Senators slugged it out on the issue of tax relief for tour boat operators in a short session yesterday.

Their debate followed anger over the freedom schooner which tour boat operators claimed had undercut their operations after being waived duty and work permit hassles.

However, Government Senator Walter Roban, who is Chairman of the Marine and Ports board, yesterday said it is illegal for Government to waive any fees or licences.

And Marine and Ports cannot waive the requirement for any vessel to have a local pilot, he added.

Sen. Roban said he doubted whether the , which is a replica of an ancient sail ship, would have been much competition to 21st century boats typical in Bermuda.

The boat came to bring a positive experience about history and culture and brought two young Bermudians on board, said Sen. Roban.

He said the Finance Ministry is dealing with the issues raised by the boat operators along with others in the tourism business.

Opposition Senator Bob Richards said Government is treating small businesses like step children.

?The issue isn?t about the ,? he said. ?It is about the economics of the tour boat operators.

?They play a key part in the tourism product.?

He said Bermuda?s beautiful waters are a massive selling point but the industry is dying.

Sen. Roban interjected that the Finance Minster is in talks with the boat operators but Sen. Richards said tour boat operators have not been given concessions on liquor licences.

?An owner of four boats told me he pays more liquor licence fees than the Southampton Princess,? Sen. Richards said. ?Charter fishermen get fuel breaks for carrying a maximum of four people to the banks.

?These ships get no breaks on fuel. The largest proportion of fuel is Government tax. It?s over half. The bigger the boat, the more fees you pay.

?It doesn?t take into account whether the boat picks up five or 105. You are paying the same if you are empty.?

He said the industry has been trying to meet with the Ministers of Finance and Tourism for years but without success.

He said Government had recently fobbed them off with an excuse about being in the middle of the budget.

?Operators are eventually going to have to find something else to do, no one can be in business and not get a return on their investment,? he said. ?They are upset with Government regulations and taxes.?

Tour boat operators can get ten percent relief on duty but it can take a year to come through.

?A tour boat can cost $1 million, ten percent is $100,000 and Government sits on this for a year,? he added.

Government Senate Leader Larry Mussenden said the previous UBP Government made the liquor licensing act apply to boats but now they are now trying to blame the Government.

He said the Minister of Finance met with boat operators in March and said concerns needed to be forwarded in writing.

He said the process had not stopped because of the budget but it had to be factored into how Government managed its money.

Opposition Sen. Kenny Bascome said Bermudians have no compassion until things affect them or their family personally and he said, as a small business operator, he knows first hand how taxes sting.

Government Sen. Raymond Tannock said if liquor licence fees were only levied on one of the boats an operator owned, then other multi-outlet businesses in town would want similar breaks.

The motion to adjourn also touched on race with Sen. Roban praising a frank speech made by former UBP campaign manager Michael Winfield at a meeting on Independence which called for racial talks and reconciliation.

Opposition Senate leader Kim Swan said the Independence issue is stirring racial tension similar to that seen at elections.

He said the PLP have ignored overtures to draw up a code of conduct to help reduce racial mudslinging.

And he called on Government to commit to a referendum for deciding on Independence and to get over its romantic notion of forcing the issue at an election.

?Tension is so ripe you can cut it with a knife,? he said, adding a referendum could be called at any time as no date is necessary.

Government Sen. Neville Tyrell said the referendum is a red herring used by those who are against splitting from Britain.

And party colleague Sen. Reginald Burrows said Bermuda had used referendums in the past.

One had heavily backed keeping the death penalty but Britain then forced Bermuda to overturn the death penalty anyway.