Written statement to Parliament

Sale of trust ports

Launching consultation on criteria relevant to the appropriateness of sale of a major trust port in England or Wales under the Ports Act 1991.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Rt Hon Philip Hammond MP

I am today launching a consultation on the criteria that the government considers particularly relevant to the consideration of the appropriateness of sale of a major trust port[1] in England or Wales under the Ports Act 1991.

During the consultation period, which will run for 6 weeks until 27 June 2011, I am seeking the views of interested parties on the following criteria, which I propose to adopt in place of those set out in the written ministerial statement on the sale of trust ports of 25 January 2010.

In view of this consultation, I have asked my Rt Hon Friend the Minister of State to suspend her consideration of the application for a transfer of the port undertaking made by Dover Harbour Board under the Ports Act 1991 until I announce a decision on the proposed criteria.

The Proposed Criteria

The following criteria are those which the government considers particularly relevant when considering an application under the Ports Act 1991 for the sale of a major trust port in England or Wales. This covers the consideration of any proposal for a transfer scheme submitted under section 9 or 10 of the 1991 Act, together with the exercise of the Secretary of State’s functions in respect of the subsequent sale of the port to which the scheme relates. The Secretary of State also intends to have particular regard to the policy considerations set out below before making a transfer scheme himself under section 12 of the 1991 Act or subsequently approving the sale of a port to which his scheme relates.

Community participation

The Secretary of State will not approve an application for the sale of a trust port under the 1991 Act unless the sale is considered likely to deliver an ongoing and significant level of community participation in the port. Such participation could take a variety of forms, but must include the ability to influence the port’s long term development and may include the right to receive a share in the profits of the port, or the future increase in its value. It does not necessarily require a community role in the operation of the port.

Future Development of the Port

The Secretary of State will not approve an application unless the sale is considered likely to deliver an ownership model with the capability and access to capital to meet future investment needs.

Fair price

The Secretary of State will not approve an application unless the sale is considered likely to represent good value for money, having regard not only to Exchequer proceeds and market conditions, but also to other benefits including those to the community and the wider economy.

Fair competition

The Secretary of State will not approve an application that is likely to deliver an ownership model which results in unsatisfactory levels of competition in the relevant sector.

Transport networks

It is highly desirable for an application to be likely to deliver an ownership model which will cause the port to be operated so as to contribute to reliable and efficient transport networks.

Sale process

It is highly desirable that the sale should be conducted in such a way as to give all bona fide prospective purchasers a fair and equitable opportunity to participate.

Employee involvement

It is desirable for an application to be likely to deliver port employee participation in the ownership of the port, such as the right to receive equity shares or a share in its future success[2].

[1]For the purposes of the Act, a ‘major trust port’ is a trust port with an annual turnover above a certain limit (currently £7.6 million). In England and Wales this currently includes Dover, Tyne, Milford Haven, Shoreham, Poole, Harwich Haven and the Port of London Authority (though the latter is excluded from provisions on privatisation contained in the Act).

[2]This is without prejudice to the Ports Act 1991 section 5(3) requirement to have particular regard to the desirability of encouraging the disposal of the whole or a substantial part of the equity share capital of the successor company to managers or other persons employed by the port company etc.

Published 16 May 2011