HC Deb 10 February 1982 vol 17 cc1076-89

Order for Second Reading read.

10.48 pm
The Under-Secretary of State for Scotland (Mr. Alexander Fletcher)

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

This short Bill was introduced in another place. It has been passed for our consideration now having been welcomed there, particularly, I should record, by Lord Boothby, formerly the hon. Member for Aberdeenshire., East, who, I am happy to say, even at the ripe old age of 82, still takes an active interest in matters that affect his former constituency.

The Bill gives powers to establish harbour trusts to hold, manage and maintain harbours in Scotland and to transfer to such trusts any harbours held or maintained for the time being by the Secretary of State for Scotland as harbour authority. The immediate purpose of the Bill is to enable the Secretary of State to disengage from his role as harbour authority for Peterhead Bay harbour and to set up an independent harbour trust to take over this responsibility.

Peterhead Bay harbour is a major North Sea oil and gas servicing port. I should perhaps explain how the Secretary of State for Scotland comes to be the responsible authority for it. In the mid-19th century, it was decided that a "harbour of refuge" should be established on the north-east coast of Scotland to provide shelter during adverse stomis for the sail-driven herring fleet. The Government of the day, however, as practical Victorians, thought that a prison should be constructed beside the harbour so that the harbour works could be built by men who in today's parlance would be described as "doing their porridge". Peterhead was not the first choice for this combined harbour-prison development. Wick was better placed, but, while the people of Wick wanted a new harbour, they were not prepared to accept a prison along with it. In that respect, nothing has changed much over the years.

Peterhead was chosen and the Peterhead (Harbour of Refuge) Act 1885 gave the Admiralty power to construct massive breakwaters enclosing the Bay of Peterhead to form a harbour of refuge and for that purpose to use "male Scotch convicts" who were to be housed in a new prison at Peterhead. Work began in 1888, but the breakwaters were not completed until 1956–68 years later. Again, nothing has changed much over the years.

With the demise of sail, the herring fleet no longer needed a harbour of refuge and, therefore, little or no practical use was made of the harbour. For administrative reasons, the harbour was transferred in 1960 from the Admiralty to the Secretary of State for Scotland by an order-in-council and the harbour was kept more or less on a care and maintenance basis. That changed, however, on the discovery of oil and gas in the North Sea. The Secretary of State began to receive inquiries about the development potential of this strategically placed harbour, which contains within its two breakwaters 200 acres of sheltered water with up to 60 ft. of depth. But the Secretary of State was unable to respond to those inquiries.

He did not have adequate powers under the Harbour of Refuge Act either to develop the harbour himself or to allow other people to do so.

It was therefore necessary to promote legislation to give further powers. The Harbours Development (Scotland) Act 1972 was a public Bill covering harbours in Scotland for which the Secretary of State was harbour authority. But, like the Bill before us today, it was promoted essentially to deal with Peterhead Bay harbour. The 1972 Act was debated in the House in June of that year when the opposition co-operated with the Government of the day to put through this urgently needed legislation in less than seven weeks. There has been throughout a commendable history of co-operation between both sides of the House to develop this important North Sea oil facility. Lord Campbell of Croy, when Secretary of State, authorised commencement of development, but it was Lord Ross of Marnock, in his time as Secretary of State, who opened the £3 million service base which was built on reclaimed land at the south of the harbour. The past eight years have also seen the development of another service base on the north side of the harbour and of a tanker jetty able to receive oil tankers of up to 40,000 tonnes.

Throughout these developments the Secretary of State has had advice from the Peterhead Bay Management Company. That company was set up in 1973 to advise on development decisions affecting the harbour. Its commercial advice over the development period has been a big factor in the success of the Government's plans for the port. I wish to express our appreciation to the chairman and directors of the company for all the work that they have done during the years to help convert the unused harbour of refuge into a successful commercial port.

I do not believe that anyone thought that the company would last as long as it has. One reason for the delay is that until now it has not been possible to find parliamentary time to put through legislation to allow the Secretary of State to transfer the harbour.

Also, some time was devoted to consultations to determine whether to amalgamate the two harbour authorities at Peterhead: that is, to bring the bay harbour and the adjacent fishery harbour, now the foremost white fish port in the land, under one management. It was found, however, that there was no local enthusiasm for unification of the authorities, and the Government of the day decided that separate arrangements must be made for the Peterhead Bay itself. The right hon. Member for Rutherglen (Mr. MacKenzie) will recall announcing that when he opened the new tanker jetty in 1976.

The Scottish Office has consulted extensively on the terms of the Bill with local bodies and those with an interest in Peterhead Bay harbour to obtain views on the proposal to form a new authority. In every instance the Secretary of State's policy of disengagement from Peterhead Bay in favour of an independent trust has been accepted.

The Bill provides for the setting up by order of trusts to become harbour authorities for any port held or to become harbour authorities for any port held or managed by the Secretary of State. Commercial ports in Scotland are traditionally trust ports: the Clyde, the Forth, Montrose, Dundee and Aberdeen, for example, are all administered in this way under the general supervision of the Secretary of State for Transport. Creating a Peterhead Bay trust under the Bill would this Peterhead into line with the other commercial ports in Scotland. An order for Peterhead would also set out the arrangements for membership of the authority and we propose that the new board should contain representatives of local authorities, from the adjacent fishery harbour, and other members appointed by the Secretary of State. We intend that the Government appointees should have commercial and harbour management expertise, including knowledge of the oil industry upon which the prosperity of the harbour depends. By this means we hope to create a well-balance executive board able to react quickly and effectively in the interests of both the locality and the harbour itself.

Mr. George Foulkes (South Ayrshire)

I am not complaining about the suggestion to set up a trust and a board along the lines suggested by the Minister. However I wonder whether it was considered during the discussion that the responsibility might be taken over by the British Transport Docks Board, as it is the most successful harbour in the United Kingdom, at Ayr. Was it considered that the British Transport Docks Board might take over Peterhead?

Mr. Fletcher:

Our endeavour is to put the Peterhead harbour on the same basis as almost all the commercial harbours in Scotland—the Clyde, the Forth, Montrose, Dundee and Aberdeen. Most harbours are run on a commercial basis. The British Transport Docks Board is an exception. We wanted to apply the normal type of trust to Peterhead.

Under the Bill the Secretary of State will also be able to transfer to a trust a harbour held or maintained by him, together with all the rights he enjoys as harbour authority for the port and also any connected liabilities. In the case of Peterhead Bay, the trust will take over transferred assets at full market value and in addition will be given rights such as the power to levy vessel and cargo dues and to develop the harbour. It will also accept the liabilities to maintain and repair the harbour, to keep it properly dredged and to make arrangements for trafic manoeuvering within it. Our aim will be to create a modern trust with the full range of powers and duties normally held by the harbour authority of a commercial port.

The authority will, in addition, have some particular responsibilities, which will be of interest to my hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie). It will, for example, be obliged to ensure uninterrupted access to the fishery harbour at Peterhead. It is of the utmost importance that fishing boats using Peterhead should be able to put out to sea without hindrance so that the efficiency of that major fishing port is not hampered in any way. We will ensure also that the fishing boats will continue not to be charged for crossing the harbour.

An obligation will be placed upon the new authority in relation to the "Lido" beach. This, I should explain, is a recreational area much used by the citizens of Peterhead and lies at the western edge of the harbour. During the passage of the 1972 Act, great concern was shown in the House that the environment of this amenity area should be protected as far as possible from the harmful effects of the development in the harbour. Successive Secretaries of State in all their decisions over the years have taken great care to ensure that that should be so. The new authority will be required to continue this policy.

Finally, there are the financial implications of these proposals. The harbour is a profitable commercial operation. Income payable to the Secretary of State in the year ending March 1981 was over 1 million, while in the same period the Government's expenses were just under £380,000. Thus, the surplus achieved in that year was £677,000. The capital side of the balance sheet is equally encouraging. Since 1973, £1 1 million capital expenditure funded by parliamentary vote has been used in the harbour. Within only eight years, the capital debt has been totally repaid.

These are good results, I am sure that hon. Members will agree that the Government will hand over to the new authority an extremely viable and healthy commercial operation well placed to continue to give vital support and thrust to our North Sea oil industry. The Government have been responsible for this harbour for 95 years. Since the passage of the 1972 Act, they have taken full advantage of every development opportunity. Development of the harbour is virtually complete. Its future in North Sea oil exploration and development is assured. It is logical, therefore, that the harbour should be managed in the same way as the other major commercial Scottish ports, and should be passed into the hands of an independent harbour trust. I commend this Bill to the House.

11 pm

Mr. Bruce Millan (Glasgow, Craigton)

This is not a controversial Bill, and we do not oppose it. Nevertheless, it is an unusual Bill, because it is expressed in general terms, as was the 1972 Act, to deal with the harbour of Peterhead Bay.

It is unfortunate that, in dealing with a specific harbour, the Bill is couched in general terms, particularly when the Secretary of State does not appear to know what other harbours he owns. I tabled a question for him to answer on Monday of this week, asking him to list the harbours that are held and maintained by him. He said that he held and maintained Peterhead harbour but that there was no list of the other harbours and that it would be too costly to produce such a list. It is rather odd that the Scottish Office does not know which harbours are under the control of the Secretary of State. The Minister, in introducing the Bill, said that there was no immediate intention of disposing of anything else. I hope that there is no intention of disposing of anything else at the moment. It would have been nice to know what the Bill covered apart from Peterhead Bay.

I want to make two points about what is happening at Peterhead Bay. The Minister described the history of the harbour. He particularly mentioned the Peterhead Bay Management Company and the directors who have run the harbour since the 1972 Act. I, too, visited the harbour and I was familiar with the directors of the company. I may not be completely up to date, but I remember that Dr. Maitland Mackie was the chairman at one time. The company has done a good job for the harbour, and I join the Minister in his tribute to the work done by all those concerned, not just Dr. Mackie. I believe that Mr. Williamson was the chairman at one time. Others have been involved, and I believe that they have all done a good job.

As they have done a good job, and as the Minister said that the harbour has made money, it is all the more extraordinary that almost all the harbour assets were sold off before the Bill came to the House. The Minister did not mention that fact. The quay for the oil service base and the associated facilities—from which, presumably, the money was made to produce the satisfactory profits that have come to the public purse—have been sold off at some time during the past few months. It is quite extraordinary.

I am not opposed to the idea of passing this harbour to a harbour trust, but what are we passing? As far as I know, we are passing a tanker jetty and a breakwater. The breakwater itself will not generate much income, but the part of the harbour that was generating a satisfactory income—the oil service base—has been sold. The Minister did not even mention that. There was no reason to sell. Why was it sold? Why was it not held and passed to the harbour trust and the public authority? Why did the Government think it necessary to sell it? Why did they sell it for that price? It is an extraordinary business. Perhaps the Minister can explain the arithmetic.

The Government's consultative document of 1 July 1981 said that the harbour's assets were valued at £3.6 million. According to an answer which I received on Monday, the old jetty has been sold to oil interests for £2.4 million. That leaves assets of £1.2 million available. However, Lord Mansfield said that the value of the assets to be handed over to the new trust was £650,000. The figures do not square. The assets were apparently £3.6 million. They were sold at £2.4 million and only £650,000 worth of assets was left. What has happened to the rest? Is the figure of £2.4 million too small? If it is, why was that favourable figure chosen? We are talking about a favourable public asset.

The Minister said that there was revenue amounting to about £1 million, £300,000 worth of expenditure and a profit of about £600,000. It is a pretty good deal, if those are the figures, to sell the profitable bit for £2.4 million. That leaves something which is not particularly commercial. That was not dealt with either by the Minister tonight or by the other place. Why were the assets sold? What was the benefit? There might be gaps in my information, but why was such a favourable figure involved, and such an unfavourable figure for the Peterhead management?

The Bill tells us nothing about the setting up of the trust. It will be set up by order, subject to a negative resolution. If we do not like it, we can table a prayer against it. That is not satisfactory because we cannot amend the order. What do the Government intend to do about consultation?

What about the composition of the new authority? The document of 1 July suggests a basis for discussion on the composition of the new authority. It includes harbour interests, the regional council, the management and district council, the chief executive of the new authority and three members—one to be nominated by the Secretary of State. I do not disagree with that, but it is normal to have a trade union representative, for obvious and desirable reasons. May we have an assurance that one of the three Secretary of State's nominees will be a trade union representative?

11.9 pm

Mr. Albert McQuarrie (Aberdeenshire, East)

I am very grateful to my hon. Friend the Minister for his complimentary remarks about my illustrious predecessor of a few years ago, the noble Lord Boothby of Buchan and Rattray Head. As my hon. Friend said, the noble Lord is 82 this month. He continues to take an active interest in the constituency of Aberdeenshire, East and he and I meet regularly in the Palace of Westminster and I often hear his wise counsels.

I welcome the Bill, which is in line with the Government's policy to transfer power from central Government to those within local communities. Like my hon. Friend the Minister and the right hon. Member for Glasgow, Craigton (Mr. Millan), I pay tribute to the members of the Peterhead Bay Management Company Limited and the staff for the most efficient way in which the bay harbour has been administered. It is a highly organised harbour and ranks with the finest in the United Kingdom, employing within the harbour area many highly skilled operatives. That has been of great benefit to Peterhead, in my constituency. That is due in no uncertain manner to the devotion shown by those responsible until now for the management of the bay harbour, which has encouraged firms to set up within the harbour area, thus creating much-needed employment in the indigenous industries as well as in the oil and gas industries.

As has been said, there are two harbours in Peterhead: the Peterhead Bay harbour—formerly known as the Peterhead harbour of refuge—and a series of inner harbours that are principally used by fishing vessels. To reach the fishery harbour, vessels must enter the bay harbour. It is worth recalling that the development of the bay harbour—which my right hon. Friend the Secretary of State will place under the control of the new trust—was commenced in 1886, when it was decided that a new prison should be sited to the south of Peterhead. In return for the town council's permission, the Admiralty would, by the use of convict labour, construct a harbour of refuge for the fishing fleet by building breakwaters across the opening of Peterhead bay.

Powers to do that were taken under the Peterhead Harbour of Refuge Act 1886. Until 1960, the Admiralty was the harbour authority for the bay harbour, but it was in that year that the function was transferred to the Secretary of State for Scotland. When it became apparent that the full potential of the bay harbour was not being exploited, the then Secretary of State—under the Harbours Development (Scotland) Act 1972—obtained the consent of Parliament to develop the harbour. The result is the excellent bay harbour, which is in operation and which is managed on behalf of my right hon. Friend by the Peterhead Bay (Management) Company. Its main function is to advise the Secretary of State on the commercial development of the bay harbour and—through its harbour manager—to look after the day-to-day affairs within the harbour on his behalf.

Access to and from the fishery harbours is gained by crossing the bay harbour and all traffic berthing in either harbour must pass between the two breakwaters. It has always been a primary concern of Secretaries of State for Scotland, including the right hon. Member for Craigton and my right hon. Friend, to ensure that there is as little disruption as possible to the fishing traffic entering or leaving the port of Peterhead, to the extent that any major movement of fishing vessels, either going to sea or returning to the market, has priority over all other vessels.

I am delighted to learn this evening that that practice will be continued when the new trust is brought into being. A joint liaison committee—comprising members of the Peterhead Bay (Management) Company and the Peterhead harbour trustees, who administer the inner harbours—meets from time to time to discuss matters of common interest in the operation of the harbours. One of the functions approved by the joint committee is that the harbour master of the fishing harbour is in charge of the movement of shipping within the fishery harbour and the bay harbour. The harbour master at present holds an appointment from the Secretary of State for Scotland in respect of his duties in the bay harbour. Therefore, can my hon. Friend tell the House whether the harbour master will retain his appointment, and whether the liaison committee will remain in being; or will both of those matters be for the decision of the board of the new authority proposed under the Bill?

I turn now to the powers and functions of the new trust which are covered in clause 1(2). I understand that it is the intention of my right hon. Friend to make the trust as representative as possible of the local community—he made that point in his opening remarks—and also of the various sectors of industry which are connected with both harbours. I welcome my right hon. Friend's proposals and express the hope that he will endeavour to make the composition of the new trust as widely representative as he can and give consideration to the existing harbour interests, the regional and district councils, the community of feuars of the town of Peterhead, and the oil and gas industries which at present operate within that harbour area. Obviously, my right hon. Friend will have a most difficult task in satisfying all the requests which have been made to him by the various bodies interested.

I hope that, in considering the nominees of the new trust, appointments will be made only after the most serious and careful thought, bearing in mind that the new body will have greater responsibility than the present board. I also suggest to my right hon. Friend that, as the new trust will have delegated authority for the administration of, and the responsibility for, the bay harbour, he might like to consider a cosmetic change in the title of the new trust.

I should like to put three further points to my hon. Friend. First, the new trust which is to be set up will be in the same position in its control of the harbour as other commercial ports in Scotland which are run by trust boards. In the case of the other trust boards, the responsibility within Government lies with the Department of Transport. Will my right hon. Friend say whether the bay harbour trust will come under the Department of Transport on formation, or will it remain within the power of the Secretary of State for Scotland?

Secondly, in considering a national refuge role, the facility remains to revert the bay harbour to a NATO harbour or refuge. Is it the intention of my right hon. Friend to ensure that any leases which may be granted by the new trust will have a clause incorporated which will specifically require a resumption of the NATO facility in a national emergency? Perhaps my hon. Friend will confirm what proposals there are in this matter, which could be important if not made clear before the new trust is set up.

I should like to refer to the remarks made by the hon. Member for South Ayrshire (Mr. Foulkes) in connection with the possible consideration of the National Dock Labour Board scheme being brought in for this harbour. I am sorry that the hon. Member has now left the Chamber, because I can tell him that when the discussions were taking place at local level concerning this matter, there was no desire by the people in the bay harbour to have the dock labour scheme put into operation. The fishermen made the pertinent point that if the dock labour scheme were brought into operation and the dock labour scheme employees arrived in Peterhead, they would throw them into the sea, the reason being that Aberdeen is now dying as a direct result of the dock labour scheme being in operation there. The fishermen of Peterhead want nothing to do with the scheme.

Finally, there is the financial implication in the setting up of the new trust. As I understand it, my right hon. Friend intends that the assets and liabilities attaching to the harbour will be taken over by the new authority. I note in this connection that my right hon. Friend proposes that, with the exception of the breakwater structure and the tanker jetty, the other assets of the harbour will be disposed of before the transfer of power to the new authority—this may answer to some degree the point made by the right hon. Member for Craigton—which will enable the present outstanding debt of the existing harbour authority to be substantially cleared, leaving the new authority with only a very small debt burden.

I am also pleased that my right hon. Friend has taken this into consideration and that he intends to give some borrowing powers to the new trust in the interim period. That is particularly important in view of that fact that in 1980–81 the provisional maintenance expenditure for the existing board was estimated at £151,200. However, from 1981 to 1984, the maintenance work will increase in cost, owing to the necessary repairs at the south breakwater, which is estimated to cost £300,000 per annum.

I support the Bill and congratulate my right hon. Friend on seeking powers to disengage the central Government from the role of the harbour authority for Peterhead bay harbour which I hope will also lead to a reduction of staff at the Scottish Office and thus, in some small way, reduce the present public expenditure commitment.

11.22 pm
Mr. J. Grimond (Orkney and Shetland)

I shall ask one or two questions about the Bill. I have a little experience of harbour areas in which both oil-related activities and fishing occur. Although it is said that the Bill only immediately applies to the harbour refuge near Peterhead, it is, of course, drafted in general terms and might be applied to other parts of Scotland.

First, we must be told how many harbours might come under the Bill. It is incredible that the Scottish Office do not know that answer and Parliament cannot be satisfied with that situation.

Mr. Barry Henderson (Fife, East)

Is the right hon. Gentleman aware that in a Written Answer of this week the Scottish Office said that there was only one harbour, as such, held and maintained by the Secretary of State for Scotland and that that was Peterhead?

Mr. Grimond

If there are two harbours that might conceivably come under the Bill, I am surprised that they are not specified. The Bill is drawn in general terms. However, the Scottish Office will no doubt confirm that only one other harbour could be affected.

There is at least a danger of some conflict between the interests of the oil supply vessels and fishing boats. So far, that problem is containable round Orkney and Shetland. Fishing boats are not, of course, exclusively used for fishing, and there are other sorts of craft concerned with leisure which may be affected by the rules and byelaws applied to harbours.

As I understand it, the Government oppose the setting up of new quangos. This is a new quango and I ask whether it is necessary. If one considers the title of the Bill, it is for the establishing of harbour trusts and not for the handing over of existing harbour trusts or the disposing of harbours in other ways. As we understand it, this is an anti-quango Government and here they are setting-up a quango. We want some explanation about that.

We are told that the most successful port in Britain is Felixstowe which is run by private enterprise. Has that aspect been considered? Has the local authority been considered? I do not want to press that point on the grounds expressed by the hon. Member for Aberdeenshire, East (Mr. McQuarrie), but we should know why we are establishing a new board and why it is not going to the existing board which, presumably, controlled Peterhead fishing harbour, to the local authority, or to be disposed of in other ways. We want to know why the Bill is specifically confined to the establishing of new harbour trusts and not the handing over of harbours to existing trusts of harbour authorities. It might be handed over to the user of the harbour.

My next point concerns the finances of the harbour. I understand that it is presently extremely profitable. What happens to the profit? Is it to be included in the Bill without any financial obligations one way or the other to a new trust? Is that trust entitled to borrow—as I believe it is—and to retain any profits it makes? If so, can those profits be used only for the development of the refuge harbour or for the general advancement of Peterhead, its fisherman and other maritime interests?

We need to know a little more about why the Bill is in its present form, why it is confined to establishing a new quango and what other possible future has been considered for this harbour.

11.25 pm
Mr. Robert Maclennan (Caithness and Sutherland)

The Under-Secretary of State, referring to the historical origins of Peterhead Bay, recalled that the original choice had been for Wick in Caithness. In the last two decades, the people of Wick have greatly regretted the decision that was taken by their forebears not to take advantage of the offer to develop the facilities but to accept the less attractive proposition that a prison should be established by convict labour. They felt that it was particularly unfortunate in view of the proximity of Wick harbour to developments in the oil industry and the Government's evident lack of interest in promoting the development of Wick harbour as a servicing base for industry.

Some people feel that, as the port of Peterhead is in the ownership of the Secretary of State, that might to some extent account for the promotional efforts that were made to attract the oil industry to Peterhead in preference to Wick and other ports on the littoral of the North Sea. The Government's failure to take adequate steps to draw the attention of possible operators in the Beatrice field and other fields in the inner Moray Firth area to the attractions of Wick harbour was also felt to be remarkable. Some have wondered whether the status of the harbour trust contributed to this situation.

Mr. McQuarrie

The hon. Gentleman has suggested that, despite the advantages of Wick, the Government of the day promoted Peterhead harbour because it was under the ownership of the Secretary of State. Perhaps he will reflect on the fact that the first oil to come ashore in Scotland was at Cruden Bay, which is close to Peterhead. That was the reason for the accelerated expansion of Peterhead.

Mr. MacLennan

I do not deny what the hon. Gentleman said. Peterhead was the natural place to go in the initial stages of the development, but I suggest that recent developments are more contiguous to the coast of Caithness than to the hon. Gentleman's constituency. The Beatrice field is only 12 nautical miles from the port of Wick. Other exploration going on in that area makes Wick a natural place to service these developments. Indeed, there is growing commercial interest in these possibilities.

The Bill is somewhat odd and its origins are far from clear. In another place the Minister of State, Lord Mansfield, said that consultations initiated by the Scottish Office had taken place with bodies with an interest in the harbour about the proposal to form a new authority and that all had accepted the Secretary of State's reasons for wishing to disengage from the harbour in favour of an independent trust. But neither the Minister of State in another place nor the Under-Secretary of State in this place has favoured us with any of those reasons.

Apparently the harbour has been run profitably under the excellent management of the Peterhead Bay Management Company. It has been presented almost as a matter of administrative tidiness that we should have primary legislation to make the arrangements in Peterhead conform with what is going on elsewhere. That is not good enough. A satisfactory commercial operation has been run by local people for the benefit of the community and the Minister wants to turn it upside down. It is not as though the Secretary of State is withdrawing wholly from the operation. He intends to appoint the trustees. Therefore, he is not proposing to stand off from the operation.

I suspect that there is more to the Bill than meets the eye. I suspect that the right hon. Member for Glasgow, Craigton (Mr. Millan) may have put his finger on something that the Public Accounts Committee may wish to pursue further, and ask what has happened to the assets that have been generated over the past four years, to which the Minister has drawn attention. Is this new trust to be capable of being as profitable as the harbour has been prior to the sale of these assets? The Minister has so far been exceedingly cagey about that and not a word was said about this in another place in introducing the Bill.

The right hon. Member for Craigton has drawn attention to the financial discrepancies, upon which the Minister must throw some light when replying to the debate. If he does not, it is extremely likely that my colleagues in the PAC will be taking a close look at what has happened. Is this a matter of selling off yet another public asset to private concerns, with the result that there could be damaging effects upon the prospects of the harbour being run in an integrated way? We do not know and the Minister has been most unforthcoming about this. The House deserves more frankness than we have had.

11.30 pm
Mr. Alexander Fletcher

By leave of the House, I should like to reply to the points that have been raised. I say to the hon. Member for Caithness and Sutherland (Mr. Maclennan) that there is nothing mysterious about the Bill or the steps that the Government are taking to bring Peterhead harbour into line with other commercial harbours in Scotland and elsewhere in the United Kingdom.

The right hon. Member for Glasgow, Craigton (Mr. Millan) asked about the effect of the legislation on other harbours. He made fun of the fact that we were unable to list all of the possessions of the Secretary of State for Scotland. I doubt whether the right hon. Gentleman could have done so when he held that office. Peterhead Bay is the only harbour for which the Secretary of State is presently designated as the harbour authority. When the Harbours Development (Scotland) Act 1972 was before Parliament the Secretary of State was also the harbour authority for Uig pier. This pier has since been disposed of, as part of the estate to which it was attached, so that there is, technically, no other harbour for which the Secretary of State is responsible.

The Scottish Office has extensive agricultural estates in Scotland, many having small moorings and jetties that are too numerous to identify and that fall within the definition of a harbour for the purposes of the Bill. There is no present intention to transfer any of these to a harbour trust, but it could happen that, as the development of oil resources proceeds around the coast of Scotland, some of these harbours might find themselves in a position similar to that of Peterhead in 1972. Therefore, the 1972 Act and this legislation could later be used to transfer such a harbour from the Secretary of State to an independent trust.

The right hon. Member for Craigton also asked about the sale price, which was settled on the advice of the chief valuer and was the best price that could have been realised. There may have been some considerations taken into account by the chief valuer as to his estimate of the potential life of North Sea oil activities as they will affect the harbour.

The question of the sale of assets at Peterhead Bay harbour was also raised by the right hon. Gentleman. We are confident that the new authority will be able to function perfectly well without land holdings. There will be a minimum financial effect for the new authority as a result of a prior sale of assets because under the proposed disposal it will receive about £410,000 less in rental income than the Secretary of State receives now. If the assets were not sold and transferred as a commencing capital debt at their market value of over £2½ million, the annual repayments over 20 years would amount to about £405,000. We see the trust being perfectly able to manage in the financial sense, without the land holdings that have been disposed of. I should correct the right hon. Gentleman on one point. Not all the assets are to be sold by the Secretary of State. The tanker jetty is not to be sold now.

Mr. Millan

No.

Mr. Fletcher

I am sorry; I thought the right hon. Gentleman said that it was being sold. He will know, therefore, that it is proposed that the jetty be transferred to the new authority at asset value, which is about £650,000. It will be asked to review its attractiveness for development and sale.

Mr. Millan

What I am interested in is the apparent discrepancy in the figures. The hon. Gentleman said that the assets, apart from the jetty which is valued at £650,000, the figure I quoted and which was given in another place, have been disposed of for the best price possible as valued by the district valuer. In the consultative document, issued only in July last year, the value of the assets as at February 1980 is given as £3.6 million. The amount received is £2.4 million and the value of the assets which are left is only £650,000. On the face of it, the bits which have been sold must have been disposed of at a value less than the value in the consultative document as at February 1980. That seems odd. If anything, one would have thought that the normal process of inflation might have put the figure up beyond £3.6 million and that therefore considerably more than £2.4 million would have been obtained from the sale. That is the point about which I was asking. I hope I have made myself clear. If the hon. Gentleman is not able to answer tonight, I should like him to write to me. If he can answer tonight for the benefit of the House, that would be useful. We want this point cleared up.

Mr. Fletcher

The major difference is the tanker jetty. I should like to look at the question more carefully and come back to the right hon. Gentleman on it.

The right hon. Gentleman also asked about the appointment of trade unionists to be members of the authority. In the draft of the harbours order we have included a statement to the effect that amongst the qualifications of those appointed will be experience in the organisation of workers.

My hon Friend the Member for Aberdeenshire, East (Mr. McQuarrie) joined in the praise for the management company and the splendid work that has been done. I know that my hon. Friend has first-hand experience of the valuable contribution that has been made by the management company to the development of the port. Responsibility for the harbour trust in future will lie with the Secretary of State for Transport, which is the normal procedure in these matters. I can confirm that the new authority will be in funds at the commencement of its operations. Arrangements have been made for that. I cannot answer my hon. Friend's point about NATO, but I shall write to him about it.

My hon. Friend also asked about the harbour master and the staff. It is expected that the staff, who number three, including the harbour master, will transfer to the new authority. We expect that the existing agreements with the fishery harbour trust will continue, remembering that the fishery harbour will be represented on the new trust. Agreements, which include the unified traffic control systems, the navigational arrangement for both ports, the joint weather warning systems and the single pilotage district which the trustees of the fishery harbour operate will be maintained under the new arrangements.

Mr. McQuarrie

Is my hon. Friend saying that the fisheries harbour master will be in control of both the fishery harbour and the bay harbour? Will that appointment be made by the Secretary of State for Scotland, or will it be made by the new tust when it is set up?

Mr. Fletcher

The appointment will be made by the new trust. Initially the harbour master who is in command will be transferred to the new trust, but thereafter any changes in that appointment will be a matter for the new authority.

Mr. McQuarrie

I think that my hon. Friend is confusing the issue. There are two different appointments. There is a harbour master for the fisheries harbour, appointed by the Secretary of State for Scotland, and he is the person who controls both harbours as regards all shipping. Then there is the harbour manager, who is the employee of the management company.

Mr. Fletcher

I am referring to the employee of the bay harbour management company. I am not referring to anyone at present employed by the fisheries harbour.

The staff of three employed by the management company, which includes the harbour master, as I understand it—

Mr. McQuarrie

No.

Mr. Fletcher

If I am advising the House wrongly about this, I shall have to return to my hon. Friend.

The right hon.Member for Orkney and Shetland (Mr. Grimond) asked why a quango was necessary. I suppose that a harbour trust of this kind is a quango, but we are also winding up a quango, in the form of the management company, so at least we are not adding to the number of quangos. It could be argued that a harbour trust is not formally a quango. It gives the best hope of reconciling the various local interests. The right hon. Gentleman will appreciate from his experience of harbours that fishery interests are very important and are well looked after by the fishermen themselves. Although it was considered that there might be a single harbour authority, this was the compromise which, following the consultation, seemed to suit all those involved.

The question why there was not a straight handover to private enterprise is affected by the age of the break waters and the possible maintenance involved in them, which we feel is better handled by a harbour trust, which has access to Government funds in a way that a commercial enterprise might not have.

The hon. Member for Caithness and Sutherland (Mr. Maclennan) talked about the merits of Wick and Peterhead. I do not wish to be drawn on that matter, but if he believes that Peterhead, because of its unique position under the Secretary of State, was favoured in any way, that is all the more reason for him to welcome the Bill, because it now puts Peterhead on an even-handed basis with other harbours in Scotland. I hope, therefore, that the hon. Gentleman will welcome the Bill, which I am happy to commend to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).