§ The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind)
Discussions with the Scottish Transport Group are continuing. My right hon. Friend's object is to secure a substantial saving on the level of subsidy now being paid to Caledonian MacBrayne for its service on this route.
§ Mr. Dewar
Does the Minister accept that this whole business is a disgraceful example of political prejudice? Is it not wrong to create a monopoly for one operator whose facilities are essentially unsuitable for non-vehicular traffic? Will not the sum total of the Minister's efforts be redundancies, a capital loss for Caledonian MacBrayne, and a second-class service heavily supported by the taxpayer? Is it not time to abandon the whole woeful exercise, which is merely an attempt to fix the market at the expense of the travelling public?
§ Mr. Rifkind
The hon. Gentleman has an extraordinary concept of a monopoly if he suggests that it is creating a monopoly to remove a subsidy from one of the competitors which, even with the subsidy, has been constantly losing traffic to the unsubsidised competitor. Seventy per cent. of the car traffic is voluntarily choosing to use the unsubsidised service, and no responsible Government could properly ignore that.
§ Mr. Donald Stewart
As the whole issue was thrashed out at a hearing before the Scottish Transport Users Consultative Committee, which found in favour of the existing arrangement, why does the Minister not accept its findings, each side having had plenty of opportunity to present its case?
Is the hon. Gentleman aware that there is no comparison between the service being offered by Caledonian MacBrayne and the inferior vessels being run by Western Ferries?
§ Mr. Rifkind
If the right hon. Gentleman believes that conclusion, it is of some interest to note that he voted for the undertaking when the matter was before the House. I remind him that the substance of the STUCC's inquiry and report was to point to the inadequacy of the "Highland Seabird" option which had been proposed at that time. In the light of that report, my right hon. Friend indicated that that option would not be pursued. He further indicated that there was no question but that a full and, if necessary, subsidised service to ensure a proper service for foot passengers would be provided for this route.
§ Mr. John MacKay
Did my hon. Friend discuss with Caledonian MacBrayne the option put to him by the members of the Cowal users committee when he met them last week in Dunoon—namely, that the subsidy should continue to be given to the passenger portion of the "Juno" run by Caledonian MacBrayne, and that it should then compete for the vehicle traffic on equal terms with Western Ferries after that?
§ Mr. Rifkind
When I met the local community in Dunoon and the local councillors, what was impressive and interesting, as my hon. Friend indicates, was that each group emphasised that it could see no justification for a subsidy for any car service provided by Caledonian MacBrayne given that Western Ferries, without a subsidy, was able to attract so much of the traffic. They put forward the proposals to which my hon. Friend referred. We are, of course, prepared to look at any proposals that are consistent with the objective of ensuring a proper service to the community and the removal of unfair competition.
§ Mr. George Robertson
The hon. Member for Argyll (Mr. MacKay) is yet another sinner who has come to repent at Question Time. Does the Minister still not grasp the fact that the damage that will be done to Dunoon, even by this half-cocked compromise that is now being put forward, will be such that local opinion will still be mobilised against everything that he says? Will he even now reconsider his decision, given the consequences that it will have for the people of Dunoon?
§ Mr. Rifkind
The outcome of my meeting with the local community was that they, unlike the hon. Gentleman and his hon. Friends, certainly did not argue that the status quo—involving a massive subsidy on the one route in Scotland that should never have had a subsidy—was acceptable. Labour Members should come to terms with the fact that it is a poor use of a large sum of money to provide a subsidy to a car service when, without any subsidy, the alternative company is meeting the needs of 70 per cent. of the car users on that particular route.
§ Mr. Speaker
Order. I was intending to move on at this stage, but it has been indicated to me that this question relates to the constituency of the hon. Member for 519 Renfrewshire, West (Mr. Buchan). To preserve the balance, I call the hon. Member for Bute and North Ayrshire (Mr. Corrie).
§ Mr. Corrie
Can my hon. Friend assure me that any subsidies that are saved on this run will be used in the west of Scotland on expensive routes such as the Ardrossan-Brodick run in my constituency?
§ Mr. Rifkind
I can give that assurance. The whole objective that the Government are seeking is not simply a reduction in public expenditure in the area concerned. We are seeking to ensure that the subsidies, which have been doubled in real terms to the Scottish ferry services over the last few years, are provided where they are required. We are not prepared to give a subsidy where it is clearly unnecessary, and where, indeed, local users of the route have opted for the unsubsidised company.
§ Mr. Buchan
Is the hon. Gentleman aware not only of the anger but of the total astonishment with which this ludicrous decision was received on the lower reaches of the Clyde? Is not the truth of the matter that he is replacing a semi-public monopoly with a private monopoly which has no social obligation whatsoever? Will he now tell us that, if he is going ahead with this ludicrous scheme, he will not be asking local authorities to fund the money for the two quite useless terminal points and claim that that is public saving?
§ Mr. Rifkind
Even if he wished to do so, my right hon. Friend has no power to create a monopoly either for that route or for any other. There is nothing to stop any provider of a ferry service from setting up and carrying it out on an unsubsidised basis. My right hon. Friend has indicated that he is not prepared to give a massive subsidy of £500,000 to a company which, even with that subsidy, has, over the last five years, lost more and more car traffic to the other, unsubsidised, operator. If a solution that recognises the absurdity of the present position can be found, we shall be prepared to consider it. What we are not prepared to do, and what the local community did not ask us to do, is to continue the status with a subsidy of that kind.