§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Noble.]
§ 12.47 a.m.
§ Mr. J. Grimond (Orkney and Shetland)
On Tuesday we got the first public, firm information about the Government's plans for a new pattern of shipping services to the North Isles of Orkney. It was then announced by the Secretary of State that a new company is to be formed with Sir Douglas Thomson and Colonel Scarth as chairman and vice-chairman who are giving their services free. I am sure that everyone would like to thank them for that and to wish them well in what is not going to be an easy task. I welcome the assurance that the Government will give assistance under the Highlands and Islands Shipping Services Act, not only to maintain but to improve—and, I stress, improve—these services. I am glad, too, that the Government have agreed to provide new vessels. I shall, however, have some questions to ask, about the schedules, the type of vessels and the conditions of this aid.
The Government are wise in saying that they will include in the new company strong representation from the North Isles. I have always emphasised that the main purpose of these services must be to benefit the people of the Isles regardless of how we do it or through what company, and, by benefiting them, to stop depopulation. I have stressed, therefore, that people living in the islands should be strongly 864 represented, as I am sure they will be now, on the board of the company.
But in spite of this statement on Tuesday and the progress which is being made, we still have a long way to go before we see this company actually in being with new vessels on the sea. This delay is having a bad effect on the Isles. I do not think anyone would accuse my constituents of being impatient. It is many years since the Orkney Steam Navigation Company itself drew the attention of the then Government to the difficulty it was bound to face, owing to rising costs, in replacing its vessels, and it is fully eight years since I myself asked for inquiry into these services. This request, after being refused, was eventually accepted, and, of course, we had the report made by Mr. McGillivray as long ago as 1957.
The first lesson we are bound to draw from the history of the matter is that the solution of this sort of problem does not get any easier by delay. I am sure the Government will now agree about that. I have pointed it out many times. I hope that the period of delay is now closing. Once again I put it to the Under-Secretary that the "Thorfin" and the "Sigurd" are now over thirty years old, and I believe they are the last coal-burning vessels of their type in this country. They are getting more and more expensive to run, and last autumn we had this crisis when the "Thorfin" was due for survey. The Government eventually agreed to assist over this, but in the end the survey cost about £12,000 on a ship which is worth about £3,000. The taxpayers have had to meet an expensive bill, which could have been avoided if we had dealt with this matter quickly.
Once a decision has been made to help, as it has in this case, the great thing to do is to get the help to the places which need it as quickly as possible. If it were the policy of the Government never to help industry or transport we should have no special complaint, but they are continuously subsidising transport with much less justification than in the North Isles of Orkney. Indeed, the Shipping Bill which the Government introduced, and which was passed into law over a year ago, was no new departure. The Government were already subsidising MacBraynes to the tune of over £300,000 865 a year, and transport all over the country is helped. The railways are allowed to run up a deficit, and many urban transport undertakings are assisted in one way or another.
I make no complaint about that. I am in favours of some subsidies. We all agree that certain types of transport must be helped. The type which has an overpowering case for assistance is that which is essential for a vital service to a community. If ever there was an area in which this sort of transport is needed, and in which the case for help can be made out on both economic and social grounds, it is the islands in Orkney and Shetland. Further, the North Islands of Orkney produce a substantial amount of food, and are inhabited by people who still run viable communities and do a great deal to help themselves. They contribute to the national wealth, as the Under-Secretary will agree. They are highly reasonable people. But it does not seem that much of this has told in their favour.
Further, a word of appreciation is due to the Orkney Steam Navigation. If it had taken a selfish course it could have closed its service and sold its assets years ago. It is worth recording that the directors' total remuneration each year is £100. There is some discrepancy between the attitude of the Government—and here I am not blaming the Scottish Office—to this essential transport service in comparatively poor islands and their attitude towards the Cunard Company and MacBraynes. The Cunard Company is to get help to the tune of £18 million for a luxury liner. I am all in favour of helping shipping and shipbuilding, but, like many hon Members, I do not think that the case for this particular assistance to the Cunard is nearly so strong as it is for some assistance to an essential service which no one pretends the people can do without, and which no one has pretended for some time can be left entirely to the resources of the present company.
Delay has undoubtedly taken place before we are in sight of getting anything to put this essential service on a proper footing, and to replace the vessels in question. In extenuation of this delay the Government will say that they had to carry out very complicated 866 negotiations, and that the blame does not lie entirely on them. I accept that the Government have taken a great deal of trouble in this matter, and I do not want the Under-Secretary to think that I am ungrateful to him for the patience he has shown. But he must agree that there has been no desire to obstruct or delay in Orkney. The Orkney Steam Navigation Company has made it quite clear that it waited for the proposals of the Government. Those proposals took some time in coming. Indeed, there did seem a moment when there was a certain paralysis of the Government's will, combined with the inability to apply commercial sense, or even common sense to the problem. Again, I do not necessarily blame the Scottish Office. I dare say that there have been difficulties for the Government over finance, but I hope that has been rectified and that now we are embarking on a definite course of action the right decisions can be more quickly arrived at.
Further, it will be a tragedy if, having agreed on the present scheme, we do not ensure that it is adequate. I want to stress this very strongly, and have done so to the Under-Secretary before. After experience of these negotiations, and noting the Government's apparent reluctance to start air or other types of unconventional service, I doubt whether they have the determination to look sufficiently far ahead to put this service on a sound footing which will last for some time. At this late hour, it will be a waste of public money to do too little.
I should now like to remind the Minister of the situation. First, as to the costs that the islanders have to face. It costs about 36s. 7d. to send a beast from the North Isles to Kirkwall. Freight charges are unquestionably heavy and enter into the price of every commodity the islanders have either to buy or sell. As to passengers, one can now get from London to New York and back more quickly than one can get from Kirkwall to Westray, and if one lives in the North Isles and wants to buy something in Kirkwall, or see the dentist to have a tooth stopped, one may have to stay for anything from one night to three nights from home.
Incidentally, less and less often have visiting officials been completing their tours by the ordinary services and I rather 867 think that it would be no bad idea if every official having dealings with the Highlands and Islands was compelled to make an extended annual tour, using the regular service in that area.
It is no good patching up the services without improving them and stopping the rise in freight charges, and there is a lot to be said for altering the pattern of the services. The Rousay, Egilshay and Wyre group of islands, for instance, might have some of its needs met by landing craft. There is a case for separating passengers and mail from livestock and heavy freight, and for moving the former by faster ships or hovercraft or aircraft. There is a case for direct shipments, and for regrouping the islands, and there is a special case for improved services to North Ronaldshay. It is high time that these problems were gripped, and solved, because, in the meantime, traffic is being diverted. More and more motor boats are running, and there are projects for direct shipments and, possibly, charter air services.
I am certainly not expert enough to say what the best form of service may be, but I am pretty certain what the aims should be. Someone should be put in charge, with a clear directive to decide between the alternatives and then to run the improved services. It is absolutely essential to have good management, and that is not easy to come by in the Highland area—and it needs paying for. I realise the difficulties, but it is one of the main clues to the whole problem.
The main heads of the directive should be that freights must be held down; that the passenger and mail services must be accelerated so that visitors to Kirkwall could sometimes transact their business and get in and out of the city on the same day, and that there must be adequate carriage of livestock and heavy freight dovetailed into the markets.
I conclude by asking some questions to which answers are due. First, now that the new company has been agreed on, what is to happen to the Orkney Steam Navigation Company? I know that it is projected that it should more or less hand over the service this summer, but is it intended that it should then go out of business? Perhaps, the Joint Under-Secretary of State will say a word about that.
868 Secondly, what is the timetable for future operations and when may we expect the new boats on the North Isles run?
Thirdly, may we be told something about the speed and the type of services envisaged? It seemed a little odd at one time that new boats were being put on the drawing board before the manager had been appointed, but if this will speed the operation, I shall not complain about it. But if they have been designed, or partly designed, as I understand is the case, then somebody has some idea of the sort of schedule which these boats may be expected to keep. May we be told something about this? What about their speed? I appreciate that to make them fast is to make them rather expensive, but it is necessary that they should be much faster than the existing boats and able to maintain a better schedule.
Fourthly, apart from the schedules and services on the main North Isles route, how are such islands as North Ronaldshay, Rousay, Egilshay and Wyre to be served? Has any consideration been given to the ferry services to the Rousay group?
Fifthly, what about piers? The news of the postponement of work on the North Ronaldshay pier is heart-breaking and confirms all one's worst suspicions that something is wrong somewhere within the Government machine. It is vital for new services to be assured of adequate piers on the islands. At the moment there is no pier at Wyre or Papa Westray and inadequate piers at many other islands.
Sixthly, what is the policy over direct shipments and air services? I ask this because I am frequently asked about it. A solution may be that the new company should be empowered to help with these or to operate them where necessary. The difficulty is that the years go by and there is a danger of a chaotic situation developing unless some firm guidance is given.
I draw the Minister's attention to the use of aircraft. Both conventional aircraft and helicopters have a great deal to contribute to this sort of operation. Sometimes the Scottish Office gives the impression of living in the age of Bleriot and the Wright Brothers. They speak of aircraft services as though they were 869 some remote hope for the future. But we had aircraft services before the war, and they were given up only on nationalisation. For certain types of transport, particularly passengers and mail, there seems to be much to be said for them.
Lastly, and most important, when the Government speak of improving the services, as the Secretary of State did in his statement the other day, does this mean that frieghts will be kept down and that the speed and frequency of the services will definitely be improved? Is there to be some form of annual running help for the company? Without this, I fear that the usefulness of the assistance might be jeopardised.
In conclusion, I thank the Joint Under-Secretary for coming to Orkney at least twice and for taking a great deal of trouble over this problem. We are also grateful to the Secretary of State and everyone else who has had to deal with it. We should like to see the project finished, but even when it is finished we shall welcome the Joint Under-Secretary of State if he feels inclined to pay us a further visit.
§ 1.3 a.m.
§ Mr. John Peyton (Yeovil)
Would my hon. Friend be good enough to tell the House the size of the subsidy involved in relation to both capital cost and recurrent cost in running this service? The hon. Member for Orkney and Shetland (Mr. Grimond) has made it clear that this is a subsidy. I find it a little odd that he has referred to this point because, like myself, he has opposed subsidies; not merely did he oppose the subsidy to the Cunard Company in Committee, however, but he went to the length of voting against the Third Read-of that Bill, in company with those two redoubtable opponents of subsidy, the hon. Member for Nelson and Colne (Mr. S. Silverman) and the hon. Member for Ebbw Vale (Mr. M. Foot). I think that my hon. Friend ought to deal with this point, because the Leader of the Liberal Party is in a very odd position.
§ 1.4 a.m.
§ The Joint Under-Secretary of State for Scotland (Mr. Gilmour Leburn)
The hon. Member for Orkney and Shetland (Mr. Grimond) is to be complimented on raising this question, particularly tonight 870 when we have had a general debate on shipping during the day. I am sure that there are in the North Isles of Orkney some 2,800 people who will take more interest in this question than many millions of people will in the other question.
The hon. Gentleman knows that the problem of the North Isles service has been engaging our attention for a very long time now. He has been somewhat critical of the delays which have taken place. I shall try to answer as many of his questions as I can, but I should like to go briefly over what has happened over the past years. We go back first to the approach in 1955 by the County Council of Orkney. The Council raised the question of depopulation in the Isles and the associated problem of transport services. The situation was examined by the Highlands Panel which suggested that the possibilities of reorganising the existing company or of introducing another company to provide the services should be considered by those principally concerned in Orkney, namely the existing company and the principal shippers. I lay special emphasis on the conception of a local solution, because the Government all along have had that aim in mind and have rather been guided by the idea of having it based on the local service itself.
The hon. Gentleman has gone over the ground in regard to Mr. McGillivray taking a hand in things and the recommendations which Mr. McGillivray made. He knows that the discussions which Mr. McGillivray was having with the local companies were unfortunately cut short due to Mr. McGillivray's untimely death in 1959. By that time it had become clear that considerable financial help would have to be given from the Government if the two ships which were running to the North Isles were to be replaced. This led to the question of providing the Secretary of State with suitable powers. As the House knows, the Highlands and Islands Shipping Services Bill was presented in 1959 primarily for the purpose of making assistance available for replacing the ships. The Bill became law just over a year ago.
It is not possible for me tonight, in reply to the question asked by my hon. 871 Friend the Member for Yeovil (Mr. Peyton), to say exactly how much money will be involved. But as I go along he may get some idea of the figure involved, if he will listen carefully.
Concurrently with the later stages of the Bill the Government discussed with the North of Scotland Company the possibilities of that Company taking a major part in the organisation of the services. The House will remember that when the Bill was passing through its various stages my right hon. Friend and I explained that the purpose was to assist an existing company. We wanted if possible to use an existing company or companies which were operating in the area, but one cannot always hasten negotiations like this and guarantee their success. Unfortunately we had to accept last summer that we were not able to reach agreement with the North of Scotland Company, and later in the year the Orkney Steam Navigation Company told us definitely that it was not willing to continue to be responsible for the services even with Government assistance.
It was at that stage that my right hon. Friend was fortunate in securing the invaluable assistance of Sir Douglas Thomson to advise him on the shipping and organisation problems. Sir Douglas recommended that a new company should be set up. Thanks to the co-operation of Colonel Scarth, the Convener of Orkney County Council, this has now been done. I should like to associate myself with the remarks of the hon. Gentleman in paying tribute to Sir Douglas and Colonel Scarth. I should also like to say a word of thanks to the hon. Gentleman for the help he has given us. The company will be a local company. It will be composed mainly of local people, with two Government directors. It will have local headquarters and will arrange schedules and operate the services. Two ships will be provided on charter by the Government. As operating expenses, including the charter fee in respect of these ships, are likely to make the services uneconomic, the Government will be prepared to negotiate an agreement with the new company for the payment of a subsidy to enable the company to meet its losses. The company may also wish to raise some local capital, but that is really a measure for the new company to determine. The 872 agreement between the Government and the company will have to come before the House for approval. I hope that this may be very early after the Summer Recess.
As my right hon. Friend said the other day, negotiations are taking place with the Orkney Steam Navigation Company about the transfer of responsibility. We are making arrangements for the new company to take over, using the present ships, as soon as possible this year. In the interim I know that the present company will co-operate in continuing the services. I am very grateful to them for this undertaking. What the future of that company will be is not for me to say. It is a matter for the company. It could carry on in some other form or go into voluntary liquidation.
The working out of the arrangements for reorganisation has not delayed the designing of the ships which are to be built and chartered by the Government. I should prefer not to enter into details about the ships tonight because my right hon. Friend hopes to make a statement about this very shortly. The designing of the ships would have been simplified if the future operating company had been in existence and available for formal consultation. But we have done the next best thing. We have consulted Sir Douglas Thomson and the secretary and the masters and chief engineers of the existing company. We have had the advice of the Ministry of Transport and, of course, of our own Department's marine and engineer superintendents.
The consensus of their opinion on the type of ships to be provided is that they should provide the essential passenger-cum-cargo services that have been required in the past and that this is the best sort of ship on which to form a firm basis for the company. I am interested in what the hon. Gentleman said about air services, and I certainly do not rule out the possibility of a charter cargo service direct from, say, Aberdeen to the North Isles. But I am sure that in this matter we must have a firm basis of two passenger-cum-cargo ships. From that point there need be no restriction whatever in the way of supplementing these basic services with other forms of transport.
We have given careful thought to the alternatives; to motorboats, aircraft, helicopters, and hovercraft. The time 873 may well come when hovercraft will fill the bill, or helicopters. At the moment that is a matter for the future, but there is no reason why that possibility should be ruled out.
The hon. Gentleman asked about the services and the charges. That is a matter which we must leave to the new company, though in the agreement which will eventually come before the House, there will be conditions for my right hon. Friend to have control. On the question of charges, we appreciate that the people living in the North Isles are suffering under great difficulties and hardships because of this double transport charge which they have to meet.
The question of piers is undoubtedly a difficult one, but the county council has a substantial programme of pier work in preparation, including new piers for Papa Westray and Wyre and improvements to a number of other piers.
The programme has been designed with the new ships very much in mind and, as the hon. Gentleman knows, work is expected to begin on North 874 Ronaldshay pier either later this year or early next year. Provisional Order procedure is being initiated for Papa Westray and my Department is waiting for the county council to formulate their proposals for the other pier works.
The hon. Gentleman said that there had been a good deal of traffic lost by the existing company, and that is true. He is also worried because there has been depopulation from the North Islands, and that is also true. But that is, unfortunately, true of other remote parts of Scotland.
What is heartening is that there is a good deal of prosperity in the agricultural world, if one looks at the subject overall. In the last five years the livestock population of the North Isles has gone up by 20 per cent. and, despite the adversities of life there, we can, along with this prosperity in agriculture, look forward in the hope that the new ships and the new organisation will help in giving a bright future with bright prospects.
§ Question put and agreed to.
§ Adjourned accordingly at seventeen minutes past One o'clock.