Blogging from the Highlands of Scotland
'From fanaticism to barbarism is only one step' - Diderot

Tuesday 14 August 2007

SNP and its 'Mickey Mouse' economics on ferry fares

The Scottish Finance Secretary John Swinney has announced phasing in "road equivalent tariffs" (RET) on a trial basis, route by route:

"I believe that the way forward is to consider the benefits of introducing a road equivalent tariff (RET) approach to setting fares in Scotland.

"This approach would not just benefit islanders by providing cheaper fares but could also boost island economies by attracting tourists and supporting businesses."

I would like to think that his vision expressed in the final sentence above might come to fruition, but unless it does, all this represents is a politically-motivated move to provide subsidies, under the guise of RET. And if the views of Alf Baird, a professor of maritime transport at Napier University's Transport Research Institute, on the desirability of 'a move away from state-owned services', are valid (and in my view they certainly are) then operating these RET policies would make glaringly clear whether lowering prices in the way Mr Swinney suggests is viable. Commercial companies, unlike governments, can't insulate themselves from the market by conjuring up additional revenue in the form of taxes.

I've written about this subject before.

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