1. This Report is based on work carried out by our predecessor committees, the Transport sub-committees of the Committee on Environment, Transport and Regional Affairs and of the Committee on Transport, Local Government and the Regions. Each of those committees took substantial evidence from many groups, including the Government and its agencies, the European Commission, industry groups, individuals and companies, the Health and Safety Executive, industry safety and training bodies, unions and professional associations, English Nature and the RSPB. When the Transport Committee was formed in July 2002 the bulk of the work had already been done, and ample evidence had been assembled. We decided that we should bring our predecessors' work up to date by inviting any organisation which wished to do so to submit a supplementary memorandum, and by holding a single evidence session to cover any points which needed clarification, but that we would otherwise rely on the information already provided. We are extremely grateful to all those who gave evidence to us and to our predecessor committees in what has been an important and long-running series of inquiries. We are also extremely grateful to all the organisations which hosted visits by our predecessor committees, and by us. In the course of these inquiries the Committee and its predecessors visited the Port of London, Grimsby and Immingham, Japan and Hong Kong.

2. We would particularly like to thank our specialist advisers, Professor James McConville and Dr Heather Leggate. Their expertise and assistance has been invaluable in drawing together vast amounts of evidence and drawing up this report.

3. Modern Ports: A UK Policy[1] set out a United Kingdom policy, but recognised that responsibility was both devolved and reserved. "Ports, harbours, piers and boatslips" are not reserved under the Scotland Act, but shipping policy and marine safety are reserved.[2] This report deals largely with matters of interest to United Kingdom as a whole, although in some cases the detail of our recommendations will be most directly applicable to England. We note that the Welsh Affairs Committee has looked at ports during its inquiry into Transport in Wales.[3]

4. The Government has been developing its port policy during the course of our inquiry. In November 2000 it published Modern Ports: A UK Policy, a paper on the policy development of the industry. It has published work on container terminal capacity; conducted consultations on light dues, and on appraisal methods for port development and published a new Project Appraisal Framework for Ports.

5. This work is driven by the fact that shipping is the main transport method for international trade[4] and the United Kingdom's ports are a gate way to that trade, as well as being drivers of their local economies. More than 388 million tonnes of international freight moved through our ports in 1999 - 95 per cent of the countrys international freight movements by tonnage and 75 per cent by value. Another 177 million tonnes of domestic freight moved through the ports system. 32 million international passengers and 38 million domestic passengers used United Kingdom ports in 1999.[5] As an island, we depend on ports to move both freight and passengers. They are a vital part of the transport chain. They drive both local and national economies.

6. Ports do not simply provide facilities for shipping; their key function is to transfer traffic, passenger or freight, between transport modes. Although the nature of the links to land transport needed will depend on the type of cargo handled, the efficiency of a port is dependent on the quality of the inland transport system that serves it.[6] Port activity must not be viewed as an end in itself or a separate entity. On the contrary ports are becoming increasingly integrated into the entire system of distribution and movement of commodities and people in the country's domestic and external trade.

7. Ports are an essential part of the fixed capital or infrastructure of United Kingdom. They are very costly, whether a new investment or an extension to a port, but usually offer large economies of scale. But ports have little or no alternative use. If there is a mistaken investment or the investment is no longer required they cannot be transferred to another use, and their cost is irrecoverable. Investment decisions are made easier if Government policy is clear and stable, and there is confidence that the Government recognises the importance of the sector.

8. Modern Ports: A UK Policy recognises the dependence of the UK economy on international trade, and that ports support national and regional economies. It states that "It is in the national interest that our ports remain able to handle current UK trade and its potential development efficiently and sustainably."[7] Nonetheless, Government policy on ports is largely market-driven. Following the deregulation and privatisaton of much of the industry in the 1990s, the majority of the United Kingdoms key ports are in the hands of private companies, which have been left largely to their own devices in developing their facilities and services. The industry has come under increasing pressure in recent years from overseas competition, deteriorating infrastructure, a poor safety record and external pressures from national and European legislation. This report considers the structure of the industry, Government policy toward that industry and prospects for the future. Ports are important for the United Kingdoms economy; Government policy must ensure that our port industry remains healthy and internationally competitive and provide a solid framework for its success.

2   Details of competence can be found in Modern Ports: A UK Policy, section 2.2. See also Q 518. Back

3   Second Report of the Welsh Affairs Committee, Session 2002-03 HC 205-I Back

4   Environment, Transport and Regional Affairs Committee, Opportunities and Development Prospects at Major Ports, Minutes of Evidence and Appendices, HC (2000-01) 244 i-iv, p. 217. Evidence from the inquiry by the Transport sub-committee of the Transport, Local Government and the Regions Committee is published in a companion volume to this report, and memoranda are identified by serial number e.g. POR 1. Back

5   Modern Ports: A UK Policy, para 1.1.3; the figure for domestic passengers includes river crossings. Back

6   HC (2000-01) 244 i-iv, p. 201, p. 208 Back

7   Modern Ports: A UK Policy, paras 1.1.11.1.2. Back