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HOUSE OF COMMONS MINUTES OF EVIDENCE taken before the on the Before: Sylvia Heal, in the Chair Mr Adrian Bailey Mr Brian Jenkins Sir Robert Smith Ann Winterton
[Mr Peter Davis, Counsel (Legislation) in attendance]
MR JOSEPH DURKIN appeared as Agent. 1. CHAIRMAN: Good afternoon, Mr Durkin. I wonder if you could perhaps introduce the members of the team who are with you today. 2. MR DURKIN: I have Gordon Thomson, who is the Chairman of the Whitehaven Harbour Commissioners, Celia MacKenzie, who is the Vice Chairman, and Terry Ponting, who is another Harbour Commissioner. 3. CHAIRMAN: Thank you. Perhaps you would like to address the Committee now, Mr Durkin. 4. MR DURKIN: Madam, this Bill is promoted jointly by the Whitehaven Harbour Commissioners and by W3M Charitable Foundation. The Whitehaven Harbour Commissioners are a body corporate having perpetual succession and a common seal. They are a not-for-profit organisation and are an independent body governed by their own local legislation, namely the Whitehaven Town and Harbour Acts and Orders 1708 and 2002. The Commissioners are a trust port and, as such, only have the powers expressly or impliedly conferred upon them by that local legislation or by public legislation, principally the Harbours Act 1964. They exist to maintain, operate and improve Whitehaven Harbour. They have no shareholders or owners, and any surplus income is ploughed back into the harbour for the benefit of their stakeholders, who are in the main the harbour users, the local authority and the local inhabitants. 5. I understand, Madam, that you would like to know something about the constitution of the Commissioners. I can assure you that they are not an old boys' club. In January 2000, this Government issued a Guide to Good Governance to govern the future constitution of trust ports. The core principles in that guide are openness, accountability and fitness for purpose. Pursuant to that guide, the Whitehaven Harbour Commissioners instructed me to draft and prepare an Order which would reconstitute them in accordance with the Government's guide. Unfortunately, the Commissioners were short of cash and so they asked the Department if they would take over the Order, which they very kindly did. Very exceptionally, therefore, this Order is made under section 15 of the Harbours Act 1964. They are normally made under section 14. I tell you that because it is a very special Order, and it is probably 25 years since one of these has been made. 6. The Order provides that there should be not less than seven and no more than nine Commissioners. One of those is the Chief Executive, who holds that office by virtue of being the Chief Executive. The other six or eight members are appointed by an appointing body, pursuant to Article 5 of the 2002 Order. The appointing body is established by paragraph (6) of that article and consists of a person nominated by Copeland Borough Council, another one by Cumbria County Council, the Chairman of the Commissioners and two other Commissioners. Between them, they appoint the Commissioners and they have to be fit for purpose, and "fit for purpose" is set out in paragraph (4) of Article 5. They have to have "special knowledge, experience or ability in one or more of the following matters..." and then it is set out at (a) to (g); for instance, management of harbours, shipping or other forms of transport. They therefore have to be fit for purpose and they have to be appointed in an open manner. To do that, the Commissioners advertise the post of Commissioners when they become vacant. Anybody can apply, but they have to demonstrate that they are fit for purpose. They can only hold office for three periods of three years each and then they must step down and make room for others. 7. CHAIRMAN: That is very helpful. You have even, in your response, anticipated one or two of my supplementary questions. Could I ask if any of my colleagues have any comments to make? 8. ANN WINTERTON: I may have missed it, but could you say a few words about the W3M Charitable Foundation and the trading company - or are you coming to that? 9. MR DURKIN: Yes, I am. Whitehaven Harbour is a very substantial Georgian harbour. It was developed by a local landowning family, the Lowther family, starting in the mid-1600s. The harbour has always relied heavily on coal, which was mined locally and exported from the harbour to Ireland and to other places abroad. 10. In the mid-1700s, Whitehaven Harbour had risen in prosperity to become, after London, one of the six most important ports in the country. There were trade links with America, and tobacco, sugar and spirits - particularly rum - were imported in exchange for cargoes of manufactured goods. As one of the consequences of the American War of Independence, Whitehaven lost that trade, and its leading position as a port began to decline. 11. Until recently, the harbour continued to rely heavily on coal exports and also on the import of chemicals used for the manufacture of detergents. However, by the early 1990s all of that trade had dried up and the harbour became virtually defunct as a trading port. At that time, very few recreational craft used the harbour. The town of Whitehaven was also in a state of economic decline. 12. Madam, there is a set of exhibits. Perhaps I could refer you to page 1 to begin with, and I will come to the others later. Page 1 shows Whitehaven Harbour. The picture was taken in 1993, and there you can see that it is a magnificent harbour and it is virtually defunct at that time. 13. In December 1991, the Whitehaven Development Company was established as a vehicle for bringing together the joint resources and expertise of British Nuclear Fuels, English Partnerships, Copeland Borough Council, Cumbria County Council and the Harbour Commissioners. The intention was to promote the regeneration of Whitehaven and the renaissance of the harbour, with a view to improving the economy of Whitehaven by creating new jobs and making Whitehaven and the harbour respectively an attractive town and an amenity for the benefit of both the local people and also for tourists and other visitors. 14. The Development Company was established as a not-for-profit organisation and was expected to have a lifespan of ten years. It began with a capital of approximately £4 million which was given to it by its shareholders. Since the establishment of the Development Company, a total of just over £61 million in funding has been raised, of which approximately £18 million has been used for the renaissance of the harbour. 15. That money, namely the £18 million, has been used mainly to provide, first, works to strengthen the harbour walls and to construct a sea lock entrance to the inner harbour, both as a flood defence and to maintain a navigable depth of water at all times in the inner harbour. Secondly, the money was used to establish a marina, including supporting infrastructure such as shower and washrooms, fuel bunkering and waste disposal facilities. The marina is the central feature of the regeneration of the town and of the harbour. Thirdly, the money was used to provide substantial infrastructure for the fishing industry, including a fish reception hall, a new ice-making plant and fuelling facilities. 16. Perhaps you would turn to page 2 of the exhibits, Madam. On the left is a picture of floodwaters rushing through the harbour. They then finish up on the right, as you can see, in the town, flooding it. Page 3 shows the lock gates which were installed at the mouth of the inner harbour and, since then, there has been no further flooding. A suitable depth of water is now maintained at all stages of the tide in the inner harbour. Page 4 shows the recreational craft now bobbing around happily in the water, and there is some text there which is quite interesting. Page 5 shows the fish hall and page 6 shows the ice plant. There is text there to say that it can add up to 13 per cent in added value. 17. In November 1997, the Millennium Commission agreed to provide substantial funding of approximately £5.6 million for regeneration purposes. That sum was part of the £18 million of grant money used for the renaissance of the harbour. The Millennium Commission required that a charitable trust be formed to be the recipient of the grant and the holder in perpetuity of the assets to be created for the benefit of the public. As a result, W3M Charitable Foundation was formed and the shareholders in the Development Company donated their shares in the Development Company to the Charitable Foundation, with the result that the Development Company became a subsidiary of the Charitable Foundation. The ten‑year lifespan of the Development Company has been extended and still continues. 18. I should mention that the Millennium Commission was dissolved at the end of last year and its assets and functions are now vested in its successor body, which is the Big Lottery Fund. 19. In forming the Charitable Foundation, the founders of the Development Company created the Charitable Foundation to be the recipient of grant money to be used by the Charitable Foundation for the regeneration of the harbour. This was reflected in the objects clause contained in the Memorandum of Association of the Charitable Foundation, and that Memorandum is the main constitutional document of the Foundation. The objects clause of the Charitable Foundation was widely drawn at the suggestion of the Charity Commission. Those objects are powers, but they will not be extinguished by the enactment of the Bill: they will be transferred by Clause 5 of the Bill to the Commissioners. However, they will become more narrowly focused, because the Commissioners will only be able to exercise those powers - and I quote from Clause 5 - "solely for the purposes of the improvement, maintenance and management of the harbour for the public benefit, and as part of the Commissioners' harbour undertaking", and that is the W3M Foundation, Madam. 20. A trading company was also formed to run the business of a visitor attraction, The Rum Story, and that newly formed company, W3M (Trading), became the second subsidiary of the Charitable Foundation. Those three companies are the Whitehaven companies which are referred to as such in Clause 2 of the Bill. 21. The regeneration projects have won many awards for public art, lighting design, waterside environment, seaside resort, and even car-parking awards. Perhaps I could take you to page 7 of the exhibits. You can see the attractive features that have been installed in the harbour. The one on the right is not too attractive. It is John Paul Jones, who was a rebel who was born near Dumfries, finished up in the American Navy and once invaded Whitehaven Harbour! 22. Page 8 shows more harbour features, as do 9 and 10. Going on to page 13, that partly depicts The Rum Story, which is a building set out to show how rum came into being - and I think that some people even finish up by drinking it! Page 14 shows one of the valuable assets, which is a car park. The picture on the left is as it was when it was vandalised and people did not use it. Then it was renovated and brought up to a very good state, as is shown on the right. Page 15 is a boat repair facility, which the Commissioners themselves have no powers to operate, but they will when the assets are transferred to them together with the functions of the Whitehaven Company. Page 16 shows Whitehaven Harbour as it is now. 23. The grant money has been expended in carrying out the programme of regeneration, which has now been virtually completed. The Commissioners and the Whitehaven companies see their future task as maintaining, operating and improving the regenerated harbour. They recognise that they will need to do so without recourse to public subsidies and that the Commissioners and the companies should combine their skills and their assets and proceed in perpetuity as one entity, namely as the Whitehaven Harbour Commissioners. 24. However, the Commissioners have no powers to receive and operate some of the assets of the Whitehaven companies, such as the car park and the visitor attraction, both of which are shown in the exhibits. The Bill is therefore necessary to authorise the Commissioners to receive, to carry out the functions, to manage and to deal with the assets of the Whitehaven companies. The purpose of the Bill is therefore to transfer the various functions and assets from the Whitehaven companies to the Commissioners and to provide for the dissolution of those three companies. 25. Madam, you may like to know that the combined turnover for the three Whitehaven companies for the last financial year was almost £724,000, and that sort of turnover will greatly assist the Commissioners for the future in maintaining, operating and improving the harbour. 26. The Whitehaven companies employ 22 permanent staff and four seasonal workers. All of those permanent staff will transfer to the employment of the Commissioners. They will retain their jobs and they will have the benefit of the Transfer of Undertakings (Protection of Employment) Regulations, which are commonly referred to as TUPE. I understand that the four seasonal workers will also be re-employed each season. 27. The Department for Transport were made aware of the Bill's proposals at a very early stage and they do not object to the promotion of the Bill. I did try to get them to say, "We support it" but they said, "We can't say that because we would have to get the Minister to stand up and say so" and they did not want to. However, they have no objection to the Bill. 28. The Attorney General, having consulted with the Charity Commission, has presented to this House a report on the Bill, in accordance with SO 158. In his report, he concludes by stating that he has no objection to the Bill. 29. The promoters have, in accordance with SO 38, included a statement in the printed memorandum attached to the Bill that the provisions of the Bill are compatible with convention rights of the European Convention on Human Rights. The Joint Committee on Human Rights, in their second report which was prepared on 30 January of this year, stated that the Bill did not raise rights issues of sufficient significance to warrant the Joint Committee undertaking any further scrutiny of the Bill. No petitions have been deposited against the Bill. 30. Two amendments are proposed, as set out in the filled-up Bill. One is a drafting amendment to paragraph 6 of the preamble and is consequential on an amendment made in the first House. The second amendment is more substantial and was agreed with the Open Spaces Society, who were concerned that a copy of the Millennium Agreement should be made available locally for public inspection. As a result, certified copies of the agreement have been deposited at the offices of the Commissioners and at the Cumbria Record Office in Whitehaven. A copy of the official receipt for the deposit of the copy of the agreement at the Cumbria Record Office appears as the final exhibit at pages 17 and 18 in the set of exhibits before you. 31. Two further amendments are proposed in addition to the amendments in the filled-up Bill. They are both amendments to the amendment agreed with the Open Spaces Society. The first of those additional amendments is to insert the word "certified". That word was omitted in error from the filled-up Bill, and I apologise for that omission, Madam. The second additional amendment is to delete the word "respectively", and so avoid a degree of ambiguity which would otherwise occur and which was noted by your Counsel. 32. Madam, I have told you about who is represented today and I will not repeat it. Subject to proving the preamble, the promoters request that the Bill be permitted to proceed, with the amendments as proposed in the filled-up Bill, and with the two additional amendments which have just been handed in. 33. CHAIRMAN: Thank you, Mr Durkin, for giving us background to this Bill and for the explanations that you have already offered us in relation to the appointment of Commissioners. My colleagues on the panel may have some further questions to put to you. 34. MR BAILEY: Yes, I have two. I am intrigued. This process is to hand over the assets of three companies to the Commissioners. 35. MR DURKIN: Yes. 36. MR BAILEY: What sort of corporate identity will the Commissioners have? How will you badge, if you like, the structures, assets, whatever? 37. MR DURKIN: As I said at the beginning, Sir, it is a statutory corporation established by its own local Acts and Orders. The latest one which I handed in, the Order of 2002, reconstitutes them in their present form. They are a body with perpetual succession and a common seal. In certain respects, they are very much like any other Companies Act company except that, instead of being governed by the Companies Act, they are governed by their own, unique local legislation, and they can hold assets in perpetuity, as can any company. 38. MR BAILEY: So it will be described as what? The Whitehaven Harbour Commissioners? 39. MR DURKIN: Yes, that is their corporate title. 40. MR BAILEY: My second question is this. In the explanatory memorandum, the section on continuation of employment, I understand that, as of the day of transfer, existing staff will be transferred under the TUPE conditions. 41. MR DURKIN: Yes. 42. MR BAILEY: There is also a clause which possibly generates a level of ambiguity. "Employment of members of the staff to which subsection (1)...applies shall be deemed for all purposes to be a single continuing employment." My limited knowledge of TUPE regulations is that they are time-limited. Is there anything in that provision which compromises the employment rights of those that are already employed and will be employed on that transfer? 43. MR DURKIN: I am not aware of any at all, sir. Mrs MacKenzie knows the TUPE regulations better than I do, and I think that she has been operating them with the assistance of a local firm of solicitors who are better at employment law than I am. 44. CHAIRMAN: Would you like to make a contribution, Mrs MacKenzie? 45. MRS MACKENZIE: Yes. I have been in discussion with a firm of employment lawyers in Carlisle, a firm called Baines Wilson, who have been taking me through the procedures in readiness, should this Bill be accepted. All the staff have been notified according to the TUPE regulations and given the opportunity to have a representative act for them, should they feel it appropriate. We are in the process of awaiting the final move for the agreement for the transfer of their contract of employment now to the Harbour Commissioners, should the Bill be enacted. 46. MR BAILEY: Can I clarify that? What is the position of the staff on this? I am unclear. 47. MRS MACKENZIE: The staff have accepted that they are appropriately represented, and are accepting transfer of their contracts from - it is W3M (Trading) primarily that they are employed by - to the Whitehaven Harbour Commissioners, once the Bill has been enacted. I have all of their letters, which each of them has signed, that they have agreed to have their contracts transferred. 48. MR BAILEY: May I finish by thanking you? I have learnt a lot more about Whitehaven than I knew before. 49. MR JENKINS: There are one or two things that strike me as having to be thought about. You say on the Commissioners that one should be appointed by Copeland Borough Council. I take it that this Bill will be here for a long time. 50. MR DURKIN: They are not appointed by Copeland Borough Council. There is an appointing body. If, Sir, you look at the 2002 Order, under Article 5(6), it consists of one person nominated by Copeland, one by Cumbria: not to be Commissioners but to be members of an appointing board, which sit and interview potential Commissioners. The appointing body having interviewed them, it then selects the most appropriate candidate, who becomes a Commissioner. 51. MR JENKINS: The Commissioners are then elected, you say, on this open system - or selected? 52. MR DURKIN: No, they are appointed. 53. MR JENKINS: You tell us that it will be advertised and you will select people on their experience, et cetera. 54. MR DURKIN: Yes. 55. MR JENKINS: How do you maintain that to be an open system? 56. MR DURKIN: It has to be advertised. Anybody who thinks that they are suitably qualified can answer the application. 57. MR JENKINS: I must have missed that in the Bill. 58. MR DURKIN: It is not in the Bill. It is in the Guide to Good Governance, of which I do not have a copy with me, only the first two pages. That is what the Commissioners are obliged to follow, and they do. That is the Government's own Guide to Good Governance, as to how they should appoint people. 59. MR JENKINS: How will that procedure be maintained in the future if it is not in the Bill? 60. MR DURKIN: Because the Commissioners, being law-abiding persons, follow the Guide to Good Governance issued by this Government. 61. MR JENKINS: You think that is a sound enough policy guidance, do you? 62. MR DURKIN: The Department for Transport, which has overall charge of the ports industry, keep an eye on these things and they know what is going on. 63. MR JENKINS: On the normal age limit for Commissioners, you say that at 65 they must not be appointed - if they are over 65. 64. MR DURKIN: I am sorry? 65. MR JENKINS: I am on the "Arrangement of Articles" on page 8, Article 10, "Normal age limit for Commissioners". 66. MR DURKIN: That is a bit ageist, is it not? I am not sure that it would be allowed now. It may be that the Commissioners, when the dust settles a bit after this amalgamation, might want to review what powers and duties they will collect from the three Whitehaven companies; and, when they decide what they have and what they should do with it, they might decide to promote another Order at some stage, and they could do something about that limitation on age. 67. MR JENKINS: I bring it to your attention. I think that it is probably challengeable. 68. MR DURKIN: The 2002 Order has been made and it is not part of this Bill. I brought it here this afternoon because the Chairman wanted to have an explanation as to how the Commissioners are constituted. That was the reason for bringing the 2002 Order here today. It is very astute of you to spot that age limit. 69. CHAIRMAN: Perhaps Mr Davis would like to offer an explanation. 70. MR DAVIS: As I see it - and correct me, Mr Durkin, if I have got this wrong - the 2002 Order, as marginally qualified by the Bill, but only marginally, remains in full force as the governing document for the Commissioners. 71. MR DURKIN: Yes, it does. 72. MR DAVIS: Simply because there is nothing in the Bill that says it does not. 73. MR DURKIN: That is their constitutional document; their latest one. 74. MR JENKINS: It is challengeable. 75. MR DURKIN: I do not think that it is challengeable, Madam. There is a provision in the Harbours Act that says that there is a six-week legal challenge period after a revision Order has been made, and that six-week challenge period ended five years ago. 76. MR DAVIS: Is the concern about an age limitation now? 77. MR DURKIN: Yes. 78. MR DAVIS: I am not sure what effect any legislation on age limitation would have with this but, as an initial guess, I would think that, because this does not prohibit the employment of someone over a certain age, it is more likely than not to be secure. 79. CHAIRMAN: Perhaps the Commissioners present and the agent will have heard what my colleague has said and no doubt will pay due observance to that comment. I appreciate the fact that he has raised it and perhaps it is a matter that you may wish to pursue further, just to be on the safe side. 80. SIR ROBERT SMITH: You gave a background as to how the commercial activity switched a lot to leisure. Is there still trading through the port at all, apart from fishing? 81. MR DURKIN: None at all, as I understand it. 82. MR THOMSON: Cargo-wise, the answer is no. We do have the fishing; that is the commercial side of it. The leisure side, of course, is the yachting and boating, power-boating, that sort of thing. We do have at this time a balanced budget - Whitehaven Harbour. Perhaps I may take this opportunity of saying that we have been in existence as a Board of Commissioners since 1894, which is 113 years ago. It is my considered opinion that there has been more development and accomplishment in Whitehaven Harbour in the last 13 years than there was in the previous 100 years. If this Bill is passed, anything that happens after that will be more development and more success for the port of Whitehaven. 83. CHAIRMAN: Thank you very much, Mr Durkin. We have had the benefit of hearing your presentation to us, explanations from the Commissioners who are here present, and indeed we have seen the letters both from the Minister and from the Attorney General. I think that we are all of the opinion that clearly we have seen an example today of some regeneration in the area of Whitehaven and, like my colleagues, I too am now curious to go along and see Whitehaven, having seen the work that you have done. I certainly have great pleasure in saying that we are prepared to accept this Bill and that it moves forward, and we wish you, your Commissioners and all who are involved every success for the future.
84. MR DURKIN: Thank you very much, Madam. 85. CHAIRMAN: I now need to call upon Mr Gordon Thomson formally to prove the preamble.
MR GORDON ELLIOT THOMSON, Sworn Examined by MR DURKIN 86. MR DURKIN: Is your name Gordon Elliot Thomson? (Mr Thomson) It is. 87. MR DURKIN: Are you the Chairman of the Whitehaven Harbour Commissioners? (Mr Thomson) Yes. 88. MR DURKIN: Have you read the preamble to the Bill, including the amendment to paragraph 6? (Mr Thomson) I have. 89. MR DURKIN: Is the preamble true? (Mr Thomson) Yes.
The witness withdrew 90. CHAIRMAN: Thank you very much indeed, and thank you for your attendance here today. _______________
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