Meeting of the Parliament

Meeting date: Tuesday, April 30, 2013

Official Report 704KB pdf

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Topical Question Time

The next item of business is a debate on motion S4M-06388, in the name of Fiona Hyslop, on the implications for Scotland of the royal charter on the self-regulation of the press. [Interruption.] I am sorry. It is topical questions, isn’t it? [Laughter.] Okay. I say to those who are waiting with bated breath to ask their topical questions that we will move on to them.

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Pentland Firth Ferry Service (Contingency Plans)

1. Thank you, Presiding Officer. It is okay. I will be participating in the next debate as well.

To ask the Scottish Government, in light of the engine failure of the MV Hamnavoe, what contingency plans are in place to maintain the lifeline ferry service on the Pentland Firth. (S4T-00328)

The Scottish Government recently put the contract in place to provide the lifeline ferry service between Scrabster and Stromness and we remain firmly committed to the route. Serco NorthLink is engaging with the European charter market to source another vessel that can be brought to this lifeline route while MV Hamnavoe is being repaired.

I am monitoring the situation and I am satisfied that every effort is being made to source an alternative vessel. Indeed, I have requested that Caledonian Maritime Assets Ltd assists in that. While that process continues, Serco NorthLink has put in place immediate contingency plans to ensure that all booked traffic and passengers are moved to either the Serco NorthLink service between Aberdeen and Kirkwall or the service that is provided by Pentland Ferries.

Serco NorthLink plan to introduce a freighter to the route in the next few days, to ensure that freight can continue to travel on the Scrabster to Stromness route. The freighter will also be able to carry cars, but it will have a limited foot passenger-carrying capacity.

As the contract that the Scottish ministers have with Serco NorthLink imposes penalties on the operator whenever it does not deliver ferry services to schedule, it is fully incentivised to find an alternative means of meeting its contractual requirements. For each return sailing missed, the cost to Serco NorthLink will be £7,732 in penalties. In addition, the operator will suffer a loss of revenue and be liable for the direct and indirect financial consequences of the repair, which in this case are likely to be substantial.

I am slightly concerned that, in some media interviews this morning, Liam McArthur may have given the impression that the temporary loss of the Hamnavoe is preventing people and goods from reaching Orkney. As I think he knows, that is not the case. With the contingency arrangements now in place, Orkney is very much open for business, although we are seized of the need to restore the lifeline service between Scrabster and Stromness as soon as possible.

It is only fair to say that I was contacted this morning by a number of local business that have confirmed that they have had difficulties and have had to shift their transport patterns or have lost tourism bookings as a result of the problem.

It is now five days since the Hamnavoe suffered a major engine failure; five days during which my constituents and many local businesses have been left without their lifeline service between Stromness and Scrabster and there has been little evidence of an effective contingency plan. With confirmation that the Hamnavoe might be out of service for four weeks, anger in Orkney at the lack of progress is understandably boiling over.

Can the minister confirm that, under schedule 5 of the contract that was signed with Serco, commitments were made for ferry replacement and redeployment? Can he advise me what those provisions are, as they have been redacted from the version on the Transport Scotland website? Will the minister ensure that the existing NorthLink fleet, including the second freighter that he referred to, is redeployed until a suitable replacement vessel has been found, and that that happens immediately, so that my constituents are provided with the lifeline service that is specified in the Government’s own contract?

It is worth remembering that this was a catastrophic failure of a crankshaft or at least a vibration dampener on the starboard side. What happened was unforeseen, although it will be examined closely because it is important that we and Serco know whether it was the manufacturer’s fault.

As Liam McArthur knows, the Hamnavoe has served the people of Orkney and Caithness for many years. The fact that it has been catastrophically damaged by a mechanical malfunction has provided some consternation for people in those places, as he rightly says.

The explicit provisions of the contract are that Serco NorthLink has to deal with vessel failure by responding to it in an efficient and effective way. It is also obliged to make best use of its existing maritime expertise and industry contacts, not least to access a replacement vessel. As I said, we are helping with that by providing the expertise of CMAL.

There is no complacency here. People are working very hard 24 hours a day, round the clock, to repair the damage as soon as possible and they are working hard to procure an additional vessel. It is also true that contingencies have been put in place to make sure that people can travel, on Pentland Ferries and, if necessary, on the other route that is provided by Serco NorthLink.

I note the minister’s reference to “catastrophic” engine failure, which is terminology that I was reprimanded for using earlier in the week. He is absolutely right that no one could have predicted the engine failure, but clearly the eventuality was envisaged by the minister’s officials when the contract was negotiated. That being the case, I, like my constituents, cannot understand why no effective contingency arrangements appear to have been put in place.

The minister has set out the financial penalties to Serco for on-going lack of reliability or delivery of the service, which provide an incentive that I welcome. Can he advise me and constituents to whom and to whose businesses there has been a loss whether that loss is remediable through Serco or by writing directly to the Government?

I have outlined the penalties that apply to Serco. As was the case under previous Administrations, there is no provision for the compensation that I think Liam McArthur is hinting at. He has raised with me the question whether additional costs have been incurred by his constituents, which I have undertaken to look into with Serco NorthLink. I am happy to do that and get back to Liam McArthur in due course. The same arrangements are in place for a loss of service as always have been. A loss of service happened previously with MV Clansman, as the member may recall. The same provisions applied then as do now.

We all agree that normal service on the key Serco NorthLink service between Scrabster and Stromness must be quickly normalised. Will the minister confirm that Serco NorthLink will be able to modify the roll-on, roll-off facilities at those ports in order that cargo boats and then possibly a passenger and car ferry can be accommodated so that the service can be resumed as quickly as possible before the MV Hamnavoe returns?

I am happy to confirm to the member that discussions have taken place between Serco NorthLink and the harbour authorities. Modification will be required, not least in relation to the original freighter that is being brought in to provide a freight service.

I understand that that is not straightforward process, but the authorities in Scrabster and Serco NorthLink are working on that. The procurement of an additional vessel will, obviously, take into account the particular mooring and other requirements of that vessel to ensure that it is suitable, if at all possible without any need to make further modifications.

I am not sure whether the minister was in post in 2010 when a similar incident happened with MV Clansman but, at that time, I asked that a stand-by vessel be bought to fill in at times such as this when there was catastrophic failure with a vessel. Such a vessel could be used on a secondary route in between times so that a ferry would be available but it would be paying for itself. Will he give that idea serious consideration?

What applies now that did not apply in 2010 is that we have two contracts with two different providers. Such a suggestion would have to be dealt with in the context of one contract. If we required Serco NorthLink to have an additional vessel, the overheads would be substantial, and those costs would have to be found from either additional subsidy—and the subsidy levels are already at record levels for ferry services in Scotland—or additional cost to the passenger. Neither of those options is acceptable.

It is necessary for the operator to provide a replacement vessel as quickly as possible, rather than have a six-year overhead of an additional vessel that could not be used on any other routes on the Serco NorthLink contract because it has guaranteed the vessels that are being used for Shetland separately. That is not a realistic option to undertake for this particular contract.

The fact that businesses and travellers are having difficulty booking the Pentland Ferries service from Gills Bay to St Margaret’s Hope in Orkney confirms that this is a lifeline service and, indeed, that an effective contingency is even more valued in these times of need. Given that the service receives no public subsidy at all, will the minister look again at the state’s zero subsidy for lifeline services?

The level of subsidy for that service was looked at as part of the tendering process. We had a substantial consultation in which we talked to all the stakeholders involved and we were agreed on the level of subsidies that we would provide to that service.

My officials have spoken to Serco NorthLink as recently as the past hour to ensure that the booking of passengers on to the Pentland Ferries service is carried out as easily as possible and that the necessary capacity will be provided. Therefore, there is substantial collaboration between Pentland Ferries and Serco NorthLink. If the member is aware of additional booking difficulties, I am more than happy to look into that to ensure that the problem is remedied as soon as possible.

Will the minister confirm whether the vessel that is being procured will provide the service across the Pentland Firth while the crankshaft is being replaced and for the entire period for which MV Hamnavoe is out of service? Will he therefore confirm that neither MV Hrossey or MV Hjaltland will be taken off the Lerwick and Kirkwall to Aberdeen routes during that period?

In response to Tavish Scott’s latter question, I have confirmed that we do not intend to take vessels from the Shetland routes on to the service, which is something that we made clear when we let the contract. If an additional vessel can be procured to replace the Hamnavoe in the meantime, the idea would be to have that in place until the Hamnavoe comes back into service.

The minister will be aware of the harsh winter and late spring and the effect on livestock, which are being required to be fed unseasonably late. Will the contingency plans make provision for essential livestock feeds and fertilisers being delivered to Orkney, in support of the hard-pressed farming and crofting community?

I understand that they do. In addition, the new freighter, which is in hot layup, as it is called, and which will come in if the modifications that I mentioned can be made, will start to alleviate such pressure as still exists. As I understand it, feed and other necessary freight are getting through, but we want the new freighter to come on and provide additional capacity. That might happen as soon as tomorrow.

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Salvesen v Riddell

2. To ask the Scottish Government what its response is to the Supreme Court ruling on the Salvesen v Riddell case. (S4T-00329)

On 24 April, the Supreme Court issued a decision in the case of Salvesen v Riddell, holding that section 72(10) of the Agricultural Holdings (Scotland) Act 2003 is outside legislative competence, because it is incompatible with agricultural landlords’ rights under article 1 of protocol 1 of the European convention on human rights.

We were disappointed by the Supreme Court’s ruling. The court has given us a year to work out how to respond. Agricultural tenancy legislation is highly technical, as members are well aware, and the Government will need to consult carefully with stakeholders and the Parliament on what steps to take.

I share the cabinet secretary’s disappointment at the decision. Labour will work with the Scottish Government to deliver a workable solution that supports tenant farming in Scotland.

Affected tenant farmers have been in limbo, which has caused distress and uncertainty, and the cabinet secretary will be aware of their disappointment at the recent decision. I understand that the Scottish Government asked for a limit on retrospection, which was not granted. Will the cabinet secretary say how many tenant farmers are affected by the judgment?

Although the Supreme Court’s ruling on incompatibility was limited to section 72 of the 2003 act, the court said that that section’s relationship with section 73 needs to be looked at again. Will the cabinet secretary address concerns in that regard?

The number of tenancies that are affected is difficult to quantify, given the timescale involved. We estimate that between 120 and 350 notices to quit agricultural tenancies were served by landlords on tenant farmers in limited partnerships during the Agricultural Holdings (Scotland) Bill’s passage through the Parliament. That gives us a rough estimate in the context of the overall number of tenancies in Scotland; in 2012, 512 out of 6,775 tenancies in Scotland were limited partnerships under the Agricultural Holdings (Scotland) Act 1991. It is clear that tenancy agreements are affected.

As the member said, the court declined to limit the retrospective effect of the judgment, although it suspended the effect of the decision for 12 months—or more, if required—to give the Parliament the time to take necessary steps to ensure that its legislation complies with ECHR. The court recognised that this Parliament is the right place in which to debate the way forward and acknowledged that a full consultation with all interested parties in the 12 months ahead will be vital. We will ensure that that happens, with all parties in the Parliament.

As the cabinet secretary said, the decision is suspended for 12 months. At this point, can he give an indication of the Government’s anticipated timescale for bringing forward proposals?

I appreciate the information that the cabinet secretary has provided today. Given the complexity of the issue, will he say how he will keep members informed of the Government’s work? If possible, will he comment on the issue to do with section 73?

I will ensure that a briefing on the complex issues behind the case, including the relationship with section 73, is issued to the relevant parliamentary committee and other interested members. I am sure that the member has read the judgment and knows that it raises a number of complex issues. We are considering our options and want to take a little time to do so; we will make every effort to keep MSPs in the loop, because the Parliament must approach the issue on a cross-party basis, for the sake of tenant farming in Scotland.

In view of the importance of the proportionality test in ECHR jurisprudence, what lessons does the Scottish Government think can be learned from the decision in Salvesen v Riddell?

In relation to ECHR and in light of the judgment, it is clear that ministers must carefully define and articulate the public interest, balancing that with the safeguarding of individual rights. As the judgment illustrates, the court took the view that Parliament overstepped the mark in trying to prevent avoidance measures. The court thought that the steps that were taken were disproportionate. We have to strike a careful balance, but I am sure that the Parliament wants to put the public interest first. How we do that will determine the extent of our success in taking the issue forward.

In light of the judgment, whom will the cabinet secretary be consulting before bringing forward his proposals?

Clearly, that will depend very much on the extent to which we have to legislate. If, as seems to be the case, legislation is required, we will have to carry out a normal consultation, so all the stakeholders and the parliamentary process will be involved. At the moment, we do not quite know what options to take, as the member will imagine. Given the complexity involved, we want to take a few weeks to understand the options. If legislation is required, it will have to go through the full consultation process.