§ Mr. Corrieasked the Secretary of State for Scotland what assistance he will make to shipping services to the Scottish islands in 1983–84.
§ Mr. YoungerI propose to offer a revenue grant to Caledonian MacBrayne Ltd. of £6.65 million. Taking account of opportunities for economies, this means that in general the company should, for a further year, not require to increase its fares. There are separate considerations in the case of its Gourock-Dunoon service, to which I return.
I propose to offer a revenue grant of £0.90 million to the Orkney Islands Shipping Company.
I will increase from £2.4 million to £3.3 million the assistance I give to traffic on the roll-on/roll-off service to Orkney and Shetland operated from Aberdeen and Scrabster by P and O Ferries. This will allow the introduction of 15 per cent. discounts on the fares paid by visitors to the islands, in addition to those discounts already provided for island residents and for freight. Discussions have taken place with Orkney and Shetland Islands council and with the shipping company on this proposal.
I will also make available assistance of up to £1.45 million to the bulk shipping companies in the north isles and on the west coast to allow them to rebate their tariffs to users on the same basis as in 1982–83. In the case of P and O and the bulk shipping companies, actual grant disbursed will depend on the level of demand for their services and on their commercial tariffs during the year.
In the case of the Gourock-Dunoon service operated by Caledonian MacBrayne I have to take account of the effect of subsidy on the competing service provided by Western Ferries Ltd. I have told Caledonian MacBrayne that its subsidy for this route will be restricted, and that fares and tariffs which are low in relation to those on most comparable services will consequently have to increase. The Monopolies and Mergers Commission has examined the financing of this service in a report which will be published shortly.
In total I expect Government revenue support in 1983–84 to amount to £12.3 million, an increase of 16 per cent. over the corresponding sum which I estimate will be disbursed this year. This increase represents further progress in the fulfilment of our commitment to increase in real terms Government assistance to sea transport services. I do not propose changes in the system of distribution of these subsidies, pending consideration of the Monopolies and Mergers Commission on Caledonian MacBrayne.