Tariff Rebate Subsidy (Northern Isles)

Part of Prayers – in the House of Commons at 9:34 am on 12th March 1997.

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Photo of Mr William McKelvey Mr William McKelvey , Kilmarnock and Loudoun 9:34 am, 12th March 1997

I was merely saying that the Government had suggested that there was an unfair advantage; I was not saying that. My hon. Friend is right, because the Select Committee strongly felt—I put it no higher—that there was a very cosy relationship between the Scottish Office and P and O. In effect, P and O has been subsidised at a time of loss, and I shall return to that matter in more detail later in my speech.

The competitive tendering process has more to do with dogma and a bias against publicly owned, yet—as in this case—successful operators than with any threat to competition. I am concerned also that the Scottish Office is saying that, as passenger ferries carry freight and livestock, those services do not need to be separately defined as "lifeline". Freight-only services are likely to be provided in line with demand without subsidy; and it was pointed out to the Select Committee that, if new craft were to be introduced on that route—as they no doubt will be in the future—they might not have freight capacity and might be simply for passengers and cars. That would leave the islanders in a precarious position—again, the reverse of what the subsidy was intended to preserve.