Official Report 417KB pdf
Welcome to the 10th meeting in 2015 of the Infrastructure and Capital Investment Committee. Everyone present is reminded to switch off their mobile phones, as they affect the broadcasting system. As meeting papers are provided in digital format, visitors may see tablets being used during the meeting.
Apologies have been received from Jim Eadie, Alex Johnstone and Mary Fee. We are pleased to have with us Linda Fabiani as a substitute for Jim Eadie.
At item 1, the committee will take evidence on the Harbours (Scotland) Bill from the Minister for Transport and Islands, who is accompanied by the bill team. I welcome Derek Mackay, who is the Minister for Transport and Islands, Chris Wilcock, who is the head of ports and harbours at Transport Scotland, Pauline McMillan, who is a policy manager in the ports and harbours team at Transport Scotland, and Stuart Foubister, who is a divisional solicitor in the legal services directorate in the Scottish Government.
The minister has indicated that he does not wish to make an opening statement, so we will move straight to questions. I will kick off.
Minister, what consultation did the Scottish Government undertake with shipping and port industry stakeholders prior to the introduction of the bill? What key issues were raised and how have they shaped the proposals in the bill?
Thank you, convener, and good morning. Before the bill was introduced, we held stakeholder consultations with the key stakeholder groups, including the British Ports Association, the United Kingdom Major Ports Group and the UK Chamber of Shipping.
No particular issues were raised. There is a very clear issue that we want to address and there is understanding and acceptance of that. We have received general support for the bill but some issues have been raised around mediation, with some stakeholders feeling that legislation may not be required and that the aim could be achieved through non-statutory guidance. In essence, there is support for the bill to achieve what we have set out to achieve.
Okay. What is that?
We want to give assurances about the trust port model and remove the potential conflict identified by the Office for National Statistics, whose review could reclassify certain trust ports as public corporations. That could have an impact on the public purse, as any borrowing that the ports undertake could then be counted as Scottish Government borrowing, which would be unhelpful and unnecessary. We will remove the existing provisions to clarify that as best we can, and we will continue to work with the ONS to achieve clarity.
We will also make the process more efficient by removing some unnecessary bureaucracy, such as the requirement to submit six copies of draft harbour orders along with the application for the order.
Thank you. We will move on with a question from David Stewart.
Thank you, convener. Are there plans to introduce mediation in disputes about harbour dues and, if there are, would it be on a voluntary or statutory basis?
We have agreed with the industry that non-statutory guidance on mediation will be prepared. That will be welcomed by stakeholders. There are already provisions that allow us to engage in mediation. Maybe people need to be made more aware of the existing provisions.
Thank you. For the record, will you outline for the committee the main provisions of the Harbours (Scotland) Bill?
I will ask Chris Wilcock to give the technical detail and the committee can certainly probe him further on that. Just to confirm, I think that you mean in relation to existing specific powers around mediation. Is that what you are looking for?
Yes.
On mediation, section 31 of the Harbours Act 1964 contains a right to make a formal appeal to the Scottish ministers about the level of harbour dues that are set. That can be quite a complex process—it is a last resort. No appeals have been brought to us since devolution, although there have been examples down south and there were examples prior to devolution. However, we had an informal approach on a potential appeal under section 31 and our role was quite limited, given that a formal appeal would have sat with us. That is why we want to introduce a mediation stage to the process.
As the minister said, when we spoke to the industry about mediation, the ports were clear that they already undertake a level of local mediation and that non-statutory guidance might be the more appropriate route. That is what is preferred, but it is important to note that the formal appeal process will, under section 31 of the 1964 act, remain in effect and we will provide additional guidance on other measures.
Did you pick up evidence of regular disputes between users of harbours and the harbours themselves? Do we need a mediation stage? What evidence do we have for this step?
As I mentioned, we have had some tentative approaches in relation to harbour dues. During the past three years maybe half a dozen people have come to us—a group from a particular sector—and the matter was resolved through discussions between the particular ports and the users. From Transport Scotland’s perspective, that is the best manner in which to resolve these things: rather than have ministerial or Government involvement, mediation allows the bodies concerned to build their relationships. Resolving matters locally is the best way.
Thank you. I have a final question. The policy memorandum states that the primary purpose of the bill is to provide
“an improved legislative framework for trust ports across Scotland”.
Can you explain how it will achieve that aim?
I am happy to do that, but to go back to the previous question from David Stewart, it is important to bear in mind that, although there may be an issue about dues, there is also an issue about control. Control is a separate matter concerning harbour revision orders and empowerment orders and there is a separate process when there is a dispute about control. It is worth mentioning that that has been more controversial than the dues issue.
The bill progresses our aim of improving the legislative framework for trust ports by removing ministers’ power to compel trust ports that are over the relevant turnover threshold to bring forward privatisation proposals. That will remove a level of uncertainty for the ports affected. It will also reaffirm our support for the trust model as part of the diverse range of ownership structures in Scotland. That is how the legal change will bring about the purpose that we are pursuing.
Thank you.
We move on with a question from Mike MacKenzie.
Thank you, convener, and good morning, minister. The policy memorandum states that the bill
“satisfies a commitment by the Minister for Transport and Veterans to the Office for National Statistics following their review to reclassify certain trust ports … as public corporations.”
Can you explain when the commitment was made, what was committed to and why you considered it appropriate to make it?
My predecessor, Keith Brown, wrote to the Office for National Statistics on 5 September 2013 to advise that the Scottish ministers had no intention of exercising the power to require a port to privatise under section 10 of the Ports Act 1991 and that they would consider the introduction of legislation to remove it, if necessary, to avoid ONS classification of trust ports that went over the relevant threshold as public corporations. Following the ONS’s decision on 25 September 2013 to retain the classification, Mr Brown made a commitment to take forward legislation, which is exactly what we are now considering and pursuing.
Thank you, minister. My second question is about the policy memorandum, which indicates that classification of a trust port as a public corporation could have implications for Scottish Government budgets. What might those implications be?
Essentially such classification would mean that the borrowing that a trust port may undertake would count against Scottish Government budgets and be deemed as our borrowing. We would have no control over that and it would affect the public purse substantially. For example, the very exciting proposals around Aberdeen harbour could mean investment of £300 million and a significant amount of borrowing. It would therefore have an impact on the Scottish Government’s accounts and potentially our borrowing. This is only a technical matter of bureaucracy and clarification, and we want to resolve it so that it does not have an impact on our Government’s ability to borrow and spend.
Thank you, minister. I should say in passing that I share your enthusiasm for the proposed investment and improvements at Aberdeen harbour.
Good morning. Has the ONS offered any guarantee that the passing of the bill will mean that trust ports will not be characterised as public corporations at some point in the future?
The honest answer is that it has not given such a guarantee. Previous discussions with the ONS suggest that the bill should satisfy its needs on classification. That said, because of its working practices, the ONS cannot give a cast-iron guarantee about the model that it would decide on. We will be in contact and share progress with the ONS and the Treasury to ensure that discussions are concluded in a positive way. If any other issues emerge, such as classification, we can address them.
I hope that discussions will be concluded by stage 2 of the bill, but that is in the hands of the ONS and, potentially, the Treasury. We will share further information with the committee if we do not get the assurance that the matter will be resolved. All the early indications from the discussions we have had are that, if we legislate as proposed, it should be sufficient to remove the ports from the classification. If issues emerge, they will have to be addressed. Chris Wilcock can provide the current position.
As the minister outlined and as the committee will be aware, Aberdeen harbour is already classified as a public corporation and has been since 2000, based on the turnover threshold. The ONS has also identified Lerwick and Peterhead harbours as potentially approaching that threshold, which makes a solution all the more imperative because of the pending Aberdeen investment and the on-going investment at the other two ports.
When we engaged with the ONS, we asked it to look across the UK at all the factors that had led to the original classification in 2000. There were varying levels of Government control across the UK but in Scotland, the key element was the legislative provision whereby ministers can compel a port to privatise. We have gone back to the ONS to ask whether, if we were to produce a bill to remove that provision and the ONS had the opportunity to look at the detail, it would it be prepared to reconsider its decision. The ONS has said that it will do that, but it will only be at that point at which it looks at the bill in detail, and possibly all the other factors, that we will have a final decision on classification. As the minister has said, we will work to push through solutions to any issue that comes up.
If the ONS decides to reclassify trust ports, how quickly is that likely to take effect and could a delay have an impact on current port development proposals?
We want the process to take place as quickly as possible so that the issue can be resolved. That is not in our hands but in the hands of the ONS.
To answer the second part of your question, if there were a delay, it would not have an impact on any trust port’s plans but it would have an impact on the Scottish Government’s accounts.
I see that the Finance Committee has not carried out any formal consideration of the financial memorandum, which states that no costs would be incurred by Government, local authorities, other bodies, individuals or businesses. Is that still the case?
Yes, it is.
Thank you.
Thank you very much. Those are all our questions. Is there anything you would like to add?
I have nothing to add, convener.
That concludes our evidence at stage 1 of the Harbours (Scotland) Bill. The committee will consider a draft report on the general principles of the bill at a future meeting.
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