WESTERN HIGHLANDS AND ISLANDS (TRANSPORT AGREEMENT)

HC Deb 12 May 1952 vol 500 cc1025-73

11.38 p.m.

The Parliamentary Secretary to the Ministry of Transport (Mr. Gurney Braithwaite)

I beg to move, That the Agreement, dated 3rd April, 1952, between Her Majesty's Government and David MacBrayne Limited for the maintenance of certain transport services in the Western Highlands and Islands of Scotland, and for the conveyance of mails in connection with the said services, be approved. It is notoriously hazardous for a Sassenach to cross the Border unescorted, but I am hopeful that my reception from hon. Gentlemen representing Scottish constituencies will not be too unfriendly, as I come to them on this occasion laden with gold, and my hon. Friend the Joint Under-Secretary of State for Scotland will reply at the end of this debate to any points which hon. Members may desire to raise.

The purpose of this Agreement is to maintain certain transport services in the Western Highlands and Islands of Scotland, and to continue for another 10 years the subsidy to David MacBrayne, Ltd., for this purpose. As hon. Gentlemen are doubtless aware, this arrangement goes back a considerable time, to be precise 61 years. It was in 1891 that the Post Office first made an arrangement with this company for the carriage of mails.

I do not think that the need to subsidise the transport system of the Western Highlands and Islands is seriously questioned on either side of the House. By approving from time to time over a period of years previous Agreements of this nature, the House has recognised that to provide essential transport in such a sparsely populated area cannot in the nature of things be a remunerative venture, and that, unless the inhabitants are to be burdened with transport costs well beyond their means, and if their ability to remain and thrive in these areas is not to be jeopardised, the Government must help.

The Agreement before the House tonight is intended to supersede that made in 1949 by the right hon. Member for East Ham, South (Mr. Barnes) when he was Minister of Transport. That Agreement ran for three years and could have continued thereafter, subject to six months' notice on either side; but, in fact, the Company gave notice during the regime of the last Government that it wished to terminate the Agreement on 31st December last. It agreed, however, to extend the period of notice on the understanding that the new Agreement would operate as from 1st January of this year, whenever it might be approved.

The Company terminated the Agreement because, on looking back, it turned out to be a very hard bargain indeed. It provided for an annual advance to the Company of £240,000, including £215,000 on operating, plus £25,000 as remuneration on capital employed; representing a rate of interest of three-and-a-half per cent. Now, as hon. Members need hardly to be reminded, price levels rose from 1949 onwards, and the figure of £240,000 proved to be insufficient.

Some of these increased costs were passed on as percentage increases in freights and fares, corresponding to those in the inland transport system. But, in spite of this, the gap between revenue and expenditure tended to widen. The consequent loss was borne, largely, by the Exchequer, but part also fell on the Company under the arrangement, for sharing profit and loss which was part of the Agreement; although the causes for the loss were beyond the Company's control.

In order to provide necessary new vessels and road vehicles, the Company was forced to resort to a bank overdraft and it is not surprising, therefore, that the Company took the first opportunity to terminate the Agreement. My right hon. Friend the Member for Renfrew, West (Mr. Maclay), when Minister during the past six months, had no hesitation in carrying on negotiations for a new contract which were begun when his predecessor was in office. Successive govvernments have negotiated for many years past with the Company to carry on this service, and nobody is better able to give this service than this Company, with its long experience of the waters around the Islands, and the roads on them and in the Highlands.

When previous contracts have been submitted to this House, as this is submitted tonight, some hon. Members have urged that this island shipping service, and its related road service, should be run as part of the nationalised transport system of this country. But I am not surprised that the previous Socialist Minister of Transport, despite some pressure in the other direction, maintained the traditional position under which these services were provided by an independent company.

Now, when a company is in receipt of a large sum of money from a Government for the provision of certain services, there is very properly some need for public control over the activities of that company. We are fully satisfied that the Government's interest in MacBrayne's is fully looked after by the presence on the board of a Government director as well as by the other safeguards of the contract itself.

We have been careful to see that while, on the one hand, the Government's interest is fully protected, on the other hand the company is not subjected to such detailed control as to prejudice in any way its sense of responsibility for the proper running of the concern and the spirit of enterprise which is essential in running any shipping business, be it large or small.

I am concerned in this opening speech mainly to explain to the House the general terms of the contract, and I will leave it to my hon. Friend the Joint Under-Secretary of State for Scotland to deal more specifically with the services to be provided when he replies at the end of the debate. But, in general, the level of services which David MacBrayne Ltd. undertakes to provide is broadly the same as under the contract now coming to an end.

I turn to the terms of the contract which is before the House. It is intended to run on this occasion for 10 years. The company wanted the term to be as long as possible so as to give itself security of tenure as contractor. We agreed to 10 years because without a substantial length of contract the company could not be expected to provide the new vessels and road vehicles necessary for the proper maintenance of the service.

Mr. Leslie Hale (Oldham, West)

My recollection as a Member of the Committee upstairs which dealt with the Transport Act is that the Minister who has just resigned was rather critical of the whole thing. If my recollection is correct, the question of the price level arose every two years during the last five years. Is it now to be stabilised at this new high figure, and do the Government now think that this high figure will remain for 10 years, or is there any provision for a reduction?

Mr. Braithwaite

I, too, was on the Committee which dealt with the Transport Act upstairs, and I have a reasonable recollection of the speeches made by many of us, including that of the hon. Member for Oldham, West (Mr. Hale). But I would ask the hon. Gentleman to allow me to unfold the terms of the contract because the question of price levels has been given considerable consideration and dealt with. If at the end the hon. Gentleman's displeasure has been aroused, then, perhaps, he might endeavour to seek an opportunity to make his point.

I was about to remark that the 10-year period of contract was the pre-war practice to which it is now proposed to revert. The general financial principles of this Agreement are the same as those of the last which received general approval on both sides of the House under the late Government. They are briefly that the company undertakes to provide certain specified steamer and road services and the Government, for their part, pay a grant calculated to give a reasonable return on capital employed coupled with a measure of risk and incentive so that, within limits, the company bears a proportion of any deficiency, but has the opportunity to share in any excess profits.

Now I come to the figures which I think will cover the point raised by the hon. Member for Oldham, West, a few moments ago as to just how the financial adjustments have been made since the last contract was arranged. On this occasion the annual advance proposed is £360,000. It is true that this is 50 per cent. more than the advance of £240,000 written into the last contract and that the services in this new Agreement are substantially the same as those in the last; and, of course, the hon. Gentleman has raised a point which requires some elucidation.

I suggest to the House, however, that the real comparison—and perhaps the hon. Gentleman will follow me here—is not with the figure of £240,000 which was written into the contract last time, but with the final amount paid to the company under the old contract, which for 1951 will not be far short of £300,000 because of the widening gap between expenditure and revenue to which I have already referred.

The figure of £360,000 was arrived at after some very hard negotiations based on a most careful investigation of the Company's accounts and allowing for known increases in the level of costs on the one hand, and the effect of increased charges on the other. The difference of £120,000 is due, to the extent of £110,000, to increased costs only partly offset by increased revenue—wages, dock labour, fuel, and repairs. The remaining £10,000 is due to the increase from 3½ per cent. to 5 per cent. in the rate of interest allowed on capital employed.

Mr. Hale

The hon. Gentleman did promise to make the point clear, and I am anxious to understand this because of the criticism levelled in the last Parliament. He did say that rates had gone up, and that £120,000 had been added because MacBrayne's had an overdraft and would not carry on. He then went on to say that the figure had not gone up much if we considered all the financial provisions. He finally said that this Agreement is going on for 10 years—guaranteed. If that is so, is it really the contention that increased rates and £120,000 more costs are to be features of a Conservative Government for the next 10 years, if they last so long?

Mr. Braithwaite

I always like to give way, particularly to the hon. Member for Oldham, West, because his interventions are always of interest and sometimes relevant. But it really is a little difficult when the picture is still incomplete. I am still endeavouring to explain the matter to the House, and when the whole picture is drawn hon. Members will be in a better position to praise or blame the arrangements made.

I had got to the increased rate of interest. The risk and incentive arrangements—that is, arrangements under which certain excess profits and losses are shared by the Government and the Com- pany—have been retained in the present Agreement. This matter has been conducted in years past on a non-party basis, and it is worth reminding hon. Members —I emphasise this—that this arrangement formed part of the contract negotiated by the right hon. Gentleman, the Member for East Ham, South. It was welcomed by this House at the time and did not attract the strictures of the hon. Member for Oldham, West on that occasion. It may be that his translation to the Opposition side of the House has sharpened his wit.

The Company's profit of £35,000 is not guaranteed, and within a limited range the Company may make more or less than that figure, according to a formula laid down in the last contract. Any profits made over £35,000 are to be shared equally between the Company and the Exchequer up to a total of £15,000, from which point the surplus, if any, goes to the Exchequer.

Conversely, if the profit falls short of £35,000 the Government will bear one half of the deficiency up to £15,000, and any loss in excess of that amount; the other half of the first £15,000 is to be borne by the Company. To simplify what I hope is not a difficult calculation, the Company's profit of £35,000 may be increased or reduced by as much as £7,500. The Company may accordingly earn a maximum profit of £42,500, or a minimum of £27,500. At present levels of taxation, as they bear on this Company, this would enable it to earn sufficient to pay approximately a minimum dividend of 4 per cent. on the issued capital or a maximum dividend of a little over 6 per cent.—

Mr. Hale

Tax free?

Mr. Braithwaite

—but the contract provides that the Company shall not pay a dividend of more than 5 per cent. on its issued capital. This limitation on dividends is not new. I am sure it appeals to hon. Members opposite. On the previous occasion it was the subject of an exchange of letters, in fact, outside the Agreement.

The remaining provisions of the Agreement are substantially as before. There is provision in the contract under which the annual sum may be adjusted if the steamer or road services are altered—

Mr. Malcolm MacMillan (Western Isles)

Could the hon. Gentleman say whether he means that the dividends will be tax free?

Mr. Braithwaite

Not the dividends.

Mr. MacMillan

It was understood on this side of the House that the hon. Gentleman meant that they were tax free.

Mr. Braithwaite

No. These, like everything else, are subject to taxation. If I created the impression that they were tax free I apologise to hon. Members. As I was saying, the annual sum may be adjusted if the steamer or road services are altered, if freight rates or fares are changed, or—as is necessary in a long-term contract of this sort—if in any two consecutive years the surplus profits or the deficiency exceed £15,000.

I turn to the arrangements made for the building of new ships. The Agreement requires the Company to build one new passenger and mail steamer and one new cargo vessel. This may seem to hon. Members on both sides of the House to be a small programme when we remember that this Agreement is to run for a decade; but this is the immediate requirement, and it would be unrealistic to attempt to write into the Agreement as a contractual obligation the exact number of new vessels which may be required over the next ten years. The Company has, however, assured us that it will not hesitate to build or acquire additional new vessels if these are necessary for the fulfilment of the obligation upon it under the Agreement to provide a sufficient number of good, substantial and efficient vessels each of adequate power and speed.

The House may wish to know something of what the Company has done to renew and improve its assets during the last three years. First, as regards its cargo services, the vessel which the Company were required to build under the 1949 contract was launched in the autumn of 1950 and put into service in April, 1951, as the "Loch Carron." She is now operating as one of the two vessels providing the cargo service to the Outer Islands and the improved service which this fast modern vessel can give is very valuable.

In the early part of 1949 the Company acquired an ex-German vessel of 330 tons deadweight, and she is now operating as the "Loch Frisa." In addition, the Company during 1950 was able to purchase a Swedish vessel of 750 tons deadweight which was built in 1946. She has been installed with refrigeration space for the carriage of fish, and is of a kind very suitable for the Company's cargo services. As the "Loch Dunvegan" she is giving a much better service on the Glasgow-Stornoway cargo run.

The Company has been able to sell two cargo vessels which had become uneconomic to run, namely the "Lochgorm" and the "Lochshiel." It has, however, had to retain the services of two old vessels, the "Clydesdale" and "Hebrides," in spite of earlier hopes for their disposal; but plans for their replacement are now in hand.

As regards passenger ships, the Company has not acquired any new ones for its passenger, mail and excursion services since the "Loch Seaforth" was built in 1947; but during the last three years certain alterations and improvements have been or are in process of being made. The "Lochfyne," which is used in winter on the Ardrishaig mail steamer service and in the summer on the Fort William-Oban trip, is to be reengined this year. The new engines, with which she is to be fitted, will increase her speed to 16 knots and it is expected that, when the work has been carried out, she will be entirely satisfactory and have a further useful life of about 15 years.

In addition, the "King George V," which is used in the summer on the popular Iona and Staffa excursion, was converted in 1951 from coal to oil burning. It is hoped that, with her increased reliability, she will be able to be used on other services in addition to the steamer excursion run. She has now a further useful life of between 10 and 15 years.

Hon. Members will, therefore, see that, although under the previous Agreement the Company were required to provide only one newly-built vessel, the "Loch Carron," it has acquired, in the last three years, in addition, two modern secondhand ships, the "Loch Frisa" and the "Loch Dunvegan," and is affecting major improvements to two others, the "Loch Fyne" and the "King George V."

In all, since 1946, the Company has put into service five vessels of post-war construction—the "Loch Seaforth," which carries passengers and mails, the "Loch Broom," the "Loch Frisa," the "Loch Carron" and the "Loch Dunvegan," all of which are cargo vessels, either built to the Company's order or acquired secondhand. It has also put into service four new passenger launches built to its special design for ferry services. I think the House will agree that the Company's performance in the provision of new vessels has been as good as conditions generally have allowed.

As regards road transport, the position is that the Company has acquired a number of new coaches and goods vehicles, and its fleet now consists of 109 coaches and 25 goods vehicles. There is no doubt that the effect of the, subsidy has been to keep the Company's charges to a reasonable level. At present, MacBrayne's steamer freights are about 120 per cent. above pre-war. Steamer fares are only 55 per cent. above pre-war, which means that generally the increases in MacBrayne's freights and fares have been kept in step with similar increases of railway charges elsewhere.

Finally, I feel confident that hon. Members, on both sides of the House, will join in paying tribute to the crews of the MacBrayne fleet. This has been so often said, and repeated on previous occasions when this contract has been under examination, that there is a risk it might appear to have become a matter of form. It would be a pity if that were the case.

Anyone who has travelled in these ships, and I confess I have not, although I have been very well informed by hon Friends who have, knows full well the high quality shown by the masters and crews in their duties in all weathers, working often to a difficult time schedule and in waters as hazardous as any around the coast of the United Kingdom. I cannot fail to mention the work of the drivers, mechanics, and superintendents of the road services, many of whom work under conditions which no one will pretend are easy, and the operating staff on sea and land, and the administrative and clerical staff in London, Glasgow, and the ports.

I mentioned previously that the Minister has the right to nominate a Government director. That director, since 1947, has been Sir Hector McNeill, not to be confused with the right hon. Gentle- man, the Member for Greenock (Mr. McNeil), but another distinguished Scotsman. He has accepted the invitation to remain in that post for a further year, if this Agreement is approved. His knowledge of the area, and his concern for the welfare of the people, make him a valuable adviser to Her Majesty's Government and to the Company. I feel sure the House will be glad to know that he will continue to give his services.

I therefore commend this Agreement to the House as an equitable arrangement, combining reasonable remuneration for the services to be rendered with a real stimulant to efficiency and adequate safeguards to the Exchequer. I trust hon. Members on both sides of the House, representing Scottish constituencies, will also concur in that view.

12.5 a.m.

Mr. Malcolm MacMillan (Western Isles)

One reason why the hon. Gentleman can be fairly confident that he is not going to suffer the full and logical consequences of the criticism from this side of the House is that we are perfectly well aware that we must keep the MacBrayne steamer service on the Minch, because it is absolutely essential to the economic and social life of the Islands. We have, perhaps, some reason to congratulate ourselves that this question is being handled by the Ministry of Transport. It is of some interest to note that we even had the presence of the Minister himself for a few minutes before he found the matter somewhat exhausting, but we are much happier with the hon. Gentleman than with some obscure overlord in another place.

I should like to join in the tribute paid to the captains and crews of the MacBrayne steamer service. I know it sounds all very formal, because we have said it time after time when this contract has come up, but I do so none the less sincerely, the more so because I have frequent contact with them. I pay my tribute with great sincerity, as I am sure other hon. Gentlemen representing the Highlands and Islands will do, to those men who run this service in all sorts of weather and under great difficulties at times. At the same time I should like to pay my tribute also to the men and women of the Post Office service in this part of the country.

The hon. Gentleman perhaps made one slip in what is a characteristic way when an Englishman is dealing with Scottish affairs, when he said we would welcome him as a Sassenach—we welcome him Sassenach or not—because he is coming "laden with gold." I wonder if he is coming laden with any more gold than he would take to any other part of the country to give something like a similar service.

I have always regarded it as insulting nonsense—I know it was not intended tonight in that way—to say that special financial concessionary arrangements are being made for the people of the Highlands and Islands in the form of the Post Office contract involved in this agreement and the subsidy to the MacBrayne steamer service. No such special arrangements are necessary between London and say Nottingham, Glasgow or Stirling, for the very obvious reasons that no crossing of between 40 and 80 miles of sea is involved. But in the Islands the sea is the highway, and it is no specially generous provision to ensure that the citizens of this country, who happen to be in the Western Isles or in the North-West Highlands, have access to the rest of the country, in which they are equal citizens with equal obligations which they equally discharge.

Therefore, if it comes to talk about amounts of money, it should be remembered that if there were no sea there would be a trunk road constructed and permanently maintained to the extent of 100 per cent., without any argument, without any 10-year contract, and without the Santa Claus attitude on the part of the Treasury, which does not always look too well as Santa Claus. This subsidy and mail contract is, in fact, cheaper than a trunk road service would be over a similar distance in any other part of the country. There is this difference at the same time, that no private individual or semi-private company would expect to be guaranteed profits of 5 per cent., taxed or tax-free, from a trunk road service, which would be borne entirely by the nation and the Treasury.

In this area of the Western Highlands and Islands, we pay full Income Tax and more than full Purchase Tax. We pay every indirect national impost of every kind, the same as citizens in any other part of the country. I want to get it absolutely clear that this Agree- ment is not such a special gift or consideration, as some hon. Members like to think. Indeed, it is not going too far to say that because of the inaction of Governments and the lack of sense of that responsibility which they should by now have acquired, we pay more for our transport in the Highlands and Islands than do people in any other part of the country.

We pay more for our passenger fares, more for the freights for our goods, more for our food because of these excessive rates, and more for our coal, clothing, furniture, fishing gear, agricultural implements and gear of all kinds. Why, therefore, hon. Members should take the attitude that this is a special concessionary gift to that area, I cannot understand.

There is just that bitterness behind the criticism that we get of these things in the Highlands and Islands because the people know, to take just one instance, that in war-time, and at the very beginning of it, no less than 25 per cent. of the total of the Royal Naval Reserve came from the Western Isles of Scotland. I think it is true to say that their losses in the two wars, on land and on sea, were higher proportionately than those of any part of the country.

When it comes to peace-time—this is the other side of the picture—the unemployment and transport costs of the Western Isles today are also the highest of any part of Great Britain. These are two contrasting types of claim which it should not be possible to make at this time of day, and yet these things, unfortunately, are true. I appreciate that the hon. Gentleman did not adopt the Santa Claus attitude in any offensive way. This measure is only, in fact, a part of the equalising of conditions as between the citizens of the Islands and the northern mainland and those in the rest of the country.

One of the things that we on this side criticise—and some hon. Members opposite have also criticised it—about the whole of this MacBrayne subsidised steamer—and, nowadays, bus and freight lorry—system, is that a certain test is applied which is rather offensive and, in my view, fully out of date with modern views of what a modern transport service ought to be. This is what Leslie Burgin said of the basis of the service—I remember him saying it in the House on the occasion of the renewal of the contract dated December, 1938: The test is always, 'Are the freight charges sufficient to bring in 5 per cent. on the ranking capital?', and the standard which any tribunal judging these fares is to have before it is, What is the amount necessary at the end of the year to provide a minimum return on the agreed capital?' Not "Is the service sufficient," but "Are the freight charges sufficient to bring in 5 per cent. on the ranking capital?" and so on. Then he said that the Minister's own criterion—if there were disputes regarding the contract—must be this: 'What is the figure at which freight charges and fares ought to be stabilised in order to produce 5 per cent. on the agreed capital?'"-[OFFICIAL REPORT, 7th February, 1939; Vol. 343, c. 874.] All the time there has been this guarantee of 5 per cent. dividend on the ranking capital, which, of course, has been increased over the years.

If we on this side of the House express the view, as we did on the last occasion and on occasions previous to that, that there should be a better control today, directly under responsible public auspices, in the interests of the people of the Highlands and Islands and not in the interests of a 5 per cent. dividend, then we need not ask anyone to excuse us for repeating it tonight.

Let me quote Mr. Tom Johnston, who is respected by Members on all sides of the House, and who said, in 1939: The fundamental difference between the two sides of the House on this issue can be very briefly stated. We believe that the road to the Islands ought to be as much a public service as the roads are on any part of the mainland and that the inhabitants of the Outer Islands ought not to be compelled to yield a profit to a private company or to a semi-private company any more than the inhabitants of the mainland should be compelled at this time of the day to yield a profit to a private company operating the roads in the neighbourhood. A coastal, a sea, service to the inhabitants of those Outer Islands ought to be as much a communal service, rendered free and gratis to the local inhabitants, as are the road services on the mainland to the inhabitants of the mainland. He went on to say: For our part we would welcome any kind of proposal for a sea transport service owned and run by the community."—[OFFICIAL REPORT, 7th February, 1939; Vol. 343, c. 875–6.] Other Members from various parts of the House joined with him. The hon. and gallant Member for Argyll (Major McCallum) will forgive me for reminding him of his maiden speech, delivered before his deterioration into a more characteristic Tory, and when still enthusiastic and full of the altruistic ardour of the radical pioneer fresh from the Highlands, speaking for people and not for 5 per cent. He said: As regards steamer communication, is it possible to organise some system of public utility service on the lines of the London Passenger Transport Board, some organisation not left to private commercial enterprise? We are told by the steamship companies that they cannot possibly lower the freights now prevailing. In fact, MacBrayne's will tell you that without the subsidy which they receive from the Government they could not possibly carry on. The hon. and gallant Gentleman finished that part of his speech with a sort of interim peroration: I maintain that the welfare of the Highlanders and the inhabitants of the Western Isles should not be at the mercy of commercial enterprise…"—[OFFICIAL REPORT, 17th July, 1940; Vol. 363, c. 277.] I do not think he expected very much mercy when he put it that way.

Well, that is broadly, in principle, the view of my party. We have not departed from that. I hope he has not, either. We do recognise the difficulties which MacBrayne's were facing during the postwar years. The Government had to face the same sort of difficulties. There was the requirement of new vessels to be considered, and problems arising from war requisitioning. There were 101 things—the immense increase in the costs and other matters—to be worked out before a new contract could be issued. Therefore, with rather bad grace, and still with all the sort of criticisms so eloquently expressed pre-war by the hon. and gallant Gentleman the Member for Argyll and Mr. Tom Johnston, we allowed MacBrayne's to run the post-war service, though perhaps not in the way we should have liked it to be run.

It is not for the Parliamentary Secretary to say that his predecessor did not agree that there was a better way of running the MacBrayne's services. In 1949 I said, I admit, I could not quite agree with the Minister of Transport when he said that the only agency he could conceive which could carry out these services efficiently was MacBrayne's. There is the agency of the Transport Commission. At the time when the Transport Bill was before Standing Committee— and the hon. Gentleman was on that committee, so was I— the Minister undertook to draw the attention of the Commission—without discussing the merits of the case—of taking over the MacBrayne steamer service by agreement."—[OFFICIAL REPORT, 17th March, 1949; Vol. 462, c. 2417.] The hon. Gentleman was on that Committee, as were several of my hon. Friends, and he will remember that undertaking. The only thing I wonder is whether the undertaking was carried out.

Mr. Braithwaite

I was not disputing that these views have been expressed from the benches opposite. Whatever his theoretical views may have been, the right hon. Member for East Ham, South (Mr. Barnes) did in fact make the contract which I described to the House.

Mr. MacMillan

I am not disputing that he had to accept a situation which did not permit of a better solution, and in face of the limitations and difficulties of the post-war period. I am excusing him to that extent. But I should like to know how far the Transport Commission have considered, at his request, or at the request of his successors, including in recent weeks, the Prime Minister, the question of whether they might take over by agreement the MacBrayne steamer service.

This service affects every development, and has prevented a great deal of the development we should have liked to see in the Highlands and Islands. It has frustrated and dwarfed economic development in many places. High freight charges and the absence of a good, adequate, regular and reasonably cheap transport service is reflected directly in the fall of population. While the Scottish population has increased over the years, in a matter of 80 years the population of the Highlands and Islands has gone down by about 20 per cent. Because of high transport charges and the high cost of living, we find the smaller places dying out, while the area as a whole is desperately trying to hold its present population, which is only possible through the old people living longer nowadays.

Fishing cannot prosper, and neither can agriculture under excessive freight burdens. Transport costs make every effort at development a sure failure in advance, and make a mockery of any form of enterprise so far as the Islands especially are concerned. I know that all that is, even officially, recognised, but not sufficiently in practical terms of either finance or transport improvement. A transport service by sea is the whole basis of Island life and work and development. Everyone and every Committee that has ever considered Highland problems and questions—de-population, agriculture, fisheries and the rest—has come to the conclusion that transport is the basis and life-line of all the economic and social life of the area.

The Highlands and Islands are not asking for any concession beyond what could be called some equalising action; something to give them an equal start in development and enable them to make up for the handicaps of remoteness from supplies and markets, of distances and geographical difficulties of all kinds. This —however much of a Santa Claus gesture the hon. Gentleman might like to make—is only a very small part of the ultimate solution of our main transport problem.

There are one or two local matters which I should like to see dealt with, and I am sure the hon. and gallant Member for Argyll would agree. I should like to see the Island of Barra having a much more direct service, and the Island of Tiree and the inner Islands with their own service. Both the hon. and gallant Member and I have experienced all the difficulties in this connection in travelling both ways when on constituency business. I should like to see the Island of North Uist, which has no air service, with a much improved steamer service. If they are not to have again the air service they used to have at one time let us go back some way, at least, to the days when they had in fact a five-and even at one time a six-day a week steamer service in the Outer Isles. If they could get half that today, they would be immensely happy and grateful.

I should like to put in a special plea for North Uist, even within the framework of this Agreement. I know that we cannot amend it. But I should like to see whatever influence the Secretary of State has, along with his numerous aides and helpers—and the more the merrier, as far as I am concerned—and the influence of the Minister of Transport, the Post Office and all the rest being used to put on all the pressure they can on MacBrayne's, even within the limits of the finance supplied, to try to improve the frequency and programme of the services to North Uist Island and to give Barra a more direct service. Stornoway today is pretty adequately served; there are no complaints there, and I am not going to create any local complaints that are not real.

I ask the Minister to have a look at what is being done to implement the Ferries Report. I should like to know what is happening about the projects mentioned in the Ferries Report, which the Minister had in his hands on the 30th December, 1947, and about which we have heard very little since. We are still waiting to know, for example, what has happened about the North Ford Causeway in the Outer Isles, which the Royal Engineers were to survey last winter, but which has not been surveyed yet. There are other ferries and bridge and causeway projects in the Report. What is happening about them?

Lastly, I want to say that MacBrayne's are responsible for many road services by bus and lorry, and, so far as most people in the Highland and Island areas are concerned, they do not object when MacBrayne's, for economic and other reasons, cut out certain local calls by sea, provided that they give an undertaking that they will provide an adequate and no costlier alternative service overland. I think that places which can be supplied overland are infinitely more fortunate than the Islands, which cannot have that alternative.

I would make this plea—knowing that, if MacBrayne's can provide a service by road, in many cases, it will be inevitable that many local calls by sea will have to be cut out. Let us try to help them to build up their service by making it possible for them to use the roads, by making those roads usable. It is one thing to plough through rough water, and another to keep a bus ploughing day in and day out over the roads in the Western Highlands and Islands. There is considerable feeling among road users in these parts that, again, they are paying more than other road users in other parts of the country.

There is the much worse problem of wear and tear, as well as that of the cost of repairs. I shall not harry the House at this late hour with examples of the cost of sending goods to and from the Western Highlands and Islands to the south. It is almost impossible to develop an export industry in the Islands, or for a crofter or fisherman or other producer to branch out and make anything of a livelihood today from his croft or his fishing boat because of the exorbitant freight charges to and from the Islands.

I read a letter the other day from Ross and Cromarty, from a man who wanted to send some machine tools from Stornoway to England. MacBrayne's, he said, quoted him 16s., and the Post Office quoted 4s. I know that there are a lot of things that can be sent through the post, but, if it is the fact that things can be sent four times cheaper through the post, I guarantee that in future some queer packages will be in the hands of the Post Office, rather than in those of MacBrayne's.

It really is an impossible situation when it can cost as much to send goods from London or the Midlands, or even from Glasgow, to the Western Islands as it does to send goods to Australia or the other side of the Atlantic. But that has happened in case after case.

It is only once in ten years that we can discuss MacBrayne's at this length, and so I hope hon. Members will forgive me for having detained the House for so long. But, I do hope that the Minister and his colleagues will realise that I have been impartial so far as this lack of a transport policy is concerned. There is no single problem which is with us in the Highlands and Islands so persistently as this problem of sea and overland transport. Every sort of development depends upon solving this basic problem of transport. It is all to the good that there should be plenty of Highland development schemes and planning; but without adequate transport, there can be no real development; and without economic development, I doubt if we shall be able to hold our own much longer against the other overshadowing problem of depopulation.

12.33 a.m.

Major D. McCallum (Argyll)

I felt when I first came into this House that MacBrayne's steamer services might be better run if they were nearly a national service in the sense that they were an important part in a national undertaking. Of course, I realised that during the war years nothing could be done, but after the war, when a Socialist Government took office with such a tremendous majority, I then said, "We are going to see MacBrayne's nationalised."

What happened? After great deliberation, and consultations, no doubt between all the Departments concerned in the Government, it was decided that not only could MacBrayne's not be nationalised, but that all the coastal shipping services around the kingdom, also, could not be nationalised. Perhaps that day will come; we must all wait and see. So far, however, hon. Members opposite have realised that this was not a feasible proposition, and I bow to the superior knowledge of the Government of the time.

I should like to join with what has been said tonight by way of tribute to the personnel of the MacBrayne staff, and especially to the captains and crews of the steamers. The weather in which they have had to sail their ships during the past winter has been exceedingly severe, and if one makes the crossing between Tiree and Barra very often, one realises that although the crews may have been a little short-tempered, or did not do as much as usual for the comfort of passengers, they have shown great courage and gallantry.

If I may, I should like to touch upon a few of the points which have been raised, and if I cannot have an answer tonight, I hope I may have it later. Fitst, the position between MacBrayne's and the local authorities, and particularly the county councils. In view of recent developments, the county councils in the West Highlands are taking over ferries and often piers served by the MacBrayne ships; in one area, where the hon. Member for Central Ayrshire (Mr. Manuel) comes from, the county council has taken over the arrangements for ferrying cattle out to the MacBrayne steamers when they arrive in the loch.

I hope that the Scottish Office or the Ministry of Transport, whichever is concerned, will be able to recommend to MacBrayne's that they act in the closest co-operation because the local authorities are going to great expense and they are among the poorest county councils in rateable values in the whole country. If they are going to put up the money to run these piers and ferries they are entitled to expect the closest possible co-operation by the steamship company.

Mr. James McInnes (Glasgow, Central)

Am I to understand from the hon. and gallant Gentleman's remarks that Messrs. MacBrayne are not at the moment giving the maximum co-operation to the local authorities?

Major McCallum

There have been disputes in recent times. I will not say that they are not giving close cooperation, but there have been disputes over certain landings, particularly ferry landings, and as these ferries are being taken over by the county councils it is hoped that the company and the local authorities will work together. I am encouraged to put this view forward because I am doing so at the request of one of the local authorities who raised this question with me some time ago.

The next point I wish to raise, and which has already been raised by the hon. Member for the Western Isles (Mr. M. MacMillan), is about the steamer service, which is called the Inner Islands Service; the boat which leaves Oban, calls at Tobermory, Coll and Tiree and then goes on to Barra and Lochboisdale. Would it not be possible to cut out the run between Tiree, Barra and Lochboisdale?

It is much more convenient for the people of these islands to be served by the boat from Kyle or Mallaig. It gives a much easier crossing of the Minch than the crossing from Tiree. There are numerous occasions owing to bad weather when the boat is unable to call at Tiree. The passengers on board then have to face a five. hours' rough crossing of the Minch. I think it is true to say that 75 per cent. of the crossings are rough. The passengers, including old ladies and sick children, have to be carried on to Barra and Lochboisdale and brought back again across the Minch.

If something can be done, I think it would be of great benefit to both the peoples of the Outer and the Inner Isles. I have raised this matter before, but have always been told that it is impossible to make a terminus at Tiree. It is only a short crossing from Gott Bay to Bunessan, where a boat can lie in perfect safety all night if the weather forecast is bad. I am very doubtful about the question of it being too dangerous. In previous debates I have pressed for the mail boat from West Loch Tarbert to Islay to call at the Isle of Colonsay, but I was always told that it would be too dangerous.

But after five years agitation they are now calling four times a week at Colonsay, and even in the winter months they are calling there twice a week. Cannot the Company experiment again with this service which ran during the war? During the war Tiree was a terminus and boats lay up there over night. I am sure that something could be done to cut out that uncomfortable, wasteful, and wholly unnecessary crossing of the Minch between Tiree and Barra.

Some of the people of Barra—the farmers—will say that they require their cattle to be brought to the Oban market and that they must have the service. But such cattle are always brought in by special cargo-boats. I hope the Under-Secretary will try that crossing this coming winter once or twice. I am sure he will use his influence with the Secretary of State and the Minister of Transport and that between them they will decide that the crossing can be dispensed with.

May I raise another point about this Inner Island Service? During the summer months the start for inward passengers from Tiree, who are generally bound for Glasgow or farther south, is 5 a.m., when they have to be on the pier waiting for the boat. There is no waiting room. Generally, it is raining. The discomfort is complete. Is that really necessary? During the winter the service starts at 7 a.m. Why should not that be the hour all the year round, unless we can get the change in the service altogether?

I complained to the Secretary of State not long ago that intending passengers on the islands do not know when the boat is arriving, or whether the boat has passed by and decided not to call at all. I am grateful to the right hon. Gentleman for taking up this matter with the Post Office, and he has recommended to Argyll County Council, and no doubt to others, that telephones be installed in the ferry or pier masters' houses, so that information can be passed about estimated times of arrival or about the weather being too bad. A move has already begun and I hope that it may be extended to all the islands.

Another point is the arrival of the mail boats in Oban. Generally, they try to run to connect with some train, the midday or afternoon train to Stirling and Glasgow. There are occasions in bad weather when boats arrive a quarter or a half hour late. Would it not be possible for the Company to arrange with the Railway Executive to hold up the train leaving Oban station for at least a certain time, to give the passengers on the boat an opportunity to make the connection? That is done at Southampton, Dover, and elsewhere: why not there? We always get the same answer—that the trains not only have to connect with the boats but with other trains at Stirling or Glasgow, and that it is a single line between Oban and Stirling. It is not beyond the ingenuity of the Railway Executive to make an arrangement whereby the train can wait a reasonable time, although I do not suggest it should wait in bad weather, when the boat comes in, say, five hours late.

Then there is the question of the protection of the mails. I have had recently a number of complaints that on certain boats, like the Lochinvar, which serves the Sound of Mull, the mails are stored on deck and in bad weather they are not covered with tarpaulin, so that they suffer damage. Then, when they arrive at ports such as Craignure, where mails have to be discharged by ferry boat, the mails are not covered and they get even wetter, and by the time they are delivered they have suffered quite a bit of damage. Could consideration be given to the question of the Company instructing their personnel to cover the mails with tarpaulins during this bad weather? It is only a small point, but I have received various complaints about postal packets arriving soaked and useless at the end of the journey, as has already been mentioned by the hon. Member for Western Isles.

In opening this debate the Minister mentioned that the Company were to build two new boats—one for passengers and one for cargo—in the course of this contract. Can we be told for what service they are intended? It would be very interesting to know, and I dare say that if we could know the complaints which are received by hon. Members standing for the constituencies concerned would be considerably reduced. It is my personal hope that the passenger boat is intended for the Sound of Mull.

Another question—which has already been raised on numerous occasions—is that of the high freight rates. What the authorities do not realise when we make complaints about the high rates which are charged by MacBrayne's—and it may not be MacBrayne's fault—is that these rates are charged on top of railway charges, and freight is already paid to the port of loading. Instead of the Islands being a nice, cheap place to live in as they used to be, they are becoming impossibly expensive, due entirely to the very high freight rates. I suggest to the Ministry of Transport that just as the white fish industry are by way of working out a flat rate for white fish, a flat rate could be worked out for freight rates in respect of the Highlands and Islands services. I am sure I shall be told that it cannot be done; but I think it might be considered.

One of the freights which causes a great deal of complaint on the services is the freight charged for cars. Cars to the Isles of Mull and Islay, and so on, are charged at very high freights. It is a complaint of the tourist people concerned that the freights are so high that the people who used to come to the Islands for the summer holidays can no longer bring their cars with them.

Finally, I should like to mention the bus services. There again, the operators —particularly the drivers—in some of the winter months have to cope with dreadful conditions. They cope with them extremely well. I would only say that there are complaints, and if any hon. Member of a constituency served by MacBrayne's road services does forward to the Company complaints they have received I hope the Company will not feel that we are making a direct dig at them. They are complaints which would be made about any other service. But there is one section where I think MacBrayne's could very well run one of their short bus services—between Inveraray and Dalmally. They run a service from Glasgow to Inveraray, Lochgilphead, Ardrishaig and Campbeltown.

There are services from Glasgow to Oban; but the trunk road from Inveraray to Dalmally is not served by any bus whatsoever MacBrayne's run very good services in the Fort William area and other areas. I would suggest they might include in this contract a service connecting these two main trunk services. I have raised a number of local points, but, as the hon. Member for Western Isles said, this is probably the only time for 10 years when we shall have an opportunity of raising any points on this MacBrayne contract, and I make no apology for it. MacBrayne's always claim they are the Highlands and that the Highlands are MacBrayne's. Therefore, MacBrayne's must not be too much put out if the people of the Highlands often have grievances and complaints to make to them.

12.51 a.m.

Mr. J. Grimond (Orkney and Shetland)

As one of the only two hon. Members of the House who represent a constituency composed of islands, I would like to support the hon. Gentleman the Member for Western Isles, and the hon. and gallant Gentleman the Member for Argyll (Major McCallum), in what they said about the appalling freight charges in the Highlands generally. It is no exaggeration to say that the future of the Highlands depends on whether we can reduce these charges or not. In my constituency, we have not the pleasure, or the pain, of travelling in MacBrayne's boats, and, as a result, we have not been insulted by the Treasury with any offer of gold—to our great regret. But, we suffer very much from the same troubles as have been mentioned already.

I was glad to hear the hon. Member for Western Isles stressing one point. To islands, whether in the west or north, the sea passage is their main road. It is their vital link and, I think, they have a strong case for having Government assistance in keeping that link in good working order. I should like to press further the point already mentioned, that when one has reached the main centres—Stornoway, Kirkwall, or Lerwick, or wherever it is, people who live in outer islands, still have further journeys to make. The hon. and gallant Gentleman the Member for Argyll mentioned that one has to pay the rail charge before ever coming to the boats. And I would agree and go further. When one's goods are unloaded off the steamer, one has further charges imposed to get them to one's croft.

It should be stressed that the whole economy of the Highlands has altered greatly in the last 50 years. It is no longer an economy based on subsistence crofting but on trade, and at every stage in their trade the local people are up against freight charges. A year ago or so, during the debate on this Motion, I looked up some of the costs. They are comparable, whether in the Western Isles or in my own area. I do not believe that people in the South realise what terrific burdens they are. These are some examples: feedingstuffs, 33s.; sugar, 40s.; seeds, 60s., between Leith and Kirkwall. Then, one has extra charges in the more remote islands. In the last six or seven months these prices have increased by 10 to 25 per cent., 5s. 10d. on fuel, 6s. 8d. on groceries to Lerwick, for instance. Petrol, if taken to Whalsay, one of the islands in my constituency, would have a charge of 18s. 3d. on a 50-gallon drum between Lerwick and the island.

Then, in addition to the problems of the steamer services themselves all the islands of Scotland are extremely badly served by piers. In some places in the Western Isles and in the Shetlands there are no piers at all. One has to load goods into a boat and an extra charge is made for unloading them ashore. If the Government is to bring back trade and increase agricultural production in Scotland they must consider this whole subject of freights and transport right through from the factory to the croft. In the Western Isles the Government have taken the step of paying a subsidy. They have not done so in the Orkneys and Shetland, but in what ever form it is given I think some Government assistance is needed. A comprehensive policy should be developed which will, in the long run, raise the population, increase trade, and so reduce costs of freight, but in the short-term some direct help must be given.

The subsidy, as I understand it, was £240,000 and is now raised to £360,000. Can the hon. Gentleman tell us what the capital employed in MacBrayne's is today, because I think there is some confusion on the matter? For instance, the North of Scotland Company is paying 15 per cent. on their issued capital, and I understand MacBrayne's are entitled to pay 5 per cent. on their issued capital, but certainly in the case of the North company I know it amounts to less than 1 per cent. on the capital employed. It would also be interesting to know whether in the view of the Government this is a subsidy based on any particular freight charges. Is it to keep the charges at a certain level or to reduce them, and how far are the forecasts of freight charges taken into account? Frequently we are told in the Orkneys and Shetland that our freights are no higher than those in the Western Isles. It is cold comfort to be told that our friends are just as badly off as we are. What we want to know is do the Government foresee a progressive reduction in freight charges, or on what is their policy based?

Have the Government any views on the type of new ships to be built? There is the problem of piers and anchorages in bad weather. In the Orkneys and Shetlands we have not only our main shipping company but smaller companies, sometimes with one boat, serving the smaller islands. Are the Government prepared to give them some assistance or to assist in the building of a small type of boat which will give more economical service and reduce freight charges? Mention has been made of one boat with refrigeration space, but are the Government taking any steps to provide companies in the West and North with ships really equipped to move quick frozen fish? I believe that there is no such ship at present operating.

I would say this lastly to the Government, that they must not leave the general problem too long. We must leave some proposals for freight equalization and reduction. They must not think that by giving the subsidy this year to one shipping line they are solving this difficulty. The fact is that it is becoming progressively worse. As the population falls the burden on the survivors increases, and it is really reaching the point where the Government must give their views on the long-term policy and state their short-term plans to help the islands of Scotland as a whole.

12.59 a.m.

Mr. John MacLeod (Ross and Cromarty)

We all congratulate the new Minister of Transport on his appointment, but regret, particularly those who represent the West Highlands, the forced resignation of the right hon. Gentleman the Member for Renfrew, West (Mr. Maclay) who has particular knowledge of the West coast of Scotland, and sincerely hope the new Minister will acquaint himself with the appalling conditions of transport and communications in the West Highlands today.

The main object of my remarks tonight is to deal with how the Agreement affects the western seaboard north of Kyle of Lochalsh, as it affects the western seaboard of my constituency of Ross and Cromarty. The second paragraph on page 2 of the Copy of the Memorandum of Agreement states: The Minister of Transport may also require the Company to add to, alter or discontinue any of the general services. I think I am right in saying that MacBrayne's have discontinued all the cargo services serving the mainland north of Kyle of Lochalsh, except for Scoraig and Applecross.

I have no doubt that from MacBrayne's point of view that decision is correct, but it is imperative that alternative services should be provided to meet the needs of the people there. The hon. Members for Orkney and Shetland (Mr. Grimond) and the Western Isles (Mr. M. MacMillan) have mentioned how the sea route is the main road for those people but when facilities are taken away from that main road, it is even more essential that adequate alternative services should be put in their place.

I certainly agree with the hon. Member for the Western Isles that the £360,000 is no gift to the Highlands. The increased freight charges, which have been mentioned by all previous speakers, are an intolerable burden and are virtually a tax on the existence of the people living in those areas. I hope that the time will come when this problem will be tackled really seriously and effectively by the Government.

I was a member of a small sub-committee of the Highland Panel that travelled down the western seaboard north of Kyle of Lochalsh when it was decided that MacBrayne's should withdraw their cargo services to the mainland ports. We found that despite the bad communications and the appalling state of the roads, the local inhabitants were not patronising MacBrayne's services. I do not think that MacBrayne's were necessarily to blame, although there were complaints of irregularity of service. It was mainly due to the double handling which the people have to make when a ship arrives in port. The people have to handle the goods at quite considerable cost from the port to their homes.

People in these areas are now using road transport, for the simple reason that they can get the goods direct to their own farmsteads and to their very doors. We found that instead of bringing goods from Greenock or Glasgow, as in the past, all the inhabitants were bringing their goods from the East coast—from Easter Ross, Invergordon, Dingwall and Inverness. All their fertilisers, seeds, seed potatoes, farm implements and practically everything, in fact, was brought by road transport from the east. That was the reason why the MacBrayne services were not being used.

One matter on which I should like an assurance from the Minister concerns MacBrayne's giving up slipways or piers. If it is not definitely arranged that they do give up calling then the piers and slipways will be bound to fall into disrepair unless they are taken over by some responsible body. We can well understand MacBrayne's not carrying on these uneconomic services, but there are still some areas which have no roads at all and no adequate alternative service could be provided.

If the House will permit me I should like to deal with two local places in my constituency, Scoraig and Apple-cross. At the moment the cargo for Scoraig is transferred from a small boat, a photograph of which I have here, and perhaps my hon. and gallant Friend the Member for Inverness (Lord Malcolm Douglas Hamilton) would be good enough to hand it to the Minister. This is a picture of the type of boat by which they have to transport their cargo. Mac-Brayne's want to stop calling at Scoraig, and I have no doubt they are justified in that.

I had a letter from the hon. Gentleman the Member for West Perth and Kinross (Mr. Snadden) the Joint Under-Secretary, in which he says: The county council have been asked to consider a modified scheme for the road shore and slipway at Badlaurach and improvement to the slipway at Scoraig. He goes on to say: If the county council agrees we shall do our best to have the grant approved without delay. With regard to "do our best to have the grant approved without delay," I would like an assurance from the Minister that if they agree to that modified scheme they will get the grant. Further, the letter goes on to add: Badlaurach slipway needs a provisional order. I hope this will go a long way to improving conditions. If the slipway at Badlaurach is not improved the whole object of the service is lost. By making the slipway adequate goods will be brought by road, as is happening all over the western seaboard now, and be ferried across to Scoraig thus saving MacBrayne's from having to call in that region at all.

With regard to Applecross, if one looks at the first schedule of the Agreement it will be seen that on the Stornoway service between Stornoway, Kyle of Lochalsh and Mallaig calls at Applecross on the outward and inward journeys, except from October to March inclusive when inward calls will be made in emergencies only. What happens in that period is that if one wants to make a short journey to Kyle one has to go all the way to Stornoway and wait there until the steamer comes back to cross the Minch to Kyle. That is the only public service out of that region during those months. It is an intolerable position and there will never be any development in the area at all so long as those conditions prevail.

There is no doubt that the best way to serve Applecross is by a ferry from Toscaig to the Kyle of Lochalsh unless a proper road, or two roads as it happens, are to be made in that region. We hope that one day we shall see those roads made. MacBrayne's are not attracted by this ferry service although a ferry service from Toscaig to the Kyle of Lochalsh on the Stornoway run would save 20 minutes, and they could well utilise that 20 minutes by discharging at one of the main ports.

If MacBrayne's are not attracted I have sent a letter to the Scottish Office pointing out that there are some local men in the area who would be willing to have a shot at running a service, provided, I imagine, that they could have the postal contract and some initial assistance. If such a service is provided I am sure it would mean that Applecross would develop, because the West Highland survey made by Mr. Fraser Darling points out that there is still a great deal of agricultural development possible in that area and small industries which could be developed. The kind of reply we get to a suggestion for such a service is, "You cannot have a ferry service until you have a pier," and it would seem to be vice versa. Perhaps one result of that will be that we shall get the road built.

I am sure we all wish MacBrayne's good fortune. Mention has been made of the hardships of the captains and crews of this service and the severe difficulties with which they have to contend. I think it is due to a great extent to the economic state of the area which has to be served. I hope that the Minister will consider these suggestions and that they will help MacBrayne's in maintaining a service which is so essential to the people of the Western Isles.

1.13 a.m.

Mr. A. C. Manuel (Central Ayrshire)

I hope I may be forgiven for intervening in a debate which has a purely Highland flavour. I think I may, because of my Argyllshire background, and my interest in this problem. I do not think there is any problem more important than this to the Highlands. After all, there is a fair amount of money involved and while I agree with the arguments about the importance of maintaining the transport facilities in the Highlands I think we have a duty to examine the sum which is being allocated.

This sum of £360,000 is not a small one, and the indication is that there is to be allowed a 5 per cent. dividend on the issued capital. That is not to say that it will be paid, but I think the Under-Secretary ought to tell us, when winding-up the debate, what was the estimation in the minds of the negotiators of the interest that would be paid on loan capital. They must have had some sum in mind. They say they will not allow more than 5 per cent. to be paid, although there is an indication that 6 per cent. could be paid. A rate of 5 per cent. on loan capital today is a very good investment, and there are many businesses which would be very pleased to be earning that amount on their invested capital.

There is another point at which we ought to look in this connection. The Agreement provides for 5 per cent. or £35,000 in each financial year, and that might lead one to assume that the issued capital is £700,000. One would assume that some effort to control the issued capital—

The Joint Under-Secretary of State for Scotland (Mr. Henderson Stewart)

No. The issued capital is £500,000, and the capital employed is £700,000, and the figures which the hon. Gentleman mentioned refer to the capital employed, not the issued capital.

Mr. Manuel

What I was doing was multiplying by 20 the outside figure of profits which is being allowed—£35,000. If the loan capital is only £500,000, that means that there is to be something more than 5 per cent. I hope that the Under-Secretary follows the point, and that we shall be told what the real figure is.

I understand that the figure of £360,000 which is incorporated in this Agreement is an increase over the last Agreement of £120,000, and we should be told what is the increase in the amount of issued capital over the last Agreement. There is bound to be some increase there also, and I hope the Under-Secretary has taken the point.

I was interested in the remarks made by my hon. Friend the Member for the Western Isles (Mr. M. MacMillan) about roads. The roads on the mainland and on the islands are not in the condition in which they ought to be, nor are they having the expenditure upon them which they ought to have. After all, MacBrayne's are running a very large fleet of buses, and will be paying a considerable sum into the Road Fund by means of their road licences. I do not know just what that figure will be, but it must be considerable, and an augmentation of something that would be very small if MacBrayne's were not running on these roads.

I also want to ask if MacBrayne's are expected to maintain piers where necessary by means of the aid given them by this Agreement. There is, not only in the islands but on the mainland, a great necessity for piers to be kept in repair, and I am thinking particularly of the pier at Salen, Loch Sunart, where there is only a slipway, but where there used to be a pier with water deep enough to take ships at any time. Now there is only a pier well in the bay and on certain tides the steamer cannot call there at all; that has caused great inconvenience.

Also, I should like to ask—and I understand this from some members of the Highland Panel—whether there are to be some new craft to ply on Loch Shiel between Acharacle and Glenfinnan. Could the Under-Secretary give us any information about that? Is this new craft included in this expenditure for this year, or if not, when is it expected that the decision of the Highland Panel for this new craft will be brought into operation?

Is any of the subsidy being spent to keep the service running between Glenfinnan and Acharacle, on Loch Shiel? I hope the House will not think that I am encroaching too much, but I travel up there as frequently as I can, and if there is to be a new boat, it will be a great boon for the people resident along the shores of Loch Shiel. Scattered crofters live in this area, and they would benefit; and if this new craft is to be provided, it would be a great advantage at the Acharacle end if it could take cattle and sheep to Glenfinnan, where they could be taken on to Fort William and make better prices, instead of their owners being forced to accept hard bargains as happens sometimes at Salen.

Major McCallum

The Clanranald boat does carry both sheep and cattle.

Mr. Manuel

Yes, but I am also thinking of better accommodation; but perhaps the hon. and gallant Member knows it better, because he takes such an intense interest in the activities of the Highland Panel.

I do hope that if the new craft does begin to operate on Loch Shiel we shall have some really good facilities for passenger traffic; for it could be made well worth while in the summer for tourists on Loch Shiel, going up to Glenfinnan via Acharacle, or, alternatively, from Glenfinnan to Acharacle and Fort William. If this does come about, I hope, also, that the men employed on the new ship will enjoy better conditions of service than in the past, and that wages will be more in conformity with what is generally paid by MacBrayne's in other areas where they ply their vessels. These are all questions which I think ought to have been put tonight, and I hope that we may have an answer to them when the Under-Secretary comes to reply.

1.25 a.m.

Lord Malcolm Douglas-Hamilton (Inverness)

I quite agree with the hon. Member for Central Ayrshire (Mr. Manuel) that we have a duty to examine this sum of £360,000. I also agree very much with what the hon. Member for Orkney and Shetland (Mr. Grimond) said, that the whole question of MacBrayne's is related to the general Highland problem. The hon. Gentleman advised the Government, very soundly, not to leave this problem until it was too late to deal with it adequately.

What, in fact, is happening is that we are spending greatly increased sums each year on these services. This sum has gone up enormously in recent years, not due to any fault on the part of the company but to circumstances which have made the cost of operating boats greater as the years have gone by. But we have not kept pace with the problem. We have not kept pace with the depopulation of the Highlands and Islands of Scotland which is still continuing.

Surely we must earnestly consider this matter. Are the services really effective? Are they giving the service we want? I must say I find myself very much in agreement with the hon. Member for the Western Isles (Mr. M. MacMillan) when he says he deplores the consideration of whether the charges were sufficient to pay 5 per cent. instead of whether the service is efficient. Probably the allowing of 5 per cent. would be a cheaper way of getting a good service than by nationalising MacBrayne's.

What we have to consider is whether the service we are getting from MacBrayne's is adequate. Nobody disputes the qualities of the skippers and the crews. I notice that one of the provisions of the Agreement is that all vessels shall be subject to the approval of the Minister and…be fully manned and commanded by a skilful Master. The masters of MacBrayne's are extremely skilful and the crews are very hard working. Exactly the same applies to the men operating their bus services. I heartily agree that they entirely fulfil the provision that they shall provide a sufficient number of competent, steady, honest and careful drivers of good character and duly licensed to drive. But I received in my mail this morning a letter from a constituent of mine who lives in the Isle of Skye complaining about a journey which she made in one of MacBrayne's steamers. She states: As one of your constituents, may I bring the following grievance to your notice, not that I can hope for any redress, but something may be done to help other unfortunates in similar circumstances. Whether a service is nationalised or not, when it supplies the public in the shape of a monopoly one must always be careful, and it is up to Parliament to see that the true relationship between the public and the operator is not destroyed, that a proper service is given and that a take it or leave it attitude is not adopted. This lady goes on to complain that: On Wednesday, 16th inst. at 8.45 p.m. I left Castlebay, Barra, on the s.s. 'Lochness' in the hope of catching the 'Loch Mor' at Lochboisdale and getting to Armadale the following day. When a short distance out of Lochboisdale, the 'Lochness' broke down and we lay anchored there for about six hours, while the 'Loch Mor' sailed by. We were stranded in Lochboisdale all day Thursday and all day Friday. When the 'Loch Mor' returned on Friday evening we were informed she was returning direct to Oban and would not take any passengers to Mallaig. She was due to return to Lochboisdale on Sunday afternoon, which would have meant passengers spending a night in Mallaig. Those of us who had to get back to Skye had then to take bus to Benbecula, plane to Stornoway and 'Loch Seaforth' to Kyle. Messrs. MacBrayne, when presented with a note of expenses incurred (due entirely to their fault) denied all liability. Surely, when they are so handsomely subsidised by the Government, they should be compelled to show some consideration to the travelling public. I think that letter is really worth bringing forward in the light of the provision of this enormous subsidy which we are to vote to MacBrayne's.

My constituent goes on to cite another grievance: that when they did arrive at Kyle from Stornoway in the early morning she could get no response to persistent knocking at the Lochalsh Hotel. Finally, at 7 a.m. she was able to take the ferry to Kyleakin where they were most courteously received at the Marine Hotel. That is an attitude we do not want to see encouraged. The matter should be brought to the attention of MacBrayne's, like similar matters of that kind. We do expect for this enormous sum we give every year a good service.

As my hon. and gallant Friend the Member for Argyll (Major McCallum) said, MacBrayne's are rather apt to think themselves the Highlands, and the Highlands would certainly not be the same place without MacBrayne's. We have to be grateful to them, but we have not been competing in the battle of depopulation. A survey was made in 1890 for passenger services on the west of Scotland, with a view to improving communications, and it was then suggested that somebody should undertake a service going all the way up the west coast to Cape Wrath. That has not been done, and there is no adequate road up towards the north west, which is probably the worst part of the whole British Isles from the communications point of view.

It is not only that we are depopulating the Highland area, but we are missing a great opportunity. With our overcrowded island today it is imperative we should reverse this trend, bring back trade, and achieve repopulation. I would suggest, in this connection, that we should look ahead. In the Memorandum of Agreement it says the Minister of Transport may also require the Company to add to, alter, or discontinue any of the general service.

I do not think there is anything to prevent Messrs. MacBrayne's from undertaking flying boat services up the west coast of Scotland. That would indeed be a really useful lifeline and bring the people living on the west coast very much nearer and within easier reach of their markets. I suggest a service from the Clyde to Oban, Tobermory, Mallaig, the Isle of Skye and up to Ullapool; and one from Fort William through the Great Glen from Inverness to Fort Augustus, Fort William, Oban, and the Clyde; and one from Inverness through the Great Glen to the Outer Islands. This would make a tremendous difference to life in the whole Western Isles.

While we on this side approve this new Agreement we at least have got reason to question whether in every respect the MacBrayne services are being as efficient as they might be—whether they are, in fact, making the best of the opportunities which exist. I trust that Messrs. MacBrayne's and the people in charge will consider very carefully indeed the remarks made in this debate.

1.34 a.m.

Mr. William Ross (Kilmarnock)

I was rather interested in the suggestion made by the noble Lord the Member for Inverness (Lord Malcolm Douglas-Hamilton) about flying boats. Perhaps some of that American capital that has become quite legendary might be used by private individuals in their pursuit of profit in that part of the world. I do not doubt that if there had been any profit at all to be made there, perhaps in some hotels scattered around that area, private enterprise—

Lord Malcolm Douglas-Hamilton

May I remind the hon. Gentleman that 20 years ago I tried for two years to operate flying boat services in the west of Scotland?

Mr. Ross

I want to return to the speech of the Parliamentary Secretary. The document he was discussing is entitled "Western Highlands and Islands of Scotland," but I felt that he was going over a purely financial document that might have been applicable to any other part of Great Britain, and that he failed properly to realise the importance of this service to these islands and the people living in them.

I should like to stress a point which was made by my hon. Friend the Member for Western Isles (Mr. M. MacMillan), that the road to the Isles is a sea road and, as such, should be a public service for the people of the Highlands and Islands. I thought there was a sense of smug satisfaction about the speech of the Parliamentary Secretary, as though he were saying, "I am bringing you gold." If he is bringing gold it is not for the people of the Highlands and Islands, It may be to look after every conceivable contingency for Messrs. MacBrayne's, to whom he is now bringing a guarantee of £35,000 a year or 5 per cent., whichever is the greater—and is also limiting their possible loss or gain to £7,000 a year.

He seemed to think that there was some incentive there; but he failed to explain paragraph 19 (4) which states that if there is a loss exceeding £15,000 in two successive years the Company and the Minister must get together and work out a just sum to cover that loss. So what we are really discussing is not just the £4 million. I think it is most unfair that this question of a vital service to a very important part of Scotland—which will not be properly discussed again for 10 years —should be tagged on to the end of a busy day. I do not think that is doing justice to the interests of the Highlands and Islands.

After all, the conditions of life of the Islanders are entirely dependent on this service. There is no reason for satisfaction. The Parliamentary Secretary said, "The freights have only gone up by 120 per cent. over pre-war and the steamer passenger rates by about 55 per cent." But what were they pre-war? I should like to take Stornoway for an example—and it is probably the most favourable example I could take. Does not he realise that the cost of living there, as compared with Inverness, is 2s. in the £ more, and that even a loaf of bread is 2d. more in Stornoway than in Inverness? And as one goes out to the Outer Islands it is even more. Everything which these people require is raised in price because of the failure of the Government to make this a proper public service.

Mr. Braithwaite

I am not quite clear what Government the hon. Gentleman is complaining about when he says they have failed to make this a public service.

Mr. Ross

The only Government I can complain about at the present time is the present one. I have complained before.

The speech made by the hon. Member for Western Isles tonight was not exactly completely new. I can remember making the same speech when the Labour Government were in power. I took the trouble to read the debate which took place in 1938, when the hon. Member for Western Isles made a very much stronger speech—in the company of Toni Johnston, David Kirkwood and others—to Mr. Leslie Burgin, who answered the debate. The point is that the people of the Islands are living under these conditions because of the failure of successive Governments to recognise their rights.

There is no other part of the country which is bearing the burden the Highlands and the people of the Islands are bearing at present. The burden borne by this part of Scotland is completely unequalled by any other part of the country. I am glad that the hon. Member for Kidderminster (Mr. Nabarro) did not appear tonight. He has already begrudged us the extension of hydroelectricity to many of these parts, and he might have put down a Motion opposing this service as another gift of gold from a generous Ministry of Transport.

We all know that "The Road to the Isles" is a song, which we like to hear sung by Robert Wilson. But we have to remember that at the end of that road there is always a pier. Then come MacBrayne's, and MacBrayne's services are by no means perfect. The biggest burden of all, as far as the people of these Islands are concerned, is the freight charges. This full liability will amount to possibly more than the £360,000 per annum as remuneration of the Company for its services, plus the further amount.

I congratulate the Minister of Transport on the fact that at least the policy of transport for the Highlands and Islands merits about 15 pages in the Agreement. He managed to get the policy of transport for the whole country into about 2½ pages. [An HON. MEMBER: "A sketch."] It is not a sketch. I would describe it as a caricature. How are the 109 coaches to be affected by the new dividing-up policy?

There is a further matter requiring elucidation and I am sorry that the Minister of Transport is not here. A battle is going on between the various Front Benchers over the powers of the Minister of Transport concerning fares. In this Agreement, the Minister of Transport definitely has power. It is stated that …no changes shall be made without the consent of the Minister; and (b) the Company shall forthwith give effect to any changes in such rates and fares which may be required by the Minister,… On what policy is the Minister of Transport to work or base his intervention to raise or bring down charges? We have a right to know. It is all unknown to us so far, because there was no enlightenment in the speech of the Parliamentary Secretary.

The Minister may be thinking that now is the time to step in and reduce the charges. We have had the indication that something should be done for the provinces. What about something being done for the Western Isles and the Highlands of Scotland? Nobody need ask whether the Minister has the power to do something or not. He clearly has taken the power, and what I want to know is how and when he will use it.

There is something else on which we require reassurance. Paragraph 11 (3) of the Agreement says: For the performance of such road services the Company shall provide a sufficient number of competent, steady, honest and careful drivers of good character and duly licensed to drive. Paragraph 13 (3) says: The Company shall recognise the freedom of their workpeople to be members of trade unions. Could the Under-Secretary or Secretary of State pass that information on to a certain firm in Dundee?

Altogether, this document covers practically every possible contingency for the firm that is to run the service. They just cannot lose, because if they lose for two successive years they are recompensed. What will happen? Do the Government or the Minister of Transport think that by the time the extension of the contract has expired, in 10 years, there will be a much better service for the people? For nearly 50 years the people have been crying out for it.

There is only one solution, and that is that the Government should recognise their responsibility to the people of these Islands and do a little more than pay tribute to their gallantry in time of need. Unless something is done to offset the disadvantages of living in that part of the world it may well be that depopulation will continue. I hope to hear from the Under-Secretary that the Government will start properly to consider justice for the people of the Highlands and Islands as well as the contingencies affecting MacBrayne's.

1.47 a.m.

Mr. A. Woodburn (Clackmannan and East Stirling)

We have had an interesting debate, and I think it is rather a pity it did not take place at a more propitious hour. This is a subject not merely of interest to the Scots Members, for there are many English Members who have enjoyed travelling in the Highlands and know them better, I am sorry to say, than a good many of our own people.

I should like to reinforce what hasbeen said by my hon. Friend the Member for the Western Isles (Mr. M. MacMillan) and my hon. Friend the Member for Kilmarnock (Mr. Ross), that in considering the whole question of transport in the Highlands it must be remembered that this service is, in effect, the road service of the Highlands. It only requires a little thought to realise that it is virtually an economy to have these steamers. I know of one road which was under consideration which was to cost £500,000 to serve a comparatively small number of people.

Mr. J. MacLeod

Does the right hon. Gentleman not realise that the people in the Western Highlands are using such roads today, and are not using the MacBrayne service? That is happening all over the western seaboard.

Mr. Woodburn

But there are certain parts of the Highlands where it would require the expenditure of £500,000 to make a road. Access by sea is available and makes these parts of the country habitable where otherwise they would not be so.

I hope that the Ministry of Transport will consider this matter not purely from the economic point of view but from the social point of view as well. If the people are to produce food in these parts and get it to market they must have transport, and it is the business of the nation to provide them with the means of transporting their goods. Where that cannot be done by road it must obviously be done by sea. I hope that the Minister, who has Scottish connections, and succeeds another Scottish Minister, will at least view this matter in a sympathetic light and not from a hard commercial point of view.

It is true that the question arose as to whether MacBrayne's should be brought under the Transport Commission, and the hon. and gallant Member for Argyll (Major McCallum) need not worry about once having said that they might become a public service. There is nothing particularly Socialist about nationalisation. The Conservatives invented it long before the Socialists used it. In the main the Conservatives probably nationalised far more services than even the Labour Government did after 1945.

What is the best way of serving the public? That question must be judged on its merits. It may be that in some cases the work is farmed out on condition that somebody does the service and is allowed a reward for doing it. We may argue as to whether the reward is great or small, but we are in the difficulty that if we are not prepared to pay a reasonable reward we may be left to do the service ourselves. Nobody is quite sure whether that would be an economy, because serving the Highlands of Scotland is no easy task, and it is much wiser to use the services of people who have built up long years of "know how" and experience than to try to jump about in a period when the nation has plenty of other things on hand.

Major McCallum

The right hon. Gentleman will remember that MacBrayne's have had other private concerns in opposition to them, but owing, obviously, to Government assistance and subsidies, they have been able to squash those private concerns each time.

Mr. Woodburn

I have seen in the Highlands, in times when no other vehicle was able to use a certain road, mail vans taking people from place to place. That happened when no other motorist would venture upon the roads.

Major McCallum

I was referring to steamer services.

Mr. Woodburn

It is, of course, open for the puffers and other people to serve the Highlands if they can find trade. Nobody objects to private enterprise carrying out that service, but the State, nevertheless, has to ensure that there are communications for people as an essential basis, although they may be supplemented by other private enterprise.

So far as my hon. Friends are concerned, we are certainly not in any way opposed to this contract. It may be that we can see many improvements that might be made, as most hon. Members have been able to indicate, and I am sure that it is an advantage to the hon. Members who represent the Highlands that they have this opportunity of expressing their views on the contract. If I know them, in spite of the fact that the contract is not to be renewed for 10 years, they will find other opportunities of saying what they have to say about the Highlands and the transport system.

I congratulate the noble Lord the Member for Inverness (Lord Malcolm Douglas-Hamilton) on the restraint he has shown tonight. When I saw the opportunity for discussing freight charges in the Highlands, I thought he was good for at least three-quarters of an hour. His restraint tonight may be an indication that he is reserving himself for another opportune occasion. At this time of night, on behalf of the whole House, I thank the noble Lord for that restraint. I, too, will show a good example by not prolonging the debate further and in allowing the Under-Secretary of State to reply.

1.54 a.m.

The Joint Under-Secretary of State for Scotland (Mr. Henderson Stewart)

At this very late hour, I am sure the House would not wish me to take up too much time, and if I appear to skim rather quickly over the various points that have been raised I think that that would be for the convenience of us all. If I miss any of the points that seem to hon. Members to be important, I shall write to them about them.

I agree with the right hon. Gentleman the Member for East Stirling (Mr. Woodburn) that this is not just a matter of economies. There are our social duties —and our national duties—to be performed, and it is in that way that we always look upon the matter. Other Governments have done so, and we hope to maintain the good tradition.

I was very pleased to hear the hon. Gentleman the Member for the Western Isles (Mr. M. MacMillan) say, "We must keep MacBrayne's in the Minch." That is the view, I think, of the whole House. He said, further, "Nobody else can carry on as they are doing." I think he is right about that, too. As the hon. Gentleman said the sea is the highway of the Western Isles and the subsidy is justified for this particular service for this particular group of our citizens. I do not think the House will want to enter into a discussion about nationalisation. It is not proposed here, nor was it proposed by the previous Government. I do not think it is suitable for this particular service, for which the country is responsible.

The hon. Member and my hon. and gallant Friend the Member for Argyll (Major McCallum) asked about the Inner and Outer Island services. Both hon. Members mentioned this on previous occasions, and we know what they feel about it. We sympathise with their views, but at the moment it does not seem possible to do what they want. But with the new vessels to be provided in this Agreement we may be able to improve the service in a way which at the moment seems out of the question. I think that that may be the answer.

With regard to the North Ford, the hon. Member for the Western Isles knows we are anxious to help, and my right hon. Friend the Secretary of State has said so in the House. I do not need to emphasise how much we recognise that transport is almost the key to the prosperity of the Highlands. That was mentioned by the hon. Gentleman the Member for Orkney (Mr. Grimond). But how we can improve the transport services to the Islands and reduce freight rates and fares at this time I do not yet know. Nor does anybody else. Yet that should be the common aim, and we are moving towards that goal by improving the MacBrayne service.

My hon. and gallant Friend the Member for Argyll raised the question of MacBrayne's co-operating with the local authorities. We understand that view, and whatever the Scottish Office can do to bring it about will be done. He has also been persistent about telephones, and action will be taken to try to get telephones into these out of the way places so that potential passengers may be warned of any delays in the arrival of boats. If the Oban boat is late for the train it must be most annoying, particularly to my hon. and gallant Friend, but whether we can get the railways to hold up the train is a matter we shall put up to them. My hon. Friend the Assistant Postmaster-General was present when the question of protection of the mails was raised, and I am sure that he will give this matter his attention.

It has not been possible to decide yet what we are going to do with the new boats. There is very good reason for that. It has to be thought out very carefully, but I can indicate what we fancy will happen, though I do not want to give any guarantee. The new passenger and mail vessel will replace the "Lochness," which is now the reserve boat. The new vessel will be employed on one of the scheduled routes, either the Inner or the Outer Island route, but it is not yet certain which it will be. The new cargo vessel is to replace either the "Hebrides" or the Clydesdale "the other vessel going into reserve. The House will appreciate that it is not safe to judge the employment of these vessels by the present scheduled services, as the new ships may make possible modifications and improvements.

Major McCallum

Surely the Company are not going to bring in a new passenger boat to replace the "Lochness," the best sea boat they have.

Mr. Stewart

It may well be that my hon. and gallant Friend may be consulted and his advice will be very much welcomed.

Mr. James H. Hoy (Leith)

Surely it is a strange case which the hon. Gentleman is presenting to us when he says, "We will buy new boats and when we have them we will think what we shall do with them." Surely there is a plan which is being followed. Is there not some purpose in mind arid a route over which they will operate?

Mr. Stewart

It is just that I was being reasonably cautious. These boats are intended to replace the old boats, and what I was asked was to say on what routes the new boats would be operated. That is a matter for MacBrayne's and not for the Scottish Office, and it is not possible for me to say at this moment what it had been decided to do. I intimated as clearly as I could what I fancied would be the destination of those new boats and I think the indication I gave will turn out to be about right.

My hon. and gallant Friend also spoke about the high freights for cars. We all sympathise with his view and if I knew of some way of reducing it I should be very glad. The hon. Member for Orkney and Shetland (Mr. Grimond) very skilfully introduced, as I expected that he would, a comparison between the rates of the company which looks after his part of the world and the rates of MacBrayne's. It would be out of order if I entered into that matter in detail, but I may say that per sea mile, the actual freights to Orkney are slightly less than the other freights.

Mr. Grimond

I do not want to delay the hon. Gentleman, but he has made two important statements. He has accepted the view that as far as the Islands are concerned the sea is their main road, and he has said that this subsidy is one of the principal factors in the Government policy for Highland transport. In Orkney and Shetland the sea is as much our highway as it is in the Outer Isles. We, too, are having great difficulties over our services, especially the inter-island services which are most expensive, and in some respects, for example the Skerries, quite unsatisfactory. On the Government's own showing we have a very strong case for a subsidy. The Government are, in fact, guaranteeing MacBrayne's a higher rate of profit that our lines earn.

Mr. Stewart

I can only say that the company to which the hon. Member refers has never asked the Government for any assistance, and I can only assume that they are doing reasonably well. The hon. Member did say that some kind of subsidy was necessary and that is the view of us all. He asked me about the issued capital and the capital employed. The issued capital is £500,000 and the capital employed is £700,000.

The hon. Member for Central Ayrshire (Mr. Manuel) and the hon. Member for Kilmarnock (Mr. Ross) referred to this and I think there is some misunderstanding on the part of the hon. Member for Central Ayrshire. On page 8 of the White Paper he will see, at paragraph 19: There shall first be calculated a sum (hereinafter referred to as the interest on capital ') which shall be either a sum at the rate of 5 per cent. on the mean of the capital employed… The profit of the company is assessed for the purpose of this Agreement on the capital employed, and those profits, according to the Agreement, may reach a maximum of 6 per cent. and a minimum of 4 per cent. We think it would be a mean of 5 per cent. That is one thing.

Another figure altogether is the dividend which the Company may pay, and the dividends are based, not upon the capital employed, but upon the issued share capital of the Company. There. too, the figures vary from a possible 6 per cent. maximum to a 4 per cent. mini- mum, with a mean of 5 per cent. That is accounted for by the fact that the profit made upon the capital employed in the Company is, of course, subject to Income Tax Profits Tax, and so on, and, when that is taken off, the situation arises that the dividend on the issued capital may be 4, 5 or 6 per cent. I hope that explains the matter. Hon. Members will note, however, that the maximum dividend actually paid in any year may not exceed 5 per cent.

On the question of a vessel for quick freezing, which the hon. Member for Orkney and Shetland raised tonight and also the other day, we hope that this is matter which the White Fish Authority may, sooner or later, be able to take up.

My hon. Friend the Member for Ross and Cromarty (Mr. J. MacLeod) told us about the change in the circumstances in the area north of Kyle, where the shipping services had been stopped, as he told us, with the consent of the local people, and the Highland Panel had also found that was so. A more acceptable and more economic service has now been provided, and we are all pleased that that is the case.

With regard to piers, he suggested that, if MacBrayne's were only using a pier or harbour and not owning it, and they decided to leave that pier or harbour, or not to use it any longer, some arrangement should be made so that it did not fall into disrepair. In this case the local county council or other authority or private person who owned it would remain responsible for the pier's upkeep.

Mr. J. MacLeod

Some of the piers were used to a great extent for fishing. That use is still there, and the point is that the piers are falling into decay.

Mr. Stewart

If it is a MacBrayne pier which they cease to use for this special shipping service it is in the interests of those who lease it for fishing purposes to keep it going. Similarly, if MacBrayne's have vacated a pier owned by someone else, it is the owner who will assume responsibility for the pier.

Lord Malcolm Douglas-Hamilton

In the case where MacBrayne's do not own the pier, but where pier dues have to be paid. and the passengers have to stand in the pouring rain to pay their twopences, is it not possible to get MacBrayne's to collect that payment on the ship, whether they own the pier or not?

Mr. Stewart

I will be pleased to pass on that suggestion. I have seen it in operation elsewhere.

I think that my hon. Friend the Member for Kinross and West Perthshire (Mr. Snadden) was quite correct in that letter he sent to my hon. Friend the Member for Ross and Cromarty. As regards a grant from the Government, what is intended is that if a scheme goes forward, and the county council are prepared to play, while it is not for me to say that there will be a Government grant—because I am not the Chancellor of the Exchequer—I can say that all the authority of the Scottish Office would be behind the application. With regard to Applecross and Scorraig, my hon. Friend has been asked by the Highland Panel to make a report on this problem, and we shall await with the greatest interest the recommendations which he makes.

I have already dealt with the point made by the hon. Member for Central Ayrshire, about finance. I think that the best answer I can give about Loch Shiel is that I will write to him; otherwise, the reply might delay the House unduly.

To the points made by the noble Lord the Member for Inverness (Lord Malcolm Douglas-Hamilton), I would reply that we all share his desire to make MacBrayne's both adequate and efficient; we are all agreed about that, and I assure him that anything which we can do to achieve those ends we shall do. I am sorry about the lady who was left standing on the quay at Loch Boisdale. [HON. MEMBERS: "She has gone now."] Perhaps she would have been happier had she gone by flying boat, and if we could get flying boats into these islands, we should be very pleased; but I am not sure that it could be done at present.

I have been asked about policy on fares, and policy generally. Her Majesty's Government's intention is that by a general improvement of the finances of the country, by paying our way, and balancing our accounts, we shall improve the general economics of our land. When that is done, we shall be in a position to make a real advance in the Highland problem. That is our policy; that is our intention, and we shall make every effort to cause the Highlands to be a better place than we found it.

Question put, and agreed to.

Resolved, That the Agreement, dated 3rd April, 1952, between Her Majesty's Government and David MacBrayne Limited for the maintenance of certain transport services in the Western Highlands and Islands of Scotland, and for the conveyance of mails in connection with the said services, be approved.