§ Motion made, and Question proposed, That this House do now adjourn.—[Mrs. McGuire.]
7.12 pm§ Mrs. Ray Michie (Argyll and Bute)I am grateful for the opportunity to raise the future of the Campbeltown-Ballycastle ferry service and I welcome the Minister, the hon. Member for Cunninghame, North (Mr. Wilson), to the Dispatch Box. It gives me some confidence to see him there as he knows something about the subject and will, I hope, understand what I am talking about. For that reason, it will not be necessary to go into the detail of the background.
Suffice it to say, as the Minister will recall, that expenditure was approved for infrastructure at Campbeltown and similarly for Ballycastle and Rathlin island following various meetings that we had with the Northern Ireland Transport Minister way back in October 1994. However, the then Secretary of State for Scotland was determined that if a link were established, it should be run by a private operator. He was most reluctant to allow Caledonian MacBrayne to take it on for various reasons, as spelled out in a letter to me in 1995.
I draw the Minister's attention to the then Secretary of State's answer. He acknowledged that Caledonian MacBrayne was
enjoined, as one of the strategic objectives set by the Secretary of State, to consider, and, where appropriate, exploit commercial opportunities outwith the approved services.However, he went on to say:The role of the public sector in the economy should be restricted, and services whenever possible should be provided by the private sector rather than the public sector.At the time, in the absence of any real interest from private sector operators, it seemed sensible to allow Caledonian MacBrayne to take on the route. It had the experience, the staff, the recruitment base and the boat.Need I remind the Minister of his own words in the Official Report of 3 July 1996? During Scottish questions, the hon. Gentleman asked the then Scottish Minister:
Is not the main obstacle that Ministers must overcome their quite irrational prejudice against anything operating in the public sector? Does not everyone involved in the project…agree that the sensible thing to do is to allow Caledonian MacBrayne to operate a vessel that it owns?"—[Official Report, 3 July 1996; Vol. 280, c. 970.]All that is history. Fortunately, Sea Containers made an offer to run the service through its subsidiary, the Argyll and Antrim Steam Packet Company. The company entered into a contract to operate for three years during July, August and September, and, if possible, to extend the service to nine months a year from the third year. That has not happened, and it is no secret that the company has not broken even.The inaugural voyage on 1 July 1997 was launched by the right hon. Member for Glasgow, Anniesland (Mr. Dewar), now the First Minister in Scotland. There was much rejoicing and good will, and many expressions of confidence and support, particularly from the right hon. Gentleman. There can be no doubt that the service has bestowed both financial and community benefits on the Kintyre area during the difficult years during which it has run. In the first year, there was no prior promotion of the service. The second was a disaster for tourism because of 585 the strong pound, the world cup, atrocious weather and an unsettled situation in Northern Ireland. Kintyre also had to contend with the closure of its main road following a huge landslide.
I cannot stress too strongly the need for the service to continue for the benefit of both Antrim and Argyll. I, of course, know more about Kintyre, an area that relies on primary industries such as agriculture, which, particularly in the dairy sector, is currently suffering great stress. The sight of more and more fanners having to give up is too heartbreaking to contemplate. It is also difficult to attract inward investment. The closure of the Machrihanish air base and the Campbeltown shipyard were real blows to the community. There is a high rate of long-term unemployment.
Shipping services between Scotland and other parts of the United Kingdom are properly the concern of the Westminster Parliament, which is why we are holding this debate. The Campbeltown to Ballycastle service connects two fragile parts of the UK that are encountering considerable difficulties. The service unites a common culture, offering opportunities to strengthen ties not only between Antrim and the west of Scotland, but with the whole of Ireland.
What is to be done? In search of a way forward, Argyll and Bute council and Moyle district council held talks last Friday with Hamish Ross of the Argyll and Antrim Steam Packet Company and with Argyll and the Islands Enterprise. The promotion of tourism is vital to the service. Although better marketing this year, co-ordinated by the local tourist board, resulted in a marked increase in the number of vehicles using the service this summer—some 23 per cent. more vehicles used the service in July, and the August figure was up 19 per cent.—the route still operates at a loss.
The ferry's introduction has had an effect. Bob Chicken—whom I know the Minister has met—has said, on behalf of the Kintyre marketing group, that it is absolutely essential for the morale of the area that the ferry service should continue. Much depends on business morale, which was substantially boosted on the launch of the service. The area got new investment in hotels and previous negative reports from Campbeltown were replaced by very positive ones.
There is no doubt that a strengthened overall marketing strategy is needed on both sides of the water, with a pricing structure that provides a range of more competitive fares to potential ferry users. I was grateful to the roads service in Belfast for responding to requests from me and others for better signs to the ferry. Earlier this year that work was completed, with 15 signs giving directions to the ferry. That was welcome.
Particularly at the beginning, I was also keen to promote the transport of freight, including animals and the export of sheep, cattle and pigs. Kintyre farmers, who strongly supported the service, wanted to build up business with the Province. I then discovered that Ballycastle was not designated as an import port. I asked the then Scottish Minister, Lord Sewel, to take it up with the Northern Ireland Department of Agriculture. Eventually, the import licences were amended. I was grateful for that, but, of course, there has been little benefit to the farming industry since.
586 There is another freight option. I have a letter from the director of transport for Argyll and Bute council, who says:
An option, presently being explored with forestry interests in Argyll and Bute which could significantly aid the financial viability of the service, is the establishment of a complementary freight service between Campbeltown and Troon to facilitate the shipment of timber to the pulp mill at Irvine.Troon is in the constituency of the hon. Member for Ayr (Ms Osborne), so both she and the Minister know all about it. I do not know whether that idea is feasible, but it is certainly worth examining. A massive amount of timber is due to be harvested in Argyll and some at least should be transported by sea because the damage to the roads and hundreds of small bridges will result in huge repair and maintenance costs. That is yet another burden for a cash-strapped council.Can we find a way forward for the company to continue? I hope that we can. If Sea Containers withdraws, the only option seems to be Caledonian MacBrayne, but how do we get the boat back? As the Minister said in his letter to me:
If Caledonian MacBrayne wish to seek permission to develop services outside their traditional area, they would, of course, require to seek the permission of the Scottish Executive as the First Minister is now the sole shareholder in the company.Of course, as the sole shareholder the First Secretary has the power, but I would expect the Minister to do all that he can with the Department of the Environment, Transport and the Regions, the Northern Ireland Office and the Scottish Executive to ensure that this service continues.Kintyre is a very vulnerable area. As Ken Abernethy, the chief executive of Argyll and the Islands Enterprise has stated:
We do not know of any better way of changing the framework of the economy than retaining the direct employment and the throughput of visitors generated by the ferry.I know that the Minister is sympathetic. He said so in his recent letter to me. So is Dr. James Hunter, the chairman of Highlands and the Islands Enterprise. In a letter to me last year, he said:Argyll and the Islands Enterprise have recently agreed to make Kintyre their top priority.However, the company cannot make Kintyre a top priority without the proper support. I am told that support cannot be forthcoming because the ferry is not a lifeline service. I suggest that it is and should be made a lifeline service just as much as the Dunoon-Gourock service is. Kintyre is a peninsula. The people in Campbeltown always feel that they are at the end of the line and that they might as well be an island. I look for the service to be developed into a lifeline service.I am certainly not being disrespectful if I say that I do not want tea and sympathy. Argyll waited long enough for a change of Government and some hope for the future. The withdrawal of the Campbeltown-Ballycastle ferry line would be indefensible. I ask the Minister to do all in his power to see that that does not happen.
§ The Minister of State, Scotland Office (Mr. Brian Wilson)I congratulate the hon. Member for Argyll and Bute (Mrs. Michie) on securing the debate and putting the case so eloquently. I can probably cut short the debate by saying that I am happy to give the undertaking that she 587 seeks. I will do everything that I can to support the outcome towards which she is working and towards which, as she generously acknowledged, I have a record of working.
I go back a long way with the service. I remember travelling on its predecessor from Campbeltown to Red Bay in the late 1960s and the 1970s. The service did not stop for lack of demand; it was a successful service. It stopped only because the difficulties at that time made it undesirable to the authorities to have another port of entry and egress from Northern Ireland. It took a long time for the service to be re-established, and I fully endorse the hon. Lady's comment that it would be a tragedy if it were to be lost at this stage. Its potential has not been fulfilled and it needs time to be developed.
Just to get the constitutional context right, we are discussing the Ballycastle-Campbeltown service tonight because the service is not a devolved matter for the Scottish Parliament. The service does not begin and end in Scotland so it is properly a matter for this House to discuss. I must say that this is the form of devolution that I prefer—two people from Argyll talking about this sort of matter and agreeing on virtually everything. However, some aspects of the debate inevitably impinge on the powers of the Scottish Parliament and Executive, especially the ownership of Caledonian MacBrayne, if it enters the frame again as a player.
No one would dispute that the subsidy that goes to the services provided for the Scottish islands and other communities cannot be used to cross-subsidise a service outside the Caledonian MacBrayne undertaking. The nub of the matter for Caledonian MacBrayne, as for anyone else, is whether the service can be made viable or can garner support in other ways long enough for it to become viable. The idea of subsidising it through the block grant to the company is a matter for the Scottish Executive and in particular the First Minister. That certainly was not the proposition in 1994. The service was intended to be unsubsidised. Part of the folly of what was done then was that Caledonian MacBrayne did not ask for money to set up the service. However, because it had the power of a network behind it and owned the ship, it would have been infinitely better placed to run the service than the people who were invited in.
Sea Containers Ltd., through its subsidiary, has operated the service for the past three seasons, as per its agreement. It is well known that the company is involved in a series of meetings with all interested parties to seek a way forward that would enable the route to continue and develop. Everyone knows the possible outcomes of the discussions, but it is important to note, and it is only fair to the company to stress, that as I speak it has not withdrawn from the service or announced that the service will cease.
The service has been provided by Sea Containers without any direct subsidy, but it has operated free from harbour dues at both ports. Despite that, it is generally acknowledged that the company has been losing money on the service—during the past year, it appears to have lost a significant amount. The company had hoped that demand would increase over time so as to make the service viable. This year, the local tourist board, the local enterprise company—Argyll and the Isles Enterprise—and the Argyll and Bute council supported a £150,000 marketing campaign to increase the use of the service. 588 I have not seen much evidence that the marketing campaign was funded in that way—at least at the Scottish end.
There has been a modest effect. Figures given to me suggest that the average carriage on each journey has risen from about 45 passengers and 10 vehicles to 54 passengers and 13 vehicles. That is quite a large percentage increase, but it is clearly not enough to put the service on a secure footing. Equally clearly, it does not come within a mile of the service's potential. Inevitably, there are difficult matters for us to consider, and we should do so as constructively as possible.
We should not get hung up on the phrase "lifeline service". This is not a lifeline service in the normally agreed sense—for example, it is not like the service to Colinsay or to Barra. It is an important service, but we should not be trapped into using terminology that cannot be justified in the context of discussions of ferry services in general.
What can we do? The debate is especially useful, because it focuses attention on the difficulties, and adds to the momentum to find a constructive outcome that is shared by all people of good will towards the service. That is the theme of my remarks this evening. However, there is no easy answer; there are difficulties everywhere we look. There are difficulties with the subsidy, with the current operators, with CalMac—not least because it no longer owns the ferry that operates the service, as the hon. Member for Argyll and Bute realises—and with EU rules on state aids and public service obligations. There are many complexities, but none of them—individually or collectively—makes a case for washing our hands of the problem. Nothing that I say tonight should be interpreted in that way—indeed, the contrary is true.
I have written to the Scottish Executive about the service, and about the interface of interests between my Department and the Executive. They are well aware of the difficulties with the Ballycastle to Campbeltown service. I have also held discussions with the Under-Secretary of State for the Environment, Transport and the Regions, my hon. Friend the Member for Streatham (Mr. Hill); I am extremely pleased that he is in the Chamber this evening. He has responsibilities for shipping and can be relied on to take a constructive view of the matters that we are discussing. I have also initiated discussions with the Northern Ireland Office, which has a large role in the matter. I am pleased to note that the hon. Member for East Antrim (Mr. Beggs) is in the Chamber.
We have reached the stage at which we are investigating all the options. At present, no one should put up any barriers to the continuation of discussions on the identification of possible solutions. I hope that we shall have time for those discussions.
As the hon. Member for Argyll and Bute pointed out, the Government have inherited an unfortunate situation that resulted from the refusal of the previous Administration to allow Caledonian MacBrayne to operate on the route. At that time, CalMac owned the ferry—the Claymore—and was anxious to proceed with the service. I understand that it is on record, recently, that the CalMac management is still anxious to proceed. However, it was prohibited from doing so; instead, the Claymore was handed over to Sea Containers Ltd.
We now need to find other ways to make progress. I assure the hon. Lady that if the Scottish Office—with other Departments and Government agencies—can play a 589 part in finding a solution, we are more than willing to do so. I offer my personal commitment to working towards a successful outcome.
I have no doubt that this service is important to both Kintyre and Northern Ireland. Its potential has not yet been fully realised, and it would be a tragedy if it were withdrawn after so much commitment and public money have been invested in it. Some £8 million has been invested in harbour improvements so that the service can operate. To give up and write off that kind of money after three years is not a sound investment.
This is a niche service with a tiny share of the overall market, but it is important to the communities involved. Because the service operates outside Scotland, it is properly the concern of the United Kingdom Government, and I am already in touch with the various Departments, the Scottish Executive and the appropriate agencies with a view to establishing how we can assist. It is important to stress that, as of today, the present operators have made no statement on their future intentions.
There are many avenues to explore. The hon. Lady referred to the possible involvement of an Ayrshire link. I should have preferred her to mention Ardrossan, but I 590 shall have a word with her about that later. Going back to the original proposition, I was involved in meetings with the Northern Ireland Office a long time ago, and the intention was that, had CalMac been operating, it would have made perfect sense to have involved Ardrossan because it already has a base there. Once the service was taken away from CalMac, however, that fell through.
Thus there is the possibility of an Ayrshire link and the environmental benefit from transporting timber between Kintyre and Arran by sea rather than by road. It is also worth stating that there is the general drive, to which I am committed, to improve and widen the links, whether they are infrastructural, economic, social or cultural, between Scotland and the north and south of Ireland. We want to increase those links as much as we can, and this ferry service is an important link between two interesting and historically linked geographical and cultural communities. We now have something that binds them physically. I entirely endorse the view that it should not be lost lightly, and I give my personal commitment to doing everything possible to maintain it.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-three minutes to Eight o'clock.