Competition versus state aid

Written by Andrew Duff MEP and published in East Anglian Daily Times on Tue 15th May 2001

Our East Anglian ports, especially Felixstowe and Harwich, are facing an important challenge of increased competition from Europe. The European Council, including Tony Blair, has asked the Commission to develop a coherent policy on ports aimed at increasing efficiency and modernising the port infrastructure. Liberal Democrats support that aim in the interests of lower costs and increased trade. Who wouldn't?

Unfortunately the Commission appears to have approached the problem in a crab-wise direction. They have proposed a draft directive which would force port owners to open up their services like pilotage, towage, mooring, storage, and cargo and passenger handling to competitive tender. This in itself is well intentioned, although it clearly targets the very big publicly owned and operated mainland ports like Rotterdam and Antwerp and is much less appropriate for the typically smaller British private ports. The docks at Felixstowe and Harwich are already congested, and planning permission for their extension is being considered. But there is clearly going to be an additional space and safety problem if several operators have to work on the one site.

Any more liberalised port arrangements would require additional new regulation to ensure transparency, quality of service and environmental protection. The draft directive is no open cheque for free-loaders: only authorised service-providers, properly supervised, would be allowed to tender for work. Employees would continue to enjoy protection under national employment law - although this is less meaningful in the UK which, unfortunately, still falls below European Union norms in the way it treats the workforce. Current self-handling owners, like Hutchison Ports, would of course be able to tender to keep their whole existing operation intact. The East of England's successful "one stop shop" port services should not be damaged or fragmented for no good reason.

But the Commission deals with only half of the battle - the dockside arrangements - and as yet has done very little to enforce existing EU restrictions on state aid to ports. The European Parliament has now to decide, with the Council of ministers, on how to react to the Commission proposal. MEPs are facing strong political pressure for liberalisation from the shipping companies and against it from the dockers' trade unions and monopoly port owners, like Hutchison. The Lib Dems are insisting that the public subsidy granted to most ports on the mainland is made part of the equation before we allow progress on access to port services.

But we should not shirk the challenge of competition either because it means change or because it comes from "Europe". Indeed, if British port operators are empowered to gain a foothold on the continent, so much the better.