Marine Navigation Aids Bill [HL]

My Lords, I thank my noble friend Lord Berkeley for bringing forward this Bill. It has generated an excellent and thought-provoking debate in your Lordships’ House, although there is an element of déjà vu, as we went over quite a lot of this ground during the summer on the order. My noble friend will know that the normal practice is that the Government do not support or oppose Private Members’ Bills in this place. We make no exception in this case. He will be able to tell from what I have to say that, while we welcome some provisions, the Government have serious reservations about other aspects of the Bill. I acknowledge that some clauses of the Bill are consistent with the Government’s position on improving the powers of the general lighthouse authorities. They are based on clauses that were included in the draft Marine Navigation Bill when we consulted on that measure in 2008. I thank my noble friend for including those provisions in his Bill and I apologise for the fact that it has not so far proved possible to find time to bring the draft Bill forward as a programmed government Bill before your Lordships. The timing of this debate is, in one sense, a little unfortunate. The Government have acknowledged the need for a comprehensive assessment of the provision of the maritime aids to navigation service in the UK and Ireland by joining our Irish counterparts in commissioning a wide-ranging study, to which a number of noble Lords have referred. That work was announced on 10 June 2009 by my honourable friend the Shipping Minister and is being carried out by WS Atkins, which is due to report next month. It would be inappropriate of me today to anticipate its recommendations. I expect, however, that if Atkins delivers results in accordance with its terms of reference, we will see some useful ideas on how the three general lighthouse authorities can make improvements to their working practices, both jointly and individually, which will feed through into efficiency savings. I am sure that the lighthouse authorities will welcome the noble Earl’s comments and his reference to the improvements in efficiency that he detected when he visited them. I should like to comment in particular on what is, I think, at the heart of my noble friend’s Bill, which is the proposal to transfer the powers and duties of the three authorities to a newly established marine navigation aids commission and for many of the related powers of the Secretary of State for Transport to be exercised by an office of marine navigation aids regulation. If that were done, the current unified system of aids to navigation throughout Ireland would be lost. My noble friend is aware of the assessment of the provision of the aids to navigation service that we have commissioned. In the terms of reference, we asked for consideration of the costs and benefits of the present structure of three authorities compared to a unified system or one divided along national boundaries. We await the outcome of that work with interest. The disadvantages of a unified system may well outweigh any benefits, but we do not want to embark on a route such as that proposed by my noble friend without a careful assessment of the costs of doing so. My fear is that a new, dedicated regulatory body would prove much more expensive than the current arrangement for managing the general lighthouse fund and overseeing the general lighthouse authorities, which involves—this is the answer to the question asked by my noble friend Lord MacKenzie of Culkein—only two full-time people and the part-time help of a number of others in the Department for Transport. The regulatory costs of the existing arrangements are kept to a minimum at present and the DfT resource is part of a larger remit with wider responsibilities than just the administration of the GLAs. In addition, there would be a considerable set-up cost in relation to pensions, redundancy, relocation, retraining and new infrastructure in creating two new bodies, so it is likely to be a long time before any savings would emerge. Those costs would have to be met by the shipping industry through the general lighthouse fund. I should also remind your Lordships that, in his 2005 report Reducing Administrative Burdens, Sir Philip Hampton recommended a large reduction in the number of regulatory bodies. I can understand the logic behind having one body to deliver a maritime aids to navigation service and this will be considered as a part of our current study. However, we must remember that the existing authorities have an excellent record of providing aids to navigation to the very highest international standards and we do not want to compromise that—I commend what the noble Lord, Lord Greenway, said about that. I strongly suspect that, if we are to retain the local knowledge and incident-response capability that are crucial to our safety performance, it will be difficult to make significant cuts in the regional infrastructure inherent in the present structure, so savings from consolidation are likely to be small. However, we believe that there will be significant opportunities for building on the already extensive collaboration between the three authorities. This is where I anticipate seeing some more cost savings appearing in areas such as the management of the combined fleet of ships. For similar reasons, we should carefully consider the evidence before taking the step of splitting the management of Irish Lights. I fully accept that we have to improve the funding arrangements and ministerial colleagues are engaged on this. However, Ireland is a good example of where geographical considerations are not necessarily coincident with political boundaries and we want to be sure that the long-term solution that we come up with is consistent with both economic objectives and our maritime safety objectives. The lighthouse service in the UK and Ireland is rightly held up as an excellent example of co-operation, bringing together a unified British Isles solution to maritime safety. The Commissioners of Irish Lights have continued as a cross-border body since the establishment of the Irish Free State, the success of which was confirmed by both Governments by the inclusion of CIL as a model of all-Ireland co-operation within the 1998 Belfast agreement. We would only move away from such co-operation if all the benefits of doing so were very clear. I should at this point refer to the discussions that are taking place between our shipping Minister, my honourable friend Paul Clark, and his Irish opposite number, Noel Dempsey, the Irish Minister for Transport. As recently as 2 February, this week, Mr Clark wrote to Mr Dempsey on the subject of the funding of Irish Lights’ activities in the Republic of Ireland. He said in the letter: ""I think it would be of great benefit if we could jointly state our unequivocal commitment to progress to a situation where Irish Lights were fully financed from Irish sources within a definite period"." However, I correct the figure to which my noble friend Lord Berkeley referred as the cost of Irish Lights. The subsidy to the Irish Republic is not £15 million. I seem to remember that he used that figure in our debate in the summer. The correct figure is, of course, substantially less than that because the £15 million figure includes the cost of providing a service for the coast of Northern Ireland. Subject to what Atkins may say in its report, it is possible that even the economic case for changing the current arrangements in relation to Ireland will prove unconvincing. I do not believe that the UK or the Republic of Ireland would be willing to transfer responsibility for their aids to navigation to another sovereign state. It would then follow from my noble friend’s proposal that there would have to be two separately funded authorities providing aids to navigation in and around the island of Ireland, which may be less efficient and more difficult to co-ordinate. It would also follow that if the Republic has a separately funded system, ships visiting both countries on one voyage would have to pay light dues twice, once to each country’s authority. That would have implications for the shipping industry’s costs. Turning now to some of the less controversial aspects of my noble friend’s Bill, I welcome the way that he has embraced some of the ideas that went into the draft Marine Navigation Bill when we put it out to consultation in 2008. Whatever organisation is responsible for providing maritime aids to navigation, they need to have the powers and authority to do so effectively. The measure to clarify the extent of jurisdiction will help to assist the providers of aids to navigation in operating an efficient safety regime everywhere in the seas around this country. Looking at Clause 8 of my noble friend’s Bill, I am pleased, too, that he agrees that the funding of the lighthouse authorities should remain essentially as it is. The system is not perfect and we are continuing to look for ways to improve it, not least by trying to include as many as possible of those who use the aids to navigation in the payment system. The possibilities for obtaining income from commercial activities by the providers of the service are important in maximising the use of resources. It is inevitable that there has to be some spare capacity in a system that needs to be capable of rapid response to emergencies. If that spare capacity can be employed profitably in other, non-critical commercial work that brings in additional income, it can only be to the benefit of those who pay for the system. The general lighthouse authorities have already made good use of their existing powers in this way and I therefore applaud the clause that permits greater use of spare assets. An often overlooked but none the less important aspect of the work of the general lighthouse authorities is their involvement with local lighthouse authorities in ensuring that standards are maintained. In drafting the Marine Navigation Bill, we took the view that these powers would benefit from improvement, particularly in respect of the enforcement of directions by a general lighthouse authority so that on the, admittedly quite rare, occasions when there is a serious failure in the delivery of local aids to navigation, there should be the threat of a criminal sanction to deter continued non-compliance. My noble friend is therefore quite right to incorporate this in his Bill. Regarding Clause 10, my noble friend is clear in his intention that as many people as possible who benefit from the work of the lighthouse authorities should pay for them. Generally, we agree with him, but any attempts to broaden the base of payers must be workable and cost effective. In the case of this particular clause, I believe that, in its present form at least, it could impact only on a small number of vessels involved in activities such as safety and revenue or fisheries protection. Clause 12 deals with pension liabilities. These are a growing issue for the general lighthouse fund. In a sense the general lighthouse authorities are a victim of their own success in modernising and automating their infrastructure which has created a large number of pensioners in comparison to the present staff levels. By operating a pay-as-you-go final salary pension scheme from the general lighthouse fund, we have reached the position where pensions are a disproportionate part of the costs of the service. The authorities’ net pension expenditure in 2007-08 was £14¼ million. They are carrying an unfunded potential liability of some £330 million. Like many other sectors, this is a situation that cannot be allowed to continue for the long term, and changes need to be made to enable future pensions to be fully funded. I am pleased that my noble friend Lord Berkeley has included this sensible measure, which is based on the clause in the draft Marine Navigation Bill, to enable changes to be made which might modernise the authorities’ pension arrangements. It is a step that will have to be taken regardless of any other changes to the governance of maritime aids to navigation. I will nevertheless remind your Lordships that as we advised during the consultation on the draft Bill, the Government have no intention of reaching any conclusions on new pension arrangements for existing or former staff of the general lighthouse authorities without full consultation with all those involved. Before I conclude, I wish to respond to some of the points which were made in the debate. I echo the tribute made by my noble and learned friend Lord Boyd of Duncansby and the noble Earl, Lord Attlee, to those who work in the lighthouse service. They do a wonderful job, sometimes in very difficult circumstances. It is right that this House pays tribute to them today. My noble friend Lord MacKenzie of Culkein referred to the increase in light dues, as, indeed, did many other noble Lords in the debate. It is worth putting on the record that even after the increase in light dues that is due to take place on 1 April this year, light dues will be no more in absolute terms—that is, 43 pence per net registered tonne—than in 1993. This is 32 per cent lower in real terms after taking account of inflation. I am pleased that the noble Lord, Lord Greenway, referred to the decision by Maersk to divert an extra line from the Far East to Felixstowe. Like him, we believe that this is an indication that the increase in light dues will not act as a deterrent to foreign shipping companies bringing their ships to the United Kingdom. As regards the efficiency of the GLF, its investments in recent years have generated very positive returns which have helped to maintain or cut light dues rates. Viewed over the past five years, the portfolio has delivered a positive return of 11 per cent. That is another example—I hope the noble Earl, Lord Attlee, will agree—of the GLF doing the right thing. I hope that I have explained why the Government are concerned about the proposals in my noble friend’s Bill for establishing a Marine Navigation Aids Commission and an Office of Maritime Navigation Aids Regulation. We are also concerned about his proposals for the effective turning off of the Irish Lights. My noble friend is well-intentioned and very determined. I suspect that we shall hear from him and other noble Lords on the subject on more than one occasion in the future. However, I hope that he will realise, from our efforts to carry out a full review of the provision of aids to navigation, that the Government share his concern to achieve an end result that provides an improved and efficient service. We are not convinced that his model is the right one, but we admit that we do not yet know all the answers. I hope that the current review will provide many of them. I thank all noble Lords who contributed to the debate for their excellent speeches.