Guy Stenhouse: Time for the Scottish Government to privatise ferries

Sometimes, belatedly, the Scottish Government inches in the right economic direction.

The UK Government announced some time ago it would promote a number of freeports throughout the UK. Freeports do not do much for the economy as a whole but they are an excellent way of regenerating specific areas.

Instead of grabbing as many freeports as possible for Scotland, the SNP Government tried to add bells and whistles to the programme and, pathetically, to change its name. The result is that freeports are being set up in England – the one on Teesside started operating in November last year and its promoters hope it will generate £3.2 billion of revenue over the next five years and create 18,000 jobs – and Scotland has none. Places like Inverclyde need initiatives like this and the Scottish Government should be ashamed it has dropped the ball.

Despite the foot-dragging by the Scottish Government, the Secretary of State for Scotland has tried valiantly to reserve two freeport opportunities for Scotland. Both should be grasped as quickly as possible. We are told Scottish Cabinet Secretary for Finance and the Economy Kate Forbes is now leading the discussions – this begs the question of what she was doing before but it sounds like progress. Get on with it.

The other tiny piece of good news is that the Scottish Government is looking at the structure for the delivery of ferry services.

The result of this revelation is immediate screaming in the media from unions, MSPs and others that this might be the first step on a slippery road to ferry services being provided by private operators. This of course – as everyone is supposed to agree – must not happen. But why?

What is it that private ferry operators do which is so bad? Do they deliberately cast off just before the connecting bus arrives? Do they wilfully suspend a service if the weather is not flat calm? Do they order the wrong sort of ferries from yards which cannot build them? Do they throw fare-dodgers overboard? Surprise, surprise, they do none of these things.

Fortunately, we have an excellent example of a small private company starting up a ferry service which took on the state-owned Caledonian MacBrayne head on and beat it, not because it was bigger or better funded – it was not – but because it provided a better service.

In the 1970s, Western Ferries started a service to rival Caledonian MacBrayne on the Gourock to Dunoon crossing.

Today Western Ferries still plies the route, CalMac has gone. Customers voted with their feet. Western Ferries provided a fast, frequent, better-timed and reliable service with ships it specified and purchased itself because it kept its operating costs low and therefore made the profits which enabled it to invest.

Western Ferries is not the only example of private operators providing a great transport service to the remoter parts of Scotland. Think of Loganair, a private company providing lifeline air services to island communities. The Scottish Government provides a subsidy where necessary, the system works fine.

Caledonian MacBrayne and CMAL, which owns the ships, have proved again and again they need to be restructured. Their failures are not those of the men and women on the ships themselves but of management and, above all, the Scottish Government as ultimate controller. The wrong ships are ordered – from the wrong yards and not enough of them, the infrastructure is expensively over-engineered, the service is poor and unreliable, the terms and conditions of the employees are from the 1970s and need reformed.

The private sector can fix this. The routes should be individually tendered – involving the relevant island in drawing up the tender specification as well as in overseeing the performance of the eventual operator. For its part, the Scottish Government must not cave in again to the unions regarding the ability for the operator to cut costs and it must also resist imposing nice-to-have social agendas onto the tender process. Private operators could then step forward and provide a better service to our island communities at less cost.

It is time for the Scottish Government to show it is a government and not a jumped-up council – do something which is right and brave. Privatise the ferries.

Guy Stenhouse is a Scottish financial sector veteran who wrote formerly as Pinstripe

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