Category Archives: RET

Government’s own shocking report finally shows shameful axing of commercial RET is killing these islands

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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:

Impact_of_Removal_of_RET_from_CVs_-_Final_Report

Still no RET report date from Keith Brown

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SCOTTISH PARLIAMENT
WRITTEN ANSWER

25 April 2013

Index Heading: Transport Scotland

Rhoda Grant (Highlands and Islands) (Scottish Labour): To ask the Scottish Government when the research it commissioned on the impact of removing road equivalent tariff for commercial vehicles on routes between the mainland and the Western Isles, Coll and Tiree was completed and on what date it will publish the findings.

(S4W-14263)

Mr Keith Brown MSP :  Over the last few months we have engaged closely with the study consultants and with Steering Group members on the final report into the post-RET commercial vehicle fares impact study. We are finalising publication arrangements, and anticipate that the report will be published shortly.

SCOTTISH GOVERNMENT

Where is the RET report?

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OUTER HEBRIDES COMMERCE GROUP

15 April 2013

.

Keith Brown
Transport Minister
Transport Scotland

.

Dear Mr Brown 

Last July at a meeting in Stornoway you met with representatives from the Outer Hebrides Commerce Group and Comhairle nan Eilean Siar.  At that meeting we all agreed to co-operate and contribute to a study looking at the impact the withdrawal of “RET” is having on our communities.  The Report undertaken by MVA Consultancy was finalised some months ago, but as yet, we have no date or confirmation for publication.

The membership of the OHCG is deeply concerned with this unnecessary delay.  Comhairle nan Eilean Siar, Highlands and Islands Enterprise and the OHCG all assisted your Department and provided support and data so that a credible and properly informed Report could be published.  

On behalf of the membership of the OHCG and ordinary families of the Outer Hebrides we urge you to publish, without delay, the Report’s findings.   The report is a public document – paid for by British taxpayers – and as such should be in the public domain.

It is worth noting that since we last met our communities, businesses and families have had to contend with another massive 10% hike in ferry fares: this latest increase in your ferry-tax is over and above the 50% increase your Government imposed a year ago.

We trust you understand our growing frustration and would greatly appreciate your immediate intervention.

Yours sincerely

.

David Wood

Vice-Chairperson

Outer Hebrides Commerce Group

Rumours of rebellion in SNP over RET as Southern Isles secretary quits

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There is speculation tonight that another two SNP stalwarts may follow Andrew Walker, the secretary of the SNP in Uist and Barra, and quit over the party’s opposition to RET.

One of them told me privately weeks ago he was very angry about it and said he was “having trouble getting my head round the fact that the SNP is now against lowering the cost of taking supplies to the island”.

He said: “Just because Edinburgh says we should do something does not mean the local party should toe the line on an issue like this. We have no strong characters in our local party who will say enough is enough. That is a huge problem for us.”

Another SNP stalwart has told friends tonight that they will need time to think about staying in a party that wants to increase ferry fares without a murmur from its island branch.

RET is positive – government report

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After the announcement that the Scottish Government is to axe the Road Equivalent Tariff discount scheme for commercial vehicles on west coast ferry routes, a study has found the scheme has had a positive impact on the Western Isles, Coll and Tiree.

The document, a summary of a £60,000 consultants’ report due to be published next month, concludes that island hauliers did pass on savings by keeping charges stable rather than by slashing prices.

Transport Scotland has not denied the leaked summary is genuine but has not commented on specific claims the government has jumped the gun by announcing the axing of RET on commercial traffic before the report is published next month.

The pre-publication summary drawn up by transport planning specialists MVA Consultancy of Edinburgh has an Emerging Conclusions section which includes statements that:

  • Evidence suggests RET for CVs had a positive impact on economies of Western Isles, Coll and Tiree
  • RET was, in most cases, passed on by hauliers to local businesses – not necessarily in lower transport charges, but stable charges
  • Removal of RET has, or will, lead to higher transport charges
  • Higher transport charges have a negative impact on island economies – some greater than others – particularly hitting marginal sectors in vulnerable communities

The Scottish Government accepts that a 10% increase will apply to all large commercial vehicles, regardless of size, on routes to the Western Isles, Coll and Tiree.

It insisted that cuts imposed on its budgets by the UK Government mean that difficult decisions were necessary to ensure that existing ferry routes and services were maintained. It has said that RET for commercial vehicles was removed as there was limited evidence of benefits to the local communities and it was not considered cost-effective.

It has also maintained that the result of the RET pilot to the Western Isles, Coll and Tiree showed that the major impact of RET was on the tourism industry and although commercial vehicles made up around 40% of the cost of RET, there was no evidence of resulting benefits to the local communities.

Stornoway haulier David Wood, vice-chairman of Outer Hebrides Commerce Group which campaigns to reduce the burden of commercial ferry fares, said the higher prices were already in Caledonian MacBrayne’s booking system so the consultation was that in name only.

He added: “After speaking to about 80 businesses the consultants hired by Keith Brown have discovered that cheaper fares greatly aided the islands’ economies. Yet when the folly of their proposed fare increases was pointed out to them, certain SNP politicians – including local politicians in the islands – sneered and questioned the credibility of the people making the counter-case and the basis of the claims.
“This report was due to be published at the beginning of 2013 by way of informing government as to pricing policy. Yet Keith Brown has contemptuously ignored his own report, insulted the consultants who were handed £60,000 for their efforts and given a two-finger salute to all islanders and taxpayers.
“He’s still playing the game that it’s an issue between government and the hauliers. It absolutely is not. It’s an issue that should now exercise every family and business in the islands.”

A Transport Scotland spokesman had no comment to make on the leak but said it intended to consider the findings of the study first then set up a working group to take it forward, consulting with key stakeholders as it did that.

He added: “The study itself is due to report in January 2013. However CalMac’s booking system is normally opened in December for summer bookings, when the changes are due to take effect. Ministers are investing a total of £2 million in 2013 in commercial vehicles on the Western Isles, Coll and Tiree in order to limit the increase to 10%.
“This is a significant reduction to the average 34% increase planned for 2013 under the transitional arrangements.”

OHCG encouraged by Scottish Government Ferry fares pledge

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The Outer Hebrides Commerce Group has welcomed the commitment from Scottish Transport Minister, Keith Brown MSP, to work with them and help inform future Ministerial decisions regarding ferry fare pricing policy. After months of publicly bruising exchanges, the Minister requested a meeting with the Group – and they parted, having agreed to sign up to a study that will accurately reflect the benefit of reduced ferry fares.

OHCG chairman Calum Campbell, of Polybox Ltd said: “Clearly, there is at last, an appreciation by the SNP Government that massive ferry fare increases depress an already struggling economy. We have had to endure one 50% increase, but today we pledged to work with Government to prevent a further 50% increase next April. We are pleased that Mr Brown signed up to a proper examination of the benefits of reduced ferry fares. The six month study will determine exactly how island businesses and families benefited from cheaper ferry travel. Sadly, the last study commissioned by the SNP Government was error ridden, and misinformed the Government. We already have the support of Comhairle nan Eilean Siar to assemble the information required, and we will demonstrate that another 50% increase will be disastrous for our island families and businesses”.

David Wood from Woody’s Express also attended the meeting at the Comhairle offices today. He said: “Mr Brown’s request to meet with us was welcome and conciliatory. Prior to this year’s 50% increase in fares, our views were being dismissed and rubbished. But today, Keith Brown came to the islands, and appeared to genuinely listen to our group, comprising business representatives from Barra to the Butt. We’d hope that in January next year that the Minister will be able to conclude that he must halt the 50% increase due to be implemented next April. We also welcome his commitment to simplify the complicated and discriminatory ferry fares structures that currently exists for commercial traffic. We were very pleased to hear that he wants all hauliers to benefit from a new and easily understood pricing regime. We will work with the SNP Government and Comhairle nan Eilean Siar to inform a properly conducted study”.

In attendance were:

Calum Campbell, Chairperson OHCG, Polybox Ltd
Gail Robertson, Co-ordinator OHCG, DJ Buchanan Haulage
David Wood, Woody’s Express
Duncan MacInnes, WIFA
Alasdair Morrison, Harris Tweed Hebrides
Hector MacDonald, Hebrides Haulage
Shonnie MacRitchie, County Hotel
Shonnie MacLennan, John MacLennan Contractors Ltd
Angus Campbell, Leader Comhairle nan Eilean Siar
Norman MacDonald, Convenor, Comhairle nan Eilean Siar

Transport minister will meet RET campaigners

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Transport minister Keith Brown is due to meet the Outer Hebrides Commerce Group (OHCG) on Tuesday.

Polybox boss Calum Campbellm, the chairman of OHCG, welcomed the opportunity to present to the minister in straightforward terms, the negative impact the 50% increase in commercial fares is having on the islands’ economy.
“We also hope that the SNP Government won’t proceed with their plans to add another 50% to ferry fares in eight months time. We need the Government to support our islands during one of the worst recessions in living memory.”

Woody’s Express boss David Wood, another member of OHCG, is still concerned that the SNP Government didn’t listen to their pleas before implementing what he called the “first massive increase” of 50% last April.
“We do hope that Keith Brown will be in listening mode and will pay attention to the detail our group is going to present to him. We are pleased to have the opportunity to inform Keith Brown – we now need him and the SNP Government to act, and drop their reckless plans for another massive ferry hike in March next year.”

OHTG is now a fully-fledged economic campaign group

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The Outer Hebrides Transport Group has become a body with wider remit. It is now the Outer Hebrides Commerce Group, has appointed office bearers and is adopting a constitution to lobby on behalf of economic community of the Western Isles.

New chairman Calum Campbell, of Polybox Ltd in Stornoway, said those involved in the transport group did sterling work to highlight the negative impact the 50 per cent ferry fare increase was having on this economy. At the last meeting, it was agreed to widen the group’s appeal and secure support from even more island-based companies.

“We already have more than 100 companies signed up pledging support to fight the further 50% increase which will be imposed next year. But we need every business large and small to get involved. I’m looking forward to working with businesses and councillors from across islands.”

Gail Robertson, co-ordinator of the Outer Hebrides Commerce Group, said every family and business had been affected by the ferry tax and they had to remain focussed on campaigning against the 50% increase the SNP government intend to impose next March.

Calum Campbell added: “Our newly-formed group already enjoys the support of Comhairle nan Eilean Siar and we have representatives on our committee from Barra to the Butt. We will shortly be inviting our MSP to a meeting to see if he can persuade his fellow SNP government ministers not to impose next year’s 50 per cent increase.”

Commercial RET rollback is already having a “devastating” effect

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The Outer Hebrides Transport Group have said that the economy of the islands is in crisis and that the effect of the 50% increase recently imposed by the SNP Government on commercial traffic is having a devastating impact.

Gail Robertson, co-ordinator of the OHTG, said: “We have been staggered by the feedback from island companies about the impact of increased ferry fares. It’s alarming and depressing – what we’ve heard from people working in all sectors of the economy.”

Mussel farmers can demonstrate that profitability has reduced by 25-50%; in the retail sector pay rises will be half of what was planned and they can’t hire any additional staff this year.

“And right across the economy no one is taking on trainees or apprentices. In haulage there are cash flow problems – costs are being carried by hauliers until payment is received and extra costs have been passed on to customers. Many businesses who’ve sent us information are having problems renegotiating prices with customers they have contracts with.”

David Wood, of Woody’s Express, added: “The ferry fares increase imposed is only the first instalment – there is another 50% increase coming our way next April – unless we mobilise and campaign against it. The OHTG has already spoken with the new leadership at Comhairle nan Eilean Siar and we hope to join them and campaign against these ruinous household and haulage taxes. This SNP ferry tax is punishing our islands, and destroying our economy.”

OHTG seeks early meeting with new Comhairle

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The Outer Hebrides Transport Group is seeking an early meeting with the newly elected Councillors on Comhairle nan Eilean Siar. They will make the formal request once the council meets and appoints a Leader and Convenor and fills all the other positions.

OHTG co-ordinator Gail Robertson said: “With a notable few exceptions, almost all Councillors in the previous Comhairle supported our campaign to try and halt the imposition of the household and haulage ferry tax. The first 50% increase has been imposed and our families and businesses are already paying this tax. We were very encouraged that 7 of the new councillors contacted us before the election and pledged, if elected, to support our campaign. We now look forward to working with them and demonstrating to the SNP Government the impact of their damaging policies.”

Stornoway haulier David Wood said: “A critically important socio-economic analysis is going to be undertaken and it will be informed with data that should have been collated before the SNP Government betrayed the islands by withdrawing support for commercial traffic. On a personal note – I am delighted that Angus Campbell, who serves in the ward I live in, has been re-elected with a renewed mandate. In the past five years Angus showed the qualities you expect from leaders. He was hugely helpful in our campaign and I know that he will not give up although the SNP Government has ignored our campaign”.

New Councillors who have pledged their support to OHTG:

Ronnie MacKinnon
Donnie Steele
Neil MacDonald Beaton
DJ MacRae
Alasdair MacLeod
Iain MacLean MacAulay
Donald Finlayson Crichton