Stephen Hammond – 2014 Speech to British Ports Association


Below is the text of the speech made by Stephen Hammond, the Parliamentary Under-Secretary of State for Transport, on 3rd April 2014.

I am delighted to have been invited back to the British Ports Association’s annual lunch.

Because the BPA represents the full breadth of ports, harbours, terminal operators and port facilities across the country you are an important and influential voice in government and beyond.

And I would like to thank Andrew for that kind introduction and congratulate you on your new role.

Ladies and gentlemen, we have had a fantastic meal today (3 April 2014).

So I will keep my remarks brief.

The economy is emerging from the storm caused by the 2008 financial crisis and years of borrowing beyond our means.

The deficit is down by a third.

Inflation and unemployment are falling.

Investment and exports are up.

We started the year with the fastest growing economy of the major industrialised nations.

While this is evidence our long-term economic plan is working the job is not yet complete.

As a country we still need to make more and export more.

And achieving that will simply not possible without you.

That why I place such emphasis on the Ports Strategic Partnership – not so much a case of we’re all in it together, more a case of all hands on deck.

And I want to talk today about some of the priority areas where I think we can work together over the coming months.

The resilience of our transport networks has been thrust into the national consciousness as a result of the recent storms.

Ports were battered by some of the biggest seas in recent memory.

I’ve been particularly impressed by your efforts to keep ports open despite the conditions.

Something that perhaps has not been appreciated as much as it should have been.

The unprecedented storms caused particularly bad damage to some of our smaller ports.

And that has had a knock on impact for businesses from fishing to leisure and put many jobs at risk.

So I am very pleased to be able to announce today (3 April 2014) that we will be making £2 million available to help the smallest ports recover.

The BPA will be contacting all eligible ports with details and application forms shortly.

These will then be assessed by an independent panel, appointed by the BPA, who will make recommendations to me.

I would like to take this opportunity to thank the BPA for their help getting this scheme off the ground so quickly.

Our smaller ports are absolutely vital to their local economies across the country.

I want to see the necessary repairs made.

Ensuring they are back up and running and open for businesses as soon as possible.

As the economy returns to growth.

As well as exporting more we can expect rising domestic demand.

Demand for raw materials, for components and for fuel.

That means we need efficient ports and they need good connections into the road and rail network.

Because while where the port is on the coastline is important your customers also need to know they can reach you quickly and reliably.

So we are doing 3 things.

First, we are investing £200 million to improve the rail freight network over the next 5 years.

But I know most ports will continue to rely on the road network.

So, second, we are investing £24 billion in the most significant upgrade of our strategic road network ever.

That will include tackling some of the most congested roads, like the A1.

But just as important is the last mile between the strategic road network and the port gates.

So, third, we have created the Local Growth Fund which will be worth £10 billion between now and 2021.

It will be delivered with Local Economic Partnerships and focussed on what is needed to unlock growth in their local area.

That includes transport investment.

And I’m pleased that forward looking Local Economic Partnerships, like Dorset, have already started thinking about how the fund can improve access to ports.

Around 120,000 people are already directly employed in UK ports.

And more jobs are being created as the economy grows and the sector invests in new capacity.

I want to see more of our young people secure a job in one of the most dynamic industries in the world.

And UK ports have access to the skilled workforce they need to be efficient and compete.

That’s why I hosted the latest maritime roundtable on the subject earlier this week.

Ministers from across government, the industry and Trades Unions discussed how we can expand, improve and promote the number of maritime training opportunities available.

Our commitment to training is underpinned by the UK’s Tonnage Tax regime and my department’s funding for SMarT to the tune of £15 million per annum.

On the land side I know that the ports sector has a good track record of investing in skills and apprenticeships and I would urge that you continue to expand this commitment wherever you can.

What was clear from the roundtable discussion was we need to be even more cohesive.

Because natural career progression means many trained on the wet side move into professions on the dry side of the industry when they come ashore.

So I want to do more to use the experience and lessons learned on the wet side of the industry to further increase opportunities on the dry side.

As you know, the nature of the economy is also changing.

Offshore production is increasingly moving back to developed countries.

More than 1 in 10 small or medium sized companies brought some production back to Britain in the last year.

That’s double the number outsourcing abroad.

Not because Chinese wages are rising but because companies now want to be closer to their customers so that they can respond more quickly to changes in demand.

That makes flexible and dynamic ports, like trust ports, that are plugged into their local and regional economies even more important.

I’ve now visited a number of trust ports and met many more of you who work in and with them.

Trust ports are a thriving and essential part of our ports and maritime sector.

And no 2 trust ports are the same.

But they all benefit the communities they serve and the economy.

I want trust ports to be able to seize the opportunities that are coming.

To help do so, over the rest of this year I want to think more about the nature of trust ports and if, or how, this might need to alter in future.

I want to work hand-in-hand with you on this.

To tap directly into your unparalleled experience and expertise.

There are 3 issues in particular that I think would be worth considering.

Firstly, how can local communities, including businesses, be engaged involved more closely in the port?

I believe ensuring that their voice is heard and acted on is crucial for any successful port.

But engaging with the local community must be at the heart of what a trust ports does.

There are some very good examples around the country of how some ports are doing this.

My question is can we do more? What works well and can this be applied more widely?

Secondly, is there scope for greater use of private finance help trust ports develop further in future?

There is no reason why trust ports, the larger ones in particular shouldn’t be an attractive proposition to lenders.

I understand your frustrations with ONS classification and we need to look further at how we ensure that access to capital is not stymied by bureaucratic accounting rules.

But are there innovative ways in which medium-sized and perhaps even smaller ports could benefit from greater access to private finance?

Third on my list, is governance.

Modernising Trust Ports 2 is 5 years old and, frankly, it needs reviewing for many good reasons, not least because we badly need to change its name.

I am well aware that trust ports no longer need modernising!

But the guidance does need to reflect the latest best practice in corporate governance and also on board appointments.

I also want to hear your views on what has worked well and what has not worked so well.

I look forward to working with you on this over the next 12 months.

The final area I’d like to work with you on is improving regulation.

I know you need light-touch and proportionate regulation to be able to compete.

Progress on the European Commission’s proposed regulation on port services has ground to a halt for the time being.

Some of you may have guessed that I have not been too disappointed.

Frankly, the Commission did not present a convincing case for the initial proposal.

There was a great deal of bureaucracy and regulation that is unacceptable for a competitive, and largely unsubsidised, port sector.

Nevertheless there are some features worth cultivating – not least in relation to financial transparency.

And these aspects have helped us to make the connection for pressure for effective action on State Aids.

It remains to be seen whether the Commission can be persuaded to act effectively on State Aid.

But if the Commission produces robust guidance, and decisions, it will benefit taxpayers, the UK ports industry and ultimately, continental operators too.

Because this country has proven beyond doubt that ports don’t need taxpayer feather-bedding to provide a great service.

I’d like to pay tribute to the BPA for your support.

Without your insight I do not think our arguments would have made such an impact.

In conclusion, as the global economy returns to growth, there are significant opportunities on the horizon.

In total, the OECD predicts that global port traffic could quadruple by 2030.

Creating demand for new capacity.

A growing global market.

And one that I want to help Britain’s fantastic companies in port operations, logistics and maritime finance compete for.

The International Festival for Business will take place in Liverpool later this year.

I will be taking the opportunity to bang the drum for Britain’s maritime industry.

For all our ports.

For our shipping industry.

And for our world-class maritime services.

I hope you will all be there to join me in attracting more business for your port, your region and the UK.

I look forward to continuing to work together, in partnership, over the coming year.

Thank you for listening.