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GOVERNMENT RESPOND TO FERRY REGULATION PETITION

UPDATED: The Government has responded to an online petition seeking action to regulate ferry prices with a less than satisfactory answer for the 17,352 people that called for action.

‘Tough’ seems to be the general gist of the Government’s thoughts on regulating ferry prices, confirming that there are no plans to regulate ferry prices in England.

In their response to the signatories, the powers that be say ferry companies provide a ‘diverse services at a range of prices’ and that there is no evidence of market failure to require regulatory intervention.

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However, Government have said they would step in where a commercially provided ferry link is at risk in order to consider options to maintain that link as a lifeline service.

When it comes down to price, the decision lays with the ferry operator. The Department for Transport say:

”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 economic impact on the island and passengers using the ferry services has been considered on 2 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 – https://www.iow.gov.uk/azservices/documents/1190-TITF-Ferry-Assessment-FINAL.PDF 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 high: http://webarchive.nationalarchives.gov.uk/20140402181519/http://oft.gov.uk/shared_oft/consultations/oft1135.pdf .

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”.

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: https://www.gov.uk/guidance/tell-the-cma-about-a-competition-or-market-problem

UPDATE: Carl Feeney, Pro- Link Chair and Director of Able Connections Ltd has responded to today’s news:

“At last we have an unequivocal decision by the central government that confirms the IOW ferry companies can most certainly not be nationalised, regulated or subsidised at any stage.

“Over 17,000 people in less than one month registered their frustration and dissatisfaction regarding the Isle of Wight ferry companies. Governing that frustration included the logistical time consuming problems, the unaffordable fares… the unreliability, etc associated with this archaic form of transport, in order to cover just a 4 mile distance in the 21st century.

“The Isle of Wight ferry companies will never be anything other than unregulated. So where do we go from here… what are our options? Today I have released on the Solent Freedom Tunnel website, a webpage to describe how the three ferry companies maintain their grasp on the institutions that should be representing the Isle of Wight. The stranglehold that these ferry companies maintain, is a tourniquet of greed and control to the detriment of the island’s welfare. I urge islanders to view the webpage released today concerning the IOW Chamber of Commerce.

“Next Friday (21st September) I will release an SFT webpage describing the Solent Freedom Tunnel scheme route, with an explanation of how the project can be achieved. The week after (28th September), there will be a presentation from international infrastructure specialists – ARUP, describing SFT viability study they will perform. Just a few days after that presentation, a crowd funding mechanism will be announced, whereby funds can be achieved to pay for the study.

“It is bizarre that our island representatives choose to maintain the status quo in such dire circumstances. I’m more and more astonished at the ineptitude of our MP as the fixed link campaign moves forward. I for one will never relent until we see independence and freedom from the oppressive control these ferry companies burden islanders with. The only way to do that is to provide regulated and affordable competition to the market, that creates 24 hour, fast and immediate freedom of movement”.

Meanwhile, Vix Lowthion of the Isle of Wight Green Party has said:

“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”.

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