Ports and Port Connectivity

I beg to move, That this House has considered ports and port connectivity. It is a pleasure to serve under your chairship, Ms Jardine. As an island nation, our prosperity has always been closely linked to the strength of our ports. Towns have flourished where ports have thrived, and declined where harbours have silted up and trade has moved on. That is true of Falmouth, the port town that I represent. Falmouth has a very distinctive story. It is a vibrant place that has always turned its face outwards to the sea. The packet ships carried trade and parcels all around the world from the late 1600s, but by the mid-19th century, the packet trade had collapsed, outpaced by steam ships. Yet Falmouth adapted, partly thanks to our geography, which has always been our strength. Positioned at the western end of the channel, Falmouth is home to the third deepest natural harbour in the world, and the deepest in western Europe. That strategic advantage has given our town enduring significance, not just commercially but militarily. In 1942, HMS Campbeltown set sail from Falmouth to Saint-Nazaire, in an operation that destroyed the only dry dock on the Atlantic coast capable of servicing the German battleship Tirpitz. Today, Falmouth continues to play an important role in supporting our national defence, as do many ports, and it has the potential to do even more in future, including through supporting work at Devonport in Plymouth. Naval and Royal Fleet Auxiliary vessels are regularly serviced in Falmouth docks. As I have said in the House before, Royal Fleet Auxiliary ships, which are so vital to our defence capability, frequently call at and live in Falmouth. I still recall watching RFA Argus depart in 2014 to deploy off Africa as a hospital ship during the Ebola epidemic. At the same time, the port has diversified. It now welcomes cruise liners, contributing to the local economy and tourism while maintaining its long-standing expertise in ship repair and refit for commercial vessels and defence. We also have an active harbour trust port and world-class firms that build super-yachts. Crucially, Falmouth is also looking ahead. With its deep-water harbour and marine capabilities, it is extremely well placed to support the emerging floating offshore wind sector in the Celtic sea. A&P, now Balaena, is redeveloping the docks to service floating offshore wind turbines. We have a cluster of innovative marine engineering businesses in the surrounding areas, which are designing anchors, floating platforms and many other things to do with floating offshore wind that grew out of the mining industry.

I am grateful to my hon. Friend for securing this debate. I wonder whether, like me, she would like to hear from the Minister today how the vision for ports that she outlined, which is so clearly tapping into opportunities in Cornwall across the critical minerals, renewable energy and many other industries, could link into our broader view for industrial strategy zones.

Obviously, I agree. Places such as Cornwall will be fundamental to growth in renewable energy, particularly with the critical minerals strategy. The industrial strategy zones will be so important to unlock that potential. I am grateful to the many hon. Members from across the House who supported my application for this debate—representing ports from Newport to Immingham, Liverpool to Southampton and Port Talbot. It reflects a shared understanding across all our constituencies that supporting our ports and ensuring that they are well connected is vital to our national prosperity. Last year, ports employment in Great Britain stood at over 31,000 people, while the wider shipping industry contributed an estimated £16 billion to the economy in 2023. However, the true importance of our ports goes far beyond those headline figures. They are critical assets supporting key national infrastructure, including energy security, defence and lifeline ferries. Ports handle 95% of the physical goods entering and leaving our country, underpinning our trade and resilience. Almost all the UK’s automotive trade passes through them, along with half our food and feed. Even smaller ports play a key part in the supply chain, exporting recycled material to keep lorries off roads, and importing and exporting materials for construction. Additionally, the impact of ports extends far beyond the quayside, reaching into the surrounding hinterlands, and acting as anchors for communities, businesses and industries across entire regions. That is crucial in coastal areas, which often suffer from high levels of deprivation. For every job directly created in a port, seven more are supported through the supply chain. The coastal-inland divide is a persistent challenge that port investment can help to address. Recent research by More in Common, supported by the British Ports Association, has shown that coastal communities and especially the young people in them see that potential. There is a genuine strand of pride among residents in such communities, with four in 10 saying that their area has economic opportunities that are not being made the most of. Young people—over half of them—were likeliest to see that untapped potential. Sixty per cent of people say that their area could become an economic hub for manufacturing, shipping and clean energy. In that, they are even more positive than the nation as a whole, where 55% of people find that prospect realistic. Ports cannot reach their potential if they are not well connected, yet at present, the responsibility for funding road and rail links often falls to port developers. That can act as a significant disincentive to investment and puts British gateways at a competitive disadvantage internationally. Many of our busiest ports, including Dover and Harwich, rely heavily on road transport to move freight. That brings with it challenges in terms of congestion, bottlenecks and pressure on local infrastructure. Historically, three quarters of port freight has travelled by road, with only a small proportion of it moving by rail. That is why I really welcome the Railways Bill, which introduces a duty on the Secretary of State to promote rail freight and set a statutory growth target. That is crucial not only for decarbonising transport but for supporting sustainable economic growth. A single freight train can remove up to 129 lorries from our roads, with clear benefits for the environment and local communities. However, we are not yet making full use of that potential. As of February 2022, around 58 ports in Great Britain had a rail connection, but 20 of those connections were inactive. In Falmouth, there is a short stretch of track linking the docks station directly to the port, but it has not been used for 20 years. With the rebirth of the critical minerals industry in Cornwall—mainly in the constituency of my hon. Friend the Member for St Austell and Newquay (Noah Law) and around—backed by a £50 million Government strategy, there will be big demand for freight transport, which could be met by rail. That is why I have been campaigning to reopen that line and working with local partners to make that real. Restoring that rail connection would strengthen Cornwall’s economy and benefit local people. We have funding for an initial feasibility study. However, a business case for a rail link would cost about £150,000, which is a massive outlay, especially when there are no obvious funding streams to provide support for that interim stage.

I thank my hon. Friend for giving way again and I wholeheartedly support the work taking place at the port of Falmouth to get the rail connection back for freight. I really hope that we can draw support from the Department for Transport in accelerating that to the next stage. However, does she agree that we also need to take a broader look at the vision for freight rail in Cornwall and wholeheartedly develop a strategy for it?

Yes, of course. There is so much more to do and so much that can be done, and we should have a co-ordinated strategy. That is so important for growth. I want to say a bit about the Transport Committee. Although this is fairly old, its 2013 report described ports as “national assets” that were essential to economic wellbeing, and called for three things: priority to be given to removing infrastructure constraints on port development; road and rail improvements to ports to be publicly funded; and Government assistance for ports navigating complex local transport improvement arrangements. Those recommendations have not been implemented. Port connectivity does not just refer to transport. Connectivity to the grid is an equally pressing challenge for ports across the UK. As the sector moves towards decarbonisation, there is a growing need to electrify operations. However, the UK’s connections queue has grown tenfold in five years, leaving more than 700 GW of projects waiting for grid access. The National Energy System Operator says that it has a plan for connections reform that is designed to clear the backlog, and it has reprioritised projects, which is very welcome. However, NESO has also alerted Ofgem that it cannot meet connection deadlines for all the projects. Many ports lack the grid capacity to support shore power, electric vehicle charging for ports and haulage fleets, as well as many other things. The BPA has warned that around 70% of UK ports are already at or near their capacity. Those national grid upgrades are critical to ensuring that ports can continue to decarbonise. Falmouth, for example, has plug-in power for ships, but the power supply is limited to smaller ships by grid capacity. The Government’s modern industrial strategy recognises ports as a “foundational” industry that underpins growth across key sectors. That is important for the clean energy sector, which depends heavily on port capacity infrastructure and capability to deliver offshore wind, for example. That needs to translate into tangible policy and investment. In our 2024 manifesto, my party committed £1.8 billion to invest in port infrastructure. Targeted funding has been allocated to individual ports. For example, Port Talbot secured Government investment through the floating offshore wind manufacturing investment scheme. Up to £64 million went to Port Talbot in March this year, but delivery is not progressing at the pace or scale that we desperately need. A recent report from the Great South West and Celtic Sea Power showed that while ports have ambitious project plans, too many schemes are struggling to get investment. In many cases, projects do not align with the requirements of private investors or public funding bodies such as the National Wealth Fund and Great British Energy. That is not because of a lack of policy ambition or capital, but because of a market failure arising from the mismatch between immediate capital investment decisions and uncertain long-term revenue streams.

I am intervening because the hon. Lady mentioned Port Talbot. Last year, I met the Associated British Ports in Port Talbot. It raised concerns that the current rail link into the docks may not have the gauge needed for the large structures that will be brought in for assembly or to get freight out from the new freeport that will be created. Does she agree that the Minister should assess whether upgrades, or even a new rail link into the docks, will be needed so that rail infrastructure—or the lack of it—does not hold back this major opportunity for south Wales?

There is a real issue of clunkiness in the co-ordination between different Departments to speed up the progress of getting these ports into use. That is one example of how we could work together so much better to ensure that Port Talbot is up to full speed as quickly as possible, which it really needs to be. The grant funding that is being deployed to support the offshore wind sector, such as the Crown Estate and the GBE supply chain accelerator funding, is focused on future users of infrastructure such as manufacturers and supply chains rather than ports. At present, the main dedicated support available to ports comes from the offshore wind growth fund, which is privately operated. That leaves a gap in public funding for the critical infrastructure needed to unlock projects. My port of Falmouth has very ambitious development plans to service—and potentially assemble—floating offshore wind, as well as on defence, commercial ship repair and cruises. It is a truly mixed port and a “no regrets” investment, but at a cost of about £120 million. It will be a struggle to fund that huge investment from shareholders alone. There is also the issue of how ports are owned. Some, like Falmouth, are privately owned, while some, like Falmouth harbour commissioners, are trustee-owned. Others, like Gorran Haven in my constituency, are charitable trusts, which often fall through the cracks of available funding. There is an argument—I am a Co-operative MP—that, as vital community assets, ports should be publicly or co-operatively owned, which I would like the Minister to consider. How do we get money into ports? What should we do? First, a joined-up approach across Government Departments is necessary. The Minister here today is from the Department for Transport, but ports sit between multiple Departments, including the Department for Energy Security and Net Zero, the Department for Business and Trade, the Ministry of Defence and, of course, the Treasury, where the money will come from. It sometimes feels difficult to know who to go to, and ports fall through the cracks. Secondly, targeted funding for port infrastructure to support clean energy industries is essential. That would help to reduce up-front risk, improve return on investment and leverage private capital. For example, in the Celtic sea, Port Talbot has benefited from funding, and a new wind port will unlock an initial 4.5 GW of floating offshore wind. The Government’s investment in Port Talbot is also bolstered by Celtic freeport’s newly released five-year plan, which sets out how Milford Haven and Port Talbot will be used to attract major investment to the region. The freeport will deploy its money and work with all those public financial institutions to bridge the capital gap, but investment in other ports in the region is needed to make the deployment of FLOW feasible. A multi-port strategy in the Celtic sea would allow activity to be distributed across several specialised ports, minimising bottlenecks and providing flexibility. Different ports bring very different strengths—Falmouth and Plymouth are very different from Appledore and its shipbuilding—so a single port approach for FLOW in the Celtic sea just would not work. There is also regional disparity. Projects in the North sea have seen significantly more investment than those in the Celtic sea with investment from GB Energy, for example, and the North sea already has established supply chain and port capabilities. Thirdly, we must address the question of revenue certainty. Ports require firm commitments from developers before they can justify and secure the capital for the infrastructure upgrades that, for example, floating offshore wind demands, yet developers cannot make those commitments without the revenue certainty that a contract for difference provides. It feels like the two sides are both waiting to see who moves first, like a game of chicken. Compounding that is a fundamental timeline mismatch. Port upgrades take a long time—five years or more—whereas the lead time for a CfD process is much shorter. That results in a structural gap that leaves ports unable to be ready when projects need them, even when the commercial will exists on both sides. Breaking that deadlock requires direct Government intervention in the form of revenue support or underwriting to de-risk that early investment. Without that action, we risk ceding our emerging floating offshore wind industry to competitors such as France, which has invested £900 million in its port of Brest. By mobilising the National Wealth Fund, for example, to support strategic port infrastructure, the Government could absorb a meaningful share of the risk and give ports the confidence to proceed ahead of CfD awards, rather than waiting until it is too late. Some examples of that support could include forward contracts, capacity leasing arrangements and state underwritten procurement mechanisms to address strategic infrastructure bottlenecks, either as an anchor tenant—where the state acts as an anchor tenant through defence or strategic demand—or as an enabler, using that procurement and underwriting to support the development of infrastructure. Finally, we must prioritise connectivity in the round, which means investing in the road and rail links that serve our ports, recognising them as national assets deserving of strategic infrastructure funding. We should also recognise ports as critical national infrastructure and use special development orders to streamline planning and consenting for significant port infrastructure. There is an ongoing pilot project for the Falmouth docks expansion. There is a co-ordinated approach under the Marine Management Organisation, which is acting as a lead regulator in a fast-track licensing process, and that is working well. Prioritising connectivity also means accelerating grid connections, so that energy capacity keeps pace with the demands of decarbonisation, future fuels and the development of floating offshore wind in the Celtic sea. Ports new, old and rediscovered are the gateway to the rest of the world and gateway to the economic future of our country, as well as our coastal towns. They can be unlocked, but it will take focus and co-ordination. I, for one, really want to untap the potential that those young people living in our coastal towns see so clearly—and that they need to grab hold of for their future.

I remind Members that they should bob if they wish to speak, even in this heat, although jackets can be removed.

It is a pleasure to serve under your chairship, Ms Jardine. I want to say a special thank you to the hon. Member for Truro and Falmouth (Jayne Kirkham) for highlighting this important topic. The title of this debate is “Ports and Port Connectivity”, but from Northern Ireland’s point of view, perhaps it should be “Ports and Port Non-connectivity”, and I will explain why. There is no port as such in my constituency, but we are on the outskirts of Belfast and the thriving agrifood sector in my constituency uses its port to ship all over the world. The Belfast port is incredibly important for my constituency and our agrifoods sector. We also have our harbours that bring in the fishing catches in Portavogie, although that is a different type of port. As a representative of Northern Ireland, I am particularly concerned by the problems that the Windsor framework has created for those trading across our borders and between ports. I will explain what the difficulties are, and then perhaps the Minister can give us some answers. I welcome the Minister to his place and wish him well in this debate and in his job. I look forward to his answers to all my, hopefully, searching questions—well, even better answers would be better. I will also talk about Belfast port and some of the things that it is doing, because we should be greatly encouraged by some of the things that are happening there. The Windsor framework continues to create friction at ports used for trading between Northern Ireland and Great Britain. Businesses report increased costs, administrative burdens or blunders, disruption to supply chains, delays and expanded inspections. Just last year, Logistics UK’s head of trade and devolved policy, Nichola Mallon, who is a former MLA at the Assembly and a lady of great knowledge, outlined that there is “a lack of awareness over the practicalities of the Framework, and also a reluctance among some GB businesses” to trade goods in Northern Ireland due to the extra requirements. We have almost unique difficulties. There was a statement about steel tariffs in the Chamber earlier, and I asked the Minister for Trade a question on a similar issue. He said that he had umpteen pages on the Windsor framework and was well aware of the issue—perhaps the Minister who is here can get us some of the way through the process. Brexit created the challenge of how to maintain the integrity of both the UK internal market and the EU single market, given the unique position of the Northern Ireland borders. The aim of the Windsor framework was to ensure smooth trade between ports. There was much expectation, but we certainly did not get the Brexit that the rest of the United Kingdom got; we got one that is tied up in bureaucracy. To some extent, the aim of smooth trade was oversold and created a misperception that the challenges faced by Northern Ireland over the Northern Ireland protocol could be removed—but that has not been the case. There continue to be significant new processes, and business owners continue to report frustration with the significant restrictions placed on them that drain their time, effort and money. When it comes to the ports and connectivity, we are not having the same connectivity as everybody else. There is a significant basis for concern that Northern Ireland businesses may be placed at a competitive disadvantage with GB-based retailers in their own market. There is substantial evidence to prove that there is an issue, and I know that the Minister will be aware of some of that. I appreciate him acknowledging some of the problems. Northern Ireland firms report higher costs on imports from GB, and there is frustration about the difficulties that third-country firms have faced when trying to sell to Northern Ireland. Those issues with smooth trading are disproportionately affecting small businesses in Northern Ireland, with many companies criticising the assistance available to them from Government. Again, if it is easy to make it simpler to trade, we should try very hard to do that. More must be done to support vulnerable enterprises, 58% of which state that, almost 10 years on from Brexit, they are facing moderate to significant challenges in trading—10 years later and things have not improved. My goodness, that is quite unbelievable. Of businesses surveyed, 34% say they have simply ceased trading to Northern Ireland, rather than meet the demands of the framework. The paperwork is so laborious, complex and repetitive that it puts people off. That clearly demonstrates that market access from Northern Ireland is compromised. Small business owners within Northern Ireland have been forced to adapt, and those retailing shorter shelf life products are now largely limited to trading within Northern Ireland, simply because it is not possible to do otherwise with short-life products. Other small businesses face increased export charges, which is another issue that they need to address. Some even report having to travel to England themselves as hauliers—as some of my constituents in Newtownards do every fortnight or every month—because hauliers are now reluctant to deliver due to the paperwork required. There remains a need to restore Northern Ireland’s full place within the UK’s internal market, as it continues to be subject to certain EU rules while GB is not. It is essential that Northern Irish stakeholders play a meaningful role in improving trading problems to ensure trading operates effectively. The first issue that I have laid out is the protocol; it might have been a bit laborious, but it is complicated and I want to have it on the record. There is still hope, however, as I, along with my right hon. Friends the Members for East Antrim (Sammy Wilson) and for Belfast East (Gavin Robinson), found in the recent announcement outlining Belfast harbour's ambitious 25-year masterplan. It includes a £1.3 billion investment to expand port capacity, support the green energy transition and regenerate the waterfront. The port handles roughly 70% of Northern Ireland seaborne trade and is scaling up to meet the rising demand and the capacity restraints elsewhere. Northern Ireland is fortunate to have a large number of cruise ships; I have been informed that the figure is between 140 and 150. Cruise ships must be bigger than I thought they were, but if these figures are correct, some 350,000 people come off those cruise ships—I suppose they are absolutely massive. They bring tourism and spending to my Strangford constituency, which is not too far from Belfast. Tourists go to the National Trust-run Mount Stewart, the Greyabbey Cistercian monastery and Harrisons, my neighbourhood café-restaurant, which is just between Greyabbey and Kircubbin. That is a spin-off of being near Belfast. I am coming to an end; I get the indication that might be a good idea. There is a real drive to enable Northern Ireland to be the hub it is designed to be. I welcome Belfast harbour’s ambition and belief. It is the turn of this House to have some ambition as well—to believe in the people of Northern Ireland and renegotiate with the EU to remove the needless restrictions and allow us all to prosper. Now is the time to make that difference. I respectfully and honestly ask the Minister—because that is my way of doing things—to step in. We are going to have a change of Prime Minister, but we do not know whether there will be a change of Minister. I wish the Minister well and ask that he endeavours to help us in Northern Ireland to overcome some of our issues.

Although only a few hon. Members want to speak, I wonder if we could limit speeches to around five minutes to get everybody in.

It is a pleasure to serve under your chairship, Ms Jardine. As many people will have already heard, East Thanet is surrounded on three sides by sea. From Ramsgate, we can see France on a clear day, but our port stands idle and neglected, despite its noble history as the home of the Navy during the Napoleonic wars. More recently, people will remember the hovercraft and the Sally Line ferries taking them to France for day trips. That is emblematic of some of the problems that we have with our ports in our island nation. Ports connect us and defend us; they are places where we trade, where we welcome visitors and where we choose who stays. Our nation’s wealth has been built on ports as gateways to the world. We are the country that we are as a result of our ports and the people who built and worked in them. Yet for too long, we have overlooked them and the communities that sustained them, even as they remain vital to our economy. Many regional ports, including Ramsgate, operate well below capacity. If we are serious about levelling up and ensuring that the whole nation benefits from growth, we must look to how we bring trade and investment to ports that have been left behind.