HL Deb 19 November 1981 vol 425 cc649-58

9.2 p.m.

Lord Banks rose to ask Her Majesty's Government whether they will explain why they believe that a satisfactory ferry service for the Cowal Peninsula will he ensured by splitting the existing Gourock-Dunoon ferry service between Caledonian MacBrayne and Western Ferries on the basis of the former catering for foot passengers and the latter for vehicles.

The noble Lord said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. The Question asks the Government whether they will explain why they believe that a satisfactory ferry service for the Cowal Peninsula will be ensured by splitting the existing Gourock-Dunoon ferry service between Caledonian MacBrayne and Western Ferries on the basis of the former catering for foot passengers and the latter for vehicles.

Perhaps I may explain the background to this Question. One of my earliest childhood memories is a rough passage between Gourock and Dunoon on that sturdy little paddle steamer the old "Glen Rosa", and many times since then I have travelled on that route in a variety of vessels, including vessels of both services which are now available.

At one time that route from Glasgow by rail to Gourock and then by steamer to Dunoon was in competition with a similar route via Princes Pier Greenock and another route on the other side of the Clyde to Craigendoran. But eventually only one route remained—the route from Glasgow Central to Gourock Pier and then by steamer from there to Dunoon Pier. In 1954 the development of car transport led to the introduction of car ferries, and by 1973 the Gourock-Dunoon route was operated by a nationalised concern, Caledonian MacBrayne, incorporating two famous Clyde steamer companies. In that year, 1973, Western Ferries introduced an alternative service operating from McInroy's Point, two miles down the firth from Gourock on the one side to Hunter's Quay on the Cowal side of the estuary, two miles up the firth from Dunoon. There is no doubt that the Western Ferries alternative service was much appreciated by car owners, partly because it was cheaper and partly because it ran until much later in the evening than the Caledonian-MacBrayne service. The ships in use by Western Ferries were small, and as a consequence they required small crews and it was possible for them to run a more flexible service.

By 1980 the division of traffic was this: Western Ferries had 67 per cent. of the car traffic, 41 per cent. of the commercial vehicle traffic and Caledonian-MacBrayne had 89 per cent. of the foot passengers. Caledonian-MacBrayne were subsidised by the Government and the subsidy in 1980 amounted to £800,000. It is believed that in the current year this will be reduced to somewhere round about £540,000. It is being reduced by putting into reserve one of the vessels used by Caledonian-MacBrayne and operating an hourly service with the other, instead of the half-hourly service which had previously been in operation.

The Government took the view that since Western Ferries had taken some 70 per cent. of the private car traffic without subsidy a continuation of the subsidy to Caledonian-MacBrayne would not be justified. It may be that ideological considerations played a part in that—I do not know—but the Government proposed to withdraw the subsidy from Caledonian-MacBrayne and to give a lower subsidy to Western Ferries. Caledonian-MacBrayne then indicated that in those circumstances they would apply to withdraw their passenger vehicle service between Gourock Pier and Dunoon Pier. The Government's plan and the Caledonian-MacBrayne reaction to it caused much alarm in Dunoon and throughout the Cowal district, for a variety of reasons. The catamaran vessel "Highland Seabird", which it was envisaged that Western Ferries would use for the passenger service between Gourock Pier and Dunoon Pier, it was argued, was not large enough and not suitable to cope with the weather that can be expected at certain times during the winter.

Dunoon Pier is in fact one of the most exposed on the Clyde. It was argued that the vessel, being a very light vessel, would have great difficulty in taking that pier and indeed that at certain tides it would be difficult for passengers to embark and disembark from it. The subsidy for its operation was only guaranteed for a year, and if that service proved unprofitable it was feared t hat subsidy might be withdrawn. Then there would be no passenger or vehicle services between Gourock Pier and Dunoon Pier; in other words, the front door service would be gone, the main tourist approach to Dunoon would have been closed.

The Dunoon Pier without a vehicle or passenger service would inevitably close, and this would have had other consequences, because the paddle steamer "Waverley", which runs cruises during the summer and is a very great tourist attraction, uses Dunoon Pier as an important picking up point. If there were no service from Dunoon Pier to Gourock Pier foot passengers would have to be bussed to Hunter's Quay and then across to the other side, and bussed from McInroy's Point to Gourock Station, making the whole operation very much longer.

Gourock Pier, of course, belongs to Caledonian-MacBrayne, and there was speculation as to who was going to maintain it, what was going to happen to it. The capacity of the Western Ferries fleet was thought not to be sufficient, even with an additional ferry which the Government proposed to help them to purchase. The Western Ferries vessels are old, about 40 years old, and the two Caledonian-MacBrayne vessels were built one in 1973 and one in 1974. There is really no comparison between the Caledonian-MacBrayne vessels and the Western Ferries vessels. The Western Ferries is a very basic service, very acceptable for many purposes and obviously attracting a good deal of traffic, but not competing in the provision, for example, of protection against the weather, in the question of refreshments and so on during the voyage. The Caledonian MacBrayne vessels are very much larger vessels. Then it was argued that there would be traffic problems at Hunter's Quay and at MacInroy's Point if all the vehicle ferry services had to go through those two places.

There was alarm also further down the Clyde in Bute and Arran, because these places do rely to some extent on the services between Dunoon and Gourock; they are operated by single vessels belonging to Caledonian MacBrayne, one operating between Wemyss Bay and Rothesay and one between Ardrossan and Brodick, and if they are out of service they fall back on one of the vessels from Gourock as a standby vessel. Similarly, in very rough weather, Ardrossan and Wemyss Bay are not accessible to the vessels and they have to make for Gourock, and so Gourock was used in that capacity. So people further down the Clyde are worried about what would happen. There was concern, too, about the provision for the carriage of mail and goods which travel by the Caledonian MacBrayne service but for which the Western Ferries vessels are not equipped.

The withdrawal of the service was referred, as was a statutory requirement, to the Scottish Transport Users' Consultative Committee and they arranged a public inquiry. The degree of local interest was evidenced by the fact that 400 people attended this inquiry in Dunoon, and many of them had to stand for several hours. They did do so, so great was the interest while this inquiry went on. It became clear that when all the factors I have described were taken into account the problem was not so simple as had at first appeared. A powerful case against the closure of the Caledonian MacBrayne service and against the Government proposal was developed. The strength of the argument was evidenced by the fact that the Conservative Member of Parliament for the Argyll Division, in which Dunoon is, Mr. John Mackay, changed his mind. Having originally been in favour of the Government proposal, he changed his mind and was convinced by these arguments.

It was not surprising, therefore, when the consultative committee were unanimous in their recommendation, that Caledonian MacBrayne should in no circumstances be permitted to withdraw from this route in view of the serious hardship, inconvenience, difficulty and knock-on effect that would be caused to users of the service. The report of the consultative committee emphasised that Western Ferries had been a helpful and caring operator, and indeed they suggested that Caledonian MacBrayne might learn from them with regard to willing service and marketing.

It has been my opinion for a long time that Caledonian MacBrayne have been very weak in the marketing sphere. But the consultative committee were clear that Western Ferries had failed to make a case to be the sole operator and they emphasised, as I have already stated, that there is no comparison of quality in the service provided. They insisted that the disabled, the elderly, tourists, commuters who go to work on the other side of the firth or who travel across the firth for educational purposes, had all to be considered. So had the businesses in the centre of Dunoon which would have been greatly deprived if the service between Gourock Pier and Dunoon Pier no longer existed.

In my opinion the consultative committee were absolutely right in the recommendation which they made. There was considerable local optimism after that inquiry that the Government would be persuaded to withdraw their proposals. There was consequently astonishment and concern when the Government announced that they were not going to accept the recommendation of the committee, but that they were going to split the service and make Western Ferries the sole vehicle operator and give the passenger service to Caledonian MacBrayne.

That leaves many problems unresolved, and in the view of a good many people that solution is worse even than the first. "Neither practical nor cost-efficient" was the way in which one local newspaper described it. First, Caledonian MacBrayne have no passenger vessel of their own and they were bound to make a heavy loss in any case on a passenger only service—that is the least profitable type of service—and it would seem that their losses would become heavier. They would presumably have to sell their better vehicle ferries "Juno" and "Jupiter", which are vehicle and passenger ferries, as I have explained, and which were comparatively recently built, even while they looked around for a passenger only vessel. Western Ferries have added an old vessel to their fleet to make up their numbers. The revenue for Dunoon Pier is bound to be substantially cut if there are no pier dues to be exacted on vehicle traffic, and the possible closure of Dunoon Pier is raised again.

There would be insufficient ferry capacity if the vehicle service were left entirely to Western Ferries. The consultative committee emphasised that they would not be suitable as a sole operator. The traffic problems, which I mentioned, at Hunter's Quay and McInroy's Point would arise. There would be no back-up vessels from Caledonian MacBrayne at Gourock for their services further down the Clyde. The future of Gourock Pier must he in question, and no solution has been put forward to the question of who will carry the freight and mail at present carried adequately in the Caledonian MacBrayne vessels.

Therefore, I have put down this Question to allow the Government the opportunity to explain how they envisage these problems being overcome. In recent weeks a possible compromise solution has been discussed and seems to be gaining in support; that is, that the subsidy should be continued to Caledonian MacBrayne, but for passenger operation only, and that the two vehicle ferry services should both continue and compete without a subsidy. I should like to ask whether the Government have considered that matter and what their view is about it. I shall certainly listen with interest to the Government's reply to the serious questions which I have posed to them tonight.

9.18 p.m.

Lord Underhill

My Lords, I had hoped that my noble friend Lord Ross of Marnock would have been able to find it possible to take part in this debate on the Question tabled by the noble Lord, Lord Banks, but unfortunately he cannot do so. Because we want to indicate the importance of the Question that has been raised and which has been put forward so admirably by the noble Lord, Lord Banks, I was asked whether I would deal with this matter as it comes under transport policies. It may be thought that I know nothing at all about the subject. I certainly have not the intimate knowledge of the noble Lord, Lord Banks, but I have been a passenger on many occasions from Gourock to Dunoon for conference purposes, and I also had the unfortunate experience on one occasion—despite 99 per cent. of the scheduled services being carried out in 1980—when, because of the severe weather, no ferries were running and I accepted a lift to make the long car journey right the way round to Glasgow.

I have also made the journey by car on Western Ferries. Your Lordships might be interested to know how I first came to do that. I was coming from the Highlands in the North. It was the first ferry that I encountered and I wanted to get down to the South. I did not travel on Western Ferries because it was the better service. It just happened to be the first one that I encountered as I drove down from the North towards Dunoon, and on I went. It may be that many other tourists found themselves in the same position. Any tourist who wants to get to the mainland and to go down by the coast will go from Hunter's Quay because it saves him going North to Gourock when he does not want to go that way at all. Therefore, there are some good points in the service.

There is no doubt that in all its services—whether it be by road or the ferry services—the Scottish Transport Group has suffered in the last couple of years because of the recession, a decline in traffic, a decline in tourism, and also because of unemployment. It is understood that the original proposal to cut out the CalMac service would have meant 60 jobs being lost. I know that one does not keep a service going just for the purpose of maintaining jobs, or not only for that purpose; but even if we took just a £4,000 loss in Government revenue—it would be much more than that if one took the national average, due to taxation and all the other things involved that national revenue would secure—and offset that by benefits to be paid, that would be nearly a quarter of a million pounds a year, so that would go a long way towards meeting the subsidy.

I shall not ask all the questions that I intended to ask because the noble Lord, Lord Banks, has put these points so admirably. I should like to know why the Government first put forward their proposal in the light of the wholesale opposition that this has met from all the interests, not only in Dunoon but those on the other side as well. Not only the Member of Parliament for Argyll, but the Members of Parliament involved on the Strathclyde side have also made strong complaints. Why did the Government put forward this proposal? One is given the impression that they have not really thought out the matter. When one looks at the Questions and supplementary questions which were raised on this issue in the other place only recently, one gets the impression that the Government have not thought out the proposal and that because of the opposition, as the noble Lord has said, they have jumped at a possible alternative, which has also led to considerable opposition.

I know that one does not necessarily always accept what consumer councils and consultative committees say, but in the light of a public inquiry that was held one finds it very difficult to understand why the Government do not accept the recommendation of that public inquiry. It seems that one goes through the machinery to endeavour to ascertain the facts in a case such as this and, despite the strong decision that was made, the Government put it on one side.

I hope that the Government will also take note of the strong point made by the noble Lord, Lord Banks, on the comparison of the vessels used by CalMac and those used by Western Ferries, and what would be the financial position of CalMac if the service that they are running was discontinued and they have to dispose of those two excellent vessels—because they could not run those on many of their other services.

The pier facilities run by CalMac at Dunoon and Gourock are excellent compared to the other services. I think that one would generally say that the facilities that Western Ferries can offer are inadequate compared with those of CalMac. The figures that were given by the noble Lord, Lord Banks, are also very telling and one notes in particular, apart from the foot passengers, the high proportion of commercial vehicles that still travel by CalMac. Why? Because their size is such that many of them would find it impossible to have a convenient journey by Western Ferries. Therefore, that matter must be considered. On the surface it seems ridiculous that a service which can operate with good pier facilities and excellent vessels should be discarded by the Government in their first decision; and I do not think that the alternative proposal bears water.

One does not want to bring a political issue into this, but it seems that the Government jump very quickly at reducing the possibility of a publicly-owned service in order to assist a private undertaking, because CalMac is a publicly-owned service. While one realises that funds have to be watched very carefully it seems that in this case the Government made a hasty decision. They retracted a little in the light of wholesale opposition, which they should have expected, and now the alternatives have been put forward, but we hope that it will be possible for the Government to say that the CalMac service shall continue in some form, and the best possible form in which it can. Therefore, we have complete support for the Question raised by the noble Lord, Lord Banks, and I hope that the Government will give a satisfactory answer.

9.26 p.m.

Lord Lyell

My Lords, I am sure that your Lordships' House will be particularly grateful for the interesting Question that has been raised by the noble Lord, Lord Banks, this evening on the question of ferry services between the mainland, as I would call it, and the Cowal Peninsula. I am sure we were all interested in the forceful speech of the noble Lord, Lord Underhill. The national football team was playing away in Portugal yesterday, and we all know that the noble Lord, Lord Ross, is an ardent supporter, but I do not think that would have kept the noble Lord, Lord Ross, from his duty this evening.

Of course, all of us know and understand the anxieties and strong feelings which the Question raised this evening by the noble Lord, Lord Banks, have raised among both the employees and the clients and customers of Caledonian MacBrayne and also among the residents of Cowal, all of whom are so dependent on the Gourock-Dunoon ferry services, and who have been so well served both by Caledonian MacBrayne and, I believe, by Western Ferries over recent years. I should hope that I can reassure your Lordships this evening on two special points. First, my right honourable friend the Secretary of State made his original proposal to withdraw subsidy from the Caledonian MacBrayne service for perfectly reasonable and sound reasons of cost, and above all of local preference for the Western Ferries service. His decision was not, as might have been suggested, one of political dogma. Certainly it was taken for, we believe, sound reasons.

Secondly, there is every intention that the matter will finally be resolved in a way which will still leave Dunoon with a perfectly satisfactory ferry service providing adequately for the needs of all those who use it, both car and commercial vehicle drivers and of course passengers travelling by foot.

I would hope to be able to put the particular issue of the Gourock-Dunoon ferry services in context if I said something briefly about the policy of the Government generally about all ferry services in Scotland. Of course, the Firth of Clyde is an especially important part of those services. The Government are committed to the survival and prosperity of all those communities—mainly island communities but including Dunoon and the inhabitants of the Cowal—who are dependent on sea transport services.

Since taking office, this Government have increased the total assistance to Scottish shipping services from £4.3 million in 1979–80 to around £9.5 million in 1981–82, the current financial year. This has the great effect of restricting the increase in charges which would otherwise have been necessary on Caledonian MacBrayne services and the services of the Orkney Island Shipping Company. It has also enabled the introduction of substantial rebates on charges on the main P & O services to Orkney and Shetland, and also on almost all the bulk cargoes to the Scottish islands. These arrangements have been widely welcomed by local industry and by commercial interests; and the increase in financial assistance at a time of general economic difficulties has been substantial.

I think that both the noble Lord, Lord Banks, and the noble Lord, Lord Underhill, would admit and agree that the people of Dunoon have seen dramatic improvements in their ferry services in recent years. Many of the inhabitants of Dunoon will remember that until as recently as 1974 they depended on the Caledonian MacBrayne service operating with the traditional side-loading vessels. Although I never took a car across, I understand that until that time cars had to be winched on and off the ship. By modern standards it must have been a somewhat slow service. But in 1974 Caledonian MacBrayne introduced their two new ships, the "Juno" and the "Jupiter". These were purpose-built for this route, being capable of end-loading at Gourock and side-loading—I am afraid by the use of a small ramp—at Dunoon. Thus, loading and unloading was quick and efficient, turn-round time was considerably improved and the boats could take larger commercial vehicles.

As we heard from the noble Lord, Lord Banks, it was at that time that Western Ferries opened their competing service. Both noble Lords pointed out that this operates with much more modest vessels, which are designed simply for taking cars and other vehicles. As the noble Lord, Lord Banks, said, this service operates over the much shorter sea crossing between McInroy's Point on the Gourock side and Hunter's Quay on the Dunoon side. I would stress that all the boats which sail with Western Ferries have to be surveyed by the Department of Trade annually. We admit that one was built in 1938, but the other two were built in 1960 and 1962, and all three are more than adequate for their purpose. Clearly, from the figures which have emerged, local people think that this service of Western Ferries is more than adequate for their needs.

Since 1974, with both Western Ferries and Caldeonian MacBrayne, the people of Cowal were offered an embarrassment of riches and of course it is hardly surprising that they should resist any attempt, however mild, to suggest that they might make do with less. There is however one problem which the Government must face with regard to the service of Caledonian MacBrayne between Gourock and Dunoon as it now operates. The problem is that, while the service generates a substantial amount of money, it also generates a substantial loss, and that has to be reimbursed by the taxpayer, at a time of considerable economic stringency. During the last financial year the service lost over £800,000 and, as the noble Lord, Lord Banks, suggested, the loss is expected to be about £500,000 this year; the noble Lord mentioned the figure of £540,000 but I think he was pinning a considerable degree of accuracy on the subsidy for this year. I am sure noble Lords will believe that that might be a reasonable price to pay for the quality of service that Caledonian MacBrayne attempt to provide. However, I hope your Lordships will forgive me if I urge a little caution at this point.

I wish of course to pay considerable tribute to Caledonian MacBrayne. They are the butt of frequent criticisms around the west coast of Scotland, but for many years they have provided the essential lifeline of our west coast island communities, whom they have served with great dedication, especially in the conditions which were expressed so graphically by the noble Lord, Lord Underhill. At some stage, apparently not even Caledonian MacBrayne could ferry him across to keep his rendezvous, and he had to come all the way back by road.

I hope the proposals of the Government over the Gourock-Dunoon service will not be taken as an attack or indeed overt criticism of Caledonian MacBrayne, for whom we have great respect. The caution I would urge on your Lordships, and the difficulty we have, is that, notwithstanding the substantial subsidies which the Caledonian MacBrayne company has received on this route, it has, since 1973, steadily lost business to Western Ferries, to the extent that, so far as we can gather, in 1981 over 70 per cent. of private car drivers and over 40 per cent. of commercial vehicle drivers have chosen, where possible, to use the Western Ferries service.

We believe that those figures offer a very clear mirror of local preferences; indeed far more so than do the views expressed at the recent hearing of the Scottish Transport Users' Consultative Committee. The figures of 70 per cent. of private car drivers and 40 per cent. of commercial vehicle drivers wishing to use Western Ferries persuaded the Government that, against the background of general economic constraint and the need to make the best use of those resources which were available for ferry services, the continued high level of subsidy to Caledonian MacBrayne in respect of this route was not justified.

It was for those reasons that my right honourable friend the Secretary of State proposed to withdraw his subsidy from the Caledonian MacBrayne service, and to provide a once-and-for-all capital subsidy to Western Ferries to assist them in acquiring a further vessel. Western Ferries would continue to operate their vehicle ferries between McInroy's Point and Hunter's Quay, but, using their catamaran, the "Highland Seabird", Western Ferries would provide an hourly service between Gourock and Dunoon Piers, for the benefit of foot passengers. An operating subsidy would be available for the first year of this particular service.

The case that was cogently presented by the noble Lord, Lord Banks, I believe reflected to a large extent the views that were also expressed by the Scottish Transport Users' Consultative Committee. Once my right honourable friend had decided to withdraw the subsidy, Caledonian MacBrayne had to announce the withdrawal of their service. The proposed withdrawal was considered by the Transport Users' Consultative Committee at the public hearing that was held in Dunoon. The noble Lord, Lord Banks, mentioned this. The committee's conclusions reflected the very substantial local objections to the withdrawal. It is of paramount importance to note in your Lordships' House that it was not within the committee's remit to consider the financial aspects of this particular matter. The main criticism of the consultative committee concerned what it regarded as the inadequacy of the proposed passenger service which was to use the catamaran, the "Highland Seabird", between Gourock and Dunoon Piers.

My right honourable friend the Secretary of State has accepted those criticisms, and has concluded that this part of the proposal should not proceed. Therefore he has now asked Caledonian MacBrayne to consider, and indeed to advise him on, alternative ways of providing for foot passengers.

At the meeting in Dunoon mentioned by the noble Lord, Lord Banks, fears were expressed about the effects of the closure of the Gourock-Dunoon Ferry upon tourism in Dunoon. The Government hope that Dunoon will not underestimate its attraction as a tourist destination. Indeed, we hope that the inhabitants of Dunoon will not underestimate the degree of planning that people put into their holidays. But this is a point that needs further consideration, and the Government will hear fully in mind this aspect of tourism in Dunoon.

Fears have been expressed since the public meeting, and indeed were expressed earlier this month to my honourable friend the Minister, who, I understand, went to Dunoon or Gourock on, I think, Guy Fawkes' Day, 5th November. I believe that there was a particular problem about the safe handling and the transmission and onward forwarding of valuable cargoes, such as pharmaceutical goods, which were sent to Dunoon. The Government are very conscious of this issue, and they hope that it can be dealt with satisfactorily in whatever solution is reached for dealing with foot passengers.

We have heard of various other solutions which have been suggested and, indeed, requested by both the noble Lord, Lord Banks, and the noble Lord, Lord Underhill, this evening. Other solutions have mentioned the possibility that Caledonian MacBrayne could be allowed to continue their present service between Gourock and Dunoon piers; but the Government believe that they should restrict the subsidy so that it would be in respect of foot passengers only. This suggestion was made by several local interests to my honourable friend the Minister for Home Affairs and the Environment at the Scottish Office when he visited Dunoon on 5th November, and the Government will give this particular suggestion the most careful consideration. It will be very carefully considered, so that an adequate service for pedestrian passengers between Gourock and Dunoon may be continued.

The present position therefore is that the Government have accepted the Scottish Transport Users' Consultative Committee's criticisms of the proposed "Highland Seabird" services for foot passengers, and are very urgently considering how best the passengers can he provided for in future. But, in the meantime and until we can reach definite conclusions, the present services of Caledonian MacBrayne and Western Ferries will continue to operate. The Government hope that all those concerned will be prepared to reserve their judgment on this difficult matter until a final solution emerges. The Government are committed to ensuring that there will be a fully satisfactory ferry service on the Gourock-Dunoon route, but they are confident that this can be provided at a much lower cost to the taxpayer than the present arrangements.