WESTERN ISLES (TRANSPORT COSTS) (Hansard, 28 March 1977)

§ Mr. Donald Stewart (Western Isles)
I am glad to have a further opportunity to bring to the notice of the Government the severe handicaps under which the Scottish Islands survive. These are mainly due to the exorbitant costs of freight and passenger travel through the Caledonian-MacBrayne operation of the Scottish Transport Group. The name of MacBrayne is not, to put it mildly, favourably regarded in my constituency or on the West coast of Scotland. There are few or no complaints against the crews and staffs. They do a good job. Any criticism is aimed at management and central Government.
I wish first to refer to the appalling cost of living in the islands resulting from high freight costs. It is worth noting that many firms have ceased to supply the islands. Many items which are delivered carriage paid in the United Kingdom mainland are now advertised as carriage extra to the Scottish Islands and the Irish Republic.
The Scotsman of 8th March carried a list of basic foodstuffs and the costs in 222 different areas of Scotland. Let me make some comparisons between Edinburgh and the Point District only a few miles from Stornoway. In Edinburgh 4 oz. of tea costs 16p. In Lewis it costs 19p. Coffee costing 130p. in Edinburgh costs 160p. in Lewis. Sugar costs 24p. per kg. in Edinburgh and 27p. in Lewis. A pint of milk costing 10½p. in Edinburgh costs 13p. in Lewis. A loaf of bread costs 18p. in Edinburgh and 25p. in Lewis. The figures for a 1½lb. of bacon are 75p. and 93p. respectively, and for half a stone of potatoes 132p. and 168p. And so it continues down the list. However, items such as cheese and lamb are cheaper in Lewis than in Edinburgh.

§ Mr. Teddy Taylor (Glasgow, Cathcart)
I agree with the implications of what the right hon. Gentleman is saying, but he should perhaps check some of his prices. He mentioned coffee at 160p. It was £2 in Cathcart last week. Perhaps the increases are taking a long time to work their way through.

§ Mr. Stewart
I am pointing out the difference between prices in Lewis and the prices in a city on the mainland. Two years ago, the local authority had to give a weighting allowance based on the London principle to its employees.
In addition to all these higher prices, people in the islands have been faced with new increases. I wish to express one word of approval, however. There is now recognition, for the first time, that the permanent residents ought to have discrimination in their favour, and they therefore receive concessions.
At the risk of being accused of wanting to have my cake and eat it too, I question the attitude towards tourists. A useful tourist industry is now being developed in the Western Isles, but it will receive a severe setback because of the high cost of carrying cars to the islands. Commercial vehicles are subjected to a lower percentage increase, but the costs start from too high a base. The company operates it against firms using their own transport in preference to MacBrayne's. The charges are a severe handicap to living standards and developments in the islands.
On the Stornaway-Ullapool ferry, Caledonian-MacBrayne quotes a figure of £15½40 a ton for its own vehicles and 223 £90.40 single and £180.90 return for other firms. For itself it carries trailers only, but other operators using the services are obliged to send an articulated unit with each trailer, thus adding to their costs.
The company has been allowed to withdraw the "Lochcarron", the cargo vessel which sailed from Glasgow to the islands. At the hearing before the transport users' consultative committee I gave evidence that certain cargoes could not be carried cheaply and conveniently by other means, but the company countered this by saying that road haulage and ferry would be entirely suitable. Within two weeks of the withdrawal of the cargo vessel, however, I had complaints from Harris that cargoes such as skins were being refused unless they were wrapped. This was an entirely new practice and it made the cargoes less worth while to ship.
If the Scottish Office is concerned that people in the islands are entitled to a reasonable level of living and development opportunities, two things must be done. It must take vigorous action to reduce the cost of transporting commercial vehicles, and it must seriously consider the Highlands and Islands Development Board's proposal for instituting a road-equivalent tariff.
The islands have had the highest unemployment figures in the United Kingdom for decades. If money were spent on helping the company, if it requires assistance, and on giving us a reasonable level of charges, there might in time be far less call on the Government for unemployment benefit and social security payments.

§ Mr. Iain MacCormick (Argyll)
I should like to associate myself with the remarks of my right hon. Friend the Member for Western Isles (Mr. Stewart). Nine of the most important inhabited islands in the Hebrides are in my constituency, and there are three points of which I wish to remind the Minister.
First, the Government adopted the principle, after the 1968 Transport Act, that Caledonial-MacBrayne should be commercially viable. That principle has now been dropped and a transport subsidy is paid to the company. Having accepted that the services cannot be commercially 224 viable, the Government should rethink their attitude towards them. Secondly, the Highands and Islands Development Board has consistently said that the services should be regarded as an extension of road services.
Thirdly, one of the best results of the Scotand and Wales Bill would have been that a Scottish Assembly would control transport policies, and its approach would have been different from that of the Government. British Rail has found it a good idea to reduce fares by 10 per cent. to try to generate trade. Would it not be a good idea for Caledonian-MacBrayne to follow that example?

§ The Minister of State, Scottish Office (Mr. Gregor MacKenzie)
The right hon. Member for Western Isles (Mr. Stewart) and the hon. Member for Argyll (Mr. MacCormick) have raised a matter of importance to their constituents which has been exercising the minds of many people for many years.
It will be clear from my name that my forebears came not only from the mainland but from the Isle of Skye, and the fact that I represent a Glasgow constituency is an indication that many of them were driven from the island many years ago. I therefore have a certain sympathy with those who live in the islands, and I am very conscious of their problems.
However, this is their way of life. It is the way of life they have chosen, and in these matters we have to strike a balance as best we can. The operators and the Government seek to strike a balance between meeting the needs of the islanders and the costs of doing so, which the taxpayer is expected to bear. Where Government grants are not involved, the market regulates the price asked and the price paid between buyer and seller. However, when the Government have to step in and take a hand it becomes much more difficult to strike a balance. The right hon. Member wants the balance to be tilted towards those he represents, and so does his hon. Friend. My contention is that at present we have the balance about right.
As the right hon. Gentleman knows, there is much more to providing shipping than merely setting rates. There are also quality, frequency and reliability of 225 services, and in many instances those features are just as important as rates. The services to the right hon. Gentleman's constituency are operated by the Scottish Transport Group, and I am indebted to the right hon. Gentleman for the compliment he paid to the group. However, I must emphasise that it is not operated by the Secretary of State for Scotland. The Secretary of State has certain powers in relation to the group's activities, especially in relation to financial control and the payments to board members, but he has no control over the group's activities apart from that.
Like most others who have been sponsoring Ministers, I strongly hold the view that it is not part of the function of a sponsoring Minister to take day-to-day control unto himself. We give responsibility to these people, and it is a responsibility that they want to have without necessarily having a Minister breathing down their necks from time to time.
The right hon. Gentleman referred specifically to the cost of living. A recent article in the Scotsman gave a shopping basket costing £12½99½p for a typical household in Stornoway, which is £1.50 less than the average highland village. But it is not true that the islanders have an unnecessarily heavy burden in this respect.
I should like to say a word about the quality of the services provided to the islanders. I have said that speed, frequency and capacity are important. These features have been greatly developed in recent years. I should say for the record that these changes are sometimes taken for granted. Once the first agreeable shock of a new service has passed, people tend to forget about it. However, there are substantial and continuing improvements that should not be overlooked in a discussion of this kind.
On the three main routes to Barra, Uist, and Harris and Lewis, in the summer there are 34 sailings a week whereas there were only 12 in 1955 and only 25 in 1965. Each vessel now has a much larger cargo capacity than the old mail boat. Similar significant changes can be recorded elsewhere, of course, but I mention those to show the main services to the right hon. Member's constituency. Traffic on the services has also increased. Between 1969 and 1975 passengers 226 showed a modest but steady increase and the number of passenger cars doubled from 350,000 to 700,000, while commercial vehicles increased by 60 per cent.
Those figures demonstrate the technical improvement that has been achieved. Of course there are occasional complaints when people feel that they have been treated less than courteously and there have been breakdowns and things have not gone quite right. But all who are interested in these matters recognise that a sustained improvement in these services has been achieved by the Scottish Transport Group and its staff.
The right hon. Gentleman tonight raised the question of increases in fares. I should like to emphasise the role of the Secretary of State. My right hon. Friend does not fix charges for shipping services. The relationship between charges for various routes and various classes of traffic is the responsibility of the Scottish Transport Group. To cover the full cost of services would mean that charges would be at an unreasonably high level. We are, therefore, paying a revenue grant. I hope that the right hon. Gentleman and his hon. Friends recognise this. We are paying a revenue grant of EP; million to the Scottish Transport Group in the current year to fill this gap. It is for the group to decide to what extent it can make economies and to what extent increases in traffic will boost revenue. Having decided that it has to go for increases, it is for the group, not the Secretary of State, to decide how the levels should be implemented.
There will always be argument about what is a reasonable level of grant. The increase of 15 per cent. in revenue from users is in line with general price movements. In the last year the indications are that the cost of transport of vehicles increased by 13½7 per cent. and that fares generally increased by 16 or 17 per cent. What is certain is that the position of island residents is not worsened relative to that of people on the mainland.
The hon. Gentleman raised, as I expected, the question of road-equivalent tariffs, based on the cost of moving vehicles by road and applying the cost to sea crossings. This has an advantage in that it offers a yardstick other than operating costs, but it is a yardstick 227 that the present Government, like their predecessors, have already rejected. The argument for it is the claim that increased transport costs inhibit the economic activity of the islands.
There are two main objections to that system of charging. The first is that it would divorce charges paid by the users of the service from the cost of providing the service. That would remove the whole operation from the real cost basis on which it must rest. The second objection is that the cost to the public, who must make up the difference between the costs and the revenue, would be too high. The Scottish Office has been examining the financing of road-equivalent tariffs. Although the work is not yet complete, the indications are that the present revenue grant of £3½ million would prove to be a total of about £7 million. Clearly, sums of that kind can be provided only at the expense of other services. My right hon. Friend sees no possibility at all of introducing an arrangement of this kind.
The right hon. Gentleman also referred to tourism. I recognise that this is important to the islands. I find, however, as the right hon. Gentleman will know, that a great many of the people who visit the islands throughout the summer are people who, in the main, are visiting their native homes and their families. By no means all the people are tourists. I have seen no evidence that the charges now placed on tourists by the Scottish Transport Group have in any way deterred the development of tourism in the islands.
The Highlands and Islands Development Board has made what I regard as a substantial contribution to the development of tourism, which, I agree, is exceedingly important. I hope it will be recognised that the Government, with the Scottish Tourist Board and with the Highlands and Islands Development Board, have made a contribution to the development of tourism in the islands and that we regard it as important.
The right hon. Gentleman also referred to the situation which follows the withdrawal of the Glasgow cargo service. He 228 mentioned especially the problem of sheepskins. He wrote to me and to my noble Friend and fellow Minister of State about it. I am sorry that we have not been able to satisfy him, but that is one of the consequences of modernisation and development. From the days when my grandmother travelled from Glasgow back to Skye, there has been a tremendous change. I do not think that we can expect sheepskins to be transported in the way in which the right hon. Gentleman suggests. We all recognise that there are good public health reasons for having them packaged properly and that this is necessary if we are to pursue a reasonable transport policy.
I listened carefully to what was said and I understand the problems faced by the constituents of the right hon. Gentleman and his hon. Friend. But successive Governments have been reasonable not only in regard to the assistance which has been given in the development of tourism and the grants which have been made to the Scottish Transport Group for the maintenance of these services but in the not inconsiderable sum which has been granted in respect of rate support grant. I believe that the right hon. Gentleman's constituency gets more rate support grant than any other part of Scotland. Those of us who are now Lowlanders, having been driven from the Highlands, wish that we had the kind of rate support grant in the Lowlands that they have in the Western Islands.
We make a reasonable contribution to the quality of life in the islands. We do it in the form of transport, in the aid that we give to the Highlands and Islands Development Board and in the form of rate support grant. I hope that the right hon. Gentleman will be gracious enough to acknowledge that on the part of successive Governments there has been a concern about the islanders and that we have done all we can to help them continue their way of life.