As For Argyll reported recently, Labour Highlands and Islands MSP, David Stewart. offered his credibility as hostage in submitting a fleet of parliamentary questions to the Scottish Government which appeared to have bene scripted by the Dunoon-Gourock Ferry Action Group.
The Transport Minister, the capable and unshowy Keith Brown, delivered an object lesson in how to show up an underinformed questioner while avoiding the politics of clogging.
Underline what the questioner should have known – and didn’t
On two particularly unnecessary questions, Mr Brown simply mentioned the facts that made Mr Stewart look particularly careless in his failure to do his homework – but drew no attention to them. It was enough to state them and let people drawn their own conclusions.
The first of these was the first Stewart question – asking if the Scottish Government had plans ‘to introduce a ferry regulator; whether the regulator would have the power to control ticket prices, and what impact a passenger-only service on Dunoon-Gourock route would have on these plans’. We pointed out that the Scottish Government had already made it plain in its final published version of the Scottish Ferries Review, that there would be no regulator. The state funds almost all of the ferry service operations in the country and owns most of the vessels delivering those services – so no situation requiring regulation exists.
Mr Brown’s reply was masterly. He simply said: ‘As noted in the Ferries Plan, published in December 2012, we have no plans to establish an independent ferry regulator.’ The emphasis above is ours – underlining how the Minister simply lays down the fact that the policy document an MSP for the Highlands and Islands [where ferry services are a vital part of life] could certainly be expected to know – was published 18 months ago, in December 2012.
The second answer using this same technique came in response to Mr Stewart’s second question, asking the Scottish Government to tell him what Western Ferries gross profit margin is. Mr Brown told him gently that Western Ferries’ annual accounts are publicly available from Companies House – and then was kind enough to give Mr Stewart the relevant website address: www.companieshouse.gov.uk.
Restate the already obvious
Mr Stewart asked ‘what the annual public subsidy will be for vessels on the Gourock-Dunoon ferry route, and whether this will be offset by the enhanced berthing costs being paid to the local authorities responsible for the respective harbours?’
This question was a bit of a muddle of facts and intentions but Mr Brown did not embarrass the questioner, pointing out, again, the simple facts that ‘A subsidy will be provided for the provision of the contracted ferry service rather than for vessels. Vessel costs; and harbour costs [berthing dues and pier dues] will form part of the overall operating costs. Each bidder for the ferry service contract will need to make their own forecast of the costs and revenues and their subsequent grant requirement.’
It is the fact of ferry subsidy that it is directed at the service not the vessels. And of course harbour dues to be paid must be calculated by each bidder in establishing the anticipated relationship between operating costs and operating revenues – with the gap between these, almost always negative, to be filled by state subsidy.
Don’t hold back on clarifying facts that damage another body
To Mr Stewart’s asking how much it cost to develop the Dunoon harbour breakwater and linkspan; and whether it has been used for the transport of vehicles’, Mr Brown had no hesitation in giving the precise costs – £5.4 million; nor in being unequivocal that the Dunoon linkspan has ‘never been used for the transport of vehicles’.
This linkspan was a commercial risk taken by Argyll and Bute Council on no evidence other than the notion that some operator or other just might concoct a business case to run a vehicle and passenger service ferry between Dunoon and Gourock town centres, in competition with Western Ferries whose route is 50% shorter and who own their own linkspans?
While the Scottish Government had provided funding towards the project in response to a request from the council, this was done two years before the first SNP government of a devolved Scotland came to office as a minority administration in May 2007. The financial irresponsibility of Argyll and Bute council in so unfounded and failed a punt reflects not one jot on the current Scottish government.
Don’t forget the value of the long grass
Mr Stewart’s text attempted to trap the Scottish Government into appearing to endorse a position that could not be sustainable under EU competition law, in asking: ‘whether Transport Scotland will put out a tender for the contract for the new roll-on/roll-off vessels on the Gourock-Dunoon ferry route’; sliding in the assumption that any such vessels would of course be vehicle carrying ROROs.
Mr Brown avoided the trap and aimed for the rough in his smooth reply that: ‘The Scottish Government’s working assumption is that new build vessels [Ed: intended music to the ears of the DGFAG but neatly unspecific on the types of vessels] are likely [Ed: but not certain] to be required for the route. Decisions on whether these vessels will be procured by the operator of the next competitively tendered contract, or by the Scottish Government through Caledonian Maritime Assets Ltd, have yet to be taken [Ed: an accurate shot into the rough]. Either way, vessels will have to meet specifications set out to deliver the policy objective of ‘a safe, reliable, frequent, commuter ferry service [Ed: avoids commitment to the specific nature of such a commuter service'] … able to operate reliably throughout the year in the weather and sea conditions [Ed: these issues have been bigged-up by the DGFAG to the point that they cannot but welcome this assertion] experienced on the Firth of Clyde’. The outline specifications provided in the Gourock-Dunoon feasibility study report provide a useful starting point [Ed: a neat avoidance of the danger of offering a coronation to a clearly 'helpful' but weak report] for the development of detailed specifications for reliable vessels.
Skate swiftly over what is indigestible for both you and the questioner
David Stewart asked what the Scottish Government’s position is on whether vessels on the Gourock-Dunoon ferry route must carry vehicles in order to be considered economically viable.
We have emphasised the attempt by Mr Stewart’s scriptwriters here to distort the picture here. A legally state subsidised passenger service will be commercially viable for a winning bidder because they are effectively insured against loss by a contracts which allows for a recalibration of the subsidy should carryings and their revenue generation not come up to the expectations of their bid.
The pitfall in the picture, camouflaged as an improbable lure in the Stewart question, is that any vehicle carrying service operated at commercial risk in the same vessel as the subsidised passenger service simply canot make a profit in competition with the existing shorter and much more cost effective Western Ferries vehicle and passenger service between the outskirts of the two towns.
The notion that, in these circumstances, such a service could be a profit-maker has been torpedoed by the feasibility study itself.
In Mr Brown’s bland political response, designed not to disappoint or aggravate Dunoon, he said: ‘The Gourock-Dunoon vehicle ferry feasibility study published in July 2013 found that a vehicle carrying service could be commercially viable if it received the same level of passenger subsidy as that estimated to be required for the provision of a passenger-only service using optimal vessels to deliver a high level of reliability’.
We have emphasised the core caveat of the feasibility study above, in an answer which simply ignored the big ‘IF’ which the feasibility study report did admit.
The consultants, is using the word ‘could’ be feasible, noted that this already hypothetical feasibility was only achievable IF Western Ferries made absolutely NO competitive response to the arrival of such a competing and part-subsidised service.
The report’s authors say that in coming to the conclusion that a town centres commercial vehicle and subsidised passenger service ‘could’ be profitable, they had not factored in ANY impact of ANY possible competitive response from Western Ferries – while at the same time revealing that western had told them it would take whatever action was necessary to protect its position.
Western had then invested in no fewer than two new ferries for its four-boat shuttle service. What efficiently run private sector business is ever going to sit on its hands and watch such an investment come under challenge from a partially state-subsidised competing service – and not make its own competitive strike?
The Dunoon-Gourock Ferry Action Group must realise this reality but, to get what they nevertheless want [but do not remotely need], are trying to push the Scottish Government into a suicidal misuse of public money under threat of withdrawal of electoral support.
The Scottish Government, which certainly does understand the reality, finds it politically inconvenient to be straight with Dunoon until after September this year.
And so the charade goes on – having now drawn the hapless David Stewart into the morass.
