Light Dues

It is a pleasure to see you presiding this morning, Mr. Olner, as other hon. Members have mentioned. I congratulate the hon. Member for Isle of Wight (Mr. Turner) on securing this important debate. It has been a useful discussion. As well as the many aids to navigation that are maintained by the various harbour authorities, Trinity House has no fewer than three important historic lighthouses on or close to the Isle of Wight, at Nab tower, St. Catherine's and the Needles, with another on the opposite side of the water at Hurst point. The general lighthouse authorities may be among our oldest institutions that have an unbroken history. Trinity House dates from 1514, but, as many hon. Members have mentioned, the authorities are not old-fashioned. The 11 staff in their joint research and radio-navigation department have a worldwide reputation. In the new headquarters of the Commissioners of Irish Lights I recently saw their high standard of work and the control room where one operator monitors and controls the lighthouses around the coast of Ireland. Their performance regularly exceeds the highest international standards for all types of aids to navigation. Paying for the GLAs is a contentious matter, and I fully understand the points that have been made by many hon. Members. The general lighthouse fund was created in 1898 to replace a complex system whereby lights were provided by a mixture of the GLAs and private operators. It pays for the GLAs in the United Kingdom and the Irish Republic. The fund's income is mainly from light dues paid by ships using ports in the UK and Ireland and from investment income. It contains £44 million of pension contributions from GLA employees, which is sacrosanct. We can use the investment income to fund pensions and other liabilities, but we cannot use it for capital funding or operating costs. We must also maintain a sensible reserve for operational expenditure or unforeseen and uninsured costs. There may be an argument for reviewing the present system of light dues and the general lighthouse fund because it has now operated largely unchanged for more than 100 years. I am wary, however, of arguments that aids to navigation and the GLAs are unnecessary for large modern ships, because it is precisely for their benefit that the deep water channels have to be surveyed and marked, and obstructions monitored and dealt with. In February we published our light dues consultation. As many hon. Members have mentioned, for more than 16 years light dues have not been increased. They have been reduced on four separate occasions during that period. That has meant a decrease of over 40 per cent. in real terms—an enviable achievement by the GLAs. Few public or private bodies could claim to have equalled that. In April 2006 the light dues rate was cut by more than 10 per cent. in the knowledge that the new rate was unsustainable in the long term but that it was possible because of the relatively high level of the general lighthouse fund, good investment returns and significant windfall gains from asset sales. The reduction was made after consulting the Lights Advisory Committee, representing light dues payers, who said at the time that they would support a necessary future rise in light dues rates. As foreseen, an increase in light dues is now essential. What we did not foresee was that it would happen in a global recession, when investment income has virtually ceased and trade has reduced so that shipping companies are laying up vessels, rationalising routes and concentrating on larger ships. Fund income is falling and we must act to ensure that the GLAs can maintain their safety functions. I understand that the shipping industry has been hit hard; it has reacted quickly by making significant cuts. We have asked the GLAs to make cuts, to defer non-essential expenditure and to look at further efficiencies. They have made cuts of 5.6 per cent this year, but there is not such a close correlation between trade and spending, in their case. Lighthouses must be lit, radio-navigation signals broadcast, channels surveyed and buoys moved. We cannot avoid taking steps to maintain those safety-critical functions, and all the hon. Members who have spoken accepted that. Expenditure deferred now may well result in greater costs in a year or two. We therefore have a difficult balancing act to perform. We have received 47 responses to the consultation, and I have held four meetings with the representatives of those most affected. I am now looking very carefully at all the comments before announcing any decision. I hope to do that within a few days. With three GLAs, and their integrated funding, we have a co-ordinated lighthouse service for the whole of the British Isles which is efficient and second to none in the world. We are nevertheless in a difficult position because since 1922 the fund has had to meet costs in two sovereign states where income does not necessarily equate to expenditure in each country. Light dues collected in the United Kingdom are being used, in part, to pay for lights in the Irish Republic. A 1985 agreement recognised that, so the Irish Government make an additional contribution towards the costs. Both Governments accept that the 1985 agreement should be changed. We have done more work and, as has been mentioned, I recently met the Irish Minster of Transport in Dublin to discuss the matter. I am pleased to say that we agreed a better formula for apportioning Irish costs on a north-south basis. We also agreed on the need for an overall assessment of the provision of the integrated aids-to-navigation service to all regions of the UK and Ireland. An evaluation is to be undertaken to consider all aspects of delivery, including continuing increases in efficiency, potential structural improvements and the overall financing arrangements. We now have the basis for making real progress. We will make every effort to reach an agreement that is more soundly based than the old one and one that ensures a fair apportionment of funding. The Irish negotiations also raised the question of whether the present GLA structure was the best.