A hard Brexit from the European Union threatens the maintenance of Scotland’s ageing ferry fleet and harbours vital for Scotland’s island communities, according to an internal corporate document obtained by The Ferret.
The owner of ferries and harbours throughout Scotland, Caledonian Maritime Assets Limited (CMAL), says there is a high risk that a hard Brexit could lead to a breakdown in vital supply chains.
An extract from the company’s risk register, released under freedom of information law, says the worst consequence of Brexit could lead to: “Delay in procurement, resulting in delays to future ship building projects and spares being identified and supplied.”
It adds: “This also has an affect on the civil engineering projects (both large and small scale); including reactive maintenance issues which require stores/supplier to rectify.”
The assessment has sparked concerns from local politicians, as well as groups representing communities and businesses that rely on the CMAL-owned infrastructure.
A “hard Brexit” is not formally defined but is typically viewed as an any arrangement that sees the UK leaving the European Union (EU), the customs union and the European Free Trade Area. It may require firms such as CMAL to negotiate new physical customs checks when they import spare parts or materials from EU countries.
The UK Government’s own Brexit guidance notes warn firms that additional customs declarations and payments are likely to be required for all companies that wish to import materials from other EU countries in the event of a “no deal” scenario.
CMAL owns 34 ferries worth £134m, with two more worth an additional £97m on order. Most of the ferries are leased to Caledonian MacBrayne, while the Northlink Ferries that serve Orkney and Shetland are leased to another company, Serco.
CMAL also owns 16 harbours across the Scottish islands and along the west coast, including Oban, Wemyss Bay, Brodick on Arran, Lochboisdale on South Uist, and Port Ellen on Islay.
Michael Russell MSP, the Scottish Government’s cabinet secretary for constitutional affairs, thought that CMAL management were right to note the high risk of a hard Brexit to the firm. Keeping the ferries at sea relies on supply chains that crisscross the European Union, he said.
“Two weeks ago, for example, they had to get parts for a break down all the way from Germany – if the usual channels become much harder to negotiate and lengthy customs clearances become the norm then there will be a high risk of delay to such repair and greater difficulties with procurement too,” he added.
“The UK government’s “no deal” notices simply serve to illustrate how appalling a no deal would be – but despite the best efforts of the Scottish Government, the UK government refuses to take the actions that would result in that threat being removed.”
Although the CMAL document focuses on potential problems with procurement as the main issue following a no deal Brexit, Russell said that leaving the EU could also cut the amount of money available to spend on big infrastructure projects in the Highlands and Islands. This could reduce the amount of investment available for harbour improvements.
In September, the Herald on Sunday reported growing concerns over the resilience of the CMAL fleet after several boats had to be taken out of service during one year for repairs.
Ross Greer, Scottish Green MSP for West of Scotland, warned that any further threat to maintenance or upgrades to the fleet was “a serious concern”.
He said: “The Greens recently uncovered that almost 4,000 ferry journeys have been cancelled in the past five years as a result of mechanical failures, and the average age of the ferries on the Clyde and Hebrides routes is now 23 years, so any risk to keeping the ferries going is a very real threat to a lifeline service.
“It’s immensely frustrating that a hard Brexit which Scotland did not vote for is causing this risk.”
As the UK government enters the final months of the Brexit negotiations, Brexit minister Dominic Raab told MPs on October 9 that he was still pursuing a trade deal that would allow goods and services to move “frictionlessly” between the UK and EU countries.
But it remains unclear whether the UK Government will be able to put together a deal that will gain the support of all the European Union member countries and a majority of MPs in the House of Commons.
Many Tory MPs, including some from Scotland, are actively campaigning for a Brexit deal that could require more customs checks, delays and payments for goods moving between the UK and the EU.
👇🏻 Here we have it. The EU will accept the super Canada free trade deal that we have been urging the government to support. Chequers is dead so in the coming months the government will have to make the choice between a no deal outcome or an FTA #ChuckChequers #FreeTrade https://t.co/CP4FQ6PHZF
— Ross Thomson (@RossThomson_Abz) October 4, 2018
“The Tories determined to drive us over the Brexit cliff edge should explain to west coast communities why they back a situation which threatens delays to the new ships and spare parts that keep us connected,” said Greer.
His concerns over the reliability of the fleet are shared by Rob MacKinnon, chair of the Outer Hebrides Tourism group. He said that the ferry services were already at capacity and noted that promised new vessels had been delayed.
Any additional delay caused by the Brexit process would be “very worrying,” he said, and could impede economic growth on the islands.
“Over 80 per cent of leisure visitors to the Outer Hebrides arrive by ferry so they are crucial to the islands tourism economy,” said MacKinnon.
“Over the summer months nearly all the existing services are already at or approaching capacity. New vessels with extra capacity are already severely delayed so any further delay from Brexit would be very worrying.”
The average age of the 31 vessels in the Hebridean fleet is 21 years. The oldest ferry working today, is the MV Isle of Cumbrae which first entered service in 1977.
Emma Cooper, chief executive of Scottish Rural Action, the charity which supports the Scottish Rural Parliament, pledged to take the concerns of rural people over the “severe impact” Brexit could have on ferry and rail links to decision makers following the next meeting of the rural parliament in Stranraer in November.
She said: “We have been out speaking to people across rural Scotland as part of our post-Brexit policy research and transport is consistently one of the biggest concerns of people who live or work rurally.
“We know Brexit may present real opportunities for our shipyards and other infrastructure providers, but in the foreseeable future, delays in procurement could have severe impacts on our rail and ferry services.”
A spokesperson for CMAL said that Brexit had put the firm in a “difficult situation.”
Whilst the final relationship between the UK and the European Union remained uncertain they said it was difficult to plan ahead, and added that they were in regular contact with both the UK and Scottish Government on the issue.
“Like businesses and organisations across the country, we are considering the potential impact of Brexit. It is the subject of continuous review as part of our corporate risk register,” the spokesperson said.
“The majority of our costs and spending commitments relate to Scottish businesses. However, some of those businesses will rely on certain component parts or materials sourced outside of the UK.”
A Scottish Government spokesperson said: “This is yet another warning of the serious threat posed by the UK Government’s Brexit proposals.
“We will do everything in our power to mitigate those risks – but the best outcome, short of remaining in the EU, is for the UK government to stay in the customs union and single market, which is around eight times bigger than the UK’s market alone. Anything short of that poses a serious risk to jobs, investment, prosperity and living standards.”
A spokesman for Calmac, the operator of the majority of the CMAL ferries, said they too saw areas where “some clarity would be welcome,” but insisted it was “too soon to make a judgement on the specific risks involved.”
A spokesperson for the Department of Exiting the European Union said: “We are working hard to secure a deal that works for the whole of the United Kingdom, including Scotland.
“We do not want or expect a no deal outcome but as a responsible Government we have to plan for every eventuality, including the unlikely outcome that we leave the EU without a deal.”
The Brexit Papers
This story was based on documents released as part of The Ferret’s Brexit Papers project. You can search across more than 350 Brexit documents from Scottish public bodies largely obtained by Freedom of Information requests.
Cover image credit: Sebastian.B | CC | https://flic.kr/p/g2k5ff