Government responds to Isle of Wight petition calling for regulated ferry fares

Over 17,500 people have so far signed the petition calling on the Government to regulate ferry fares in the UK. The Government have responded. Read it here.

Houses of parliament

Those people who signed a recent petition calling for the Parliament to regulate ferry prices will be opening emails this morning to read the Government’s response.

The petition “Empower the UK Government or Parliament to regulate ferry prices” has so far been signed by 17,355 people (at time of publishing).

No plans to regulate ferry prices
The crux of the Government’s response is that there are “no plans to regulate ferry prices in England”.

They say,

“Ferry companies in the UK operate in a competitive, commercial market, with the operators competing on price, quality, frequency and speed of their services.”

It goes on to explain that provision of frequent crossings, from a selection of locations, and at a range of prices, does not indicate, in their view, evidence of a market failure or other reasons.

Petition committee to review
The next stage for the petition is for the Petitions Committee – which is made up of 11 cross-party MPs – to look at this petition and its response.

They do have the power to press the government for action and gather evidence. If the petition – which runs until 20th February 2019 – reaches 100,000 signatures, it will be considered for debate in Parliament.

The full response
Government’s response in full:

There are no plans to regulate ferry prices in England. Ferry companies provide diverse services at a range of prices. There is no evidence of market failure to require regulatory intervention.

Ferry companies in the UK operate in a competitive, commercial market, with the operators competing on price, quality, frequency and speed of their services. In locations such as the Isle of Wight there is a provision of frequent crossings, from a selection of locations, and at a range of prices.

At present such provision does not indicate evidence of a market failure or other reasons that may justify government regulatory intervention. As such the Government has no plans to regulate ferry prices. However, in circumstances where a commercially provided ferry link is at risk, Government would consider options to maintain that link as a lifeline service.

UK ships and ports operate on a private basis, without public sector support, so the ferry companies concerned are private sector entities. The cost of a service, its quality, and frequency are therefore a commercial decision for the ferry operator, and for the company concerned to determine the commercial viability of differing service and fare levels in their current operating environment.

The exception to this is Scotland, where the Scottish Government subsidises, and also regulates fares for, a number of “lifeline” ferry services to connect remote and lightly populated locations that would not otherwise be commercially served due to a lack of demand.

This is not the case for the Isle of Wight where there are multiple operators providing up to approximately 250 sailings per day, and close to 100,000 scheduled sailings per year. Over 8.5 million passengers carried in 2017 (Table SPAS0201)

The economic impact on the island and passengers using the ferry services has been considered on two occasions. Most recently the Isle of Wight Transport Infrastructure Task Force (TITF) was established in summer 2016 to receive information and make proposals on a wide range issues vital to the Island’s future. As part of this a report was produced that assessed whether there is any correlation between economic performance and trends in ferry operations.

It noted that Isle of Wight GVA has been higher, and more consistent than, that of its mainland neighbours and is comparable with wider trends. The report also found that the island economy is changing and economic growth is being achieved with less cross-Solent travel.

In 2009, the Office of Fair Trading (OFT) investigated ferry services to and from the Isle of Wight, in particular whether there was a lack of competition, and if prices were too.

The OFT decided not to refer the ferry companies to the then Competition Commission and concluded that there existed some features of the market that prevent, restrict or distort competition “but that there is limited evidence of actual consumer detriment”.

At an individual level, we can understand that the issue of ferry fares may have an influence on people’s travel choices, particularly for those making regular cross-Solent trips, travelling at short notice, or undertaking peak time travel. Evidence cited in the report to TITF noted that, while the ferry is an asset in terms of attracting visitors, a significant proportion of people have a poor opinion of the ferry services’ value for money.

The ferry companies do offer discounted fares for regular and special users, such as season or multibuy, as well as for medical travel, that can improve the value for money for individual customers.

Overall, the two main reports produced on this issue do not indicate that there is a significant evidence of widespread economic or consumer impact. The available evidence at this time does not therefore support the regulation of ferry fares.

Though the OFT did not refer the case to the Competition Commission it said that this should not constrain a future consideration of the market if that became necessary. In the case of a competition issue or market problem today, for example businesses abusing their dominant position, it is now the Competition and Markets Authority who will potentially have an interest.

It is open to anyone to complain to the Competition and Markets Authority (CMA), citing as much evidence as possible. Whilst the CMA’s predecessors did not find behaviour requiring action, evidence of a material change in recent years could be pertinent. The CMA would then assess the case for further investigation depending on its current priorities and resources.

The procedure for making complaints to the CMA can be found here.

Department for Transport.

Seely: “I will continue to make the case”
On the announcement earlier this week of discounted fares for Islanders in receipt of housing benefit and council tax support, Isle of Wight Conservative MP, Robert Seely, said,

“I will continue to make the case that Islanders are being unfairly treated by what is effectively a duopoly.”

IW Greens: Need an MP that understands daily struggles
Isle of Wight Green Party’s parliamentary candidate, Vix Lowthion told OnTheWight,

“It’s no surprise whatsoever that our Conservative MP Bob Seely’s government have swiftly rejected the call from 17,000+ Islanders to regulate the prices we are forced to pay for our ferry service.

“The Conservative Party believes that all transport services are best provided by commercial companies free of regulation – yet this policy has led to an effective monopoly here on the Isle of Wight. The statement from the government completely ignores the situation in Scotland which has a public body to regulate and subsidise routes for the communities they serve.

“Bob Seely will continue to fail to work for Islanders on this issue because he and the Party he represents do not believe in regulation, subsidies and state intervention. How much longer must we put up with his transparent spin and bluster on this vital issue of greater accessibility for Island businesses and travellers?

“We need a different MP who really knows what it’s like for ordinary families to struggle to get across the Solent.”

IW Labour: “Contemptuous Government response”
Isle of Wight Constituency Labour Party spokesperson, Julian Critchley, told OnTheWight,

“An entirely predictable and entirely contemptuous response from a Conservative Government which always has, and always will, put the profits of private companies ahead of the interests of the citizens of this island and this country.

“Islanders will, I am sure, get the message loud and clear: the Conservative Party will never stand up for them against big business. With the ferries, as with all other issues surrounding our public services, our schools, our hospital, our care services and our emergency services, the Conservative government simply does not care what Islanders need.

“Ultimately, petitions will bounce off this uncaring Government. The only way to ensure that the Government works for Islanders, and not for big business, is to kick them out and elect a Labour MP in a Labour Government which will govern for the many, not the few.”

Article edit
10.10: Comment from Vix Lowthion added
11.40: Comment from Julian Critchely added

Image: jasonwharam under CC BY 2.0

Thursday, 13th September, 2018 8:18am

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Filed under: Ferry, Government, Island-wide, Isle of Wight News, Top story

Any views or opinions presented in the comments below are solely those of the author and do not represent those of OnTheWight.

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23 Comments on "Government responds to Isle of Wight petition calling for regulated ferry fares"

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Colin

So, in a nutshell, “Go away, we’re not interested”.

Please all remember this at the next elections, be it national or local. The tories don’t care.

yh5775

The whole Island economy is strangled by the ferry costs. The Island relies on tourism yet this is stifled by the crazy prices during the holiday season Why come to the Island when you can travel to France for the same or less.

Tim

Its unlikely that the ferries will be fixed during the lifetime of anyone currently living on the island.

I do not believe it

If the Isle of Wight constituency was a marginal Tory seat (rather than the soft Tory win-win seat it actually is [even if a babbling baboon stood as a Tory candidate it would definitely be elected]) I suspect that the present Tory Government would not be so dismissive.
What a ghastly shower they are!

iowdave

I think I might adopt a babbling baboon. I could do with the money it might earn me.

Another perspective

I recently flew to Germany, the costs from the most expensive to the cheapest was

1. Cost of getting on and off the island

2. Cost of airport parking

3 Cost of return flight from UK to Germany

eastcowes

I think we should still try to get to the 100,000 signatories. It’s clear that they aren’t using the correct data that accurately reflects what is going on with the island. We need a debate where we can get a campaign and a decent discussion going. Don’t fall at the first post!

wellsm

The most sensible response here. Of course there needs to be debate and pressure needs to continue to be put on the government, which appears not to recognise that a duopoly can have the same effect on a market as a monopoly. Mr Seely will need to demonstrate that he is indeed continuing to press the government.

prof
Unfortunately any debate would be futile. We are just one voice amongst 650 and no-one else is going to support something that has no benefit to their constituents. Better to present Mr Seely with a 120000 signature petition pointing out that we will consider voting for a candidate of another party if that candidate can offer the support the island needs that is being denied by the… Read more »
eastcowes
prof, no one said that it would be the miracle answer. We are all well aware – for many decades – that the island only has one tiny representative amongst many, all of whom have more power and wants for themselves and their own constituents. HOWEVER, if a proper campaign ever were started, pointing out the horrendous fallacies in how he civil servants do their evaluations of… Read more »
chrisinthemorning

It’s not entirely true that the government is fundamentally opposed to the idea of subsidies. Food and drink in the Houses of Parliament are heavily subsidised by tax payers.

It’s quite hard to find definitive figures but it appears that, over both Houses, the subsidy amounts to about £4 million a year. Some claim that it’s higher than that.

wellsm

Your data to prove this?

peterj
wellsm

Thanks for this it is good to see this kind of claim supported by actual data. The facts then become indisputable.

Steve Goodman
A quick search just brought up recent annual subsidy figures between about £6m and £3m. Even the Mail moaned about it last year, and the parliamentary debate which should have followed a petition was refused. Government subsidies causing concern are common; for example, their filthy fracking friends got tax breaks, beneficial law changes to remove the rights of property owners local authorities and objectors, and unelected positions… Read more »
garyeldridge
Everyone with a modicum of intelligence knows the Conservative Party is very business orientated, but to suggest that Labour, would address these key issues of Island economic prosperity is an outright, bare-faced untruth, because when in power, for a very loooong time, the evidence was- nothing was done, nada, zero, Another example of “we don’t really care and you lot, the pond-life, don’t matter” and that applies… Read more »
iowdave

Let’s not forget it was Tony Blair (Labour) who took us into a political alliance with Europe (E.U.) and feathered his own nest very nicely.

snowey
Strange that there are not many Basaltic New Yorkers, pensioned Californian State Teachers and PRC Chinese arriving frequently on Wightlink or even living here; after all they own ALL the shares in Wightlink. Not many pensioned Canadians here, after all they own all the shares in Red Funnel along with the West Midlands local government pension fund. Maybe the West Midlanders retire here. Neither of these companies… Read more »
chris1

Open up the access ports to other operators, a third service in the near term would force changes…. ports are mostly on crown land. I think in the interests of fairness that Seely has been fighting hard to get a better deal on ferries for islanders, it is unfair of the aspiring Green candidate to suggest otherwise…….

ThomasC
This is a government wedded to the concept of free markets and neoliberalism. There was never any real chance of them regulating a few market. The only way of resolving the Great Cross-Solent Rip-off is by introducing another private service to add competition to the market. That would naturally be a fixed link, let as a central government project and mostly privately funded. Ahead of that is… Read more »
wellsm

Cost? Benefits? I don’t see this ever happening and in my opinion it would be detrimental to the Island. It would fill it up with traffic on roads which are already crowded.
The duopoly needs to be broken, preferably by a third ferry company coming in, which is unlikely, so by regulation of the ferry cost.

iowdave

Unsubstantiated conjecture. Traffic would also LEAVE the island so you can only guess the outcome. It is unlikely that the duopoly will ever be broken. I seem to recall that Cowes Express tried – and failed.