183. The UK ports industry makes a vital and unique contribution to the country's economy, commercial activity and social well being. It is an industry which has experienced deep rooted change over recent decades.

184. Since the privatisation of the UK ports industry, there has been a presumption on the part of the Government that the sector could function entirely by market forces. The weakness in this analysis stems from the fact that the market is subject to a number of distortions which seriously affect the competitive framework in which it operates. The distortions essentially arise from government involvement in ports' activities at both national and European level. Ports provide an essential link in the overall logistics chain and are therefore dependent on other transport infrastructure. Such infrastructure cannot be funded entirely by the private sector, but requires investment in freight transport by the Government. Regulation constitutes further interference in the market process. EU Directives are found to apply differently in the different Member States and further fail to grasp the different port structures and philosophies. On a national level, port planning is subject to cumbersome procedures which cause serious delay, and over which the Government has the final word.

185. Despite the desire to leave the ports industry to its own devices, the Government is clearly involved its operations and activities. It should therefore look to the distortions created and find ways of alleviating the resultant problems.

186. There are of course areas where Government involvement will have a positive influence. Port statistics, forecasting supply and demand are obvious examples. More seriously, safety issues in this most hazardous of industries receive scant attention and initiatives to improve them are essentially voluntary.

187. The legislative and regulatory framework should reflect this special nature of this industry. We therefore recommend the following:

Conclusions and Recommendations

1.  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. (Paragraph 7)

2.  Ports are important for the United Kingdom's economy; Government policy must ensure that our port industry remains healthy and internationally competitive and provide a solid framework for its success. (Paragraph 8)

The Port Industry

3.  We need a regulatory framework which both ensures that ports are operated in a safe and environmentally responsible manner and does not put unnecessary barriers in the way of business. (Paragraph 25)

Statistics

4.  The Standard Industrial Classification (SIC) systems must be modified as a matter of urgency, in order to facilitate the collection of precise data on the port industry (Paragraph 29)

5.  The existing statistical information on ports falls seriously short of what is required by a modern industry. Although the Department for Transport acknowledges this, there appears to be no sense of urgency in addressing this need for accurate statistics. It is a disgrace that there is so little statistical information on an industry so vital to the United Kingdom's economic and commercial prosperity. We are astonished that so little progress has been made in developing the statistical base necessary to inform policy. The Department for Transport must produce regular statistics on port activity in collaboration with industry. This should cover in detail employment, health and safety, infrastructure and general economic data. Statistics on the accidents, injuries and illness to dockworkers are particularly important and must be made available on a national basis. (Paragraph 41)

Making Ports Safe

6.  We expect the Government to set identifiable national targets on health and safety in ports, together with a timetable for their implementation. (Paragraph 52)

7.  The current review of Dock Regulations 1988 has taken an inordinate time. The revised codes must give clear and practical guidance including an explicit definition of the term 'adequate training'. (Paragraph 55)

8.  There is an acute shortage of dedicated port inspectors to fulfil the obligations of the Health and Safety Executive (HSE). We expect the HSE to set a timetable for the recruitment of a sufficient number of inspectors together with the provision of an effective training programme. (Paragraph 57)

9.  We expect the HSE to take immediate action against employers who fail to fulfil their training obligations. (Paragraph 64)

10.  The HSE, the Department for Transport and Port Skills and Safety Limited (PSSL) must monitor levels of safety and training for port employees to ensure adequacy. Particular regard should be given to safe working practices in this most hazardous of United Kingdom industries. The Port Passport is a voluntary scheme to demonstrate the attainment of basic dockworker skills. We recommend that this scheme be energetically pursued and used as the basis for a standard and rigorous training programme. A high level of professional training in all port related activities is essential to maintain safety in the "most dangerous land-based industry in the United Kingdom." (Paragraph 66)

11.  ILO Convention 152 is concerned with the health and safety of dockworkers. We were disturbed by the changing and ambivalent attitude to this important convention and strongly recommend that it be ratified by the Government as soon as possible. (Paragraph 70)

12.  During the evolution of the draft Directive on Market Access to Port Services it has been made clear that "professional qualifications and environmental matters might be among the criteria to authorise self-handling." We strongly support this. We believe that these issues must be among the criteria to authorise self handling. (Paragraph 75)

Capacity

13.  Suitable berths are essential if the United Kingdom is to retain direct shipping services, rather than being served by transshipment from Continental ports. (Paragraph 81)

14.  We note that the predictions of forecast growth in demand are consistent and all the studies conclude that significant capacity increases are needed. (Paragraph 86)

15.  It is necessary to know how much additional capacity is needed together with the environmental costs of development in order to make effective economic decisions about meeting future demand. The Government must undertake such forecasts to ensure adequate port planning at a national level. (Paragraph 96)

16.  The operation of a port is dependent on intermodal links, which must form part of any United Kingdom ports policy. Whilst the Government is keen to allow market forces to determine port investment and operation, landside links cannot be funded on a commercial basis. The Government must therefore be directly involved in planning, funding and development of road and rail infrastructure to UK ports and set a timescale for such development. (Paragraph 99)

17.  Without rail infrastructure and gauge enhancements to ensure direct call by the international shipping lines, ports cannot function effectively. Physical rail links to many UK ports exist but are underutilised. The Government should produce a programme and timetable for expanding their use as part of an integrated transport policy. The failure of the Government to deliver on its promises for better port access is threatening the competitiveness of UK ports. The strategy for rail freight is currently low priority in terms of funding, falling victim to overspending in other areas. The Government should therefore ring-fence funding for rail freight within the overall rail budget. (Paragraph 107)

18.  The Government should appreciate that rail enhancements take time to programme and deliver. As soon as any planning consent for a major port development has been given, steps should be taken to ensure that the infrastructure it requires will be in place as soon as it is needed. Where physical rail links exist, the Government should examine the potential for developing and increasing their use as part of an integrated transport policy. (Paragraph 112)

19.  The failure of the SRA to deliver its promises for better port access is threatening the competitiveness of UK ports. It is imperative that rail infrastructure and gauge enhancements are made in order to ensure direct call by the international shipping lines. (Paragraph 113)

Environment

20.  Given the Government's commitment to the environment, it should take a more active role in the development and monitoring of environmental performance indicators. Ports must take account of environmental plans and performance indicators and the Government should monitor such statistics. (Paragraph 125)

21.  European environmental legislation relating to the classification of port approaches has been interpreted differently across member states, to the disadvantage of UK ports. The Government must be satisfied that such legislation is applied consistently and ensure that approaches to UK ports remain accessible to commercial traffic. (Paragraph 131)

22.  It is essential that a workable method of protecting the approaches to UK ports is found. The Habitats Directive should not prevent port development or expansion, but ensure that such development is environmentally sustainable. A more comprehensive strategic framework is required to ensure the integration of port development into a sustainable transport strategy to encourage environmental benefits. (Paragraph 136)

The Planning Process

23.  Although, since our inquiry began, the Government has brought forward new procedures for inquiries into major infrastructure projects, and is proposing the new legislation to speed up the inquiry process further by allowing parallel hearings on a number of different issues, much could still be done. We welcome these attempts to improve the efficiency of the planning process, without reducing the rights of objectors. However, we are concerned that they only go a small way to overcoming the problems of those who wish to bring forward proposals for major developments. (Paragraph 141)

24.  Modern Ports: A UK Policy aims to "make regulation add value rather than unnecessary cost, ensuring that regulators co-ordinate their overall demands." Whilst a standardised information system may assist the Government in their deliberations, it is not clear how the Project Appraisal Framework will contribute to the general streamlining of the planning process. The Government should therefore give greater consideration to reducing the timescale and complexity of the overall process. A necessary element of this will be to improve interdepartmental co-operation. (Paragraph 145)

25.  The Government intends to set out a clear framework to guide the aviation industry in its proposals for new airport capacity. We do not see why it cannot take a similar approach to ports. The Government must consider individual applications in the context of a national policy, and this may mean that it cannot consider single projects in isolation. There are compelling arguments for planning at an integrated national rather than individual level. We recommend that the Government adopt such an approach. The Government should continue its commitment to expansion which can be defended on environmental grounds and engage in adequate planning to determine where compensatory habitats will be needed. (Paragraph 154)

Competition with Continental Ports

26.  The UK ports industry has already experienced considerable upheaval in its shift to a privatised model. This is not the case for the majority of Continental ports. The Government should ensure that any Directive is implemented in ways which recognise the vast differences between the UK and Continental ports, and which will ensure that the UK industry can continue to operate efficiently. (Paragraph 163)

27.  The Market Access to Port Services Directive may impose significant changes on the United Kingdom ports industry. The Government should continue to press for increased transparency about State aid to other countries' ports to ensure that the competitive position of UK ports is not threatened. (Paragraph 167)

Light Dues

28.  The Department for Transport economic impact study on light dues should be made public as soon as possible. The charging system should be reviewed in the light of such findings. (Paragraph 180)

29.  The United Kingdom has historically employed a system of light dues to cover the cost of navigation aids. Such a system is inconsistent with other European countries and distorts competition. The Government should reconsider the entire concept of light dues. We support the Government's aim of ending the subsidy to Lights in the Republic of Ireland by the UK users and recommend that there should be more urgency in the negotiations. (Paragraph 182)