01 November 2007

S3M-568 Crown Estate (Taxation on Harbour Developments)

Scottish Parliament

Thursday 1 November 2007

[THE PRESIDING OFFICER opened the meeting at 09:15]

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Crown Estate (Taxation on Harbour Developments)

The Deputy Presiding Officer (Alasdair Morgan): The final item of business is a members' business debate on motion S3M-568, in the name of Tavish Scott, on Crown Estate taxation on harbour developments. The debate will be concluded without any question being put.

Motion debated,

That the Parliament notes the vital importance to island and coastal communities of their ports and harbours which serve lifeline transport links and, by supporting such industries as fishing, aquaculture, offshore oil, tourism and renewable energy, provide major employment opportunities; further notes that ports and harbours in the Highlands and Islands are largely owned by local authorities, trusts or other public bodies that operate for the benefit of the communities they serve and reinvest any profits in these communities; views with concern the charges such ports and harbour owners have to pay to the Crown Estate for the rental of areas of seabed; further views with concern the royalty charges imposed by the Crown Estate when material dredged from the seabed to assist navigation is used productively by harbour owners for land reclamation rather than being wastefully dumped at sea, and believes that serious consideration should be given as to how the Parliament's powers to legislate over the property rights of the Crown in Scotland, as outlined in the December 2006 report of the Crown Estate Review Working Group, could be used to lift this unjustifiable burden of Crown Estate taxation from ports and harbour operators.

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The Minister for Transport, Infrastructure and Climate Change (Stewart Stevenson): This evening's debate has provided a welcome and well-timed opportunity to discuss an issue that I know Tavish Scott took a keen interest in when he was the Minister for Transport. He mentioned Telford, who built harbours; I remind him that it took a Stevenson to build the lighthouses.

I am highly appreciative of the speeches that have been made by the other participants in the debate—I listened to those of Liam McArthur and Alasdair Allan, as island representatives, with particular interest because the island communities are most affected by imperfections in ports and harbours. I share the interest in harbours, which play an important role in my constituency, just as they do for island communities.

The debate is well timed because, as members know, the Rural Affairs and Environment Committee is examining the role of the Crown Estate in Scotland and, in particular, the recent report of the Crown Estate review working group. As part of that work, it heard from the Crown Estate on 24 October. On behalf of the Government, I welcome the committee's interest, which allows the views of all parties, including the Crown Estate, to be aired and placed in the public domain and—importantly—enables Parliament to fully debate the issues. The Government will consider carefully the outcome of the committee's deliberations and what members have said in tonight's debate. We await that outcome with interest, especially given the wide range of evidence and views that have already been presented to the committee.

I am aware of the view that is held widely in parts of the Highlands and Islands and in other parts of rural Scotland that, as a landlord, the Crown Estate raises significant amounts of rental income from the seabed in particular, but offers very little benefit to the people of Scotland and the communities from which that income is derived. Many of those communities have few other assets that can deliver the regular income stream that the seabed provides.

There is a broad grouping of local authorities that believe that the Crown Estate charges rents that are too high and that it fails to invest enough in marine infrastructure, such as harbours. I am also aware that some—although by no means all—members of the port sector believe that the Crown Estate takes from Scotland, but does not give back, with the money simply going to the Treasury. I certainly sympathise, to a degree, with those views.

The Scottish Government is already engaging positively with the Crown Estate on a range of marine developments. I hope that that addresses the wish that Liam McArthur expressed in his speech.

Tavish Scott: I take the point that the minister makes about lighthouses—in the coming weeks I will look more closely at those in my constituency.

The minister referred to the Government's work with the Crown Estate. Is he able tonight to say how he views that fact that although, as a landlord, the Crown Estate takes charges for its ownership of the seabed, it now wishes to invest in port facilities at one port, but possibly not at others?

Stewart Stevenson: It is important to encourage the Crown Estate to recycle the money into investment in our ports. The Official Report of the meeting of the Rural Affairs and Environment Committee of 24 October suggests—I base my comments on that source only—that there may be substantial investment in Lerwick, to take forward that port's interests. If the money were always to be returned to each port when it was raised, it would not make a substantial contribution to major projects. We should consider the approach that I have outlined: over the piece and over the calendar ports should be dealt with equitably. The bottom line is that we want more investment in our ports and harbours, and we want the Crown Estate to pay a significant role in that.

Jamie McGrigor: I take the points that the minister makes. The Crown Estate commissioners to whom I spoke made clear that they are open to applications for funding for projects, but that such applications have not been made. However, they are pursuing a number of projects, which is most encouraging for the future.

Stewart Stevenson: That is a useful observation. I suspect that at least three or four members in the chamber will encourage people to come forward with projects. I hope that the Crown Estate will respond positively to those, because harbours and ports are vital parts of many fragile local economies. When it comes to lifeline services, harbours are as important as ships and crews are.

The Crown Estate has expressed willingness to work collaboratively with us for the benefit of the Scottish marine estate, albeit that it operates within guidelines that the Treasury has set for it. Those guidelines include the stipulation that it must make a financial return on its estate.

The Crown Estate has made some progress as a partner in the development of infrastructure for renewable energy. At the end of the day, the basic legal position is clear: management of the Crown Estate is reserved to Westminster. However, the Scottish Parliament may legislate on devolved matters such as planning and the environment—planning is my responsibility, whereas the environment is the responsibility of my colleague Mr Russell—that affect the Crown Estate's activities in Scotland. The deliberations of the Rural Affairs and Environment Committee on the subject will be very relevant to our considerations.

I am grateful for the opportunity to highlight in the chamber the important role of ports and harbours. We place great importance on the port sector's economic contribution locally and nationally. Ports contribute to the health of our economy, not just by providing employment opportunities but indirectly, through related services. They make possible connections with Scotland's dispersed and remote communities, as well as with the international world, creating new business opportunities and links; I refer to the proposals for Scapa Flow. Efficient transport of goods and passengers, supporting Scotland's fishermen, the seafood industries, the energy sector and tourism, and regenerating and supporting local areas and communities are all part of the essential and economically significant role that our ports play.

The Scottish Government will do all that it can to support a constructive relationship with the Crown Estate as we move forward, but I say to Mr Scott that, if necessary, we will rock the boat. My colleague the Minister for Environment will have primary responsibility for developing our relationship with the Crown Estate, but I will work with him in relation to ports and harbours.

I thank Tavish Scott for securing this useful debate, which is an important contribution to where we will go from here.

Meeting closed at 17:35.

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