THE Scottish Government's policy on cheap ferry fares is economically illiterate, according to a leading authority on the industry.

Professor Neil Kay's comments on Road Equivalent Tariff (RET) were last night embraced by hauliers on the Western Isles who say they are now facing fare increases of up to 175%.

The Scottish Government said last month it was going to roll out RET to the rest of the CalMac network after it delivered up to 50% cuts in fares to the Outer Isles, Coll and Tiree in a pilot scheme. But it would no longer apply to commercial vehicles.

The scale of the increases led to more than 60 hauliers and other businesses forming the Outer Hebrides' Transport Group.

Economist Professor Kay, of Strathclyde University, who has made a study of the ferry industry, believes the Government's approach to RET is misguided.

He said: "What is the point of offering a shop assistant in Stornoway cheap fares to the mainland if she cannot afford even those fares because the business she worked for has just gone bust? You do not need an economist to answer that question – just common sense. No self-respecting economist would support RET as a device to get fares down."

David Wood, of Woody's Express in Stornoway, said: "If the SNP is willing to blithely tell every family in the islands an increase of £400 (or 172%) to take a lorry on a return journey between North Uist and Skye is an "exaggeration", it dosn't have an understanding of arithmetic or sense of proportion." 

But a Transport Scotland spokesman said RET had been positive, particularly in "boosting the local tourist trade and local economies as a result, and we want to see that continue".