For months the SNP have been dilly-dallying about releasing the report they commissioned about the impact of axing commercial RET. Now it’s out and it is a shocker.
JUST LOOK LOOK AT WHAT THIS TRANSPORT SCOTLAND REPORT, COMMISSIONED BY THE SNP GOVERNMENT, SAYS:
“8:3:10 The direct impacts of this long-term loss of competitiveness due to the removal of RET, if it results in higher transport charges, are clear. The most notable immediate economic impacts will be:
* a reduction in profitability; followed by; and
* reduced salaries and employment and therefore local disposable income.
8.3.11 In the longer term this will feed through to:
* business closures or off-island relocation, with consequent losses in employment; and
* reduction in headcount, as firms attempt to adapt to new market realities.
8.3.12 Given the importance of transport charges for the competitiveness of key industries in the islands, such as primary and retail sectors, the impact of higher charges could have an important bearing on the short, medium and long-term performance of the economy.”
It clearly confirms that the number of commercials using the services are down and – because they are paying a lot more since April last year – the revenue is up.
Hmm. Not quite the “support” for our communities the SNP actually promised. And they are putting fares up AGAIN.
It finds: “The evidence suggests therefore that transport charges remained constant during a period when haulage costs rose by 16%. Indeed, with general inflation also rising in this period by around 12%, businesses actually saw a real terms reduction in transport
charges between 2008 and 2012.” So the SNP government-commissioned report also finds that hauliers did not pocket the savings from RET – as certain local people continuously and erroneously claimed.
Gail Robertson, co-ordinator of the Outer Hebrides Commerce Group said: ”We are pleased that after months of delay the Transport Minister has finally published this study. It is an instructive document that clearly shows the devastating, negative impact the removal of cheaper fares are having on island families and businesses. We can appreciate why Mr Keith Brown MSP, Minister was reluctant to publish this document; it nails and dispels many assertions that were untrue.
“We do hope that all elected politicians take time to read it. For some, this report should give cause to hang their heads in shame, for others, we hope it encourages them to keep campaigning until the Scottish Government puts an equitable ferry fares system in place. We will be issuing a further, detailed response next week”.
Meanwhile, Comhairle nan Eilean Siar has welcomed the publication of an independent study into the impact of the removal of RET for Commercial Vehicles to Island areas. The purpose of the study, by MVA Consultancy and commissioned by the Scottish Government, was to consider the impact of the removal of RET fares in April 2012 on the economies of the Western Isles, Coll and Tiree. The study confirms the Comhairle’s view that the removal of RET for commercial vehicles has had a detrimental impact on the economy of the Outer Hebrides.The study also confirms that hauliers did pass on the savings from RET to consumers and that since the removal of RET, prices have increased.
Angus Campbell, Leader of Comhairle nan Eilean Siar, said: “The findings of this independent study are absolutely unequivocable. The Scottish Government now has the evidence that RET was working as planned and that there were real, substantial benefits to the fragile economies of Island areas. The removal of RET for Commercial vehicles has been damaging for the economies of the Islands, particularly smaller Islands such as Barra, Benbecula and the Uists, and has been detrimental for consumers who have faced increased prices as a result. I call on the Scottish Government, as a matter of urgency, to take the sensible course of action and reinstate RET in full, including for commercial vehicles.”
Alasdair Allan MSP, said: “I welcome the fact that the Government has carried out this independent research into what has been a contentious debate. The report identifies that the Scottish Government is spending a third of a billion pounds on supporting Scotland’s ferry services over the financial years 2012/13 and 2013/14. This is at a time when Scotland’s budget is, of course, being cut by the UK Government.“This financial support continues to include the provision of Road Equivalent Tariff (RET) fares for all cars, vans and foot passengers in the Western Isles, and increasingly on other routes too. A number of companies in the islands made clear their disappointment that the initial additional provision of RET for larger commercial vehicles in the islands has been discontinued. This has led to a series of talks with Government and concessions being sought and obtained.
“I certainly don’t want to understate the disappointment felt by a number of these companies, although it should be said that this year’s lorry fares are still less than the last pre-RET fares. In talks with the Government, we managed to obtain a number of important concessions, including the extension of the five metre rule on small commercial vehicles to six metres, an undertaking to introduce RET for cars and vans on the Sound of Harris and Sound of Barra routes by 2016, and concessions for the exporters of live shellfish. A scheme of transitional relief means that this year’s increases for lorries were capped at 10%.
“For me, the real unresolved issue, which the report highlights, is the need to find a system of charging ferry fares for large commercial vehicles that is equitable across both small and large companies, and which is consistent across the whole ferries network. I hope the Government will now consider the consistent message of a number of small companies that we should not go back to a system of bulk discount which penalises smaller operators. I have written to the Transport Minister to ask how he intends to ensure this outcome.”
Angus Macneil MP added: “I campaigned and argued against the rise when it came initially. It is a shame that when the cut came to RET initially, that those who were benefiting from it didn’t clearly signal that they were cutting haulage prices as a result, which has enabled an unfortunate ambiguity to arise.
“I think it is now important that firstly, no further increases go on lorries and secondly, that when funds become available, in other words, when the Westminster government stops cutting Scotland’s budget, that the Scottish Government lowers lorry fares.
“We must remember that for the vast majority of people, RET exists for cars and passengers and it will be extended to the Sounds of Harris and Barra during the term of this Scottish Parliament. Also, lorry fares are cheaper than they would have been had the RET trial not gone ahead and all hauliers are on a level playing field with discounts having been standardised.“
The comhairle listed the report findings as follows:
Findings
5. The introduction of RET for CVs made an important contribution to the initial equity objective of supporting, sustaining and developing the economies of the Western Isles, Coll and Tiree.
6. The introduction of RET had positive impacts for local businesses, including improved competitiveness, improved business performance and supporting local economic activity.
7. The removal of RET for CVs in April 2012 has had a significant negative impact on different types of hauliers. It has:
- had a negative effect on the volumes and margins of small hauliers, who play an important role in offering choice in the market;
- squeezed the margin of trader-hauliers who are key to the economies of small islands like Coll, Tiree and Barra;
- necessitated an increase in prices for network hauliers who require high volumes to ensure the sustainability of their businesses. In turn this will expose these firms to volume risk; and
- reduced the volume and economies of scale of full-service hauliers, thus increasing the long-run market rate for haulage.
8. On each route other than Oban – Castlebay / Lochboisdale, in the six months following the removal of RET carryings declined, compared to the same six-month period in the previous year. The decline ranged from 17.5% on the Oban – Coll / Tiree and Ullapool – Stornoway routes to 7.2% on the Uig – Tarbert / Lochmaddy route.
9. Over the same period revenue increased by over £380,000.
10. In most cases, hauliers used RET to offset rate rises being driven by other operating costs, particularly the significant increase in fuel witnessed in the 12 months to September 2008.
11. The evidence demonstrates that hauliers maintained transport charges at their 2008 level throughout the RET pilot despite total costs increasing at above-inflation rates. As a result of that approach transport charges to businesses remained constant over the RET pilot period but, with general inflation also rising, transport charges to businesses declined in real terms.
12. The sudden move away from RET for CVs is seen by the island communities and a number of their representatives as highly detrimental (even with the transitional arrangements) as a number of haulage firms and island customers who are tied into medium to long-term contracts and will have to absorb the cost of these rises. This issue is compounded by the short-term cash flow risks of hauliers, who are in many cases bearing the financial exposure of their whole supply chain.
13. In many cases, the removal of RET for CVs in April 2012 had been passed on in terms of higher transport charges, with 88% of businesses who participated in the survey noting that the increase in CV fares had been passed on to their business. Also, over 68% of businesses in the survey expect this increase to be in the region of £1,000 to £5,000 per annum. These increases in ferry fares have, in a number of cases, fed through to a decline in business performance across a number of sectors.
14. The removal of RET for CVs has had a negative impact on businesses that are moving or purchasing a low volume of goods; moving low value goods; or where the company is a price taker in the market. Many firms in the islands are of this type, particularly in the primary sector, with some areas’ businesses in the primary sector accounting for over 35% of total businesses. The removal of RET for CVs will make these businesses less competitive in the longer-term as rates progress back to their non-RET level.
15. All areas of the Western Isles, Coll and Tiree will be affected by the removal of RET fares for CVs. Given sectoral profile, recent socio-economic trends, and business location within the haulage market, some areas will, however, be more vulnerable than others and will experience different levels of impacts.
16. Areas with a large share of enterprises in the primary sector will likely be adversely affected most. The Western Isles, Coll and Tiree as a whole have a proportionately higher share of enterprises within the primary sector. This is the case, particularly in the Uists, Benbecula, Barra, Coll and Tiree where the figure is as high as 38%. It will leave these areas more vulnerable as they already face higher than average transport charges due to the lower number of hauliers in the area and less competition in the haulage market.
17. Many of the businesses in the Western Isles, Coll and Tiree are concerned that the lack of certainty and frequent policy changes on CV fares are having a detrimental impact on business confidence and long-term investment planning. Businesses stress the need for a clearly defined longer term fares strategy by the Scottish Government.
Click below for the full report:
Despicable, shameful, inexcusable – now we know why our SNP MSP Transport Minister was showing such reluctance in having this published. Another nail in the coffin. “Hebrides: Islands on the Edge”, now being figuratively tipped over the edge. OHTG have been fully vindicated, along with the support from the Comhairle. Time for a Scot Govt Re-think, and of course an apology, and maybe now even a rebate on ferry fares.
The SNP are unravelling by the minute, it is highly unlikely that any of the Three Stooges, Macneil, Manford and Allan, will hang their head in shame, as they should, far less make a public apology for their conduct to their electorate and the hauliers they traduced so comprehensively. A parcel of rogues who are damaging the fragile economy of the islands for their own narrow political ends. Shame on us for electing, and re-electing them.
Well, now we know for certain. Perhaps we should, before resorting to name calling, remind ourselves that it was the SNP who had introduced RET in the first place. So they got a good idea somewhat wrong, let’s see if they fix it…
@Akerbeltz: They got it wrong because SNP HQ don’t really believe in the policy, and offered it only as a sop to (successfully) try and get votes. Now it is being cut away bit by bit, and MacNeill and Allan aren’t doing anything about it.
The SNP u-turned on windfarms, RET, Lochboisdale-Mallaig and a host of other policies; but there’s plenty of cash for Salmond’s golfing junkets and trips to the USA.
Sorry Akerbeltz, you don’t play around with livelihoods and businesses in this sort of way. Our Transport Minister Keith Brown has been stubborn and dogmatic, to extremes, and must now consider his position. He has consistently refused to listen, and dogmatically proceeded with 60% increase in fares for CV’s (may have been 160% but for protest prior to Council elections last May). I expect to see his resignation on First Minister’s Desk Monday morning.
Mr Walker is bang on the money(. I must apologise to Mr Walker for not voting for him.) Any one seen Mr Madford and that other genius political strategist Mr Rae Mackenzie – the man who once proclaimed that he was Donald Stewarts ” political heir” Poor Domhnall must be birling. Anyway – well done to Woodie and Gail Robertson – you’ve served your community well – and exposed those who were denouncing you and your works as lies and politically motivated. You were motivated by one thing – the well being of our islands. We owe you.
Oh my goodness. The late night tweeting and Facebook MP has spoken. When he talks about his “campaign” would this be the same tweeter who accused the Gail Robertson of being politically motivated?
Please AB publish all you did in favour of your constituents. Moves afoot already in the Nat infested radio nan gael to ensure that msp and MP are not challenged or asked difficult questions – but they will be given oodles of air time for the vacuous and irrelevant. dr Allan talks about “the government” as if It were something he didn’t recognise. He’s on the ministerial pay roll( and extra 30k) yet he talks about “sending letters” to fellow ministers…ps do they ever get responses to these confounded letters. default position: when jn difficulty : write a letter….
No doubt somewhere along the line the “English” Government will be blamed for this debacle and complete lack of care by the SNP Government. Any explanation Alex,John and crew for the direction / strategy/journey that you are taking these Islands on……..A Gaelic / Cultural theme park perhaps ?……….of course no answer !.
Is Dr Allan regenerating into Maggie Thatcher? I ask my ‘Dr Who’ type question because she – in her madder days – also used to talk about the Government as if it was something she was not a part of. Besides, when Eck, Biffo and co talk about Allan, they probably ask the question ‘Dr Who?’ a lot too.
As for MacNeil, the first sentence of his own press release in the Hebrides News is a sign of how utterly useless he is. This is the second time in two or so days that he has admitted how completely ineffective he is. First about the mobile phone system for the umpeenth year in a row. Now this! … And yet he still goes on, blaming those ‘benefitting from the RET for an unfortunate ambiguity’?
When will he learn to be a proper grown up and take responsibility?
Moving effortlessly from being criticised to being mocked – oops – their hardline and smarter than most supporters – are disgusted. That’s why the party has issued an instruction not to take part in on-line local debate. ( mr Harper/mr Duncan and assorted fellow lunatics told to disengage) Genuine people like Anna Frater, Christine Burr and our excellent Rector, Francis Murray are disgusted….. rachet Harper, robber duncan , et al, frothing and fit to be tied -
Where are the SNP bunch of idiots now?
I remember last year Alasdair Allan and Co going round house to house saying haughliers were not passing on the RET savings to the public…
Can the SNP please stand up now??????
The SNP are going to lose the referendum,,,,,
Where are the SNP idiots now – stupid question. They’re round at Rae Mackenzie’s being tutored (gordonstoun style) in how to be obebient disciples of the Great Guru – Domhnall fae Barraigh.
5.10.11 Haulage firms in Coll, Tiree and the Western Isles noted that, while they did not pass on the RET
benefits in terms of reduced rates, the fares scheme provided a cushion against other rising costs
and thus forestalled a rise in transport charges. Where RET was the only difference between the
two groups, one would expect transport charges haulage rates in the control group to rise in line
with industry cost pressures.
5.10.12 Our interviews found that this was not the case – rates amongst the control group haulage firms
have been largely static throughout the RET period. However, the interviewees noted that these
stable rates are a product of greater exposure to mainland competition and a series of local factors.
There was a view amongst these hauliers that they would have increased rates if they could have
done so within the context of their market.
Here is the bog standard view of an ordinary resident : RET was introduced to bring horrendously high freight and passenger costs down. Does nobody remember how we all raged at the time against the price of tickets to the mainland (unless you bought books of tickets, in which case RET brought very little benefit) and the added costs on all basics in our shops plus coal/animal feedstuffs etc due to high freight charges?
When RET came in, did the items brought in by hauliers/small freight carriers become cheaper to buy in the islands? Did they become cheaper immediately? Those are the key questions.
I don’t recall that they did. But we also have to bear in mind that retailers and middlemen are also part of this equation. Did they pass on benefits? Haven’t read the report so apologies if this point is covered in it.
Being told that RET was sooked up in absorbing rising cost of fuel is no comfort, particularly when this process was apparently spread out over a year. How long does it take to make a decision to lower prices, for goodness sake? Doesn’t usually take very long to raise prices.
So, sorry folks. Still not convinced on this one (and no political axe to grind).
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