House of Commons Transport Committee Access to ports Eighth Report of Session 2013–14 Volume I: Report, together with formal minutes, oral and written evidence Additional written evidence is contained in Volume II, available on the Committee website at www.parliament.uk/transcom Ordered by the House of Commons to be printed 18 November 2013 HC 266 Published on 26 November 2013 by authority of the House of Commons London: The Stationery Office Limited £14.50 The Transport Committee The Transport Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Department for Transport and its Associate Public Bodies. Current membership Mrs Louise Ellman (Labour/Co-operative, Liverpool Riverside) (Chair) Sarah Champion (Labour, Rotherham) Jim Dobbin (Labour/Co-operative, Heywood and Middleton) Jim Fitzpatrick (labour, Poplar and Limehouse) Karen Lumley (Conservative, Redditch) Jason McCartney (Conservative, Colne Valley) Karl McCartney (Conservative, Lincoln) Mr Adrian Sanders (Liberal Democrat, Torbay) Miss Chloe Smith (Conservative, Norwich North) Graham Stringer (Labour, Blackley and Broughton) Martin Vickers (Conservative, Cleethorpes) Powers The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the internet via www.parliament.uk. Publication The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the internet at http://www.parliament.uk/transcom. A list of Reports of the Committee in the present Parliament is at the back of this volume. The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some or all written evidence are available in a printed volume. Additional written evidence may be published on the internet only. Committee staff The current staff of the Committee are Mark Egan (Clerk), Farrah Bhatti (Second Clerk), Richard Jeremy (Committee Specialist), Adrian Hitchins (Senior Committee Assistant), Stewart McIlvenna (Committee Assistant) and Hannah Pearce (Media Officer) Contacts All correspondence should be addressed to the Clerk of the Transport Committee, House of Commons, 14 Tothill Street, London SW1N 9NB, The telephone number for general enquiries is 020 7219 6263; the Committee’s email address is [email protected] 1 Contents Report Page Summary 3 1 Introduction 5 2 Priorities for port access 8 What are the priorities? 8 How are priorities identified and implemented? 9 Local transport schemes 9 Improvement of strategic networks 10 Conclusion 10 Who funds improvements? 11 3 Government strategy on access to ports 14 4 Conclusion 18 Conclusions and recommendations 20 Formal Minutes 22 Witnesses 23 List of printed written evidence 23 List of additional written evidence 24 List of Reports from the Committee during the current Parliament 25 3 Summary Ports are essential to the economic wellbeing of the UK. Some 95% of UK cargo movements by tonnage is waterborne and ports collectively employ some 117,000 people. Ports large and small are affected by the quality of transport links to their hinterlands, whether that be by road, rail, inland waterways or coastal shipping. Constraints on road and rail networks in particular can limit the size of a port and its economic impact. In this report we examine Government policy on improving access to ports. Local bottlenecks are of key concern to many ports. Local government structures and funding arrangements for local major transport projects have changed significantly in recent years and continue to evolve. Ports told us that the new arrangements were complex and might not prioritise projects of strategic importance. We recommend that the Department for Transport (DfT) act as an advocate for ports, helping the sector navigate complex arrangements for getting transport improvement schemes off the ground. The department should also be prepared to challenge decisions by local bodies where they fail to prioritise improvements in port access over other, less strategically important, schemes. Government policy on who should pay for transport infrastructure relating to ports is clear in principle but confused in practice and conceptually flawed. Port operators are expected to pay for measures required to mitigate increased traffic due to port expansion. Guidance exists on when the Government should contribute to traffic measures which have wider benefits, but it has never been used. However, whereas some ports have contributed towards transport schemes to improve access, others have not. The rationale for the differing treatment of different projects is not clear. Moreover, the principle that ports are likely to be the sole beneficiaries of transport schemes which make access easier overlooks the wider economic benefits of expanding trade and reducing logistics costs that are likely to arise from improved access. In our view, there should be a presumption that significant improvements to access to ports - particularly improvements to strategic networks - will be publicly funded, because of the wider economic benefits of doing so. However, this should not preclude ports from contributing to local transport infrastructure improvements, following discussions with relevant local bodies. Simplified, new guidance should be based on these principles. We commend the department for bringing forward a new high-level strategy on ports, which encompasses the issues raised in our report. We would like to see more details of how the strategy will be implemented. In our view, prioritising the removal of constraints to port development caused by inadequate transport infrastructure should be at the heart of Government strategy on ports. We also recommend that DfT: give a view on whether or not port master plans have had any impact and point to some good examples of these plans and of how they have influenced decision makers; devise a more effective successor to the Waterborne Freight Grant, to stimulate coastal shipping; and 4 clarify whether or not it intends to bring forward a National Policy Statement on National Networks and, if so, its timetable for doing so. Our impression is that the DfT could do more to promote ports’ interests within Government and internationally. We were particularly concerned to hear suggestions that UK ports were put at a competitive disadvantage when compared to foreign ports because the UK Government insists that ports pay for infrastructure that is paid for by national and local governments overseas. If the Government does apply European Commission state aid rules in this area more strictly than other EU countries it should explain why it does so. Finally, we were struck by the concerns raised with us about the complexity of the planning system. We recommend that the DfT tell us what it consider to be the appropriate balance between environmental protection and economic development in relation to ports; in what ways the Government has altered this balance since it came to power in 2010; and what work it is involved in to address complexities or regulatory barriers within the planning system which ports regard as detrimental to their interests. 5 1 Introduction 1. Ports are essential to the economic wellbeing of the UK. Some 95% of UK cargo movements by tonnage is waterborne and ports collectively employ some 117,000 people.1 Ports differ greatly in terms of their size and the cargoes they handle, as the chart below demonstrates. 2. In addition, planning consent has been granted for a number of new developments which are not yet fully operational or which, in some cases, are yet to be built.2 Collectively, these could accommodate an extra 12.5 million containers each year,3 compared to 8 million containers handled by UK ports in 2012.4 The Government has said that additional port capacity is likely to be required to meet demand over the next 20 to 30 years.5 3. Ports large and small are affected by the quality of transport links to their hinterlands, whether that be by road, rail, inland waterways or coastal shipping. Ports cannot function effectively if hauliers and logistics firms struggle to get goods in and out of them, no matter how modern and efficient the infrastructure inside the port gates. Constraints on road and rail networks in particular can limit the size of a port and its economic impact. 4. Less obvious, but equally important, is access to ports from the sea. Many ports depend on the dredging of channels of sufficient depth to accommodate visiting ships. Inadequate seaward access could prevent larger container ships reaching UK ports, leaving the country dependent on overseas ports for container trade and putting up costs for British business and consumers.6 5. Earlier on in this Parliament we expressed disappointment that the Government was not focusing more strongly on the connectivity of the UK’s international gateways, including marine ports.7 Since then, the Department for Transport (DfT) has placed increasing emphasis on transport infrastructure as an “engine for growth”,8 and announced a host of transport projects, some of which relate to ports.9 We decided to take a closer look at Government policy in this area and, in December 2012, asked for responses to the following questions: 1 Ev 38 paragraph 3 and see http://www.maritimeuk.org/wp-content/uploads/2012/01/The-economic-impact-of-the- UK-maritime-services-sector.-Ports1.pdf. 2 National Policy Statement for Ports (hereafter NPS for Ports) paragraph 3.4.8. 3 Using the standard “twenty-foot equivalent unit” measure. 4 DfT port statistics PORT0208. However, container traffic represents only a minority of overall shipping movements. 5 NPS for Ports, paragraph 3.4.16. 6 Q66. 7 Transport Committee, Third Report, Session 2010-12, Transport and the Economy, HC 473, paragraph 41. 8 DfT, Ports Strategic Partnership plan, Sep 13, https://www.gov.uk/government/publications/ports-strategic- partnership-plan-a-framework-for-discussion-between-government-industry-and-trade-unions.