TERMS AND EFFECT, ETC. OF LICENCES UNDER SECTION 4 (Hansard, 10 December 1974)

§ Mr. John Corrie (Bute and North Ayrshire)
I beg to move, Amendment No. 50, in page 4, line 41, leave out from 'operation ' to second ' which ' in line 42 and insert: '(which must be within the designated sea area to which the licence relates)'. We on the Opposition side of the Committee would like to know why it is necessary to allow a person to operate outside a designated sea area having specifically been given a licence to operate within a designated sea area. What sort of operation will take place outwith the area to which the licence relates? How far outside the area can operations take place? Are they unlimited in distance? Does this mean that operations could take place in the seas around the coast which were anywhere near a designated sea area? Could this be one mile, five miles, or 20 miles away from that area?
Subsection (1) states that 362 No relevant operations shall be executed in a designated sea area unless the person responsible for the operations is authorised to execute them by a licence granted by the Secretary of State under this section. Is the "person" in that subsection the only person who could carry out operations outside the designated sea area, or could anyone operate outside that area?
Basically, we want to know why an area should be designated at all if the person holding the licence can operate outside it. We feel, as the amendment states, that operations should take place only within the designated area.

§ Mr. John Smith
I thank the hon. Gentleman for moving the amendment. I think that I interpret him correctly in saying that it is a probing amendment which seeks to find out what is behind the Government's thinking.
The effect of the amendment would be to restrict the application of licence conditions to the designated sea area itself. It is desirable that these conditions should also be able to apply to shore operations directly connected with the sea-based relevant operations and to the towing of marine structures to and from the designated sea area.
Operations for the assembly of structures in the sea are bound to give rise to shore operations for supply, and possibly prefabrication of components. These operations could have an effect on shore communities through traffic, noise or dust. They could, however, escape normal planning control if they last for less than 28 days in the same place in any one year.
9.45 p.m.
The Secretary of State should therefore, if it is thought necessary, have the power to regulate these ancillary operations through licence conditions.
It is not expected that designated sea areas will cover wide tracts of sea, and towing of platforms and other structures will inevitably take place outside the designated areas. Unless the Secretary of State is able to impose conditions on the conduct of these towing operations, they will be governed only by the international rules for the prevention of collisions at sea, which regulate safety but would not do anything to minimise the inconvenience to other users of the sea caused when the tow cuts across ferry routes or through 363 fishing grounds. If the Secretary of State can regulate towing by licence conditions, he can ensure that minimum disruption is caused.
That explanation may convince the hon. Gentleman that we are not up to anything sinister in this case. We are trying to extend the rights and protection of the community.

§ Mr. Corrie
I thank the Minister for that reply. I beg to ask leave to withdraw the amendment.

§ Mr. Buchanan-Smith
I beg to move Amendment No. 51, in page 5, line 12, leave out subsection (3).

The Deputy Chairman
With this amendment, we are to discuss the following:
Amendment No. 140, in page 5, line 15, leave out' or fishery'.
Amendment No. 141, in page 5, line 16, after 'bed', insert: 'or private rights of fishing other than tidal rights'.

§ Mr. Buchanan-Smith
This is a probing amendment to ascertain why the Government are seeking to put into effect a provision whereby no action can lie in respect of any interference with public or private rights in relation to a licence having been granted. I can understand that there are obvious difficulties in relation to certain public rights. Indeed, I have discussed this point with the Minister. There are tremendous problems in assessing compensation, and I can appreciate that there are difficulties in relation to them.
I am concerned about private rights, which can much more easily be established, which are more easily attributable, and which may greatly affect the livelihood of individuals. It would be unfortunate if their right to take action were removed by this subsection, although there may be a very good reason for this.
I put this point forward in a probing sense. I should like the hon. Gentleman to explain how he sees this working, why the Government approach the matter in this way, and whether the hon. Gentleman sees any risk of an individual in 364 particular, or even of a group of people, such as fishermen, who have a public right to fish in the sea, suffering as a result of the operating of this subsection. That is the burden of my remarks.
If I may have an assurance from the hon. Gentleman that no one is likely to suffer in any way as a result of the operation of this subsection, I shall probably be satisfied, but I should like to hear a fuller explanation of the background and why the provision has been brought forward.

§ Mr. Grimond
I should like the Government to explain why they need what seems to me an extremely sweeping subsection.
My amendment deals with fisheries, but I have some sympathy with the amendment which seeks to strike out the subsection.
I am not very clear on the legal distinction between public and private rights. Not being a lawyer, I am unable to enter into that argument. The amendment appears to mean that if, in these areas, pollution arises from operations carried out in accordance with the licence, no one shall have any right of redress. Is that so? I can imagine a situation where fishing rights might be severely affected by pollution. Would the fishermen have no right of redress? Why should they not have rights?
I move on now to my well-known topic, udal rights. After a great deal of effort, I managed to get the Lord Advocate in the Conservative Government mildly educated in udal rights. He even amended a Bill in respect of them.
Udal rights have been guaranteed to the people of Orkney and Shetland ever since they left Scandinavia. Assuming that what is really aimed at is riparian rights, my second amendment goes as far as to keep them within the subsection, but I do not see why all udal rights should be swept away. There may be all sorts of obstructions causing hazards at sea and all kinds of pollution taking place from operations which could be said to be carried on in accordance with a licence, yet fishermen would have no rights of redress.
Once again, I emphasise that the fishing communities are of the greatest importance in Shetland and of considerable 365 importance in Orkney. I shall be glad to hear why the subsection is necessary in these wide terms and what its effect will be.

§ Mr. Teddy Taylor (Glasgow, Cathcart)
This subsection conflicts entirely with the following one. The Bill appears to say in one subsection that if a person has such an order, no one can bring an action to recover damages against him, whereas the following subsection suggests that a person is liable to pay damages where damage is done. It may be that, because of the peculiarities of the law, the two sentiments are not in conflict. But what worries me is that if a private right is interfered with, it may be possible for the person to whom a licence is given to write to the inquirer saying, "You will see from Clause 5(3) that I have no liability ", because it seems from the following subsection that provision is made for liability and that in the event of a dispute the parties may go to the Lands Tribunal for Scotland. Perhaps the Minister can explain the apparent conflict between subsections (3) and (4).
It is fair to point out that subsection (4) refers only to private rights, whereas subsection (3) refers to public and private rights. But it seems to me that there is a great danger that subsection (3) might be used by a licence holder to write to any inquirer saying, "If you read subsection (3), you will see that I have no liability," but not to draw attention to subsection (4), which appears to conflict with it.

§ Mr. Millan
The two subsections are not inconsistent or contradictory. We have first to make a distinction between, for example, an action of interdict against the licensee and the question of compensation. If we provide, as we do in the Bill, for a framework of sea designation orders and if, as a consequence, the Secretary of State gives a licence to an operator to operate within the area concerned, it will be quite absurd if that licensee carrying on activities in accordance with the licence is to be subject to actions of interdict and the rest of it by people who feel that their interests are being affected by the operation of the licence.
The fault is not that of the licensee. If he fails to meet the conditions of the licence, certain penalties are imposed upon 366 him. But we cannot have the additional penalty imposed upon him that he is subject to actions by private individuals even when he is legitimately carrying on his operations in accordance with the terms of the licence.

§ Mr. Grimond
Perhaps the hon. Gentleman can clear up one point. As I read Section 3, if, for example, oil were to escape, which is highly likely, the licensee is apparently free from action under a sea designation order so long as the oil damages only fishing activities or boats within the area designated, but as soon as the oil goes beyond that area he will become liable to action, possibly.

§ Mr. Millan
May I first make the point that people talk rather loosely about its being highly likely that there will be oil pollution. There is no particular reason why someone who is finishing the final stages of a concrete platform should cause oil pollution, any more than anybody else engaged in any industrial activity. There is an association of ideas here which is misleading. That point has to be made.
There may be certain oil operations being carried on which would give rise to danger of pollution, and some of these are subject to penalties under existing law in any case. But they will also be subject to any penalties which may be provided for a breach of the conditions of the licence. The general proposition I am making is that, even if one gives a licence, a licensee who is carrying on his activity legitimately, in accordance with that licence, must not be subject to action by individuals who feel that they are being prejudiced by the operations of the licensee. That is not the right kind of remedy.
That does not mean, however, that we should not, or cannot, provide that where a right is interfered with, and is quite legitimately seen to be interfered with, and the damage suffered by a particular interest is calculable, compensation should not be paid. What subsection (4) says is that where a particular right is interfered with under the authority of subsection (3), in certain circumstances compensation is payable. Whether we have subsection (4) sufficiently wide to include all the circumstances in which hon. Members believe compensation might be payable is a matter to which 367 we shall come in the next group of amendments, but for the purpose of the present group of amendments I believe the subsection is necessary. Otherwise, the purpose of a sea designation order would be vitiated.
If it is generally necessary, for the reasons I have explained clearly, Amendments Nos. 140 and 141 are also inappropriate because they would seek to make certain exclusions which might in other circumstances—in questions of whether compensation should be payable—be matters that ought to be considered in that context but are not, to my mind, legitimate for exclusion under subsection (3). We shall come to compensation under the next group of amendments. I hope with that explanation in reasonably simple terms of what is a complicated matter—and I say this without being the least bit patronising towards hon. Gentlemen whose amendments have puzzled me considerably until explained in simple terms—hon. Members will not press this group of amendments.

§ Mr. Buchanan-Smith
I thank the hon. Gentleman for his explanation. Certainly, it is now clearer why this provision should be included. Since we are coming on to discuss the question of compensation in the next group of amendments this might help also to answer some of the general points I have raised. Given the hon. Gentleman's explanation, I can perfectly understand that if this subsection were not included a licensee could be put at very severe risk in carrying out his operations. I personally accept that explanation and beg to ask leave to withdraw the amendment.

§ Mr. Hamish Gray
I beg to move Amendment No. 52, in page 5, line 19, after 'a', insert 'public or'.

The Deputy Chairman
With this amendment we shall take Amendments No. 148, in page 5, line 19, after 'a', insert 'public, community or', and No. 53, in line 22, after 'person', insert 'enjoying the use of or', both standing in the name of the hon. Member for Ross and Cromarty (Mr. Gray).
No. 54, in line 22, after 'right', insert: 'or a person who has exercised a public right of navigation or seafishery;'. standing in the name of the hon. Member for Western Isles (Mr. Stewart); and No. 55, in page 5, line 24, leave out from 'by' to end of line 25 and insert ' the Court of Session', also standing in the name of the hon. Member for Ross and Cromarty.

§ Mr. Gray
Public rights, community rights and private rights all have a bearing on the Bill. We would like to see them all acknowledged in their own way. Public rights could include terms of navigation rights, sailing rights and fishing rights. In my constituency, in the Outer Loch Carron, there is a well-known and famous fishing ground, particularly for prawns. Other creel fish is caught there, but the prawns are very famous. Some of the men depend on this small fishing ground for their livelihood.
At present no reference is made in the Bill to compensation for interference with the public rights which these people enjoy. What steps do the Government propose to take, and what measures do they think they can include in the Bill to take care of this situation? I accept that it is probably one of the most difficult things of all to assess exactly what the loss to a prawn fisherman is merely by the exercise in his area of the oil companies, but I assure the hon. Gentleman that I know many of the people involved and that they are deeply worried about the situation.
They are among that small group of people in the Highlands who perhaps do 370 not see the benefits of the oil readily accruing to them. More likely, they see the loss of creels and other gear. This is nothing new to them because they are accustomed to the large pair trawlers sweeping all before them. They feel that with the oil works taken over this will be a continuation of the problem they now experience.
There are also community rights—for example, the rights of common grazings of crofters. How are these rights to be determined and safeguarded? Obviously, in the taking over of the land the Government will do what they can to protect these people, but great fears exist in the areas most likely to be developed. How does the hon. Gentleman propose to give reassurance to these people?
The private rights are different again. All these rights—public rights, community rights and private rights—have their own little legal problems, and I do not pretend to suggest that, overall, they constitute a great problem for the Minister to solve. But the Bill is fairly comprehensive and far-reaching, and we must look to the Government to explain how they propose to protect the interests of ordinary people who may be adversely affected in these ways.
I do not wish to continue at length because I have no doubt that others may want to participate. I have raised a few serious points for the Minister to consider. If he cannot give me the answers now, perhaps he will give me the assurance that the Government will consider tabling amendments on Report which will take care of the interests of the people to whom I have referred.

§ Mr. Gordon Wilson
The Bill is extending almost for the first time some planning rights to sea areas. In so doing it may be giving rise to an injustice to those who fish in the inshore waters, as has been made clear by the hon. Member for Ross and Cromarty (Mr. Gray). It is generally established where a public action leads to a loss that that action normally gives rise to compensation. To make up for the loss that a person may have sustained some equitable compensation is delivered to justify the original public action.
I think it is generally agreed that the main difficulty which we face in taking 371 care of the position of inshore fishermen is that of assessing compensation. This is an instance in which some effort must be made by the Government to provide such compensation, otherwise it is possible that under the preceding subsection the result could be a gross injustice. The preceding subsection makes it clear that in the interests of oil, the national economy, the balance of payments or whatever, fishing rights in what were previously territorial waters or the high seas can be abrogated. It is suggested that some: alternative action is required.
It is already conceded that when freshwater fishers or salmon fishers are affected by public action some compensation will necessarily follow. There were many people in Scotland, and especially in the Highlands, who questioned the action, for example, of the hydro board in years gone by in paying large sums by way of compensation to the riparian proprietors. We are facing a situation in which the ordinary chap who makes a living by fishing haddock, herring or prawn can be turned off the water without compensation.
This issue is immediately relevant. Already there has been a suggestion to assemble platforms in Loch Carron. It has been suggested that they should be built at Ardyne and towed up to Loch Carron to have their super-structures added in the deep water of the loch. The first suggestion came of its own accord but possibly there will be others.
I doubt whether the Government would have been considering sea designation orders had it not been felt that there was a need for the same.
Of course, some of the areas which might be affected are reckoned in the localities concerned to be rich in fish. There are communities which rely upon them for their livelihood. This is a serious matter because inshore fishermen have to pay for their boats. They cost tens of thousands of pounds. The boats are unsuited to anything except sheltered waters close to the home ports. Many of the inshore fishermen have bank loans or loans from the Highlands and Islands Development Board or the White Fish Authority. Some of them have mortgaged their homes so as to find a deposit. If the fishing grounds are closed, these fishermen could be ruined.
372 It is the rule of law that the haddock and the prawn, for example, belong to anyone until they are caught. By closing off the waters in these areas the inshore fishermen could sustain a loss. We should try to arrive at some form of compensation for such interference. I am told that there are approximately 40 boats operating from the Kyle of Lochalsh, Loch Carron and other similar grounds. These are likely to lose their living on account of the torpedo range. It would be a great pity now when we have a Bill dealing with sea areas if something similar were to happen because of the wish to assemble production platforms in Loch Carron, Loch Broom, Loch Ewe, or Loch Eriboll.
One of the problems may concern the definition of compensation. The normal standard is to try to indicate what sort of loss might be sustained, but I feel that here we should consider compensation which could be classed as a "disturbance payment". I have been given a rather complicated calculation which might help the Minister if ultimately he is prepared to produce amendments on Report.
It is suggested that if it can be established that someone has been fishing or setting creels in a given area of water which falls within a designated sea area for three years or more a disturbance payment could be calculated on the following basis. The amount could be equal to, first, the annual loss which such operator would sustain by reason of being so prohibited or restricted, multiplied by 10. Such annual loss would be determined as being that proportion of the net annual average profit of such operator for three years immediately preceding the making of the sea designation order—as is arrived at by dividing the net average profit by the number of working days in a year and multiplying the resulting quotient by the number of working days on which such operator fished or set nets or creels or pots in, or adjacent to, that area of water.
As if that were not complicated enough, two other elements, it is suggested, might be taken into consideration. The first is any redundancy payment which any such operator might be required by law to pay to any employee if he has to dismiss that employee because of the restriction on his fishing operations. The 373 second is that the proportion of any debt secured over the fishing boat or its gear, equipment or appurtenances as is arrived at by dividing the total of such debt by the same divisor and multiplying the resultant quotient by the same multiplier. It is very difficult for the Minister to absorb those formulae as I quote them, in spite of his ability. However, he will be able to consider the details in HANSARD.
May I reiterate that the closing of certain waters could have an effect on the livelihoods of fishermen, and since this is a Government initiative in the public interest to extend some planning control to sea areas, the Minister should now consider fair and reasonable compensation for the loss that this entails.

§ Mr. Sproat
In an earlier contribution I mentioned the easily-excited suspicion and distrust of the fishing industry about oil-related activities. This is one more example of how the industry feels that it is perpetually on the defensive against the oil industry. I wish to reinforce what my hon. Friend the Member for Ross and Cromarty (Mr. Gray) said, because it is wrong in this instance to draw a distinction between private rights and the rights of the fishing industry.
The fishing industry is a traditional user of the sea, and many livelihoods depend upon it. If its activities are to be disrupted, diminished or destroyed because of oil-related activity in the short or long term, compensation should certainly be paid to it. I hope that the Minister of State will be able to give us a reassurance that he will look at this matter in principle and try to make some contribution to the problem on Report.

§ Mr. MacCormick
I wish to draw attention to the position in the county of Argyll. Many hon. Members, from all parts of the United Kingdom, must revel in the edible luxury known as the Fyne herring, which may well be under threat because of the Bill.
The fishermen in ports such as Tarbert, Carradale and Campbeltown have already expressed worries about what is likely to happen in Loch Fyne.
The Minister of State said earlier that sea designation orders would not apply to many areas of Scotland, but one of the 374 main areas to which they will apply is undoubtedly Loch Fyne. The whole loch, or large stretches of it, may well become a sea designation area.
We in Argyll are most anxious that there should be serious examination of the question of compensation. If there is not, not only will many fishermen lose their livelihoods, for the reasons other hon. Members have already given, but the country will lose a resource of great value.

§ Mr. Millan
We are dealing with the most difficult set of amendments to the Bill, because there is a difficulty in meeting in a practical way what I understand to be powerful demands by fishery interests.
There is a background to the matter which is consistent with the provisions of subsection (4). Public rights of the sort affected are not normally compensated. Any loss that may have arisen for deep-sea fishermen in the North Sea has not been compensated. Therefore, if we did something for the inshore fishermen we should be creating an anomaly between them and their colleagues in other fishery operations which may equally be affected by the activities of the oil industry.
But it is not the possible inconsistency that makes me doubtful about whether we could find a solution, although I would not say that the inconsistency and the general principles involved are not important. What is most difficult here is, first, identifying those who will suffer damage and, secondly, calculating that damage.
There have been no sea designation orders yet. It is difficult to determine in advance what the circumstances may be in relation to one particular order. The Shetland County Council representatives made the point to me that certain other oil-related activities in Shetland were likely to affect certain fishermen in a fairly precise and identifiable way. In those circumstances, although the sea designation order would not apply to the area concerned, it would be possible to work out principles of compensation.
But in other areas, perhaps the kind of areas where sea designation orders are likely to apply, it will be difficult to identify the fishermen concerned, and particularly difficult to calculate any 375 loss that they might have suffered. The hon. Member for Dundee, East (Mr. Wilson) admitted that when he described the complicated formula that certain people had put to him as a possible basis for calculating compensation.
In general terms, if one were to enter the realm of compensation one would first have to obtain evidence that a particular claimant had exercised rights in the area concerned for a specific period. That qualification is recognised in Amendment No. 54. It would have to be demonstrated that the effect of the sea designation order was to deny certain of the rights which he had enjoyed. It would then have to be demonstrated that he could not exercise similar rights, with similar profits, elsewhere. There would also be the problem of calculating the loss. Even if it were possible to get over these hurdles it might, in the nature of things—even if we got a suitable formula —be a period of years before the calculations could be made.
There are appalling difficulties here. I am not sure that even with all these points I have mentioned taken into consideration, we would at the end of the day necessarily be identifying and attempting to compensate all those who ought to be compensated, or even compensating the right people. I see no practical way of meeting what would otherwise be fairly generally held desires on this matter.
The hon. Gentleman, by mentioning a torpedo testing range—I think I know the one he has in mind—confirms that rights are interfered with at present, without compensation, for purposes which have nothing to do with the oil industry.
We would not wish to enter into a new area here which could be taken as a precedent elsewhere, thus giving appalling problems in other areas. I shall look at the matter again, although I assure hon. Members that I have looked at it already. I am not hopeful, however, that we shall be able to get a solution. Therefore, I do not invite the withdrawal of the amendment on the basis that I am hopeful that I would put something down by Report. But I shall consider what has been said tonight and give further thought to whether it will be possible to take action. If I find that we can, I shall consider having provisions inserted in the 376 Bill later. But I am not hopeful of being able to do this, and I do not want to mislead hon. Members to the effect that if the amendment is withdrawn there would be likely to be something put down by the Government, because we face problems in reaching a solution here. But I admit that I would be happy if we could reach a solution.

§ Mr. Gray
I am grateful to the Minister for his sympathetic attitude towards the amendment, but I am sorry that he cannot be more positive about what the Government could try to do for the fishermen. I want to try to twist his arm a little more to try to get a firm assurance between now and Report that he will try every possible avenue of approach to see if it is possible to find a way in which the people involved can be helped.
I apologise to the hon. Member for Dundee, East (Mr. Wilson) that I was called out of the Chamber during his remarks. I have, therefore, heard only second-hand about his reference to the torpedo range, which also affects part of my constituency. I can speak only for the fishermen who operate from my constituency. They have no great regret —indeed, no regret at all—about the torpedo range, because the Royal Navy has been most co-operative in all its dealings with them. Perhaps the hon. Member for Dundee, East is not aware of it but his political party in my constituency used this for political purposes at various times. The arguments about the Navy were quite ill-founded. The Navy is broadly welcomed by the population in the area, and I would ask the Minister not to pay too much attention to what the hon. Member said as it affects my constituents. I hope that the Minister will try to devise some means of helping those of my constituents who are adversely affected.

§ Mr. Gordon Wilson
Leaving aside the divisive statements of the hon. Member for Ross and Cromarty (Mr. Gray) about an internal political battle within his constituency, may I ask the Minister to give a firmer undertaking to look at this again? Obviously, I do not wish to provoke a Division if he will agree to re-examine this.
There is a principle here. For the first time there is an extension of planning matters into the open sea. This has an 377 effect on people's livelihood. The Minister may well quote other examples of instances when we have not helped people. However, since this Bill has allegedly been presented in an attempt to improve our balance of payments, the Government can perhaps afford to be generous about those fishermen whose interests are likely to be affected. I would most strongly ask the hon. Gentleman to look again at this to see whether he can come forward with something practical on Report.

§ Mr. James Dempsey (Coatbridge and Airdrie)
I want to ask my hon. Friend to clear up one point for some of us who do not represent seafaring constituencies. The hon. Member for Argyll (Mr. MacCormick) has referred to the possibility of the herring industry suffering adversely as a result of the provisions in this Bill. I am sure that no one would deny that one of the most attractive delicacies on any table is the herring, especially the Loch Fyne herring. To my English colleagues who have spoken of the kipper, I say that they should try some of our new tatties and Loch Fyne herring. They would realise that it is one of the finest dishes that can be presented on any table.
I would not like to think for a moment that there was any possibility of that most attractive delicacy being lost to the nation. I speak as one with a consumer interest, if not a seafaring interest, in the argument. Can my hon. Friend assure us that there is no danger of any developments which could preclude the fishing of the Loch Fyne herring off the cost of Argyllshire?
I have been to Loch Fyne. I have cycled it—the proletariat's way of getting round the country. I have youth-hostelled in Loch Fyne. I have seen the fishing there. It is one of the most beautiful and delectable spots in the whole of the United Kingdom. I feel that we should be told that there is not the slightest possibility of this attractive delicacy suffering adversely as a result of this legislation.

§ Mr. Millan
I can assure my hon. Friend that I have no desire to deprive him—or myself for that matter—of Loch Fyne herring. It does not make any easier the job of working out a compensation scheme, if we were to be committed 378 to such a thing. I say to the hon. Member for Dundee, East (Mr. Wilson) that what I have given is a firm commitment to look at the problem. I say that not because it is a simple thing to say but because it is a real intention to try to find a solution. I do not wish to mislead the hon. Gentleman or the Committee into thinking that I shall be able to produce a solution to this difficult problem. I am firmly committed to look at it again, and I will do so before Report.

§ Mr. Gray
In view of that assurance, and in the knowledge that we can return to this matter on report, I beg to ask leave to withdraw the amendment.

§ Mr. Gordon Wilson
I beg to move Amendment No. 56, in page 5, line 32, leave out '£400' and insert'£5,000'.

The Deputy Chairman
With this amendment, it will be convenient to move Amendment No. 70, in page 6, line 30, leave out '£400' and insert '£5,000'.

§ Mr. Gordon Wilson
This is a simple amendment, whose purpose is to let the judges know that if any proceedings are taken in a summary cause it is essential that licences issued by the Government to control developments are observed.
Reference was made earlier to the difficulties that might occur at Kishorn, with the implication that planning consents may not be observed. It is the normal practice for judges to go for something less than a fine of £400, although first offenders occasionally have had to bear the maximum penalty.
We seek to put the matter in context since we are dealing with construction companies which will be the gainers in connection with production platform contracts involving expenditure ranging from £50 million to £70 million each. There is a temptation on their part to get the best out of the contract, and perhaps to be a little less than careful about observing the conditions. It may well be that a sum of £50,000 on that scale of values would be a small figure, and I would be inclined to agree with that suggestion, but it would be an indication to judges that we are dealing with contracts of high 379 value and that on summary conviction a fine in the range of £1 to £5,000 might be more relevant than a fine of £1 to £400.
The Bill still contains a provision, which I welcome, to take on indictment a serious infringement of licensing conditions. I feel that if the fine is raised, on summary proceedings, to a reasonable level some benefit might be gained. It is a small matter, but I commend the amendment to the Minister.

§ Mr. Fairgrieve
The hon. Member for Dundee, East (Mr. Wilson) may suggest that the raising of the fine from £400 to £5,000 is a small matter, but I suggest that this is yet another smack at the firms who will have to carry out this work. I believe that it will be an added disincentive to those firms and that it will not help the problems of Scotland.

§ Mr. Buchan
I am a little surprised that this point should be raised by a lawyer. It seems to me that in relation to subsection (4) (a) the sky is the limit. I regard a figure of this sort on summary conviction as quite wrong. Indeed, I do not like the companies. I do not think there should be companies at all. I think that there should be public ownership.
I appreciate the devotion in the Scottish National Party to the cause of private enterprise and business. However, I believe that it is a great dereliction of duty on the part of its members that they should now be trying to clobber business in this way. I think that we should leave them well alone, and that, if companies are as bad as they are, it might be better to leave them to face the matter on indictment.

§ Mr. John Smith
The hon. Member for Dundee, East (Mr. Wilson) will be aware that a company, if proceeded against on indictment, is subject to an unlimited fine. I thought that that was made clear on Second Reading, when one of his colleagues was proceeding on a mistaken assumption on that matter.

§ Mr. Gordon Wilson
The hon. Gentleman will no doubt recall that I referred to the fact that more serious infringements could be dealt with by way of indictment. Does he agree that I was aware that in such circumstances the fine would be unlimited?

§ Mr. John Smith
The hon. Member for Banff (Mr. Watt) was engaged in a tirade on this matter on Second Reading until it was pointed out to him that another subsection covered that matter.
Deciding what ought to be a suitable penalty on summary conviction is not an easy matter. There could be a wide variety of views on the matter. If the Committee as a whole feels that the sum should be increased to £5,000 the Government will not stand in its way. Few views have been expressed on the matter. We do not take any dogmatic line about it. The Government's inclination is to accept the amendment.

§ Mr. Gordon Wilson
My hearing may be impaired. Did the Minister say that the amendment should be accepted?

§ Mr. John Smith
I said that the amendment ought to be accepted. The Government do not oppose the amendment.

§ Sir John Gilmour
I beg to move Amendment No. 57, in page 5, line 36, leave out subsection (6).

The Temporary Chairman
With this amendment it will be convenient to take Amendment No. 58, in page 5, line 37, after 'may', insert 'after consultation with the harbour authority or such local authorities as are mentioned in subsection (4) of section 4 of this Act'.

§ Sir John Gilmour
Subsection (6) gives the Secretary of State power to charge, for the issue of a licence … such fee as he may with the approval of the Treasury determine. I should like to know from the Minister what type of fee is envisaged.
Subsection (7) provides that A licence granted … may at any time be varied or revoked by the Secretary of State". If the licence is varied or revoked, what happens to the licence fee that has been paid? Is it refunded in total or in part? May we have some information on what level of fee is likely to be demanded by the Secretary of State under that subsection?

§ Mr. John Smith
I cannot help the hon. Gentleman very much on the specific point that he has made. The fee will be considered according to the particular circumstances.
The amendment would remove the power of the Secretary of State to charge 381 a fee for the issue of a licence. An amendment on similar lines has been tabled—which will have to be considered —to delete the power of the Secretary of State to make regulations enabling him to levy charges.
The creation of designated sea areas is made necessary as a result and partly for the benefit of assembly and testing operations on offshore oil equipment.
Administrative costs will be involved in drawing up and processing sea designation orders, licences and regulations. The Secretary of State and his appointed agents in some areas will incur expense in policing the designated sea areas to make sure that licence conditions are being carried out and regulations are observed. There may be costs of providing common-user moorings and of dredging, lighting and buoying.
We feel that the cost of these operations should not fall on the taxpayer. Surely it is right that the companies whose operations make this public expenditure necessary should directly contribute at least part of the cost of meeting it.
I do not think that the hon. Gentleman disputes that principle. However, he asks me to say in advance of the operation of the Act what the level of fees is likely to be. I cannot tell him. because that will depend on how things work out and the scale of the operations. The fees will have to be determined in the light of the costs that the Government incur to make sure that the licences work. I am sure that the hon. Gentleman will understand that this is an administrative matter.

§ Mr. Gordon Wilson
Amendment No. 58 should be withdrawn because it is consequential, in a way, to Amendment No. 59, which attempts to interfere with the ability of the Government to accept the money. It is a question of disbursement of money. If that is the case, and Amendment No. 59 cannot be taken because it is out of order, Amendment No. 58 falls to be withdrawn.

§ Sir John Gilmour
I am grateful for what the Minister has said. Would I be right in saying that what he is indicating is that the level of licence fee which will be demanded will be sufficiently high to recover all expenses in which the Secretary of State or any public authority act- 382 ing on his behalf has been involved, and that it is not likely to be a fee in excess of that, but is only likely to recoup the outlays made on the Secretary of State's behalf?
When one considers the enormous costs involved in the type of installations which are to be fabricated, one appreciates that perhaps a few thousand pounds for a licence, in addition to a £70 million production platform, may not be a very great sum. In all fairness, however, what those seeking licences should have assurance about is that the total amount to be asked will not be revenue for the Exchequer but a recoupment of all public expenses involved in overseeing the sea area.

§ Mr. John Smith
At present the Government are concerned, in the first instance, with recouping public expenditure. The cost of oil operations and the investment involved are quite considerable. The hon. Gentleman ought not to be too apprehensive about the capacity of the companies involved to pay the fees thought to be necessary.
I do not want to go into this matter in too fine detail. My understanding is that the first thing we must seek to achieve is the recoupment of public expenditure, but the matter will have to be kept under review by the Government. The power, I think, ought not to be thought to be limited purely to that.

§ Mr. Buchanan-Smith
It would be helpful if the Minister were a little more forthcoming in response to the specific question put by my hon. Friend the Member for Fife, East (Sir J. Gilmour). Quite simply, my hon. Friend is asking whether this is to be a revenue-raising operation, regardless of the purposes for which the revenue may be applied, or whether it is to be—as we are pressing— simply revenue which will be related to the expenses incurred by the Secretary of State in relation to his functions under the Bill.
This matter is important, because if the fees were set at an excessively high level it could add considerably to the costs of extraction and exploitation of oil. It is a cost which the oil companies would obviously have to take into account. Are the Government looking at the matter as a general revenue-raising operation or as a specific revenue-raising 383 operation for the purposes of the Bill? If it is the latter, my hon. Friend and I would be much happier, but if these fees are to be used for wider revenue-raising purposes we should have great reservations.

§ Mr. John Smith
I assure the hon. Gentleman that it is not intended to use this as another form of taxation or the raising of revenue from the oil companies. I was asked to confine this simply to the matter of reimbursement. I cannot be entirely precise about the matter, because people will read what is said in this debate and quote it against the Government later. Two reasons have been quoted. Reimbursement is the dominant principle.

§ Sir John Gilmour
I thank the Minister for what he said. While I agree that the oil companies may be in a position to pay, I should like to point out that all of us, and our constituents, are the people who will have to pay for the oil product at the end of the day. Therefore, we have a right to look after the consumer interests and make certain that no unnecessary charges are incurred in the extraction of this valuable commodity from beneath the North Sea.
However, in view of what the Minister has said, I beg to ask leave to withdraw the amendment.

§ Mr, Gray
I beg to move Amendment No. 60, in page 5, line 39, leave out 'at any time'.

The Temporary Chairman
With this Amendment, we are to discuss the following: Amendment No. 61, in page 5, line 40, at end: 'Provided the person to whom the licence has been granted is given six months notice of the variation or revocation except where the conditions of the licence have not been complied with when the Secretary of State may revoke the licence at any time.' Amendment No. 62, in page 5, line 40, at end add: '(8) Before varying or revoking a licence the Secretary of State shall consult with the person to whom the licence was granted and he shall state the grounds which shall be reasonable for the variation or revocation. 384 (9) The Secretary of State shall compensate the person whose licence is varied or revoked for any loss incurred as a result of the variation and revocation provided that the aforesaid person has complied hitherto with the conditions of the licence.'

§ Mr. Gray
Subsection (7) reads: (7) A licence granted under section 4 of this Act may at any time be varied or revoked by the Secretary of State. I do not pretend that occasions may not arise where people who have been awarded licences may come into default. I think it is rather severe to include the plain statement "at any time". This seems to me to give tremendous power to the Secretary of State.
In the associated amendments, Nos. 61 and 62, conditions are briefly set out which we feel would be more reasonable for the licensee.
Amendment No. 61, states that 'Provided the person to whom the licence has been granted is given six months' notice of the variation or revocation except where the conditions of the licence have not been complied with when the Secretary of State may revoke the licence at any time'. We think that is reasonable enough, provided there has been some drastic contravention. We think it should be spelled out. It seems very glib just to state that this licence can be revoked at any time. We should like the Government to think about this one and consider writing into the Bill, perhaps on Report, something more specific.
This is a fairly simple point which does not require a lengthy speech from me. We think that it is unfair that the licensee should be in a danger of having his licence revoked at any time by the Secretary of State without specific reasons being spelled out in the Bill.

§ Mr. John Smith
I understand what the hon. Member for Ross and Cromarty (Mr. Gray) means. He wants to put restrictions on the power of the Secretary of State to vary or revoke a licence at any time.
The first two amendments would require the Secretary of State to give six months' notice of his intention to vary or revoke a licence, unless he is revoking the licence because its conditions have not been complied with. This is unrealistic and could in certain circumstances easily work to the disadvantage of the licensee. If, for example, the 385 licensee found it necessary to carry out his operations in a way that was not covered by his existing licence, he would approach the Secretary of State presumably to have his licence varied. If this amendment were made, the Secretary of State would have to say, "I am sorry, although I agree with the variation you want to make you will have to wait six months until I can make it." In those circumstances it might not be helpful to the licensee concerned. The question of revocation would arise only if there had been a breach of the conditions of the licence in normal circumstances.
The proposed new subsection (9), which is proposed as part of these amendments, would require the Secretary of State to compensate a licensee for any loss he incurred as a result of the variation or revocation of the licence, provided the licensee had hitherto observed the conditions. If the Secretary of State were ever to revoke a licence for reasons other than failure to observe the conditions, or to impose further conditions that resulted in a loss to the licensee, he would do so only if he were convinced that such action was necessary in the public interest.
For example, unforeseen shock waves generated in the water might be killing fish, or a licensee who relied hitherto on supply boats might take to using helicopters, and thereby disturb residents near the shore. If there were no designated sea area, the people affected would probably seek legal action. They would not expect to have to buy off the person responsible for the nuisance by paying him compensation, which might be one of the results to occur.
If compensation were payable, some people might say that compensation should be paid the other way round. Since actions of this sort are barred by subsection (3), the Secretary of State would have to intervene to protect the public interest.
I understand why the matter has been raised, but there are some complications which occur as a result. We believe the licensing system can be made to work perfectly well as the clause stands.

§ Mr. Alexander Fletcher
There are two points here—one of compensation if the licence is revoked and one of the right of appeal in the event of the licensee 386 feeling that his licence has been revoked unnecessarily. It could happen that an absolute power vested in the Secretary of State by this provision was abused, and it would not be encouraging for people working on these provisions to find that licences could be revoked at any time and they had no right of appeal or entitlement to compensation.

§ Mr. John Smith
The amendments do not provide a right of appeal; they merely ask that the licensee shall be consulted. Obviously he would be consulted. If complaints were brought to the attention of the Secretary of State about the operation of the licence and it were alleged that some of its conditions had been breached, normally these matters would have to be put to the licensee. The Secretary of State would be reluctant to revoke or vary the conditions of the licence other than for a very good reason. In this instance, we have to have confidence in the integrity of the Secretary of State holding that office at the time, regardless of his party.

§ Mr. Gray
I cannot say that I am satisfied with what the Minister has said. It is what is said in this legislation at the end of the day that has to be acted upon. However honourable the present Secretary of State or any future one may be, there is always the possibility that some rogue Secretary of State could abuse the power, and this legislation could be interpreted in the wrong way.
I accept the limitations of the drafting of the amendments, but I hope that the Minister will accept the spirit in which they are submitted. We feel that the Bill gives the Secretary of State wide powers and that the licensee should be protected. There should be a requirement that he be given a reasonable indication of the reason why his licence is likely to be revoked.
The Minister is in a charitable mood tonight. I hope that he will not close his mind to the amendments but will be prepared to think about them between now and Report.

§ Mr. John Smith
I take on board all that the hon. Member for Ross and Cromarty (Mr. Gray) has said, but I must resist this amendment.
The oil companies and construction companies will be working within sea designation areas. They will be given 387 licences. Normally, provided that they carry out the conditions, they will have nothing to fear, and we do not anticipate much trouble. The power of the Secretary of State is a last stop, to give him some interest on behalf of the Community.
Whatever may be the possibilities about who holds the office of Secretary of State, he represents the public interest. Most Secretaries of State do, and there are many people to remind them of their public responsibilities.
The hon. Member for Ross and Cromarty feels that I have been less charitable to him than I have to other hon. Members. My limits of charity are not yet reached, but they cannot be extended on every occasion. I am afraid that on this amendment I must give the hon. Gentleman a disappointing answer.

§ Mr. Gray
I am still not completely satisfied, but I can see that I shall not budge the Minister.
I beg to ask leave to withdraw the amendment.