My Lords, I am aware that passenger transport services to and from the mainland are regarded by residents of the Isles of Scilly as a lifeline. Ferry services, unlike most of those to the Scottish Islands, are able to operate commercially without subsidy and have done so for many years.
I am grateful to the Minister for that Answer. Perhaps he is not aware that Cornwall has the lowest GDP in the UK and has been awarded continuing convergence funding, and that it also has the fourth lowest average wage in the UK as well as very expensive housing.
His Answer is correct but the ferry only runs for seven months every year and the return fare is £90. This compares with Islay in Scotland where there are several ferries a day all the year round and the return fare is £12.50. Will he not take forward the report from the Council of the Isles of Scilly proposing an affordable lifeline service every day of the year and as a start allow the Council of the Isles of Scilly to use some of the ERDF money that is still outstanding for some key extensions before the deadline runs out?
My Lords, I am aware of the economic difficulties in Cornwall. As regards the comparison with the Scottish situation, it is difficult to make valid direct comparisons when the circumstances vary and the service is rather more complicated.
It is important to remember that transport links to the Scilly Isles are provided on a commercial basis, whether by sea or by air. Cornwall Council rules itself out of leading the smaller-scale infrastructure schemes so development work has been undertaken by the Council of the Isles of Scilly and Penzance town council. These involve improving provision for freight handling, extending the quay at St Mary's and dredging at Penzance to accommodate a deeper-hulled vessel. The noble Lord is quite right that the ERDF funds are time-limited.
Will the noble Earl consider the fact that the present ship engaged in the seven months of the year service will not be replaced on a commercial basis because the helicopter and the ship are running on borrowed time? Will he give serious consideration to extending the PSO arrangements in Scotland to the Scilly Isles? They are part of our economy but they will be more or less cut off when the existing ships and infrastructure fail.
My Lords, we are not currently minded to consider a PSO because there is no need to do so as the ferry service is currently run on a commercial basis. The steamship company has recently announced that it will invest in the ship to maintain it in operational use until at least 2018 and we are not aware of any major structural defects that will necessarily prevent seaworthiness beyond that time.
My Lords, does the Minister accept that the statement of commercial viability is a thin veneer that masks the real poverty levels in the Scilly Isles? As my noble friend said, Cornwall has one of the lowest GDPs in the country. The fact that the ferry runs for seven months of the year is due to the tourist trade. However, behind that is the local community, which lives in poverty and depends on the mainland for its economy and health services. Will the Minister please review the statement that he has just made to the House?
My Lords, I cannot agree to review the statement that I made to the House because it is considered government policy. I accept that there are difficulties in the Isles of Scilly, particularly the dependence on the tourist trade.
Is the Minister aware of the great concern in both the Isles of Scilly and Cornwall over the long-term viability of the helicopter service that presently serves the islands in addition to the ferry? I understand that it is about to move from Penzance to Newquay but there is concern over whether it will survive in the long term. Does the Minister's briefing cover that matter?
My Lords, my briefing covers that. There are two air services. There is a fixed-wing aircraft, which goes from St Mary's to a few destinations on the mainland, and there is the helicopter service, which is by definition much more flexible in where it can land. There is an issue over the condition of the runway at St Mary's; it will not last for ever.
My Lords, does the Minister agree that the unrelenting application of free market principles to our merchant marine, which has resulted in it having its smallest ever numbers of officers and men, is very damaging, bearing in mind that it is the fourth service and absolutely necessary strategically for global operations? Are the Government doing anything whatever to support the merchant marine?
My Lords, the noble Lord, Lord Faulkner of Worcester, wondered how far my brief would stretch. Unfortunately, it does not stretch as far as the condition of the Merchant Navy.
My Lords, surely the Minister has already recognised that the viability of the service depends on the tourist trade and that the people who live on the Scilly Isles-on very low incomes-are paying the tourist price for the vessels, namely £90. As my noble friend indicated, that is more than four times the amount that you would expect to pay to make a similar journey in Scotland. Is it not time that the Government looked at this very seriously? There are clear potential threats to the existing services, which in any case do not meet the islanders' need.
My Lords, I am confident that there will be a service in the short term. The noble Lord asked about the cost of a ticket for the ferry. I understand that a day return is £35 and a period return costs £85 to £95. However a Scilly Isles resident's return is £20.50, so they do get a discount.