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Viewpoint / Race to bottom on ferries would be disastrous

Shetland officials have already begun talks with government ahead of tendering for the next north boats contract in 2018.

“Keep Calmac and Carry On”: the new motto adorning many Scottish Labour twitter accounts, writes Jen Stout. A few Lib Dems have joined in too.

The sentiment is great, and if these politicians spent more time regularly advocating trade union struggles, I’d have a lot more faith in them. The RMT’s fight to protect their members on the Clyde and Hebridean routes, in the face of privatisation by multinational giant Serco, should be supported. But this is not a simple tale of CalMac good, Serco bad – and, as so often happens, the tribalism and opportunism in our parliament is making a much-needed open debate almost impossible.  

Serco is, of course, bad news. As journalist Peter Geoghegan discovered on a recent trip to Shetland, the measures it has taken to squeeze money out of islanders are appalling. Installing dividers to prevent people sleeping on couches has a hint of London’s infamous “homeless spikes” about it, and charging £18 to access the ‘premium’ lounge is laughable. As Geoghegan says, you wouldn’t catch a publicly owned operator behaving like this.  

Campaigner Jen Stout says she lacks faith in the main parties at Holyrood to have a constructive debate about how to shape the future of publicly-funded ferry services.

But getting angry at Serco is pointless. Serco is an enormous multi-national company, well-known for fraud, human rights abuses and deaths of asylum seekers in its custody. Such an entity is run for profit first and foremost – that’s the way the company is structured. It will do whatever it thinks it can get away with, and expecting anything else is naive. Morality just doesn’t come into it. The key point is not to let it run public services in the first place.  

And this is where the hypocrisy comes in. Why is Serco running the Northern Isles ferry service, and why does it look set to take over the Clyde & Hebridean routes? Scottish Labour is furiously pointing the finger at SNP ‘privatisers’. The SNP is claiming it has no choice – EU rules dictate that the routes must be tendered. 

Transport and islands minister Derek McKay is insisting that a successful Serco bid would not amount to privatisation as the vessels and ports would remain in public ownership. But this is slightly disingenuous. For passengers and workers alike, if Serco wins the contract they’ll be dealing with Serco. The ownership of the boats will not be foremost in their mind when layoffs and price hikes loom.  

Who’s telling the truth – and why is no one talking about what came before? Back in 2004 when the issue of tendering arose, the Liberal Democrat transport minister was telling MSPs that the executive had to obey the European Commission. The SNP loudly challenged this, but now the tables have turned the party seems a lot quieter.  

On the Northern Isles routes, outsourcing giant Serco celebrated winning the contract in 2012 by threatening workers with zero-hours contracts and 36 redundancies – just before Christmas. The name of the company they had to deal with was Serco Ferries (Guernsey) Crewing Ltd. Channel island registration to avoid tax or national insurance – standard for a big bad privateer like Serco, eh?  But here’s a question – how come ferry workers on the west coast are working for Caledonian MacBrayne (Guernsey) Ltd? 

CalMac’s defence of this move in 2005 was that that they needed a level playing field. But it’s just one of the reasons people are asking questions about CalMac, the Scottish government’s handling of the company and indeed the whole tendering process. Criticism should not be limited to the current administration – all of this has been rumbling on for a long time. CalMac’s restructuring in 2006 cost the taxpayer an extraordinary £15 million.  

When the first incarnation of Northlink ran into difficulties not long after being awarded the contract in 2002, subsidies were massively increased – in just three years an incredible £71 million was handed over to Northlink. A re-tendering of the contract was announced, won again by CalMac in the form of Northlink Ferries Ltd. By this time Scottish ministers had acted to break up Caledonian MacBrayne into various subsidiaries, and the new Northlink was one of these. The next tender came in 2012, which of course was controversially awarded to Serco.

Some have likened the bench dividers installed in passenger ship bars to the "homeless spikes" preventing people from sleeping in parts of London.

Questions remain over this tendering process and the conduct of Transport Scotland. As with the west coast routes, smaller private operators are angry at the lack of genuine competition, with the odds seemingly stacked against them, while state-owned Northlink’s bid was apparently returned unopened.  

Court actions and demands for public inquiries have followed, and overall it seems that something is seriously wrong at Transport Scotland.

This whole sorry tale spans decades. Enormous public costs have been racked up, audits and inquiries established, and U-turns achieved at staggering speed. If there is a possibility that exemptions to EU state aid rules could be granted to Scottish routes, that should be pursued, and lack of action on behalf of the Scottish government would be rightfully condemned.

But self-righteousness from Labour and the Liberal Democrats is grating. The fact remains that the Lib-Lab executive decided in 2004 that tendering was unavoidable, and now here we are.  

For me the most worrying thing is that I have no faith in any of the main parties to discuss this like grown-ups. The finger-pointing, name-calling and naked opportunism going on right now is shameful. How can islanders and workers possibly make their voices heard amongst all this? With the Northern Isles contract up for renewal in 2018 it’s essential that answers are found quickly, because a race to the bottom in ferry services will have disastrous consequences.

Jen Stout

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