Ferry Services (Northern Isles)
The final item of business today is the members' business debate on motion S1M-3325, in the name of Mary Scanlon, on ferry services to the northern isles. Those leaving the chamber should do so quietly to allow Mary Scanlon to open the debate.
Motion debated,
That the Parliament notes with concern the on-going situation surrounding the transfer of the contract for ferry links to the northern isles; recognises that these services provide a crucial lifeline for island communities and businesses, particularly the agriculture and fishing industries, through a substantial volume of passenger and freight transport, and considers that the Scottish Executive should ensure that ferry links between the mainland, Orkney and Shetland are maintained into the future.
I am pleased to have secured tonight's debate. I trust that the dignity that has pervaded this afternoon's proceedings will continue into this debate.
I visited Orkney during the summer recess and returned with pages of notes about the ferry issue. It seemed more appropriate to raise the issues in a members' business debate than by writing screeds of letters to the minister. There has been much speculation over the new ferry contract. I hope that members will appreciate from my careful use of "alleged" and "I understand" that the main communication channel for people in Orkney has been the local media, in particular The Orcadian. There has been considerable local speculation.
Today, I look for an assurance on the long-term security of transportation of goods, livestock and passengers to the northern isles. I am not looking back to find out who was, or was not, to blame for the current situation.
I understand that a Scottish Executive tender document to replace the P&O service did not mention the movement of livestock. That seems to underpin the problems that we face today. I further understand that NorthLink Orkney and Shetland Ferries Ltd advised the Aberdeen harbour authority that lairage would not be required because of the cassette system coming into operation. Lairage was promptly dismantled. New lairage is now being installed in Aberdeen—at, naturally, a considerable cost.
I also understand that, because the P&O contract ends this month, the Scottish Executive has had to hire two boats. One is coming from Australia and the other from South Africa—again at considerable cost to the public purse—to maintain consistency in the transportation of livestock. Bearing animal welfare considerations in mind, have all other routes been considered fully, especially given the existence of the new abattoir facilities at Dornoch and the new regulations on the transportation of animals? Orkney farmers and businesses seemed to like the previous Orcargo system to Invergordon. I would like to be assured that all the options have been explored.
The new piers at Scrabster, Stromness and Kirkwall are well behind schedule and, apparently, well above their original budget. May we have a clear statement about those costs, as well as about the cost of the linkspan from Invergordon, which has been taken to Stromness as a temporary measure?
The company with the subsidy for the northern isles ferries will be NorthLink, yet, in the middle of all this change, we have a new shipping company representing the interests of Shetland—Norse Island Ferries Ltd—including main contractors such as Jim Brackenridge (Transport) Ltd, Gulf Oil Ltd, Shetland Transport Ltd and Northwards Ltd. Those developments, alongside the progress of Smyril Line, which is partly owned by Shetland Islands Council, provide excellent opportunities for Shetland, but Orkney tends to be left out of the equation. NorthLink has a subsidy of £11.5 million while Pentland Ferries Ltd and Norse Island Ferries have no subsidy. Both those independent operators are carrying substantial volumes of traffic.
It has been suggested that subsidy should be based on the amount that each operator carries. Retrospective payment of subsidy seems to respect customer choice and reward the operator that is providing the lifeline service. Farmers, businesses and passengers have said that they would like to choose which ferry to use. They say that companies should earn their subsidy.
NorthLink is slashing its freight rates now that Norse Island Ferries is in operation. Given that its business case was based on original costings, will the minister tell us the effect on NorthLink of a decrease in revenue? Can it continue to provide the promised service? Will NorthLink continue to cut charges to price other operators out and then rest back on the subsidy? That question has been raised with me and I would appreciate an answer from the minister.
I have also been told, today, that the new Norse Island Ferries is undermining confidence among people in Orkney now that Shetland has decided to go it alone. There is a feeling that Orkney will get the crumbs from the table. A Sunday-only service for the transportation of livestock, with any spare capacity being used for Orcadian cargo, is hardly the way forward. I am sure that the constituency member for Shetland will enlighten the Parliament about the new service. I am pleased to see that both Tavish Scott and Jim Wallace are here.
Unfortunately, the new service leaves the profitability of the Orkney to Aberdeen route in doubt, as it depends on Shetland through traffic. The Norse Island Ferries service may lead to financial problems for NorthLink or, it has been suggested, a massive increase in Orkney fares. We must also ask why Orkney Auction Mart has to pay off a £4.3 million loan for the new cassettes when that is a lifeline service.
In the midst of all the public money for hired boats, high subsidies and massive, multimillion pound investments into piers and linkspans, we have Andrew Banks, a farmer from St Margaret's Hope in Orkney, who bought a 30-year-old CalMac ferry, dredged the sea, built two piers and now runs the service from Gills Bay, near John O'Groats to Orkney, which is cheaper than the subsidised route and takes only one hour. I can testify to the quality of that service, as I used it during the summer. I understand that Andrew Banks has applied for the livestock subsidy, but has not yet received a response from the Scottish Executive.
I was also given the figures for Pentland Ferries. From April to November last year, the passenger numbers were 45,000 with more than 16,000 vehicles. Both those figures were exceeded by August 2002, with a massive increase in tourism business for Orkney. This week, Mr Banks purchased a second vessel, the Claymore. The Claymore has the same capacity as the Pentalina B and will operate freight and livestock between Caithness and Orkney every day of the week. That is all without a penny from the public purse.
There are many issues at stake. I will mention one more—a topic on which we could spend a whole debate. P&O employees understood that the Transfer of Undertakings (Protection of Employment) Regulations would apply to their change of employment. I now understand that NorthLink is stating that P&O workers will be taken on as new employees and that their previous service and conditions will not be taken into account. I would like clarification from the minister on that point.
I understand that the Transport and the Environment Committee is looking into the ferry services. Will the minister ensure that all parties get round the table in talks to ensure proper consultation and communication about the changes? Will the minister give me an assurance that costs are being monitored against the original estimates and that costing is based on best value for the public purse?
I look forward to the minister's positive response, to update and assure people in the northern isles who are deeply concerned about the change in the service.
I congratulate Mary Scanlon on securing the debate. I have represented the northern isles in a parliamentary capacity for the best part of 20 years and I think that I can say that most issues come back to transport—the affordability, reliability and frequency of the transport services, not least the lifeline ferry services.
When I first became an MP in 1983, we did not have new boats. We are now going to have new boats. There was one sailing a day for most of the year between Orkney and the Scottish mainland. When I suggested that, even during the school holidays, that could be increased to two sailings, I was told that I did not understand the economics of the case. Now we will have far more frequent services. Also, we now have services linking Orkney and Shetland, which did not exist in 1983.
Having seen the new vessels at the Akers yard, having been on the Hjaltland just before it set out on its sea trials and having seen the Hamnavoe and Hrossay under construction, I believe that the quality of vessels coming into the service is a major step forward in standards.
Mary Scanlon has identified several concerns. I know that the minister will welcome the opportunity to clarify several points. There is much discussion around the subject because there is a major change to something with which we have been familiar for many years. It is inevitable that there will be concern in the air. One of the obvious concerns relates to livestock and the entry of Norse Island Ferries. That has caused uncertainty and some delay in placing the orders for the cassettes. Once they have seen the system in operation, even the sceptics about cassettes believe that it is a system for the future that will secure high animal welfare standards.
The main concern is that although there will be welcome contingency arrangements—indeed, additional boats are brought on every year for the peak livestock movements—there might be a gap. There is concern about what will happen after that contingency period and before the cassettes are in place. I would welcome any assurance that the minister can give. I am sure that he will recognise that the sooner the cassettes are in operation, the more confident people will feel, especially when they can see the system working.
Mary Scanlon mentioned Pentland Ferries and Andrew Banks. Following representations from Andrew Banks, I have written to the minister, as he knows, about tariff rebate subsidy—TRS—for that service. As has happened for many years, the application will be given as proper and fair a consideration as any other. It is not a right: there are criteria. The issue of TRS for that service will be approached in that spirit.
Many of my constituents who sail into Scrabster have been saying that they have not seen much happening. The project has been slow. Everyone knew that the project would have to happen: even if P&O had won the contract, there was a need for improvements at Scrabster harbour. I share Mary Scanlon's view that we do not want to trade questions of blame or who is responsible. Perhaps the minister could reassure us about what is expected to happen at Scrabster. It is clear that it will not be in a position to receive the new vessel when it comes into service. Perhaps the minister could tell us what the time scales are and what is likely to happen to maintain that important Pentland firth crossing between Stromness and Scrabster.
My next point is about staff transfer. I fully understand that it is not for the Government to determine whether TUPE applies. It is a matter for the courts. My understanding was confirmed as recently as last week in a letter from Bill Davidson of NorthLink. Although TUPE does not apply, NorthLink will take on the existing mariners under their existing terms and conditions.
What I find frustrating—I believe that the minister shares my frustration—is that we can get a legal determination of the situation only when the staff transfer takes place. I welcome the fact that the minister has raised the matter with the appropriate minister at Westminster, because employment legislation is a reserved matter. The situation is unsatisfactory. With the tender for the Caledonian MacBrayne routes coming down the track, we would welcome some clarification of what the minister has been trying to achieve.
As this is the first speech that I have made from the back benches, I will not abuse the time. I just emphasise the point that the issue is critical. We are talking about lifeline services—and so much of the social and economic life of the islands depends on those services being secured well into the future.
When I was first elected to the House of Commons, for Hamilton in 1967, the first thing I did was visit Orkney and Shetland for the first time in my life. I did that because, when I was sitting down in London, I wanted to know what it was like to be in the furthest away places that London controlled. I have been a regular visitor over the years ever since.
I even once had the temerity to stand for the Westminster constituency of Orkney and Shetland, but I am afraid that I did not win. In fact, as members know, Jim Wallace won. I will never forget the happiness of the experience. We went to every island we could get to and I have been in love with them ever since. I visited all of them many times, except for Papa Stour, which I never managed to get to. I think the weather prevented it.
I have probably visited every company, most schools and every social organisation over the decades that I have been going to the islands. The people of Orkney and Shetland are very innovative. They sometimes have a difficult climate—they say that Orkney can have four seasons in a day—but the people are full of enterprise and there are many business start-ups. One can only admire the people and say that they deserve a lifeline service that suits them.
It seems to have been suggested that NorthLink has, wisely, been trying to boost the tourist side of its business. However, the tariff structure seems to be a bit biased against the island resident. I cannot accept that.
Everyone knows about my envy of Norway because it has its own Government. Norway also had two policies when it started considering the northern part of the Arctic circle. Those policies worked very well. They were road equivalent tariffs and equalised freights. I admire and envy the Norwegians for those two policies, because they were successful in doubling their northern population in the area up to the Arctic circle in 50 years, which speaks for itself.
I cannot add much to what Mary Scanlon said, because her speech was an exhaustive survey of all the problems that I have seen when I have gone to the northern isles. The residents of both sets of islands are worried by the uncertainty. NorthLink itself admits to uncertainty about the running costs, which throws uncertainty over all the economic, agricultural, social and cultural activities of the islands. It also throws uncertainty over sporting activities, which are developing well. As Mary Scanlon said, there is uncertainty about the P&O workers' terms. Although Jim Wallace's comments are welcome, there is still a worry. I hope that the minister will clear up some of the issues at the end of the debate.
I thank Mary Scanlon for giving us the opportunity to debate this issue, which must be aired. As a Highlands and Islands MSP, and as reporter to the Transport and the Environment Committee on the future of the Clyde and Hebridean ferry services, I have been interested to explore the experiences in the northern isles with the NorthLink contract as a point of comparison with the CalMac tender.
In the past year I have been to Orkney three times and to Shetland twice, and the major issue that people raise—no matter whether one is connected with the Transport and the Environment Committee—is anxiety about ferry services. It is right that MSPs should take time to debate the matter, because there is a great deal of anxiety about the transfer of ferry services on 1 October. There are concerns about the long-term viability of the NorthLink service, and there is uncertainty surrounding the application of the Transfer of Undertakings (Protection of Employment) Regulations.
First, I have examined the service that is envisaged, and it will be much better than the current service. Jim Wallace is right to say that only when the service is going will we know how good it is. However, it looks like fares will be cheaper and that the superb new ships will be faster. We cannot discount those positives.
When I was in Orkney and Shetland, I found that the councils, the enterprise companies and the tourist boards were excited about what the new ferries could deliver if everything went well. On the other hand, farmers, hauliers and industries such as aquaculture had serious concerns about the way in which NorthLink was handling the transfer and whether it could deliver for them. It is reasonable to expect those sectors, which rely for their livelihoods on the continuation of the ferry links, to be anxious not be left high and dry with a worse service on 1 October. They did not get a sympathetic hearing from NorthLink, so it is essential that NorthLink try to mend fences with those sectors in Orkney and Shetland.
I am seriously concerned that with competition from Norse Island Ferries and the introduction of a second ferry by Pentland Ferries, the economic sustainability of NorthLink could come into question. I am particularly disappointed that a rival freight service has been set up in Shetland as a result of dissatisfaction with NorthLink. That could have been avoided with proper discussions and negotiations. However, the reality is that NorthLink and the Executive now need to double their efforts to run a viable service in the long term, because if that is not possible, the people who will lose out will be the islanders.
The ferry services are lifeline services. I am sure that farmers, hauliers and others do not want to be left in a position in which they have to rely on a private monopoly and on cherry-picked routes, in the same way that the community of Dunoon is worried about the possibility of a private monopoly crossing the Clyde. Inevitably, that would lead to the need for either huge additional subsidies on unprofitable routes or for massive increases in fares for the people of the northern isles. That cannot be allowed to happen.
Concerns are being expressed about TUPE. NorthLink has said that TUPE regulations do not by law apply to staff, which concerns the work force. The question that the National Union of Marine, Aviation and Shipping Transport Officers posed hits the nail on the head—is it right that workers will be able to test whether they are protected by TUPE or whether they should have been made redundant only after the transfer has taken place?
I appreciate that, as the Deputy Minister for Enterprise, Transport and Lifelong Learning told the Transport and the Environment Committee only today in another context, the only way in which to judge whether TUPE applies is through the courts, but that leaves workers in a potentially difficult situation. I appreciate that Westminster would be required to legislate, but I urge the minister to continue his efforts to make representations about the issue to his Westminster colleagues.
I understand that the pier at Scrabster will not be ready in time for the new vessel and that the Hamnavoe ferry could lie idle until the pier is ready. I hope that the Executive will do everything that it can to ensure that progress is made and that the new ferry is fully operational as soon as possible. Then, we will see the benefit to the islanders.
I hope that, with a change of personnel at the top of NorthLink, relations between the company and communities in Orkney and Shetland will improve. Serious questions remain about the long-term viability of the service and about the TUPE regulations. I hope that the minister will address them in his response.
I congratulate my colleague Mary Scanlon on bringing the debate to the chamber. I have written letters to ministers and asked questions in Parliament about the subject. As a Highlands and Islands MSP, I find that ferries are causing great worry and uncertainty all over the place.
It is surely necessary that ferry services in Scotland be given the highest priority, because our nation, like Norway, has a large number of inhabited islands. However, islanders in Norway seem to receive better services than our own people. Apart from the northern isles ferries, I have been involved recently with many worried people in Dunoon, who have been led to expect that one of their main vehicle-carrying services from Gourock will soon carry only passengers. That will add huge inconvenience to the local population of Dunoon and Cowal, and make it increasingly difficult to present Dunoon as a main gateway to Scotland's first national park, which it was hoped would bring increased prosperity to the town.
Only this morning, I heard on Irish radio that the Ballycastle to Campbeltown ferry will not operate until at least next summer, which is enormously frustrating for the people of Campbeltown and Kintyre, not to mention those who are involved in the new factory, which is building renewable energy turbines. Why is Argyll and Bute, with a Liberal MSP and a Liberal MP, losing its lifeline ferry services? It is because a combination of blanket European directives and the coalition Government's policies are driving down the level of ferry services in Scotland, which is disastrous for the outlying communities that depend on them.
Great concern has been expressed about NorthLink ever since the partnership was envisaged. My main experience of it has been through the concerns of farmers and the National Farmers Union about how livestock will be transported from Orkney and Shetland. Shetland and Orkney are highly dependent on cattle and sheep farming, and only the best transport will enable the island farmers to produce quality in order to achieve a profit and to survive. There has been enough trouble with foot-and-mouth disease, and the Orkney farmers lost their vital cattle-marketing link through Invergordon last year.
The first blow occurred when, without public consultation, livestock was banned from passenger-carrying ships. The cassette system was proposed, in which animals are loaded in tiers into containers where they await transfer to ships. A similar system in the early 1970s ran into trouble because such a double-decker carriage adversely affects a ship's sea-going properties. Only two ships that were built for that system remain, and one—the Hascosay—is being refitted to take the new cassettes. We are told that the system will be ready by 1 October, but so far, not one production model has been finished.
What will happen if the Hascosay breaks down? Where is the replacement vessel that will take cassettes? Orkney Auction Mart is worried and farmers are very worried, but that is unsurprising when livestock was overlooked in the original so-called lifeline subsidised contract that was given to NorthLink. That appears to be a public-private partnership that will result in an inferior service to Shetland and Orkney. How can Orkney, with a Liberal Deputy First Minister, and Shetland, with an ex-minister as its MSP, find their services deteriorating? Is there a link between Shetland and Orkney and Argyll and Bute?
Not only farmers lost confidence—the salmon farming industry that is vital to Shetland was so shocked by NorthLink's proposed freight increases that Shetland has been forced to organise its own freight service to Aberdeen.
The problem is that NorthLink's Orkney to Aberdeen viability relies heavily on through traffic from Shetland, so there is already more uncertainty over the long-term future of NorthLink, even before a ferry has sailed. There is more uncertainty for passengers, for Orkney and Shetland businessmen and for P&O Scottish Ferries workers, who may not be covered by TUPE pension rules when they transfer to NorthLink. They and the people of Orkney and Shetland deserve better treatment, and I seek assurance from the minister that they will receive it.
I welcome Winnie Ewing's continuing visits to Shetland, particularly at Up Helly Aa. I notice that, two years since his last visit there with Mrs Ewing, Duncan Hamilton has only just recovered.
I welcome the opportunity to make a brief contribution regarding lifeline services to my constituency and that of the Deputy First Minister. The issue is far too important for our constituencies to be used as a political football, as the Tories have just done, and I will play no role in that kind of behaviour.
I agree with Maureen Macmillan. For many years, I have shared her frustration about the way in which things have evolved, and I have felt particular frustration in the past year with regard to NorthLink. The situation has changed, and I hope that it has changed considerably for the better in recent weeks, but I wish that the change had happened somewhat earlier. It is incumbent on Tory members to get their facts right in such situations. There are important details that I hope the minister will be able to clarify, but it is extremely important to separate some of the issues that relate to TUPE and the specific classification of employee we are talking about.
I would like to make three points, the first of which relates to TUPE. The separate transfer of crew, who will at least have employment with NorthLink on 1 October, is quite a different issue from the situation of the shoreside staff who work in Holmsgarth, in Mr Macdonald's Aberdeen constituency and in Orkney. The crew members will have to wait to see what the redundancy payment position is. That will be sorted out under TUPE regulations at some point, probably through a court of law or industrial tribunal. That is unfortunate and there is no question about that, but that position will at least work out.
I am more concerned about the current members of P&O Scottish Ferries staff who will simply not have a job on 1 October. I cannot conceive of any circumstances in which they should not receive redundancy payments from P&O, as their employer. They are not transferring to another employer and they will be redundant, so I believe that redundancy payments should apply to them. I hope that, in winding up, the minister will be able to inform the Parliament that that is the position, that he will support the calls that Jim Wallace and I have made for that position to be upheld, and that P&O will pay due redundancy to workers who are in that situation. P&O still refuses to confirm that those workers are due redundancy. That is nonsense—there is no transfer, so the payment of redundancy money must be upheld.
My second point relates to livestock. Livestock boats are not new, if I may say so gently to Mary Scanlon. Livestock boats have been servicing Orkney and Shetland for many years during the peak shipping season—September, October and November. They are not a new phenomenon. The ships are not a lifeline only for cars and passengers but also for livestock. In relation to her work as reporter to the Transport and the Environment Committee, I would like to tell Maureen Macmillan that I was pleased to note that the original draft tender mentioned livestock. I hope that in the tendering exercise in five years' time, those matters will be dealt with appropriately again. It is a source of some disappointment that that point was not retained in the draft specification.
A number of other members have made pertinent points about TRS. In delivering a reliable, affordable and regular service for exporting and importing livestock to the northern isles, it is extremely important that the TRS system is available to the two new companies—Andrew Banks's company and Norse Island Ferries—in circumstances where they comply with the appropriate regulations. I welcomed the minister's confirmation to the Transport and the Environment Committee earlier this summer that that would indeed be the case, and I hope that he will confirm that again today. I hope that he will also confirm that it will be his objective in handling the TRS applications.
To wind up, I look forward to attending the naming ceremony for the Hjaltland in Lerwick on Saturday and to shaking hands vigorously with NorthLink's management and congratulating it on introducing the first new ferry to service the northern isles for 50 years. That is no mean achievement and the minister and the Executive should take due credit for it. There will be a welcome step change in the quality, safety and comfort of the service for islanders. I welcome that step change, but details need to be clarified. We hope that the minister will clarify one or two important points that have been made in this brief debate.
I thank Tavish Scott for his good wishes for my health. I have just about recovered from Up Helly Aa. I could just about have managed with Winnie Ewing—although partying with her is always difficult—but to take her and four Orkney councillors was beyond me. I was nearly a hospital case.
I have a number of brief questions, some of which have been covered. Constituents have raised directly with me a number of issues and I would like clarification on them.
There is a fear that passengers will need to make up the estimated overall drop in income, as a result of the potential loss of freight, through an increase in fares. I understand that fares for next year have been fixed, but will the minister clarify what will happen thereafter? There is a real fear that fares will increase. If the tender has been won by an operation, 50 per cent of which, I assume, is Caledonian MacBrayne, will the minister have any opportunity to reflect on the tender specifications on the CalMac routes in the CalMac tender, where there is a minimum service requirement and a maximum fare requirement? If that is possible in that tender document, will the minister, as a 50 per cent owner in the other part, tell us whether the same would be possible in this situation?
I reiterate what Tavish Scott said about the urgency of the situation in respect of staff. We are talking about many shore-based staff who will not be retained—I understand that they will be out of work in two weeks' time. Therefore, the matter must be resolved urgently. Anything that the minister can do to hasten such resolution would be appreciated.
On whether TUPE applies to those who are transferring, I return to a previous question. If the First Minister is the sole shareholder of CalMac and it is 50 per cent of the consortium that has won the tender, would it be worth exploring the avenue that I mentioned? I do not know the answer to that—I merely pose the question. Perhaps the Deputy First Minister has not tried to influence the First Minister. If he has not, perhaps he should consider doing so in a back-bench role. The other question that has emerged is: what will happen to the service status of those who are transferring? Will they be credited with full service status? Any light that the minister can shed on that matter would be greatly appreciated.
I will stop there, as I have asked the minister at least 10 questions.
I thank Mary Scanlon for providing an opportunity to debate such an important subject and all members who have contributed to the debate for the constructive way in which they have done so.
Reliable and affordable ferry links to the mainland are critical to Orkney and Shetland and the Executive is committed to safeguarding such lifeline services to Scotland's island communities. We are determined to ensure that we safeguard such services in a way that is affordable to users and the taxpayer, while recognising the vital importance to the islands of ferry connections and services.
We are required by European Commission rules to tender public subsidy contracts—including the northern isles ferry contract—every five years. A couple of members have mentioned that we are currently preparing to tender ferry services in the Clyde and Hebridean isles. Tendering for the imminent northern isles contract started in 1998. The tender is for passengers and accompanied cars only, on the same basis as the existing contract with P&O Scottish Ferries. As before, we were bound to accept the lowest bid that met the service specification and, on that basis, NorthLink's bid succeeded. It has been mentioned that it is bringing in three new, larger vessels that are built to the latest safety standards, more frequent services and substantially lower fares.
First, I would like to address the issue of livestock. It is worth noting that livestock are outside the subsidy contract. That is not something new nor is it something that we have invented; it has been inherited and was operated under previous Governments when active competition for livestock carriage was perhaps greater than it was in 1998-99, when we drew up the current contract.
I will correct a couple of factual inaccuracies. The livestock vessels that have been chartered this year to meet the immediate needs this season have been chartered by P&O, not by the Scottish Executive. P&O has done that every year for a number of years, so there is nothing new about it. It is not the case that the demolition of lairage at Aberdeen was a pointless exercise. That had to happen to allow work to begin on the new terminals required for the new and larger vessels that will be used.
One of the major concerns has been the future of the livestock shipments. Members have all recognised the importance of livestock to the islands' economies. The worry has been about the position after 31 October, when the P&O service will end. My understanding is that NorthLink now plans to carry livestock in livestock transporters that have higher sides than the standard general livestock transportation and so which are more suitable for the larger Orkney cattle. That provision of livestock transporters will meet the need in the immediate period following 31 October. There is a good deal of confidence that cassettes will be on stream and will arrive soon thereafter.
As has been described, there has been considerable uncertainty about those proposals, but I now understand that Orkney Auction Mart, which is the main facilitator in providing the cassettes for use on NorthLink vessels, or other vessels, will place its orders shortly. The time from placing the orders to delivery of the cassettes should be in the order of 16 weeks, so they will be in place well before next year's peak livestock season.
I also understand that NorthLink is actively considering buying some single-deck cassettes, as well as double-deck ones, and will, if necessary, carry those on its passenger and vehicle ferries. I think that that will allay any remaining concerns.
Members have mentioned that other carriers may wish to apply for tariff rebate subsidy. That subsidy can be made available to any operator who satisfies the key requirements of the scheme. All applications are considered on that basis and there will be a level playing field.
Likewise, freight lies outside the current contract. As we know, last week Norse Island Ferries started a roll-on, roll-off freight service from Shetland that is in competition with P&O and ultimately will be in competition with NorthLink, when it takes over the service at the end of the month. It is for the companies in question to resolve their commercial interests in meeting that competition. It is for NorthLink to meet that competition as a commercial company; it is not subsidised for the provision of freight. It has to satisfy us, by providing an annual account and annual performance indicators, that it is not using the subsidy that we provide for passengers and accompanied cars to subsidise its freight carriage. Therefore, it is a matter that NorthLink will have to deal with in the usual way.
Of course, it is no surprise that NorthLink is concerned about competition; any commercial company would be. NorthLink looks to make a profit from its freight carriage and it is for it to do that by providing a competitive service. We do not regard competition for freight as a bad thing and it is not new. If competition has the effect of providing a better service for customers in due course, that will be welcome in the islands.
A number of questions have been raised about harbours. Responsibility for harbour developments rests with the harbour authorities. They have responsibility for bringing forward the necessary works on time. There have been delays, which in the case of Scrabster will go beyond 1 October. That is to be regretted. It is for Scrabster Harbour Trust and its contractors to resolve the problem. In the meantime, until NorthLink's vessel, the Hamnavoe, which will serve that route, is ready, I understand that a charter arrangement is in place with CalMac. We will work actively with them and with other interested parties, after the Hamnavoe is available, to ensure that that lifeline service continues to ply the route between Stromness and Scrabster. I hope that members will be reassured that it is our commitment to do that. We will work with all interested parties to ensure that that is done.
The transfer of undertakings is a critical issue. There is a particular legal difficulty relating to TUPE. The system was inherited from a previous Government and, in the case of the northern isles, has been shown to be unsatisfactory in two respects. First, it is not clear until the point of transfer whether TUPE applies to particular members of staff. Secondly, the incoming operator gave guarantees from an early stage to seafarers, but not to shore staff. That has operated to the disadvantage of shore staff.
I understand that P&O intends to pay a loyalty bonus to staff who stay with them until 30 September and who have not been offered a job by NorthLink or one of its contractors that has terms and conditions that are substantially equivalent to those that they enjoy at present. The bonus, which is equivalent to 13 weeks' pay, means that no one will leave the company without either a job in the successor operator or a significant cash sum. I welcome that, although I realise that it does not address the whole issue, which is why I raised the matter with my colleagues at Westminster, as members have acknowledged. We do not want a situation to arise again in which people face uncertainty late in the day.
The transfer of the ferry contract to NorthLink has been a complex process, but it will be the single biggest improvement in ferry services for the northern isles in 50 years. There will be three new vessels, more sailings, new harbours and terminal facilities and lower fares. P&O Scottish Ferries has served the northern isles well over the years and I am sure that many islanders will want to pay tribute to the company. I am also sure that many islanders will look forward to the step change in provision that will take place in the northern isles in a few weeks' time.
Meeting closed at 17:47.