Rosyth-Zeebrugge Ferry Service

– in the House of Lords at 2:45 pm on 28th January 2002.

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Photo of Lord Burnham Lord Burnham Conservative 2:45 pm, 28th January 2002

asked Her Majesty's Government:

Why they have made a grant of £12 million to a Greek-flagged ferry company operating between Scotland and Belgium.

Photo of Lord Filkin Lord Filkin Government Whip

My Lords, in November 2001 the Secretary of State announced his decision to award grant towards the capital cost of setting up a new ferry service between Rosyth and Zeebrugge. The scheme has since been refined. The Government will now pay £10.9 million to Forth Ports plc to assist with the cost of a ro-ro terminal for the new service. No grant money will be paid to the Greek ferry operator, Superfast Ferries.

Photo of Lord Burnham Lord Burnham Conservative

My Lords, I thank the noble Lord for that reply. I am sure the fact that the ferry is operating out of the Chancellor of the Exchequer's constituency has nothing to do with the matter. Nevertheless, this is a payment to a ferry company which is in competition with P&O in particular but also with the Danish ferry company DFDS. P&O has just paid £200 million for two new North Sea ferries. Where is the fairness in acting in this way towards one company and in another way towards P&O?

Photo of Lord Filkin Lord Filkin Government Whip

My Lords, P&O was an unsuccessful bidder for the new scheme out of Rosyth. In practice, the Government's reasons for supporting the scheme were, first, the strength of opinion in Scotland, from both business and the public, that there was a need for a direct ferry route from Scotland to the Continent, and, secondly—and fundamentally from the Government's point of view—the indication that a remarkable amount of heavy lorry traffic would come off the roads as a consequence. The Scottish Executive has forecast that 430 heavy lorry trips will come off the roads, largely in England. The operator will have to reimburse the taxpayer fully if it does not achieve the required level of traffic.

Photo of Lord Elder Lord Elder Labour

My Lords, does my noble friend agree that the enormous reduction in the weight of traffic on the roads between Scotland and the north-east of England, as well as producing an environmental benefit, will also assist other road users who find the congestion in that area extremely worrying and difficult? Does he further agree that there is ample evidence of sufficient trade to keep the new route in the North Sea going, providing welcome competition while not seriously threatening any other operator?

Photo of Lord Filkin Lord Filkin Government Whip

Yes, indeed, my Lords. That is substantially how the Government see the matter. Clearly, no company welcomes additional competition. However, in recent years ferry traffic on the North Sea route has been increasing by 7 per cent per annum. So we are talking about a buoyant market.

The environmental benefits are costed by a standard and accepted method; namely, by examining any consequent reduction in traffic, accidents, pollution, congestion, and so on. The benefits forecast of £36 million compares with the cost of the scheme at just under £11 million. So there is a high pay-back ratio in the scheme.

Photo of Baroness Scott of Needham Market Baroness Scott of Needham Market Liberal Democrat

My Lords, were my noble friend Lord Mar and Kellie in his place, he would, I am sure, welcome the restoration of the historic links between Scotland and the rest of Europe. It is precisely the substantial reduction in lorry miles which makes the awarding of a freight grant such an important part of transport strategy in that part of the country. Do the Government have any plans to be similarly generous to, for example, the Argyll to Antrim route, which is currently a reserved matter?

Photo of Lord Filkin Lord Filkin Government Whip

My Lords, "Not to my knowledge" is the short answer, although, clearly, if a proposal comes forward from a ferry operator and a port, the Government will be happy to consider it.

Photo of Lord Strathclyde Lord Strathclyde Conservative

My Lords, I am slightly confused as to why the noble Lord is answering the Question. He said a moment ago that the project was being funded by the Scottish Executive. If it was a decision by central government, why is it not being paid for by central government? If it was a decision of the Scottish Executive and being paid for by the Scottish Executive, why do the Government feel that they are accountable to this House?

Photo of Lord Filkin Lord Filkin Government Whip

My Lords, under the Scotland Act 1998, any grant for a transport linkage between Scotland and somewhere outside Scotland is a reserved matter for the UK Government. The decision therefore has to be taken by the UK Government, but it is perfectly in order for the Scottish Executive to reimburse the UK Government for that expenditure if they wish to do so.

Photo of Lord Berkeley Lord Berkeley Labour

My Lords, is my noble friend aware that the company that is going to be running the ferry service between Rosyth and the Netherlands recently won the European ferry service of the year award and that it will therefore provide excellent competition for the other operators across the North Sea?

Photo of Lord Filkin Lord Filkin Government Whip

No, my Lords, I was not so aware, but I am pleased and relieved to hear it.

Photo of Baroness Hanham Baroness Hanham Conservative

My Lords, will the Minister be kind enough to tell me what similar subsidies or grants are being given to ferry companies operating out of other parts of the British Isles—out of England, Northern Ireland and Wales?

Photo of Lord Filkin Lord Filkin Government Whip

My Lords, to my knowledge, this is the only such scheme at this stage. Up to now, such grants have tended to be used more for inland waterways rather than for high seas ferry routes.