Orders of the Day — Merchant Shipping (Pollution) Bill [Lords]

House of Commons, 25 January 2006.

Michael Martin (Speaker, Glasgow North East)

I inform the House that, in my view, the instruction that appears on the Order Paper is not in order, because it refers to matters that are quite unrelated to the content of the Bill. I will therefore not call it after Second Reading.

Stephen Ladyman (Labour, South Thanet)

I beg to move, That the Bill be now read a Second time.

When debating a Bill such as this, it would be normal for many of us to look to the wisdom of Lord Donaldson of Lymington for advice. As he passed away during the summer recess last year, I hope that the House will not mind if I pay a few words of respect to him before I begin my speech.

Anyone with the remotest connection to the shipping world will know of Lord Donaldson's immense contribution to improving the safety and environmental performance of the shipping industry worldwide. One consequence of the 1993 Braer disaster was Lord Donaldson's examination of how shipping could be systematically improved. His 1994 report, "Safer Ships, Cleaner Seas", led to a radical reform of standards required internationally by the International Maritime Organisation, nationally in our merchant shipping legislation and across the European Union in a series of directives and regulations aimed at consistent application of those standards.

Shipping, already among the greenest of transport modes, raised its game as a result and Lord Donaldson's work set the agenda for that improvement. He was a wise and trenchant adviser to many, Ministers included, and we are much in his debt. I am pleased that he was in his place when the Bill received a Second Reading in another place last summer. It might be tempting fate to say that the Bill completes his work, and one should not tempt fate at sea, but it follows his logic in adding to our ability to deal with the consequences of pollution and with preventive measures.

Since I have been Shipping Minister, I have made it clear that it is absolutely necessary to address critically the serious implications of any new legislation for the shipping industry. We must not add to burdens borne by an industry facing international competition without clear justification. We should, if possible, proceed only with implementing agreed international standards and enforce those standards fairly. We are therefore selective in what we seek to regulate. That said, we believe that the Bill is justifiable, proportionate and essential.

First, I would like to explain why the Bill has been drafted so narrowly. We have deliberately produced a precise, targeted Bill to deal with specific problems relating to pollution from ships. I should add that it has been my intention throughout that we should try to move forward with it as consensually as possible.

Philip Hollobone (Conservative, Kettering)

I am grateful to the Minister for giving way and I appreciate that he is about to outline the benefits of the Bill. There was talk some time ago of banning single-skin tankers. What is the state of play on that? Should we not focus on prevention rather than on clearing up the mess after an accident has happened?

Stephen Ladyman (Labour, South Thanet)

I agree with the hon. Gentleman that prevention is vital. The phasing out of single-skinned vessels and their replacement with double-skinned ones is proceeding at a pace and needs to continue, but I do not believe that the Bill is an appropriate vehicle for measures such as those he describes for this reason, which I will flesh out in a moment. It is important to get the Bill on the statute book as quickly as possible. Without it we are exposed, and if there were a serious accident, we might be unable to compensate people as fully as they ought to be compensated.

Were we to move ahead with preventive measures in the same Bill, there would have to be further debate. Even if at the end of that debate we all agreed on those measures, there would be areas of controversy that would have to be resolved, which would delay the legislation getting on to the statute book. That is why we have gone for a precise target with the Bill. We have not tried to include things that are equally important or, as the hon. Gentleman suggests, perhaps even more so.

As I said, we have deliberately produced a precise, targeted Bill to deal with specific problems that relate to pollution from ships. In particular, we have provided for considerable additional compensation in the event of oil pollution around our coast. I shall go on to explain that further, but because such a large amount of compensation rests on this legislation, it is important to keep the Bill as focused as possible. That has resulted in a small Bill, which I hope we can get on the statue book as soon as possible.

Greg Knight (Conservative, East Yorkshire)

Will the Minister comment on the definition of "pollution"? For example, does non-fuel oil such as olive oil fall within that category? Does "pollution" cover an oil that, in effect, has been solidified, such as grease?

Stephen Ladyman (Labour, South Thanet)

I will certainly deal with those points, if not in this speech, then after seeking the leave of the House to make the winding-up speech.

As well as the issue of oil pollution around our coast—the Bill specifically deals with oil pollution—we have the opportunity to provide for an important measure to reduce air pollution from ships, which could not be missed. Again, international text for that exists, so we believe that it is possible to achieve agreement on a consensual way forward.

Merchant shipping legislation already contains provision to implement, by secondary legislation, most international maritime instruments. We already have powers to implement basic compensation for oil pollution, and we have secondary legislation in hand to implement compensation arrangements for chemical pollution and for pollution from ships' fuel—the so-called Bunkers convention.

The narrow purpose of the Bill is to close remaining gaps in our primary powers and to make adequate provision for future changes in the relevant international instruments. We therefore have before us a short, focused Bill whose purpose is to allow the UK to implement two important international treaties, one greatly to improve compensation for oil pollution and the other to introduce measures to reduce air pollution from ships.

On compensation for oil pollution, ours is an island state with a coastline of over 10,000 miles, so the Government are very conscious of the potential environmental impacts stemming from a major pollution incident. We are surrounded by a number of major shipping routes and the English channel is the world's second busiest international waterway, after the Malacca straits.

Marine oil pollution can have devastating effects. The public are familiar with the dreadful images of polluted coastlines and of oiled seabirds and mammals, but the effects go much further. The economies of coastal communities and their fishing and tourism industries can be shattered following a major oil spill. The costs to local authorities and the Government of responding to an oil spill can be exorbitant. Following the Torrey Canyon incident off Land's End in 1967, it was evident that the compensation arrangements were inadequate. That led to the development of an international system to ensure that victims of oil pollution damage would be fully and promptly compensated.

The resulting international regime was founded on two treaties: a liability convention, which made shipowners strictly liable for pollution damage and required them to maintain insurance, and a fund convention, which provided additional compensation to victims of oil pollution damage when they were unable to obtain full compensation under the liability convention. The additional compensation provided under the fund convention is paid for by oil receivers in state parties to the fund convention.

The original instruments have since been superseded, but the international regime remains in place and, to date, 98 states have joined it. Since it was established, the UK has experienced two further major incidents, involving the Braer off the Shetlands in January 1993 and the Sea Empress off Milford Haven in February 1996. The international fund provided compensation of £52 million in respect of the Braer and £37 million in respect of the Sea Empress.

The compensation available through the international system was significantly increased in 1996 and the basic regime now provides for an overall limit of £168 million of compensation.

Greg Knight (Conservative, East Yorkshire)

If the Minister cannot answer straight away, I invite him to do so in his winding-up speech. The international convention is reviewed and amended from time to time. When a review or amendment takes place, is it by majority voting or does the UK have a veto if it does not like what is proposed?

Stephen Ladyman (Labour, South Thanet)

I will indeed confirm that in my winding-up speech, but I understand that we do not have a veto. However, it is the normal practice that we work closely with the other states and try to achieve a consensual way forward. It is usually possible to achieve that.

Unfortunately, the compensation available—£168 million—is not always sufficient. Under the system, full payment for claims has often been delayed until the full extent of the damage is known and the final costs of an incident can be assessed more accurately, a process that can take a number of years. We experienced such delays following both the Braer and the Sea Empress incidents.

In the case of the worst incidents, when total costs exceed the amount of compensation available under the system, claimants may never receive full payment. The total cost of the 2002 Prestige incident, which affected Spanish, French and Portuguese coasts, far exceeds the limit of the basic regime, and it is expected that victims will never receive more than 30 per cent. of their claims. The membership of the international regime agreed that it was necessary to address that fundamental shortcoming and the supplementary fund protocol was developed.

Tom Brake (Liberal Democrat, Carshalton and Wallington)

The Minister may be about to deal with my point. The supplementary fund, together with the original fund, will amount to £600 million, but the cost of the Prestige damage was £700 million. Even with the new arrangements, it would appear that, in the event of a repetition of that incident or an incident on the same scale, the fund would not cover it.

Stephen Ladyman (Labour, South Thanet)

That may be so. The hon. Gentleman is right that the total compensation that will be available from the supplementary fund will add £453 million for oil pollution victims, which means that, according to the latest prices, £621 million should be available. Those matters will, however, be kept under review. The legislation that we will pass today will allow us to use the supplementary fund, but it will also allow us to engage in further negotiations about the amount of the fund, and to agree to increases in future years through secondary legislation.

I am pleased to report that the United Kingdom played a prominent part in helping to develop the necessary reforms. The supplementary fund came into force in March last year and has so far been ratified by 15 states including most of our European neighbours. Through the Bill, we can ensure that the UK can also enjoy the additional financial protection that the fund can provide. The Bill allows the UK to implement the supplementary fund protocol and the Government intend to do that as soon as possible.

Julian Brazier (Conservative, Canterbury)

We strongly support the Bill. The Minister has stressed the role of the UK in promoting the fund. What sanctions does he envisage in the long term applying to countries such as Panama and Liberia that will effectively be free riders?

Stephen Ladyman (Labour, South Thanet)

The hon. Gentleman talks of free riders, but if those countries do not ratify the fund, they will not be able to take advantage of it. Only nations that will be party to the convention will have to contribute to it or be able to benefit from it. We shall talk to all concerned, through the International Maritime Organisation and other mechanisms, to ensure that there is wide collaboration.

Julian Brazier (Conservative, Canterbury)

Surely the Minister appreciates that it is the people who need the money who will lose it if a company registered in Liberia has a big oil spill and goes bust. People in this country who cannot be compensated will be the losers as a result of that free riding.

Stephen Ladyman (Labour, South Thanet)

The risk will be spread among all the nations of the world. The extent of the fund as defined under the convention will always be available. Even if a company went broke, we would still have access to the money that was to be contributed to the supplementary fund. The hon. Gentleman may be thinking of the 1992 international convention on civil liability for oil pollution damage—known as the liability convention—which requires a shipowner to be insured for personal liability. I shall have to check on what happens when someone does not carry that necessary liability insurance. I may be able to give the hon. Gentleman the information later during the debate.

It is expected that the costs of all but the most extreme incidents will continue to be covered by the existing fund. The main benefit of the Bill is that the supplementary fund will enable claims to be met from the existing fund without delay. In the vast majority of cases, it will no longer be necessary to delay payment until the overall costs of the incident are determined, because the supplementary fund will be there to provide additional compensation as necessary. That should ensure that claimants are spared the frustration, and indeed the hardship, of delays in full payment.

Following enactment of the Bill, the United Kingdom would be able to join the supplementary fund protocol and benefit from the financial protection offered by it within a relatively short time. Until that happens, the UK cannot gain access to the substantial additional benefits conferred by the protocol. If an incident of the magnitude of the Prestige or the Erika affects our shores, the compensation available through the existing regime may well be inadequate. That explains why I am so keen for the Bill to be enacted as soon as possible.

The supplementary fund protocol would be implemented in the UK by secondary legislation. An Order in Council has been drafted and copies are available from the Library. It contains detailed provisions implementing the supplementary fund protocol in the UK. The provisions are technical and amend those in the Merchant Shipping Act 1995 relating to the international convention on the establishment of an international fund for compensation for oil pollution damage 1992—known as the fund convention—to extend them to the supplementary fund protocol. The order will require major oil receivers in the UK to contribute to the supplementary fund just as they currently do in respect of the existing fund. Contributions will be needed only if the £168 million available from the existing fund proves insufficient.

UK oil importers already contribute to the existing international fund. They were consulted in 2004 on the proposal to implement the supplementary fund protocol. The oil industry clearly favours a predictable and international approach to providing compensation for oil pollution damage and supports implementation of the supplementary fund protocol as part of a wider strategy to improve the existing regime.

As recently as last week, tanker owners agreed to share the costs of the supplementary fund, thereby reducing the burden on the oil industry. We fully support that move. It is vital for the compensation regime to be funded in a sustainable, equitable manner, with the right balance between shipowner and cargo interests. If all parties are not satisfied by the contribution arrangements, that could in the long term be very damaging to the international regime. The agreement proposed by tanker owners will help to ensure the continued success of the regime. It is due to be adopted by the governing body of the supplementary fund in February.

The Bill also provides for the implementation of future instruments governing compensation for oil pollution damage. As I said earlier, the original instruments were superseded some years ago. The fundamental principles of the regime remained unchanged, but improvements were made to, for example, widen the scope of application. The regime now provides for reasonable environmental reinstatement measures. It has also developed considerably in respect of compensation for the economic consequences of an oil disaster; it was originally conceived as being primarily concerned with clean-up. No doubt it will continue to evolve. Indeed, it must if it is to remain viable and successful, and meet legitimate claims. It is therefore important for the Bill to provide for any future instruments that may be developed to improve the regime still further. Such instruments are, of course, agreed only after extensive debate in which the industries concerned participate fully.

The UK Government will always want the option of being part of the international regime at the earliest opportunity. That is why the Bill provides for the UK to become a party to any instrument that modifies or replaces the existing regime. Of course, such a power would not be used before the usual public consultation and regulatory impact assessment exercises had been carried out. The provision was included so that the Government of the day could, if they so decided, implement any new, internationally negotiated instruments governing oil pollution compensation without first having to pursue primary legislation. Parliament would retain active scrutiny of the future proposal by virtue of the affirmative resolution procedure, which would apply to any secondary legislation made under the provision.

The last provision relating to compensation for oil pollution is a minor amendment relating to the existing international fund as contained in the Merchant Shipping Act 1995. The 1995 Act includes a provision relating to the time within which claims must be brought against the existing international fund. To ensure that the provision in the Act is interpreted consistently with the text of the fund convention, the Bill modifies the language used in section 178 to follow the wording of the treaty more closely. The Bill also provides for a power to make secondary legislation regulating air pollution from ships. It does so by amending section 128 of the Merchant Shipping Act 1995, so removing a doubt on the current scope of that section. The secondary legislation would implement annexe VI to the international convention for the prevention of pollution from ships, commonly known as the MARPOL convention. Again, we are seeking to implement domestically what we have negotiated internationally.

The secondary legislation would apply the series of internationally agreed technical standards which form annexe VI to UK-flagged vessels. The aim of those standards is to reduce air pollution from shipping through controls of emissions of nitrogen oxides, sulphur oxides and ozone-depleting substances.

Greg Knight (Conservative, East Yorkshire)

On that point, can the Minister confirm that those regulations are designed to affect only ships currently being used on a commercial basis and that they would not affect historic ships that may be used in a regatta to celebrate the second world war, for example? Will he confirm that the powers will not be drawn so widely that they prevent the use of historic vessels for celebratory purposes?

Stephen Ladyman (Labour, South Thanet)

That is my understanding. I will try to confirm that later for the right hon. Gentleman.

The pollutants that I mentioned have been identified as causing environmental degradation and damage to human health. Nitrogen oxides react with hydrocarbons at ground level to form ozone when exposed to sunlight. Ground level ozone exacerbates pre-existing lung complaints including asthma and has been demonstrated to increase hospitalisation and use of medication.

When released into the atmosphere, sulphur oxides and nitrogen oxides react to form acidic compounds. Those can fall as acid rain or be deposited as dry particles and cause localised acidic damage. Acid deposition in both forms can cause severe damage to forests and water bodies and damage man-made structures.

It is important to tackle emissions from shipping through internationally applicable technical standards. By 2020, the total number of ships worldwide is expected to be double what it was in 2000. That growth will be reflected in increasing traffic calling at UK ports and transiting UK waters.

Generally, shipping is a friend to the environment, but there is considerable room for improvement in atmospheric pollutant emissions from ships and implementation of the annexe would be a positive step towards greener shipping.

David Davies (Conservative, Monmouth)

I thoroughly agree with the Minister about the green credentials of shipping. Does he agree that more needs to be done to extend port capacity around the UK to ensure that, as well as the large ocean-going vessels that come into certain ports, mainly Felixstowe and Southampton, we have smaller feeder vessels using the many existing ports throughout the UK to get container shipments as near to their final destination as possible?

Stephen Ladyman (Labour, South Thanet)

There is considerable work to be done on port capacity and on facilities for trans-shipping using in-shore waterways to provide a greener form of transport for many of the goods that are brought into this country. We will shortly launch a ports policy review that will look at exactly those issues and at how we can plan appropriately for port capacity of all types.

Tom Brake (Liberal Democrat, Carshalton and Wallington)

Can the Minister explain what in practice it will mean once the UK has signed the annexe? What action may we expect to see at UK ports or against vessels in UK waters?

Stephen Ladyman (Labour, South Thanet)

We will inspect to ensure that all the ships that are affected by the provision are properly maintained, operated in accordance with international technical standards and certified as meeting the criteria set down in the MARPOL convention. Essentially, that is what would be seen at ports. We expect the people who are responsible for inspecting ships at British ports to ensure that ships that use British ports are in accordance with those conventions.

Tom Brake (Liberal Democrat, Carshalton and Wallington)

Can the Minister clarify whether that would mean, for example, boarding ships in UK waters when they are at sea?

Stephen Ladyman (Labour, South Thanet)

I will have to reflect on that and perhaps answer in my winding-up speech. It would be unusual for us to board ships at sea, but I will need to find out whether that is possible under the legislation.

I am pleased to say that the proposal to implement the annexe of MARPOL that we are discussing has been welcomed by the UK shipping industry and by marine engine manufacturers in their response to consultation. It is important for the UK economy that the UK introduce legislation implementing MARPOL annexe VI as soon as possible. If the UK does not do so, UK-flagged ships will be at risk of detention or delay in ports of states that have implemented it. Needless to say, that could have a severe impact on the UK merchant fleet.

Above all, it is important for the environment both of the UK and the wider world where UK ships ply their trade that the UK should implement MARPOL annexe VI. The Bill will enable the Government to implement it by secondary legislation. Draft secondary legislation containing the detail of the regulations contained in annexe VI has been prepared and copies have been placed in the Library.

John Randall (Conservative, Uxbridge)

I understand why the Minister is introducing the Bill and the urgent need for it, but he has talked a lot about the environment. He will be aware that the Government in the Queen's Speech mentioned a draft marine Bill. Has his Department been talking to other Departments about the need for that and is there any news on when it may appear?

Stephen Ladyman (Labour, South Thanet)

I can confirm that we are talking to other Departments about that legislation. It is not for me today to give an indication of when it may be forthcoming, but I am sure that the ministerial colleagues concerned will have heard the hon. Gentleman's question.

James Duddridge (Conservative, Rochford and Southend East)

Will the Minister confirm to my constituents that the Bill applies not only to ships at sea, but to ships coming down estuary areas such as the Thames? Furthermore, will the compensation arrangements include ships once they are docked and static?

Stephen Ladyman (Labour, South Thanet)

Is the hon. Gentleman referring to oil pollution from ships in those waters?

James Duddridge (Conservative, Rochford and Southend East)

indicated assent.

Stephen Ladyman (Labour, South Thanet)

I think it unlikely that we would have an accident in estuarial waters that required the use of the supplementary fund because of the scale of accident required to trigger the use of the fund, but liability arrangements are in place to compensate people who are affected by pollution in those areas.

I reiterate that the Government are determined that the UK should have the best possible financial and environmental arrangements available to protect our coastal interests from the effects of oil pollution from tankers and from air pollution from ships. Recent oil pollution incidents in France and Spain have demonstrated that costs of major spills can far exceed the compensation that is currently available. The additional sums available through the supplementary fund should ensure that, in virtually all circumstances, compensation can be paid promptly and in full. We wish to have that protection in place as soon as possible.

John MacDougall (Labour, Glenrothes)

I am grateful for the meeting that we had on ship transfer in the River Forth. As my hon. Friend is aware, the main concern is that should an incident take place, albeit that the likelihood of that happening is minute, the scale of the problem would be enormous. Is he satisfied that the range of compensation suggested in the Bill would meet such a situation? Is there any way in which further compensation can be offered should an incident cause a much larger problem than the scale of liability covers?

Stephen Ladyman (Labour, South Thanet)

I am confident that were an incident to occur in the firth of Forth—let us hope that we are never in that position—arrangements are in place that would adequately compensate people, or that would require those making oil shipments there to have liability cover such that they can provide compensation. Although such an accident would be devastating, I doubt whether one could occur of sufficient scale to trigger the supplementary fund that we are discussing today. But I am confident that the range of provisions that will be available once the Bill is enacted will be sufficient to compensate people. That does not detract from the seriousness of the issue facing people in the firth of Forth. As my hon. Friend knows, consultations are under way on what may or may not be allowed there.

The Bill allows the UK to implement two important international treaties that will benefit both the environment and the financial protection of UK coastal interests. It is also important for the UK to be seen to be actively adopting these measures, especially bearing in mind the prominent role that we played in negotiating them. Many Members may wish to comment on measures not in the Bill that we could have taken to protect the marine environment and to deal with marine pollution, but as I said, including them would have delayed the Bill. Urgency is appropriate here to get these provisions into place, so that we are fully protected. I shall do my best to answer Members' detailed questions in the winding-up speech, if the House grants me leave to give it. I want to be as helpful as possible in order to encourage consensual and rapid progress. I look forward to the debate today and in Committee, and I commend the Bill to the House.

Julian Brazier (Conservative, Canterbury)

I begin by associating the official Opposition with the tribute that the Minister rightly paid to Lord Donaldson. He will be a great loss to the shipping world and if I may, I shall return to some elements of his report to which the Minister did not refer in his speech.

I am delighted to be leading for the Opposition on the Merchant Shipping (Pollution) Bill. Given that today is my first outing on merchant shipping since taking over this brief, I hope that it is in order briefly to stress just how important this industry is. It has taken over from aviation as the third largest service industry in the country, with a turnover of almost £10 billion a year. It carries 95 per cent. of our visible trade, and the importance of our merchant fleet to an island bordering the second busiest international waterway in the world cannot be overestimated. It is no wonder that Admiral Jervis—here, I am recalling recent celebrations—famously said the following to William Pitt the younger:

"I do not say that the French will not come. I say only they will not come by sea."

Indeed, the merchant navy has given extremely gallant service in two world wars, in the Falklands and, most recently, in the Gulf.

We welcome the Bill. As we discuss pollution today, we should remember that, as the Minister briefly mentioned, shipping is by far the cleanest form of transport in terms of carbon dioxide emissions. On average, per tonne mile, shipping produces about 10 per cent. of the CO 2 produced by road haulage. That is why, despite its brevity, this is a very important Bill. It allows for faster payments of more substantial sums in the aftermath of a major oil spill through the supplementary fund protocol, and it will cut emissions of nitrogen oxides from marine diesel engines.

The Bill enables me to demonstrate two of my party's approaches: the new consensus and the longstanding Conservative commitment to the environment. By far the most important post-war environmental legislation was Harold Macmillan's Clean Air Act 1956.

Greg Knight (Conservative, East Yorkshire)

In rightly placing on the record his concern for the environment, does my hon. Friend agree that nothing in the Bill ought to be used to prevent the use of historic vessels for regatta purposes? Any new restrictions imposed on diesel-engine emissions must not, therefore, be retrospective to that extent.

Julian Brazier (Conservative, Canterbury)

I entirely agree with my right hon. Friend on that point, and I was very glad to hear the Minister promise, following my right hon. Friend's intervention, to come back to that matter. It would be quite wrong for the Bill to interfere in any way with historic celebrations of the gallantry of our sailors in two world wars, for example. The Minister gave him a tentative assurance, which I hope he can firm up at the end of the debate.

We all know the consequences of major oil spills. We have seen the pictures on television of dead and dying birds and of coastlines ruined, in some cases perhaps for ever. Local economies are often stunted and tourism blighted. We should also remember those who live off the sea. After the Braer disaster off the Shetlands, to which the Minister referred, three quarters of the compensation went to help the fishermen whose livelihoods had been destroyed overnight.

There have been a number of other terrible spillages, such as the Sea Empress at Milford Haven, to which the Minister rightly referred. The cost of the Braer and Milford Haven disasters were $83 million and $62 million respectively—disasters that left tens of thousands of birds dying in the slick, and ruined hundreds of miles of beautiful coastline. The old liability and fund conventions made available up to $300 million to cover such costs. Those British disasters fell well within that fund but, as the Minister rightly said, that is not true of all oil disasters. When the Exxon Valdez ran aground on Prince William Sound, 37,000 tonnes of crude oil were spilled and 270,000 birds were killed. The cost of the clean-up operation was a staggering $2.5 billion.

David Taylor (Labour, North West Leicestershire)

It is of course right to establish appropriate regimes to compensate for accidents and incidents such as those that the hon. Gentleman is describing, but is he concerned that almost three quarters of all tanker incidents are either accidents by collision and contact, or are due to machinery problems? A substantial number of foreign-flagged vessels are involved in tanker accidents—I am thinking of the Bahamas, Norway, Gibraltar, Liberia and Malta—so would we not be equally well served by pressing for improvements in the quality of the maintenance and operation of foreign-flagged vessels in British waters, as well as compensating for some of the errors that they have made?

Julian Brazier (Conservative, Canterbury)

I am grateful to the hon. Gentleman for that intervention, with which I have considerable sympathy. I shall raise two points that relate to his intervention in a moment, if I may, rather than doing so now. He makes a very strong point and I hope that the Minister has taken it on board.

It is estimated that when the Prestige sank in 2002 after releasing 64,000 tonnes of crude oil, more than 3,000 km of coastline were ruined. Almost 800,000 birds were killed and the Iberian guillemot became extinct. The financial cost of the spill is expected to top $1 billion. To date, only 15 per cent. of the compensation has been paid, causing untold harm on the coasts of Spain, Portugal and France. That is why the supplementary fund protocol is so important. Not all spills will cost less than $300 million in future, just as they have not in the past. Clean-ups need to begin immediately—not after a long period of ascertaining the final cost of the operation.

The new fund, which we support strongly, will provide $1 billion, which is a big increase, and will rush in aid when it is needed. However, in moving on to the ground covered by the hon. Member for North-West Leicestershire (David Taylor) in his earlier intervention, I want to press the Government to tell the House what progress is being made on preventing disasters from affecting the most environmentally important areas of this country.

The British Chamber of Shipping told me that, worldwide, oil pollution fell by just over 90 per cent. between 1992—a carefully chosen year—and 2004. Nevertheless, what are we doing in terms of prevention? There is a slight danger that the Bill will mean that we focus on locking the porthole after the oil has bolted.

Lord Donaldson's inquiry contained more than 100 recommendations, and the Minister was right to say that some had been adopted. However, nothing has been done yet about one of the main suggestions, although the Government have long promised to act. Lord Donaldson recommended the creation of marine environmental high-risk areas, so that tankers and other vessels carrying dangerous cargoes would be routed away from environmentally sensitive regions. The Minister is my constituency neighbour, and we share a stretch of coast on a very busy shipping lane. It would be difficult to route vessels away from that lane, but that would be practical for other areas where there is a particular concern for environmental factors. Will the Minister say what progress has been made with that proposal?

Stephen Ladyman (Labour, South Thanet)

I cannot give a date for that announcement today, but I assure the hon. Gentleman that it will be made very shortly.

Julian Brazier (Conservative, Canterbury)

I am delighted to hear that.

In recent years, huge strides have been made in reducing oil pollution. I said a moment ago that the latest available figures showed that a fall of just over 90 per cent. had been achieved, but I remind the Government that that success is partly due to the support shown by the industry and individual members of the merchant navy. They are the ones who have had to amend many practices to achieve that dramatic fall.

I am worried that a new European directive might criminalise accidental discharges that are due not to reckless disregard, but to accidents involving a small amount of negligence. The directive comes from a section of the European Commission that used to be led by Spain but is now led by France—the two countries in Europe that have suffered most from oil pollution. As so often with measures from Brussels, the intention is good but the consequences may be counter-productive. First, there is a real chance that the directive may contravene international law. That would lead to the absurdity that European law could pull in one direction and international law in the other. Secondly, whatever the legal position, I share the industry's concern that young people could be deterred from joining the merchant marine.

The Government rightly can take some credit for the large expansion in British-registered tonnage as a result of the tonnage tax. I was very pleased that the Minister recently reiterated his determination to defend the Red Duster, now that the Government have acknowledged that it is under threat from Brussels. However, the recovery in tonnage has not been matched by any great increase in the numbers of British crew members. The directive means that merchant navy crew members could be sent to prison for a very long time as a result of genuine accidents in which there was no reckless disregard, but merely an element of negligence. That could have a significant effect on the recruitment of talented young people into our merchant navy.

Considerable concern was expressed in another place about vessels flying flags of convenience of countries that have not signed up to the protocol. When I asked the Minister about that earlier, his answer was very much the same as the one given by Baroness Crawley. Both said that there is a compulsory requirement to have insurance, but both must know that that insurance does not cover the really large spills. Ships from Panama, Liberia and other countries that have not signed up to the protocol are the metaphorical stowaways on the great vessel that is the international merchant fleet. They weigh the rest of us down, while using everyone else's resources.

David Davies (Conservative, Monmouth)

My hon. Friend will no doubt be aware that the largest oil tanker ever to be built will be registered in Majuro, the capital of the Marshall islands. Many people will not know where that is, and I admit that I had to look it up myself, even though I worked in shipping for many years.

Julian Brazier (Conservative, Canterbury)

I am grateful to my hon. Friend for that, and he is right to be concerned. I mean no reflection on that particular ship, but some of the most unseaworthy vessels on the high seas belong to the fleets that I mentioned. For instance, the Prestige, which sank in 2002 and caused a great deal of chaos, was registered in Cyprus' large offshore register. At least Cyprus is applying for EU membership, which means that there will be more scope to deal with the problem that its register poses.

Stephen Ladyman (Labour, South Thanet)

I want to deal with the point about ships registered in the Marshall islands. We must be careful not to suggest that, just because a place is small, it does not have a high quality flag. Many smaller nations with large fleets have high standards, but all vessels must be insured to cover their liability for any pollution that might be caused, and no uninsured vessel should be in our waters or come near our shores. The Government have powers to deal with any uninsured vessel travelling through our waters. The supplementary fund would be available to pay compensation as a result of accidents caused in our waters by uninsured vessels. The hon. Gentleman is right to say that, because some countries have not signed up to the fund, the burden will fall on the signatory countries. However, there are 98 signatories, so at least the burden will be spread out among them.

Julian Brazier (Conservative, Canterbury)

We have come full circle, as I said earlier that the countries that have not signed up to the fund are freeloading on the rest. Britain has set a positive example by joining the supplementary fund, but the Opposition would welcome measures, perhaps in the long term, to put pressure on countries such as Panama and Liberia to sign up to the fund so that they can bear their share of the burden.

I come now to the MARPOL convention. At present, ships account for 4 per cent. of global sulphur emissions and roughly 7 per cent. of nitrogen emissions. New technologies can reduce those figures substantially. Recently, P&O installed the new Krystallon water scrubber in the Pride of Kent—great name, good ship—and announced that there were "no measurable" sulphur emissions from the vessel, while nitrogen oxide emissions had fallen by 80 per cent. That is a really good example of how new technologies to reduce the levels of dangerous chemicals being pumped into the atmosphere can play such a big role. It is vital that companies with the financial base to test new inventions are given as much encouragement to do so as possible. Targets to cut emissions are an important part of the campaign against global warming, but they will be reached much more easily if there is also a focus on new technology.

The figures also show that transport by boat for both goods and passengers is considerably more environmentally friendly than transport by road. In Britain, light and heavy goods vehicles pump out an estimated 8.2 million tonnes of carbon dioxide each year. In contrast, our entire domestic shipping industry, which carries 95 per cent. of the goods traded with Britain, produces less than 1 million tonnes a year.

Occasionally, hon. Members find time to sip a drink on the Terrace. Each tug that we see pulling a large barge behind it carries enough waste to take 100 lorries off the road. The barges carrying cement up the Thames save 5,000 lorry journeys a year. The more transport we can shift on to vessels, the fewer road freight journeys will be made and the whole system would benefit. Fewer vehicles on the road mean less pollution and less congestion. I hope that the Government are giving serious thought to how to promote what is potentially by far the greenest form of transport.

Two matters are not, unfortunately, covered in the Bill. Because of an entirely understandable ruling by Mr. Speaker, we will not have an opportunity to debate in Committee the measures that would have been in the Bill on port capacity. They are too far removed from this subject, but it is vital that something is done to address our shortage of port capacity and the farcical arrangements for public inquiries on that. As my hon. Friend the Member for Uxbridge (Mr. Randall) pointed out, the Bill on marine issues was promised in the Queen's Speech and is a close cousin to this Bill—saving bird life is, after all, one of the main aims of this Bill—but the Government still have not found time for it.

Nonetheless, we congratulate the Government on this Bill and hope that it will be the first of several steps to promote safety on the high seas, protect our coastline from pollution and promote greener technologies in our excellent merchant navy. I commend the Bill to the House.

Tom Brake (Liberal Democrat, Carshalton and Wallington)

I also welcome the opportunity to debate this short Bill and wish to echo the Minister's comments about Lord Donaldson. I also welcome the hon. Member for Canterbury (Mr. Brazier) to his first outing on the subject of merchant shipping. I do not anticipate that the Bill will detain the House until late this evening because it commands all-party support. It will not need any Punch and Judy politics—although I was interested to note that Punch and Judy were back at Prime Minister's questions earlier.

In the other place, the Bill was dispatched in just over an hour and a half. Peers received no approaches from lobbyists and suggested that the Bill was uncontroversial. I concur with that assessment and do not wish to delay matters and leave the UK vulnerable in the way that the Minister spelled out in his opening remarks. The main purpose of the Bill is to allow the UK to implement two important international treaties. The first would greatly improve compensation for oil spills and the second would introduce measures to reduce air pollution from ships. A further minor purpose is a useful clarification of the claim period during which compensation claims can be made.

I come now to the supplementary fund protocol. The present regime, the liability convention, now includes 98 member states, although at the time of the debate in June 2005 it had 93 signatories. The present regime provides for an overall limit of £168 million of compensation. At the time of the debate last June, it was £160 million or £162 million. The present figure, £168 million, is compensation paid for by ship owners and oil importers. In the past 25 years, the regime has provided compensation in more than 130 oil pollution incidents. The Bill makes provision for the UK to implement the supplementary fund protocol and make available an additional £440 million for compensation in the event of a major oil spill from a tanker.

The fund was developed to provide additional compensation for victims of oil pollution in states that choose to ratify the protocol and are content for their oil industries to make the financial contributions. It was helpful of the Minister to clarify the point raised by the hon. Member for Canterbury and confirm that the UK, if it is affected by an oil spill involving a vessel that is not covered, will still be able to access the full funding available in the supplementary fund. The total amount, taking into account the existing fund and the supplementary fund, will be £600 million-plus.

The supplementary fund entered into force in March last year and has so far been ratified by 15 states. By June 2005, it had been ratified by only 10—Japan and nine states in Europe—and that underlines the Minister's legitimate concerns that the UK should join the club. Membership is now growing rapidly and we support the Government in their desire to ensure that the UK has the additional financial protection that the supplementary fund can provide.

In the other place, Baroness Crawley described the fund as follows:

"The supplementary fund should ensure that in future the regime bears the full cost. The shipping and oil industries will pay. That is in line with the 'polluter pays' principle to which the UK fully subscribes."—[Official Report, House of Lords, 14 June 2005; Vol. 672, c. 1149.]

My party also subscribes to that principle. The Bill will also ensure that the costs of funding compensation are shared by major oil importers internationally, rather than falling on national budgets. The Bill will also allow the UK to join any future regime governing oil pollution compensation.

I wish to return briefly to the polluter pays principle. I intervened on the Minister on the subject of the Prestige and the fact that the estimate of the damage is more than £700 million, whereas the supplementary fund, together with the original fund, will cover only just over £600 million. What is the thinking behind setting up a fund that does not have sufficient funds to cover an incident that has already taken place? That is rather illogical, and one would have expected agreement to be reached that the fund would have in it at least as much as would be required to cover such an incident. I hope that the Minister will be able to clarify the thinking on that when he winds up.

Air pollution from ships is not something to be sniffed at—if hon. Members will pardon the pun. Emissions from shipping are set to be larger than emissions from all UK land-based sources by 2020, according to a report from the European Parliament's Environment Committee. We therefore support the measures that allow the UK to implement annexe VI of the international convention on the prevention of pollution from ships, commonly known as the MARPOL convention. I intervened on the Minister on that point and, when he sums up, I hope that he will be able to give more detail on what the implementation of MARPOL will mean in terms of the actions that UK port authorities can take when vessels dock in UK ports. Does the UK have powers to board ships to check whether they have the insurance required under the liability convention, as the Minister implied? If a dirty-looking steamer came over the horizon, would the UK have powers to board that vessel to see whether it complied—

Stephen Ladyman (Labour, South Thanet)

I have reflected on that matter and I am now able to tell the hon. Gentleman that we would not normally board a vessel at sea. Should we wish to do so, we have powers under section 259 of the Merchant Shipping Act 1995. Normally, we would wait for the ship to arrive at a UK port where it could be detained if necessary.

Tom Brake (Liberal Democrat, Carshalton and Wallington)

I thank the Minister for that intervention. I see that he sometimes has difficulty in reflecting at speed, as I do, but I am glad that some clarification arrived as he was sitting on the Front Bench.

Hon. Members will be aware that there were 23 signatories to annexe VI of MARPOL in June, but the number might have moved on by a further five since then. The signatory countries range from Azerbaijan to Sweden to Vanuatu. I agree with Baroness Crawley that in coastal and port communities, human health benefits will result from the reduction of localised pollutants such as low-level ozone. She said:

"It is estimated that implementing MARPOL Annex VI will result in 20 fewer deaths and a £26 million reduction in associated economic loss annually."—[Official Report, House of Lords, 14 June 2005; Vol. 672, c. 1147.]

That information is extremely helpful. Can the Minister tell us how many deaths and what costs have arisen since the point at which the annexe was available to be signed by the UK?

I promised not to detain the House at great length and I will be true to my word by bringing my speech to a conclusion. Liberal Democrats believe that the Bill will deal effectively with the matters that it is intended to address: the compensation available to cover the cost of oil spills and air pollution from shipping. The Bill will receive our support.

Robert Goodwill (Conservative, Scarborough and Whitby)

This is almost a case of déjà vu, because before I elected to this Parliament I was a Member of the European Parliament, where I got off on things like this. I took through some of the Euro IV legislation and the legislation on motor cycle emissions, N1 vehicles—vans—and small spark-ignition engines, such as those in lawn mowers and chain saws. I was pleased that we managed to save the chain saw for our foresters and farmers from legislation that would have meant that the engines' catalytic converters were too heavy and hot for practical use.

My swan song was my involvement in the regulation on the quality of marine fuel. That started with Mrs. Hautala, from the Green party, as rapporteur, and then Alexander de Roo, who is a Dutch Green, took over. May I put on the record my thanks to officials from the British Department for Transport, who were supportive during that time? I also thank the officials who were co-opted to the European Commission from the Department. By and large, we managed to follow the British line, although I could not say the same of my Labour colleagues in the European Parliament on every occasion. I would especially like to mention Chris Parkin, who was very supportive.

I welcome the Bill. As we have heard, marine transport is very efficient. A ship produces a quarter of the amount of carbon dioxide per tonne kilometre as a lorry. The UK is an island and we need cast our minds back only to the second world war to remember how the submarine blockade threatened the very survival of our nation. Although we have a connection to the French mainland through the tunnel and several pipelines—others are being built—we still rely primarily on our maritime transport for survival in the global economy. Many businesses cannot survive without access to global markets through our ports and merchant fleet.

Of course, maritime transport is not as environmentally benign in other ways. There have been improvements to vehicle technology due to several pieces of European legislation, such as the introduction of catalytic converters, common rail technology and more advanced engine management systems. There have been advances in fuels. There is a perennial battle between the manufacturers of vehicles and the manufacturers of fuels about who should be making moves to improve our environmental standards further. Such an argument also goes on in the area of marine engines.

Tremendous progress has been made on sulphur. In 2000, we reduced the amount of sulphur in diesel fuels for road vehicles to 350 parts per million. We now have a regulation to provide that the amount of sulphur is 50 ppm, and there are low-sulphur diesels on the market at 10 ppm. In fact, a new Ford Focus that operates on the hottest and most polluted day of summer in the middle of one of our big European cities is as likely as not to clean the environment once its catalytic converter has reached its operating temperature. We have thus moved an awfully long way.

On power generation, the dash for gas has reduced the use of coal, which can be dirty. Power stations, such as Drax in my area, have exhaust flue desulphurisation, which has reduced the amount of sulphur to such an extent that families such as mine now have to buy sulphur fertiliser because we no longer have a free supply of sulphur from above, courtesy of the Central Electricity Generating Board. Of course, we will have an opportunity this year further to reduce the pollution caused by power generation if we take the decision to build a new generation of nuclear power stations.

When the sulphur is removed from oil that is used for petrol and diesel—for road transport—we are left with bunker oil, which is notoriously high in sulphur. Even bunker oils that are derived from our pretty high quality North sea crudes can be between 2.5 and 3 per cent. sulphur, which is equivalent to 27,000 ppm of sulphur compared with the level of 10 ppm in the new advanced diesels. While we might not have such a big problem with our North sea crudes, many southern European states have serious problems with the crudes that they receive from Russia and Saudi Arabia, because their levels of sulphur may rise well above 3 per cent. Bunker fuels derived from crudes from the Gulf of Mexico can be 4 per cent. sulphur.

As we heard from the hon. Member for Carshalton and Wallington (Tom Brake), by 2010 shipping will produce half the sulphur emissions in the European Union. The majority of that sulphur is not a major problem because it goes up at sea and falls down at sea. Some 80 per cent. of the sulphur dioxide emitted by a ship in the mid-Atlantic will go into the sea and its effects will be relatively benign. However, in MARPOL annexe VI sensitive areas in the English channel, the North sea and the Baltic, there is a specific problem due to high amounts of sulphur dioxide that is derived from our ships. Some 90 per cent. of the sulphur in some such coastal areas derives from shipping.

Despite the fact that ships might travel across the North sea, most of the shipping hugs the coast. For example, the North sea ferry from Hull to Zeebrugge does not go in a straight line, but hugs the coast. The pollution from such ships thus has a significant effect on coastal communities. I welcome the action that the Government are taking following European agreement on the MARPOL annexe VI sensitive areas. I am sure that it will considerably reduce the pollution that we experience, which is becoming increasingly significant.

Pollution is also a significant problem when ships are in port. That can be called hotelling—I guess that it is not to be confused with cottaging. Ferries can cause a specific problem because they spend a lot of time in port. The Commission proposed that auxiliary engines should be run on 0.2 per cent. gas oil, but that has been a problem for some ferries, especially cross-channel ferries such as the Pride of Kent and the Pride of Canterbury. Those ferries spend about 50 per cent. of their time in port, so it would be especially expensive for them to use such low-sulphur fuel. I was thus pleased that when we considered the legislation in the European Parliament, we allowed trials to be held on the new Canadian-developed abatement technology that can reduce pollution at source and also contribute towards energy savings at refineries. The production of low-sulphur fuel has an environmental cost at the refinery, so if ships are fitted with seawater scrubbers, the pollution can be reduced at source. Not only would that reduce the sulphur dioxide that is derived from fuel, but it would make significant reductions in nitrogen oxide, which is derived not from the fuel, but from the nitrogen in the air that is in the engine's combustion chamber.

I hope that the Minister has seen the results of those two trials with the Pride of Kent and the Pride of Canterbury. The Pride of Kent is fitted with abatement technology, but the Pride of Canterbury—an identical ship—is not. If the technology is successful, there could be ways to encourage more ferry and shipping companies to fit it. It would also reduce the particulate matter from the engines, which can be a problem. Abatement technology also reduces volatile organic compounds.

Some countries have tried market-driven solutions to the problem. I am not sure whether the Minister is aware of the Swedish approach, which has a graduated system of port dues. Shipping companies that opt for even higher environmental standards receive rebates on the port dues. The British Government might want to consider that as a way of encouraging companies to go further. A similar scheme operates in Helsinki harbour.

Another option that was suggested when the directive was discussed was to encourage more ships to opt for an electric feed while in port. The Pride of York and the Pride of Hull spend all day in Hull harbour with their main engines ticking over and their auxiliary engines running. They may well benefit from plugging into the mains. Has the Minister received representations from the industry on how we can make progress on that?

On marine fuel and tankers, a practical problem in complying with the MARPOL annexe VI on sensitive areas is when a tanker leaves its home port in Saudi Arabia or wherever and finds that it is diverted to another port. I would be concerned if our security of supply were compromised because a ship had bunkered with high sulphur fuel and could not discharge in a UK or other European port. There is a problem with the discharge of tankers. I am sure that the Minister is aware that a tanker burns around 200 tonnes of heavy fuel oil in just raising steam to discharge. I have had representations from the tanker industry, which is concerned that many of the boilers fitted to those ships cannot be run on dual fuels. That may limit the number of tankers that could discharge in the UK without expensive retrofitting.

Perhaps I can crave your indulgence for a second, Mr. Deputy Speaker, and address the issue of fuels for recreational pleasure craft. I am sure that the Minister is aware that we benefit from a derogation to allow such craft to use rebated fuel, and that that runs out at the end of they year. I was in correspondence with him last year to encourage him to apply for a renewal of that derogation. Having reflected on that, I hope that he will make an announcement fairly soon. I am sure that the European Commission will look favourably on such an application. It would reassure many of the people in my constituency who enjoy recreational activities on the sea.

A couple of years ago, I went to Galicia to see the effects of the Prestige disaster. I was not prepared for what I saw. The word "devastation" does not describe the black hell of the beaches in Galicia. Hundreds volunteered to clean it up, and many of those came from all over Spain. They wore those white overalls that we saw on our television screens. That brought home to me the extent of the disaster and how we cannot allow it to happen again.

We must not forget that the Prestige disaster was a result of a catalogue of mistakes. First and foremost, there was a major mix-up between central and regional government. I am slightly concerned that, in one way or another, we are moving to regional government in this country. I would hate to think that we could have a similar mix-up. The people in Galicia thought that it was up to them to decide how to act, but the people in Madrid thought that it was their responsibility. In the end, vital hours were lost at the start. Instead of bringing the Prestige into a safe haven and putting a boom around it, which would have caused considerable devastation but on a small scale, the ship was ordered out to sea, where it broke up and damaged 250 miles of coast, with devastating effects on tourism, fishing and wildlife.

Some 63,000 tonnes of heavy oil escaped from the Prestige and important oyster beds in France were devastated. In addition, 250,000 sea birds were killed. Some 90 species made up the 23,000 that were collected, and 17,000 of those were already dead. We often see pictures of birds being cleaned or treated in centres, but I am sad to have to relate that the majority of those birds die anyway, having ingested fuel. Having spoken to some of the bird charities, I know that they think that they must do something, but perhaps we should not expend too much money on birds that are, sadly, a lost cause, and put more resources into ensuring that a spillage is quickly contained so that we do not repeat the mistakes of the Spanish.

I note the comments by my hon. Friend the Member for Canterbury (Mr. Brazier) about boats that can be described as freeloaders—those that sail under a flag of convenience. The Prestige was an accident waiting to happen. It was a rust bucket. I was led to believe that it was registered in the Bahamas, but I bow to my hon. Friend's better knowledge. It was registered by a British broker. It had a Filipino crew and a Greek captain. The ship was owned by a Liberian firm, but was controlled by a Greek shipping magnate. The oil was being ferried from Latvia to Singapore. The oil itself was owned by a Gibraltar-based firm, with a headquarters in Switzerland run by a Russian parent company. No wonder something went wrong.

Does the Minister have information on what percentage of the world fleet falls into the category of using a flag of convenience and does not comply with the same standards as we do? What proportion of the ships that enter British waters would fall into that category? I am concerned that another Prestige is waiting to happen. It is only by the grace of God that such a disaster has not happened more often in our waters, with devastating effects.

Lee Scott (Conservative, Ilford North)

This is a Bill of only a few pages, yet it has the potential to make a significant increase in the level of financial compensation available in the event of a large oil spillage from a ship. It will also allow the United Kingdom further to control emissions from ships.

Most of the goods and food imported or exported to and from Britain travels by sea. Britain is surrounded by major shipping routes and the English Channel is the world's second busiest international waterway. In the main, transporting goods by cargo ship is an environmentally friendly form of transportation. However, when it goes wrong, it can go spectacularly wrong.

The United Kingdom's miles of coastline are at high risk from spills from tankers, and three of the world's worst oil spill disasters have occurred in UK waters. We need only remember the Torrey Canyon off the Isles of Scilly in 1967, the Braer off Shetland in 1993, and, as we have heard, the Sea Empress off Milford Haven in 1996, to illustrate how damaging such an incident can be. Oil slicks do not respect maritime national boundaries, so it is only through co-ordinated international action that we can arrive at a successful solution to that type of pollution.

This Bill will bring the United Kingdom into line with international efforts to tackle the appalling effects of oil spillages. It will allow the UK to implement two important international treaties: the first greatly to improve the compensation for oil pollution and the second to take measures to reduce air pollution from ships.

Over the years, we have seen graphic television images of the effects of oil spills on the environment, on wildlife and on local people. Sadly, the effects can be very long term, and they can wipe out species in an area and destroy local livelihoods. Marine oil pollution can have devastating effects. The television pictures of disasters, such as the Exxon Valdez incident that took place in Prince William Sound, Alaska, in 1989, made us all too familiar with the dreadful images of polluted coastlines, oiled sea birds and mammals and the other damage caused to wildlife. The local coastal communities lost their fishing and tourism industries to this major oil spill. The sinking of the Prestige in 2002 saw the discharge of 63,000 tonnes of oil, and fishermen, local hoteliers, restaurant owners and others along the Portuguese and north Spanish coast were all badly affected. In the Torrey Canyon incident off Land's End in 1967, it was quickly clear that the then existing arrangements for compensating those who suffered damage were woefully inadequate.

It has to be recognised that the recent figures from the International Tanker Owners Pollution Federation show that the number of oil spillages has reduced by around one-third since the 1970s. Large spills have reduced dramatically. Most spills from tankers result from routine operations such as loading, discharging and bunkering. These most often occur in oil terminals or ports, and most result in an oil discharge of less than 7 tonnes. Incidents in which the tanker collides with another ship or harbour facility or when it runs aground are what normally lead to the larger oil spills. Almost 20 per cent. of these result in spills where more than 700 tonnes of oil are lost.

The one third improvement in reducing oil spills is explained by the introduction of better crew training, improved terminal handling facilities, better technology and, most significantly, by the introduction of double-skinned hulls for tankers. Unfortunately, numbers of older singled-hulled vessels still operate, many under flags of convenience. Inspection shows that one in 12 of the foreign vessels inspected in the United Kingdom are unseaworthy and have to be detained. This is a disgrace. Elsewhere in Europe the situation is worse, with almost three quarters of ships inspected found to be suffering from severe deficiencies.

I am concerned that some countries have not yet announced plans and a timetable to sign up to the supplementary fund protocol. A number of these countries are flags-of-convenience carriers or open-register countries and have significant registered tonnage. Most are party to the old fund regime, but not to the new one. It would be common sense for those countries that join the new protocol to deny access to their waters and ports to ships from countries that do not sign up to the scheme by the deadline date. If this is not done, tanker operators from the countries signed up to the protocol will be working at a competitive disadvantage.

Given the greater risk of catastrophic oil spillage from a singled-hulled tanker, these should certainly be banned from entering European Union waters. There was discussion some time ago on this matter, and I would like to know from the Minister whether the Government would support such a ban.

The Bill also enables the UK to reduce air pollution from ships by implementing measures to control emissions. Ships are getting ever larger, as are their engines, and they produce a great deal of sulphur and nitrogen emissions. Some improvement can be made by reducing the sulphur and nitrogen content in marine fuel, but more innovative ideas are being tried by firms such as P&O. It has fitted a device to one of its Dover-Calais cross-channel ferries called an eco-silencer—a "scrubber", in effect. This is designed to cut sulphur emissions by 95 per cent. and nitrogen oxides by 80 per cent. I understand that many other companies are considering similar proposals.

A number of ports in the USA and Canada have introduced revised structures that allow ships in harbour to draw electrical power from shore. This has the great advantage that it enables the ship to turn off its engines in port while it loads or unloads, thereby reducing pollution in the port and the surrounding area.

There are two other areas of ship-produced pollution that I would like to discuss. The first is the improper disposal into the sea of rubbish and human waste. The second is the transportation of non-native species in the ballast water of a ship that is then disposed of at sea thousands of miles away. These exotic newcomers can then become a serious threat to native plants and animals. These issues are covered, as is oil pollution, by international laws, rules and agreements. However, in too many cases, the polluter is not prosecuted or even identified. I seek an assurance from Ministers that this is an issue that they will look at.

Like my colleagues, I fully support the Bill and welcome it.

David Davies (Conservative, Monmouth)

I am grateful for the opportunity to speak and perhaps I should declare an interest. I worked for several years in a shipping company that is owned by my parents. I have no financial interest whatever in it at the moment. Perhaps I should also come clean and say that I suppose that it could be argued that, because of some of the things that I saw going on there, we have contributed directly in a very small way to pollution for reasons that I shall come to shortly.

The other side of the coin is that perhaps I have a unique perspective on the issue. At the time that I worked for the company, I would also leave at about 4 o'clock, travel down the coast and go surfing off the coast at Porthcawl. I would do that week in, week out for most of my 20s. On one occasion, we were ordered not to go into the water by the police because of a spillage that had taken place. I can therefore say that I have been both a contributor to, and victim of, maritime pollution.

There is a lot of good news and, in commending the Bill, it is worth picking up on the statistics that were mentioned earlier. I do not want to undermine anything said by my hon. Friends, who are quite correct about the problems that exist. However, there is a lot of good news and, in a spirit of consensus, we should pay tribute to this Government and previous Governments going all the way back to the 1960s. There has been a growing realisation of the importance of better standards of maritime cleanliness.

When one talks to people who have worked in the industry for years, they will speak about some of the bad practice that has gone on, but has now largely been stopped. I refer to the emptying out of tanks and bilges. That was absolutely commonplace a few years ago. It may still happen—I do not deny that—but much of it has been stopped because of the good work of organisations such as the International Maritime Organisation and the Maritime and Coastguard Agency. They are able to go on board ships to check logbooks and to ensure that ships docking at UK ports make use of the facilities that have been put in place to clean out tanks and bilges.

Collisions are now less of a risk because in busy sea lanes, such as the Dover straits, there are clear shipping lanes that ships must go up and down. They cannot just set their compass and go anywhere they want. As the Minister has said, there is now an ongoing programme to phase out single-hulled tankers and to bring in double-hulled ones. We have certainly come a very long way; there is a lot of good news.

I do not, however, think that we should be too complacent. Headline-grabbing disasters still take place and, as I saw in the office when I worked for the company, many smaller incidents of spillage and pollution happen regularly. We used to find that we were regularly told that containers coming into the UK for which we had responsibility had been washed off a ship as a result of bad weather. I said that we were responsible for a bit of pollution, but the containers for which we were responsible contained only tea. Presumably, that does not do a lot of damage. Nevertheless, many nasty things are carried around in containers, and it is not uncommon for them to be washed over the sides of ships. Perhaps the Minister will bear that point in mind and confirm that the fund, if it is ever needed, will also apply to such small-scale incidents that could turn out to be very expensive if the wrong types of goods are washed overboard.

There are two reasons for the problem. The first is bad weather, and I appreciate that there is not much that the Minister can do about freak weather conditions and tidal waves. We do not expect him to stand there like Moses with his staff, ordering the storms to calm down and the waves to part. However, I sometimes think that his leader thinks that he could probably do that.

One issue that the Minister could consider is training. The comments that have been made about levels of training, particularly on flagged vessels from certain countries, are very relevant. Tragically, within the past fortnight, a seaman was killed on a ship that was leaving the port of Newport where I used to work. I know something about that incident, but I will not say much while it is under investigation. Suffice it to say, however, that basic safety procedures were not being carried out at the time. The Minister must agree that the issue of training arises over and over again, and it is particularly pertinent to flagged vessels. I hope that he will look into that.

When ships come into UK ports, they must take on board a pilot for many of those ports unless the master can get the exemption licence. To do that, he would have to undergo some tests within the UK. I am told informally that many of the masters tested, from certain countries, are found to have such a poor sea knowledge that not only will they not qualify for the exemption, but had they taken the test in the United Kingdom they would never be allowed to be put in charge of a UK-flagged vessel. Clearly, training is a real issue in relation to some of the vessels coming in. I will not specify any country in that regard, because some of the countries mentioned today have taken steps to raise their standards. The Minister will be aware, however, that not all such countries have done so, and that overall training levels can be poor.

On air pollution, I echo the comments of those who pointed out that whatever problems are sometimes caused by ships, shipping is one of the greenest ways of moving goods from A to B. It is of great concern to me that, at the moment, much of the freight destined for the United Kingdom on ocean-going vessels goes straight into one of two ports, usually Felixstowe. Sometimes Felixstowe is skipped altogether and it goes into Rotterdam. From there, UK forwarding companies must arrange the delivery of vast numbers of containers to their final destination by lorry. I know that rail freight services are available, but without going into too much detail, they do not operate as efficiently as one would hope. Many movements take place by road, which results in additional expense for the consumer, the environment suffering and the roads getting clogged up.

Much greater use of the current facilities around the United Kingdom would be desirable, and it should be fairly easy for the Minister to do that. I will not stretch your patience, Mr. Deputy Speaker, by talking about the amendment that I tabled but that was not called. It would be completely wrong to do so. Suffice it to say that the Minister can do a lot to help the environment by ensuring that more of our goods are moved around by ship.

I recognise that there are problems, and that the Minister recognises that we do not live in a perfect world. Things sometimes go wrong, and that is what this Bill is all about—putting in place a mechanism for dealing with something that, we hope, will not take place. I wish the Bill God speed, and I hope that it sails through Parliament's legislative channels as easily as a supertanker through the straits of Dover.

Stephen Hammond (Conservative, Wimbledon)

The Minister said in his opening remarks that the Bill was precise and targeted, and it is. Essentially, it provides the United Kingdom with protection and the best compensation in relation to pollution from oil, and reduces air pollution from ships. We support the UK getting protection from the supplementary fund protocol.

The Bill deals with our environment, and my right hon. Friend the Member for Witney (Mr. Cameron) reaffirmed recently in an excellent speech that the Conservative party has a long history and a bright future in environmental matters. That is certainly true today—it is 3–0 to the Opposition on environmental matters.

I look forward to the Minister's response to the three excellent points made in interventions by my right hon. Friend the Member for East Yorkshire (Mr. Knight). He asked for clarification of the definition of pollution in the Bill, and whether it would extend to non-fuel oil and oils that have formed a solid. Perhaps more importantly, he asked for confirmation that the Bill would not act retrospectively to prevent the usage of historical vessels in regattas. I am sure that the Minister will provide clarification in his winding-up speech.

I also want to return to the point made by my hon. Friend the Member for Canterbury (Mr. Brazier) in his opening remarks. What pressure might be applied to non-signatories of the supplementary fund protocol? While non-signatory country vessels might have insurance, they will not have enough insurance to deal with major spillages. We welcome the fact that the fund will pay out, but will the Minister explore what pressure might be exerted by the Government on non-signatories, who are nothing more than freeloaders, to sign up?

We have had an excellent debate. I did wonder whether my hon. Friend the Member for Scarborough and Whitby (Mr. Goodwill) started his speech injudiciously by saying that he got off on things like this. When I remembered that he was a Conservative, not a Liberal Democrat Member of Parliament, I knew that he would talk only about matters environmental and nothing more inappropriate. He brings his extensive experience in the European Parliament to the mother of Parliaments.

My hon. Friend raised some interesting questions. He referred to the high level of sulphur dioxide that is emitted from shipping in coastal areas around the UK, and welcomed the Government measures, as we do. He also referred to shipping in port, the need to fit seawater scrubbers, and the efficacy of those mechanisms. I trust that the Minister will have noted the distinction that he drew between the Pride of Kent and the Pride of Canterbury. Perhaps he will want to reflect on that when he replies to the debate. My hon. Friend also expressed his desire to see the renewal of the derogation for leisure craft. I know that he has written to the Minister about that, and the hon. Gentleman might wish to comment on that in his reply to the debate.

My hon. Friend the Member for Ilford, North (Mr. Scott) reminded us all of the potential threat to the UK coastline and of the need for coherent and co-ordinated international action against pollution to stop the damage to wildlife and local industry. He pointed out that despite many improvements in safety measures, one in 12 vessels inspected in the UK is unseaworthy, and most of them appear to be from non-signatories of the supplementary fund protocol. Again, he asked whether the Government should take some action in that respect or ban non-signatories from sovereign waters or ports. I look forward to the Minister's comment on that.

My hon. Friend the Member for Monmouth (David T.C. Davies), who is another of the excellent 2005 club additions to the Opposition Benches, made a contribution based on his considerable experience of the shipping industry. He pointed out that, over many years, several improvements have been secured under Governments of both hues. He stressed that that was not grounds for complacency, and spoke about the importance of safety measures on some vessels and the need for better training. He also stressed both that shipping was the green way of moving most goods and the environmental importance of that. To digress slightly, the Government have not addressed the issue of a northern rail link for freight through the midlands to Felixstowe. Such a link would continue the green trend, but freight continues to be moved by road rather than rail.

The debate has been short but excellent—it has been one of quality not quantity. I confirm that the Opposition support the Bill. We are prepared to do all that we can to ensure that it moves expeditiously through the House.

Stephen Ladyman (Labour, South Thanet)

I beg leave of the House to reply.

This has been an enjoyable debate. I am delighted, for the first time, to cross swords with some of the new Conservative Members, who made knowledgeable and authoritative speeches. Given that they all seem to be so knowledgeable and authoritative, I hope that none of them is available for consideration of the Bill in Committee, to guarantee that I have an easy time. I suspect that they have cooked their goose and they are on the list of Members who will be on the Committee, whether they like it or not.

Before I go into some of the detailed questions specifically, I should like to respond to the comment made by the hon. Member for Canterbury (Mr. Brazier) about the instruction that, rightly, Mr. Speaker has ruled out of order. Effectively, it would have allowed the Harbours Bill, a private Member's Bill that is currently being guided through the House by my hon. Friend the Member for Dover (Gwyn Prosser), to be included within the scope of the Bill. I believe that Mr. Speaker was right to rule that that would not have been an appropriate mechanism for inclusion. However, the Government offer full support to the Harbours Bill and we are keen to see it make progress. If there is any way that we can facilitate its progress by working with the Opposition, I will be keen to explore it.

Julian Brazier (Conservative, Canterbury)

We are perplexed. Why could not the Government have made time for it today? We are to finish at around 3 o'clock.

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

Order. We should stick to the winding-up speech on the Bill that is before the House.

Stephen Ladyman (Labour, South Thanet)

I shall address some of the specific issues that were raised by various Members. I agree with the hon. Member for Monmouth (David T.C. Davies) about the training of ships' officers and the need for high international standards of training and competence. That important requirement bears directly on the threat to our coastline. We try to work within the International Maritime Organisation to raise the standards of shipping generally. Indeed, one of the things that we must do to raise standards and to reduce the threat of pollution to our coastline is to show leadership within that organisation. That goes back to the issue raised by the hon. Member for Canterbury and by other hon. Members. To prevent pollution, we are showing such leadership in a number of areas. For example, within the IMO, we have started to move forward on the introduction of e-navigation. We are trying to create an international standard whereby all ships on the high seas will work with electronic navigation systems to the same standard. Those systems will work together and allow ships to be recognised from the shore and to recognise one another while at sea, to avoid collisions and groundings. There is a great deal of support for that work within the IMO, and I hope that we can reach agreement on a standard for e-navigation.

We have also shown strong leadership within the IMO's flag state audit scheme under which a flag state agrees to have the quality of its fleet audited. I am proud to say that we were the first state to support the scheme and to commit the UK fleet to being audited. Also, we were the first state to promise that, once that audit is complete and we are ready to respond to it, we will make it public. That demonstrates our strong leadership in raising standards. A number of other states have responded to our lead by saying that not only will they have their fleets audited, but they will consider making the audits public. By adopting such a positive approach, we are doing what we can to raise international standards.

Julian Brazier (Conservative, Canterbury)

The Minister has been generous in giving way. We welcome what he has just said, but he still has not addressed the issue of freeloaders in that context and that of the new protocol. What are we doing about Liberia, Panama and other such countries?

Stephen Ladyman (Labour, South Thanet)

Short of invading them, all we can do is engage with them diplomatically. I encourage Opposition Members to be realistic about what I can and cannot do. All I can do is to engage with these countries, to speak to their Ministers and to raise these issues with them—and I do. We show leadership through the IMO and use international agreements to drag up standards generally. In the world of shipping, we cannot make unilateral decisions that put our industry at a commercial disadvantage to the rest of the world. The best way to progress is through international agreements, and that is what we are trying to reach. We will continue to do the best that we can to get those countries to engage.

We should not assume automatically that because those flag states are just that, flag states, they are not alive to some of the issues with which we are dealing. Some of them are considering closely the idea of being part of the audit scheme. We are helping them to make that decision. Other states, although they may be very small places, operate to high standards under their flags and work with other major nations to ensure that their flag fleet is properly inspected.

The hon. Member for Ilford, North (Mr. Scott) asked whether I would agree to a proposal under which we would deny entry into UK ports to vessels that are flagged in states that are not party to the supplementary fund protocol. I suppose that that echoes the issue raised by the hon. Member for Canterbury. I do not think that such action is necessary. It does not matter if a vessel is flagged in a state that is not party to the supplementary fund protocol because that vessel must have insurance to cover the shipowner's liability. That is a requirement for entry into a UK port. In addition, we benefit from membership of the protocol because we are the ones who will get the money from it should that be necessary.

I was asked by the hon. Member for Scarborough and Whitby (Mr. Goodwill) whether we were considering other issues such as ships at berth using mains electricity or cold ironing, as it is known. I have not received any representations on that, but it is being considered by the UK and other states in the context of sustainable shipping. I will continue to keep an eye on it.

During the debate, my hon. Friend the Member for Glenrothes (Mr. MacDougall) asked about estuarine damage to the Firth of Forth, and other hon. Members asked about the possibility of compensation should there be damage to estuaries. I replied that I was confident that the various funds available would cover us. I can now confirm that that is the case. Money can be paid from the supplementary fund if the damage is caused as a result of a sea-going vessel being involved in an incident.

The hon. Member for Carshalton and Wallington (Tom Brake) asked about the total size of the fund and why we have negotiated a pot that is less than the damage from the Prestige is estimated to cost. That is an unfortunate side effect of the fact that it takes so long to agree such an international convention. When we set out to get states to be a party to the convention, the US$1 billion mark was far more than we thought would be necessary. Subsequently we found that even that was too little, but that is the sum available. After we get all the parties signed up, we need to address that issue.

I do not want to mislead the hon. Gentleman. He noted in his comments that the level of funding seems to have changed by a few million pounds since the debate in the other place. [Interruption.] That, as the hon. Member for Canterbury says from a sedentary position, is down to exchange rates. The amount of money available in the supplementary fund is intended to be 750 million of a unit used by the International Monetary Fund to reflect the average value of currencies across the world. It more or less works out to US$1 billion, but according to how the various currencies move, from time to time it will be 600 million, 602 million or 612 million. The figures that I quoted in my speech are based on the level of the exchange rates on 1 January this year, which are the latest figures available.

I was asked by the hon. Member for Canterbury about the EC directive that criminalises seafarers for accidental pollution. I share his concerns about that. We are working with EU colleagues on how that should be addressed. He also asked what we are doing to expand the UK shipping industry. He rightly gave credit to the Government for the increase in the size of the British fleet as a result of the tonnage tax. I remind him that the training commitment that comes with the tonnage tax means that in 2005 and 2006 there are 1,300 UK trainees in cadet ships, so there are many benefits from the tax. I will shortly make an announcement about how I intend to move forward on issues related to the tax to continue to encourage the UK fleet to expand.

The right hon. Member for East Yorkshire (Mr. Knight) asked me about historic vessels. I am not sure that I will be able to convince him 100 per cent. today, but I undertake to look into the matter further for him. There is no specific exemption for historic vessels, but our view is that they will probably not be affected by the MARPOL convention because they do not use the sort of fuels and engines that generate such pollutants. However, I expect the right hon. Gentleman is not entirely satisfied with that answer, so I shall write to him or, if he serves on the Standing Committee, we can discuss it there.

A number of other issues were raised with me by various Members. The hon. Members for Kettering (Mr. Hollobone) and for Canterbury spoke about other measures we might take to reduce the threat of pollution. The hon. Member for Kettering asked me why we did not include in the Bill measures to replace single hull vessels with double skin vessels. We do not need to do so because the Merchant Shipping (Prevention of Oil Pollution) (Amendment) Regulations 2005 already implement that change. The IMO is engaged on various measures to improve standards, including the issue of ballast water. A ballast water convention was agreed at the IMO in 2004.

Greg Knight (Conservative, East Yorkshire)

I hope the Minister will pursue the matter of historic vessels and if necessary raise it in the appropriate international meeting. I am sure that other nations would not want to affect them unintentionally. Will he please answer my second question about the scope of the definition of a polluting oil?

Stephen Ladyman (Labour, South Thanet)

Yes, I can answer that. The Bill deals only with hydrocarbon-based fuel oils, so olive oil would not be included in the measure. However, negotiations are taking place on that type of cargo to put in place measures to deal with it. I can clarify that further for the right hon. Gentleman in writing. I assure him that I will look into the historic vessels issue. Clearly, it is more complicated than I suggested it might be in my opening speech. If historic vessels are not affected, fine, but it might be difficult to negotiate an exemption for historic vessels without creating a loophole that would allow other ships to sail through it.

Several hon. Members mentioned the experiment that P&O is conducting on vessels sailing out of Dover, which is an excellent initiative. However, if the company did not retrospectively have to address the regulations, would it be doing that? It is important that we do not rule out retrospection. We need to find a way that will allow historic vessels to sail when necessary without creating a loophole. I will write to the right hon. Gentleman about this.

The provisions of the Bill relating to oil pollution compensation will greatly improve the protection that we can give to those who suffer the consequences of tanker disasters. The experience of dealing with the effects of tanker incidents on our shores has ensured that the UK is an attentive and active participant at meetings of the International Maritime Organisation and the International Oil Pollution Compensation Fund. Through the work conducted by its technical committees, the IMO provides the framework of international standards that apply globally to maritime activities.

Working collaboratively with our maritime industry partners, we will continue to create the conditions needed to provide, in the words of Lord Donaldson, safer ships and cleaner seas. Our goal should be to encourage the highest technical and human standards in the transport of oil by sea, so as to prevent shipping incidents from happening in the first place, and to prevent the operation of substandard shipping. Whatever mechanisms are put in place, and no matter how safe modern ships and navigation systems have become, we must accept that the sea can be an unpredictable and dangerous environment, and that, by force of nature, accidents will occur from time to time, some regrettably affecting our seas and coastlines. When they do so, we must ensure that the communities, businesses and those engaged in clean-up operations are not subjected to needless difficulties when recovering their legitimate costs. The Government are determined to ensure that we provide our citizens and our coastal environment with the best legal and financial protection available.

It is also important that the UK implement annexe VI of the MARPOL convention, which the UK played a key role in negotiating at the IMO. Major oil spills are a rare occurrence, but atmospheric emissions from ships are constant. The new international standards and requirements are important because they will help to reduce air pollution from ships trading worldwide.

The UK coast is interspersed with both large and small ports. The large ports are mainly concerned with international trading ships such as container ships, tankers, bulk carriers and cruise ships. The smaller ports deal with passenger and cargo ferries and fishing vessels, and are predominantly used by domestic trading ships, although some have international trade routes to the continent. This results in many ship movements every day. Clearly, if those ships were required to make fewer polluting exhaust emissions through the use of cleaner fuels or improved technology, the air quality around UK sea ports, and hence around the UK coastline, would be improved.

For those reasons, the measures in the Bill relating to the MARPOL convention are essential. There is a vital need to provide proper compensation to our citizens in the event of oil pollution and to ensure that we are adequately covered in that regard. I look forward to engaging with hon. Members on these matters in Committee, and to working together to get the Bill on to the statute book so that our citizens can be protected as quickly as possible. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.