We will examine the legislation to ensure that it is fit for purpose, because that is obviously necessary if it is always at the back of people’s minds that no one has ever won.

The third decision that needs to be addressed is that involving, for want of a better word, the privatisation of Dover. My hon. Friend said that he did not want the port to be sold to a foreign national, a foreign country, or indeed anyone except the people of Dover. I respect and understand his view, but, as he well knows, it is not quite as simple as that. We are awaiting a further submission from the harbour board, whose chairman I have met in the last couple of weeks. I stressed to him that the Secretary of State and I considered it crucial for the board to produce its revised submission as soon as possible after the decision on harbour dues.

Let me explain what the Government seek from the harbour board. The criteria include an expectation that the Secretary of State

“'will not approve an application for the sale of a trust port”—

which is what Dover is—

“unless the sale is considered likely to deliver an enduring and significant level of community participation.”

I hope that the members of the harbour board have noted that. They know it for a fact, but I think it important to reiterate it as we await their written submissions.

My hon. Friend mentioned regeneration. I have visited Dover as a tourist over many years, but in recent months I have been there to meet members of the local authority and the harbour board, as well as local dignitaries including my hon. Friend. I know that it is imperative for the people of Dover to be able to see the tangible benefit of the wealth that it can produce, but my visits, correspondence and meetings with the hon. Gentleman and other local representatives have left me in no doubt that they cannot see it at present.

When I met representatives of the Unite union recently—a meeting facilitated by my hon. Friend—I encountered deep concern about the lack of investment, as it was described to me. I have put the points that were raised with me directly to the chairman and chief executive of the board, who have addressed themselves to many of them. I am not certain that the people of Dover, my hon. Friend or the union will accept some of their assurances, but I wanted to ensure that the concerns expressed to me by my hon. Friend and the union were put to the board formally, and to make public the point that our discussions had reached.

I genuinely believe that Dover has an exceptional future. I know that other countries around the world look to it—notwithstanding its problems—as a model for the development of their own roll-off ferries. I was in Taipei recently. Relations between Taiwan and mainland China are becoming exceptionally good—so good that roll-on, roll-off capacity is no longer anywhere near good enough so the authorities are looking to add five new ports. Members of the management at Dover were in Taiwan because the Taiwanese want to buy some of their skills and specialist knowledge on how to have so much movement through a port with a very small footprint and without having the best road infrastructure in the world. That infrastructure issue is also a reason why the western port—terminal 2—is so important.

I am disappointed that the harbour board feels that the market is not currently at a level that will allow for active development of the western port to go ahead, although I understand its decision. I intend to discuss the issue with the board soon. We should not just wait for the market to move; we must be ready when the market moves. The local authority is very keen for the western port to be developed so we can move forward and have regeneration.

I am sorry that I cannot at present do many of the things my hon. Friend asks me to do. I will consider all the points he has raised, however, but the quasi-judicial process that is under way may impose some restrictions.

I should pay tribute to the Bishop of Dover for the work he has done in bringing the community together. Others, as well as elected politicians, have a role to play, and he has done very helpful work.

My hon. Friend mentioned board appointments. We already have a situation in which there are advertisements for board vacancies so local people can apply for them; the posts will be advertised locally as well as in the national press. My hon. Friend asked whether there might be local involvement on the selection panel, too. I will look into that. At present it is not the case, however.

I am sure my hon. Friend knows that I was asked to extend the membership of the board by several members for two years. I looked into that and decided that, as we are currently waiting for the submission and so forth, a one-year extension was the maximum period I was willing to consider at present. I did that not to cause instability in the board, but to do the exact opposite: to make its members concentrate their minds on the future and the need to address the situation in Dover.

To be fair, that situation was created by the previous Administration, who pushed the privatisation agenda forward without carefully thinking through what that would actually do. They opened a Pandora’s box. What we now need to do is open things up fully, so that nationally we can get the full benefits of a much more efficient and growing Dover port, and at the same time the people of Dover and Deal have ownership and get tangible benefits, even if they are not involved in the day-to-day running of the port. Anyone who knows anything about the running of a port knows that it is absolutely crucial to have experts in there running it and overseeing the business side of things. It is a very skilful job to run a port.

In conclusion, although this is a very frustrating time for the workers, the unions and their representatives in Dover, it is also quite an exciting time. If we can all get this right—that is the most important thing—a great national asset with wonderful history, which is known around the world, could work brilliantly for the local people and the country as a whole. It could enhance this great maritime nation in which we live.

Let me conclude the debate by addressing a point that I found slightly amusing. Whatever happens, the cliffs of Dover are not for sale—not to anybody from any nation—as they sit outside the port of Dover.

Question put and agreed to.

House adjourned.