The Highland Line: why are Scotland’s ferry companies running their business off-shore?

David Ross

Friday 22 March 2013

It is of course entirely appropriate that the companies which employ the crew who run Scotland’s lifeline ferry services linking our islands to the mainland are also based on an island. After all that’s the only way to fully appreciate the facts of island life.

However in this case it is not one of the Shetland or Orkney islands, nor indeed one of the Hebrides – Inner and Outer – but Guernsey which is home to David MacBrayne HR (UK) Ltd, Caledonian MacBrayne Crewing (Guernsey) Ltd and Serco Ferries (Guernsey) Crewing Ltd.

The first two are involved in providing the publicly owned CalMac’s Clyde and Hebrides ferry services. Meanwhile the third is part of the Serco group which last May won the new £243 million six-year Scottish Government ferry contract for the routes to Orkney and Shetland. Serco specialises in managing outsourced government contracts here and abroad including the UK Atomic Weapons Establishment at Aldermaston as part of a consortium. As a result in 2007 it was excluded from Norway's multibillion-pound sovereign wealth fund's investment portfolio, for being unethical. So perhaps the fact that Serco is using the tax advantages offered by registering company in the Channel Islands, is hardly surprising. But CalMac is a bit different. The defence was that it had to do this to compete on a level playing field with private sector rivals in the European wide tender for CalMac’s routes, which all used crew from offshore firms that did not pay employers' 12% national insurance contributions. Crews employed in harbours, estuaries and inshore waters, such as those working on the Clyde, did not qualify for the offshore exemption. When the move was publicly confirmed in 2005, there was stinging criticism of a state-owned company going offshore to avoid paying tax to the Treasury which paid a block grant to the Scottish Executive, from which came the subsidy to run CalMac. Stephen Boyd, STUC assistant secretary described it at the time as a "grotesque spectacle." But the Treasury under Gordon Brown and the then Scottish Executive in the form of Lib Dem Transport Minister Nicol Stephen, believed it was justified. Mr Alexander said the tax loophole that allows firms to dodge £100m a year in national insurance would be closed under a new scheme targeting offshore payroll services. He said British firms with British staff had to pay British taxes. Mr Alexander said around 100,000 employees - mostly teachers, nurses and oil and gas workers - were believed to be paid through offshore payroll services set up in tax havens such as Jersey and Guernsey and could be ineligible for statutory sick pay, but completely unaware of that status. There was no specific mention of ferry crews. But it would be difficult to understand why teachers and nurses would be targeted and the 763 on the books of the publicly owned Caledonian MacBrayne Crewing (Guernsey) Ltd were left alone. That would of course beg the question, what would happen in the next round of tendering for CalMac routes which is due to begin next year. If they couldn’t compete eight years ago without going offshore, can they now? Neither CalMac nor the Scottish Government cared to speculate on that one. First to map his croft Special congratulations are due to Donald Murdie of Galtrigill on the island of Skye. He is the first crofter to have his croft put on the Crofting Register. He has managed to go through the onerous process of getting his holding mapped and applying to have the map put on the Crofting Register, held by Registers of Scotland. The last crofting reform act called for a new map-based register of crofts to be complied to tackle the lack of definitive croft boundaries which could lead to disputes. It is not the most popular measure amongst crofters, so Mr Murdie is due their respect as Derek Flyn, Chair of the representative body the Scottish Crofting Federation, made clear: "May I, on behalf of all us toiling to explain the Crofting Register to the crofters of Scotland, congratulate you Donald on this significant event of which you should be very proud. According to the Crofting Commission there are 18,027 crofts. So, only 18,026 to go!"

Contextual targeting label:

Business

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis. If you're a relatively new user then your comments will be reviewed before publication and if we know you well then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules, which are available here.

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

The Highland Line: why are Scotland’s ferry companies running their business off-shore?

Commenting & Moderation

MOST READ

SPONSORED LINKS

MOST COMMENTED