Tag Archives: RET

Scottish Ferry Services Plan 2013-2022

The recently announced ten-year Ferry Plan was made public in late December with Transport minister Keith Brown saying:

“The long-term future of ferry services in Scotland is vital not only for Scotland’s economic well-being but also for the people in our island and remote communities.Having concluded an extensive consultation which saw over 2000 responses… we are laying out how we will expand and improve ferry services across Scotland. Despite the substantial financial pressures placed on us by Westminster, we are determined to make good on our promise to deliver improved ferry services on a progressive basis and the final ferries plan will be our cornerstone in doing just that.”

The new plan impacts upon Tiree in three ways:- Service; RET; and Fares. The full document is available on-line but An Tirisdeach has included the elements relevant to Tiree here.

Coll & Tiree Service Provision

Assessment of Current Service Provision

Our routes and services needs-based assessment tool allows us to make an evidence-based assessment of current services for Coll & Tiree. The key difference between the current and model service profiles is the number of sailing days during the winter time-table period.The model service profile requires a daily service from Coll & Tiree during the winter period.

Future Service Provision

The Draft Ferries Plan consulted on the requirement to improve the number of sailing days in the winter period, with a commitment to extend the time-table to six operating days per week. The commitment was subsequently welcomed, although very few responses were received from residents of Coll & Tiree. Representation was also made, mainly from Mull residents, about the possibility of a limited number of sailings calling in at Tobermory.

Short term – winter 2013/14

Currently The Clansman provides an all year service for Coll & Tiree. The service is augmented during the summer time-table period with Lord of the Isles (LOTI). The difference in sailing days between the summer and winter time-table periods is because of the availability of these two vessels in the summer, as opposed to one vessel during the winter time-table period, as she is used as a relief vessel when the larger vessels in the fleet are rotated through their annual refit programme. The proposal for the winter of 2013/14 is to deploy the Isle of Arran to ensure a two-vessel service for Coll & Tiree during the winter period. The operational impact of this decision will be to provide an additional sailing day during most of the winter time-table period (the current winter time-table will apply during the annual 4 week refit period for the Isle of Arran).

Longer term – commencing 2016

In the long-term the Isle of Arran will not be available during the winter time-table period for this route (it will be deployed on the Firth of Clyde). The proposal for the new Oban-Craignure service during the summer period will see two vessels operate on this particular route. One of these vessels will be deployed during the winter time-table to Barra, Coll & Tiree to enable the improved level of service to continue to be delivered. At this time we will also consider what services may be offered to improve the level of provision within the new time-table.

Coll & Tiree Road Equivalent Tariff (RET)

Commitment

RET for passengers, cars including small commercial vehicles, and coaches to become a permanent feature on routes to the Western Isles, Coll & Tiree.

Additional RET concessions

Commercial vehicle length – extension of definition of commercial vehicle from 5m to 6m.

Hay & Livestock – Returning lorries carrying hay or livestock travel free when empty, other than a charge to cover pier dues.

Shellfish – an exemption to the weight limit for Light Goods Vehicles less than 6m in length, carrying live shellfish, to allow them to qualify for non-commercial vehicle rate.

Large Commercial Vehicles

At the completion of the RET Pilot Study on the Western Isles, Coll & Tiree, Scottish Ministers were persuaded that there was not a compelling case to retain RET for commercial vehicles. Recognising the financial implications of such a decision for hauliers, a transitional protection scheme is currently in place for commercial vehicles on the Western Isles, Coll & Tiree.

A study on freight fares is currently underway on the Western Isles, Coll & Tiree economies. The findings of this study will be used to inform future fares policy for commercial vehicles. Our intention is to first consider the findings and then set up a working group to take this forward and will consult with key stakeholders as we do this.

Future RET formula

Our Draft Ferries Plan indicated that further work was required around the precise rates for RET. We have now carried out this work and have set an updated RET formula. This formula has been applied to the pilot for Islay, Colonsay & Gigha and steps will now be taken to introduce this to the Western Isles, Coll & Tiree.

EDITOR’S COMMENT

Service

The new plan has committed to providing one extra sailing per week by deploying Isle of Arran to run alongside The Clansman in the short term, and a vessel from the Oban-Craignure route alongside The Clansman in the longer term. However, the plan itself recognises that this only partially meets the Scottish Government’s own Needs-based Assessment, which recognised a need for daily winter sailings! Are people on Tiree happy with an increase to five winter sailings per week or do they believe that there ought to be a daily ferry throughout the year? Alan Reid MP said: “The Ferries Review is disappointing for Tiree and Coll. The draft review had stated that the Scottish Government wanted to move to a service that operates for at least six days per week during the winter period, but the Ferries Review will only give one extra sailing. Tiree & Coll will only get sailings 5 days a week for most of the winter and still only 4 days during a 4-week period. In this day and age six sailings a week is the minimum acceptable service and I will keep supporting the campaign for this.”

RET

The plan details how the Scottish Government has provided an interim protection scheme for Coll & Tiree to reduce the impact of the removal of RET from commercial vehicles. It outlines the ongoing study on this decision on our island economies and commits to the establishment of a working group and consultation process once this study is completed. The Editor believes that it is essential for Tiree to be properly represented during this process. Tiree must have its voice heard so that we do not then suffer the financial implications of hugely increased haulage fares. An Tirisdeach will be reporting on this process on a regular basis and welcomes comments from the community.

Coll & Tiree Fares

The Press and rival politicians have jumped on the announcements of these new fares calculated by the updated RET formula, which links fares to the cost of travelling an equivalent distance on land. The average increase will be 8.2% for passenger, car and small commercial vehicle fares, and there will be a cap of 10.6% across all routes.

Transport minister Keith Brown said: “the update reflects the current costs of driving a car. The additional revenue generated by applying the updated RET formula for passengers, cars and small commercial vehicles will be reinvested in commercial vehicle fares, in order to reduce the impact of the removal of RET for commercial vehicles on services to the Western Isles, Coll & Tiree.”

Labour infrastructure spokesman Richard Baker said: “It has taken over two years to publish this ferries plan, but now it has finally been revealed, Ministers are seeking to alleviate the effect of their regrettable and damaging decision to scrap RET for commercial vehicles on routes to Coll, Tiree and the Western Isles, but are doing so in the context of fare hikes across the routes which will be damaging to the economies of island communities.”

Argyll & Bute MP Alan Reid said, “These inflation busting ferry fare increases of up to 10.6% are daylight robbery. The SNP are robbing islanders with 10% ferry fare rises. The SNP’s excuse – that the price of petrol has risen – is pathetic. According to the AA, the price of petrol has only gone up by just over 1% during the past year.” As one on-line commentator noted: “Whatever the basis used to calculate fares, it is not ‘Road Equivalent Tariff’ – that would be 45p per mile for a passenger vehicle. So, the 63 miles from Oban to Tiree should be £28.35 (£0.45 x 63). In fact, it is £56.75 – double what an RET fare should be. All fare reductions and discounts are welcome, of course, but it is wholly misleading to call the current scheme a ‘road equivalent tariff’ system.” However, if the Scottish Government is true to its word and does indeed reinvest the revenue from increased fares into helping to pay for offsetting the removal of RET for HGVs on Western Isles, Coll and Tiree ferries, then for once Tiree might actually benefit.. Chris MacRae, the Freight Trading Association’s head of policy for Scotland said: “We welcome the announcement of the Ferries Plan, and particularly the recognition that the impact of the removal of RET for HGVs must be mitigated. Freight and HGVs are a vital part of ensuring the viability and economic stability of island communities. The working group that the Scottish Government commissioned is reviewing the study into the impact of the removal of RET for HGVs. This report is due soon, so recognition that the effects of removal of RET for HGVs need to be mitigated is welcome news. What we need to see going forward is evidence-based policy making.”

Tiree Community Development Trust

Tiree Trust LogoMeeting with Councillors

Mary Jean Devon and Roddy McCuish are due to visit Tiree in October/November (date TBC).

The Trust has asked to meet with them to discuss general island issues. If there is a specific issue you would like us to raise then please get in touch.

RET consultation

The Scottish Government is investigating the impact of the removal of Road Equivalent Tariff (RET) fares from commercial vehicles on the economies of the Western Isles, Coll and Tiree since 1 April 2012. On some routes the removal resulted in an increase of up to 50% in commercial vehicle fares in April 2012.

A key aim of the study is to investigate the impact of removing the RET fare on businesses and, ultimately, the local economies of the islands. As part of the study, MVA Consultancy has been commissioned to carry out a survey to assess the potential impacts of moving to pre RET commercial vehicle fares. They would be very grateful if Tiree’s business users could complete the survey by copying the link below into your web browser.

http://www.mvasurvey.com/retcv

You can also find a link to this from the Trust website, under the news section.

Extra 2.5mil for island freight ferry fares

cargo containers

Following the meeting last week in Edinburgh with hauliers from the Western Isles and Tiree, the Scottish Government has announced an extra £2.5m in subsidised funding for freight traffic on island ferry routes. This is in addition to the extra help previously announced meaning that all vehicles up to six metres would qualify for RET.

Transport minister Keith Brown said the move was designed to bring fares for all hauliers into line and ensure no fares rise by more than 50% in a single year. The government said it would also lobby Westminster on issues that fell beyond its remit and work on a six-month study into the broader impact of its ferry fares policy.

The extra funding will cover ferry services to Coll, Tiree and the Western Isles. Mr Brown said “We are determined to support our island and remote communities and underlined this last week with new arrangements for small commercial vehicles qualifying for RET on routes to Western Isles, Coll and Tiree. Today we are providing more evidence of our commitment in support of those communities and all hauliers serving those communities. I had a constructive meeting with hauliers last week and one particular concern raised was that previous discount schemes had benefited some hauliers more than others. By capping the rises all hauliers on any given route will pay the same. Our ambition is to see greater connectivity right across the Western Isles, Coll and Tiree, and our pilot has shown the scheme to have had a very positive impact on local economies.”

More News On RET And Hauliers

cargo containers

Graham Laidlaw of Transport Scotland Ferries Unit flew into Tiree on the morning of Monday 30th January with Cllr Mary-Jean Devon and Cllr Roddy McCuish of Argyll & Bute Council, to meet 20 or so delegates representing the crofting, fishing, construction, retail, tourism and haulage sectors on Tiree and Coll.

The purpose of Mr Laidlaw’s visit was to listen to the islanders’ views on the government decision to remove commercial vehicles from the existing RET scheme. Mr Laidlaw left the island with a petition of 233 signatures.
In a well prepared, composed meeting, the Tiree community made its view clear that this decision will be ‘catastrophic’ for the economies of Tiree and Coll and will leave these fragile islands at ‘breaking point’ with unmanageable increases in costs for businesses and individuals.

Fuel prices, already 25ppl higher than the mainland will go up by another 1.25ppl. Tommy Barbour fuels has been quoted an increase in his ferry ticket from £214.80 to £370.80 for a tanker of fuel to the island. The cost of exporting livestock, the backbone of Tiree’s economy, will increase by 103%. Donald Morrison of United Auctions advised that this is going to make it very difficult to keep customers coming to the island to buy livestock. Small fishing businesses and croft businesses stand to lose £5 – 7 thousand a year. Iain MacKinnon of I.A. MacKinnon Haulage advised that the price of an articulated lorry carrying general goods will double. These costs will be passed onto customers increasing prices of building and agricultural supplies, coal, food and so forth.

Contrary to the government’s justification for its decision that ‘savings from RET have not been passed on by hauliers’ and ‘haulage is largely insensitive to RET’, there is a united view across all sectors that this is not the case. There was unanimous agreement that without RET freight prices would have escalated alongside the increasing costs associated with the industry. Tiree builder Angus MacKinnon pointed out to Mr Laidlaw that freight to Tiree and Coll is ‘ring-fenced’ and not driven by the price of the ferry tickets. Hauliers working on this route are providing life-line services carrying essential goods such as fuel, food and animal feed and exports of shell-fish and livestock. Councillor Mary-Jean Devon pointed out that she was ‘amazed that the government even expected there to be an increase in freight volume due to RET’. It was pointed out that whilst tourist traffic has increased during the RET pilot, tourist spending had not. Tiree was ‘full’ in the high season before RET and is still full. RET has encouraged the same number of visitors to bring extra or larger vehicles and trailers.

The notion in the Draft Ferries Report that tourism has seen the greatest benefit from RET has not been properly researched and the statement is distorted. Proposals put to Mr Laidlaw at the conclusion of the meeting were:

  • Ministers could simply instruct CalMac to increase fares across the board by a modest percentage to claw back the £2 million shortfall in the budget for RET.
  • That the implementation of the proposal be postponed pending full consultation on how the decision will affect the island economies.

Alan Reid, MP for Argyll & Bute has decribed the Scottish Government’s plans as ‘Outrageous ’. He told An Tirisdeach
“they are robbing Peter to pay Paul. I have written to Scottish Transport Minister Keith Brown pointing out that his proposals will increase the cost of living substantially on the affected islands. I have urged him not to go ahead with these proposals”.

Professor Neil Kay, an Economist at Strathclyde University said that the Scottish Government’s policy on cheap ferry fares is economically illiterate and misguided. He said
“What is the point of offering a shop assistant cheap fares to the mainland if she cannot afford those fares because the business she worked for has just gone bust? You do not need an economist to answer that question – just common sense. No self-respecting economist would support RET as a device to get fares down.”

RET And Hauliers

road to the oceanThe Tiree Branch of the Scottish Crofting Federation have been in touch with Keith Brown, Transport Minister in the Scottish Government, with regard to the removal of RET on Commercial Vehicles on ferries. The plan is to replace RET with an amended system of the former “bulk discount rate” which had been in place prior to the introduction of the RET pilot three years ago.

While RET is now extended to vans five metres or less in length, the fact is that most commercial carriers use vans six metres and over in length as five metre vehicles are few and far between. Crofters fear that the Scottish Government is sacrificing the former commercial RET for the sake of introducing RET to other islands without putting any more money into the scheme. One crofter said it does`not bear thinking about what the cost of freight to the island will be if RET is not reintroduced to commercial vehicles.

The Scottish Government report “Assessment of the impacts of the road equivalent tariff” pointed out that RET has made a positive impact on haulage businesses by lowering costs. The reports states that hauliers recorded savings amounting to an estimated 50% of ferry costs, and that whilst all of these savings might not have been passed on to the customers directly it allowed hauliers to offset other increased costs and therefore enabled prices to be pegged where they would otherwise have increased. Despite this, the Scottish Government recently announced the exclusion of commercial vehicles from the newly-extended RET, announcing instead that they would ‘replace RET for larger commercial vehicles on the Western Isles, Coll & Tiree, with an enhanced pre-RET discount scheme’. There is widespread concern that islanders will lose out heavily as a result of these proposed changes. David Muir of the Scottish Crofting Federation said:

“the SCF are calling on the Scottish government to provide urgent clarity on the situation as we are concerned that a reintroduced discount system could take away a great deal of the support that RET has brought to smaller hauliers. Any resulting increase in ferry fare cost will be passed on to customers.”

. Mr Muir concluded that “to support the fragile island economies what is needed is a fair syatem that retains the cost savings for hauliers and other commercials gained in the RET scheme”.
MP Angus MacNeil has called for clarity quickly on the new proposed ferry fares for hauliers if the government continues with its current proposal to get rid of RET for lorries. He said “the decision to remove RET from the hauliers is a mistake. The removal of RET will ultimately lead to an increase in prices for customers in our islands. I will be pressing for a meeting with the trasnport minister early in the year. Meanwhile a campaign group, hauliers for RET, has been assembled to both work on the RET case and to dispel the myth that arose in Edinburgh that island hauliers did not want RET. If this is not sorted freight costs and prices will go up which could ultimately impact on jobs” David Wood, the spokesman for “Hauliers for RET” commented that
“RET has benefited the islands and to remove it from the haulage industry will be detrimental to the whole community. Ultimately our customer will have to pay.”
The Scottish Ferry Services Draft Plan for Consultation states in the short term we are replacing RET for larger commercial vehicles on the Western Isles, Coll and Tiree, with an enhanced pre- RET discount scheme because:-

  • The RET evaluation report shows that savings made by hauliers through RET have generally not been passed on to the consumers.
  • In 93 per cent of cases, the reduction in ferry fares arising through the RET Pilot have been wholly or partially absorbed at some stage in the supply chain, without being fully passed on to customers. Only 7 per cent of firms in the sample of businesses indicated that the savings had been passed on in full throughout the supply chain from both their suppliers and on to their customers.
  • The cost of rolling out RET to larger commercial vehicles is an estimated 40 per cent of the total cost of RET. ? Before the introduction of RET, hauliers received discounts to their fares up to a maximum of 15 per cent dependent on their volume of business with CalMac. Island hauliers told us when we rolled RET out that they were concerned mainland hauliers would be able to compete more effectively with them now that the same discounts applied to all hauliers. We will reinstate the pre-RET discounts that were enjoyed by hauliers and increase for the Western Isles, Coll and Tiree the maximum discount from 15 per cent to 25 per cent.
  • For the Western Isles, Coll and Tiree the Government is considering how to extend the current discount eligibility criteria for hauliers.
  • The Government is open to discussing with businesses which use larger commercial vehicles the most equitable formula which could be used to apply these discounts so that they benefit both larger and smaller companies.
  • These improvements to the discount will be made for the Western Isles, Coll and Tiree only, where hauliers have received the RET discount since October 2008. While the discount has not been passed on to consumers we accept that in these difficult financial times some hauliers may find it difficult to now pay a fully increased fare. The increase to the maximum discount reduces the impact on these hauliers. We will revisit the discount again when we renew the Clyde and Hebrides contract in October 2013.
  • We will look in the next CHFS tender to extend the current definition of a commercial vehicle from 5 metres to 6 metres. This will be consistent with the position in the Northern Isles

RET Concerns

letters to editorLast week it was reported in An Tirisdeach that RET will be made permanent for Tiree; what was not in the report was that, with this announcement came the shocking news that commercial vehicles will be included.
This will mean lorry fares increasing by as much as 55%; this in real terms means an unavoidable significant increase on the price of goods brought from the mainland for the people of Tiree and Coll. If the eligibility criteria for the volume discount scheme used for commercials prior to RET is changed to allow Tiree hauliers to qualify the increase will be reduced to 33%, better but still totally unacceptable.
The savings from RET over the last 3 years, have allowed island hauliers to keep delivery costs stable in the face of escalating operating costs (such as fuel, insurance, maintenance, CPC training etc.). Removal from RET will make haulage costs unmanageable. We must campaign to get this decision reversed. Neither the hauliers nor our customers can bear such an increase and if nothing is done there is no doubt that this will seriously impact on the haulage, crofting, fishing and construction industries on Tiree and Coll as well as putting up the cost of delivering general goods to the island’s residents including fuel and groceries.
If you would like to help us lobby for commercial vehicles to remain in the RET scheme let us know and we will give you the appropriate contact details.
Iain MacKinnon I A MacKinnon Haulage