It's time for a sea change on privatisation

Comment: The greater part of Scotland's territory is its marine acres and, argues Peter Clarke they should be sold off to revitalise their industries. CHANCE plays funny tricks. I was minding my own business hurtling down to King's Cross in one of Great North Eastern Railway's luxurious first class compartments being kept high on caffeine from the fountains of coffee on order.

I was caught putting some complimentary shortbread in my pocket by an amiable looking rascal who seemed familiar but whom I could not quite place.

My companion was chatty and opened the conversation. I rambled on determined I would find a clue to who owned the broad Lanarkshire accent. By Dunbar the scales had fallen from my eyes. My companion was Dr John Reid, the Secretary of State for Scotland and as good a fixer the Government has found. Secretaries of state normally run away but this one was captive that he was in the market for good ideas.

It is always a good trick to be magnanimous towards your political opponents. Dr Reid conceded the Tories' privatisation had done much more than he had imagined possible. He said the Left would not get the authority to renationalise anything under Blair.

Dr Reid expressed a pang of sadness that there was nothing much less to privatise - the BBC perhaps and the Royal Mint. It is a bit uncivilised to argue politics with a captive politician, however polite he might be, but I tried to explain to him that we have barely started to take on the major privatisation projects - education, welfare, pensions and the mighty NHS.

None of these candidates turned him on. The psychological baggage of socialism is still in place. But one candidate did intrigue him. He confessed, indeed, that he had never even encountered the suggestion before. I argued we should privatise the sea - and the seabed.

The greater part of Scotland's territory is our marine acres. We have the longest coastline of any nation in the EU and some of the most valuable resources under water.

Until 25 years ago the only assets thought to be in the North Sea or our Atlantic provinces was fish. Then we found oil and gas. It took time to develop the techniques for offshore work but now it has become commonplace. The discovery of hydro-carbons created the need to define property rights. So far it is limited to State-issued licences. It ought to involve further into freehold.

EVERYONE agrees fishing is on the edge of disaster. All the ecologists can do is argue for restraint or quotas. This is because property rights are not being allowed. If we organised our sheep or cattle or pigs as we do our fish they would have disappeared long ago. Our inland seas ought to be enclosed as our farmland was in the agrarian revolution. Physical wires or fences are not necessary. Property rights can be observed and enforced from the skies.

So far only salmon has been farmed. We're still learning. Perhaps their constricted cages are not the best form of husbandry. If individuals or firms owned stretches of sea loch, husbandry would improve and the economics of fish farming would be quite different.

All but a few fragments of Scotland's shoreline are owned by the state - not the Ministry of Defence - but the Crown Estates. They were inherited by Regina as an anomaly. The Crown Estate Commissioners sounds like a fairly marginal quango but, in fact, it is a very well run portfolio of properties which enrich the Government more than any HRH. We have no knowledge of how well they run their millions of acres of seabed as nobody has ever been given a chance to try out alternatives. As an asset, the seabed is almost asleep, being held in what lawyers call "mort main" - French for a dead hand.

It would be pleasing to think some MSPs might take up such an idea but they strike me as a dim lot. We must look to the remnant of the Scottish Office to realise there are vast assets never before tested in the market place.

I do not claim this is an original notion. I have taken it from Donald Denman, the professor of land economy at Cambridge University. His essay "Markets Under The Sea" is one of the most illuminating papers I have read.

It is less than 60 years since we realised there were intangible assets in the sky that we could not touch or see. The entire telecommunications industry has leapt from land-bound wires and emerged because we have defined property rights in the electro- magnetic spectrum.

An infinity of data can be bounced off satellite. Originally these were the property of different governments - the USA or the defunct USSR - but now satellites are largely private.

We cannot know how maritime property rights might evolve and what sort of uses could be made of the sea. Some will doubtless feel that my proposal would be a desecration and that marine life would be degraded. I argue that owners will be vigilant against neighbour polluters. While nobody owns the sea, everyone is free to pollute it.

Dr Reid gulped. I hope he will never feel the need to say we are short of assets to sell off again. After we've privatised the seas then we can take on the schools.

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