Ferry subsidy cut ‘a tax on islands’

The Scottish Government has been criticised for a decision to remove a fare subsidy for ferries.

Opposition MSPs attacked the SNP administration for allowing some fares to rise after a review of the Road Equivalent Tariff (RET), which sets prices around the equivalent of driving the same distance.

Labour, Liberal Democrat and Tory politicians accused the government of harming hauliers and island communities.

In a Labour-led debate at Holyrood, North-east MSP ­Richard Baker highlighted a new report analysing the RET decision, which found fares have increased.

He said: “Now we have had the publication of analysis by the Scottish Government itself which shows that the removal of RET is having exactly the impact many members of the chamber warned it would have: increasing costs for hauliers and island households, amounting to a tax on island communities.”

The government introduced an RET pilot scheme on routes serving the Western Isles, Coll and Tiree in October 2008. It was removed for commercial vehicles in April last year. The MVA consultancy report found its removal had a negative effect on small hauliers, trader-hauliers and economies of scale.

Transport minister Keith Brown said everything possible was being done to avoid any negative impact, He said £4.5 million had been found for a transitional scheme over the past two years, but added: “It’s hard to assess the impact of removal of RET against the general economic recession.”