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Furious Ferry Workers on Scotland's West Coast Struck to Stop Privatisation

They're worried about their jobs if they're bought out. The case poses tricky questions for the SNP's relationship with trade unions.

by Liam Turbett
30 June 2015, 5:00am

A Cal Mac ferry (Photo by Robert Orr)

From "Balamory" to Benbecula, the quaint seaside villages along Scotland's west coast aren't typically associated with scenes of labour unrest, but that may have changed after last Friday after hundreds of furious ferry workers walked out on strike. At the heart of the dispute lies fears that the Scottish Government are priming state-owned ferry operator Caledonian MacBrayne (Cal Mac) for privatisation, with outsourcing giant Serco vying to take over services from 2016. With uncertainty over whether this could lead to a worsening of terms and conditions or redundancies, members of the RMT union took industrial action at the end of last week, in a bid to secure further guarantees from the Scottish Government. They shut down services to numerous islands in the process.

The first time I ventured aboard a Cal Mac ferry, I was less than a week old and – in common with most others who have ever lived on an island off the west coast of Scotland – they've been an unavoidable part of my life since. The whole rhythm of life on the islands they serve is dictated by the ferry timetable, from what time there'll be fresh bread or newspapers in the shops, to when the post is delivered, or anything that involves travel to what islanders know as "the mainland". The iconic black and white livery of the ferry fleet is a familiar site along the west coast of Scotland, with the company's ships carrying nearly five million islanders and visitors every year.

Unlike much of the UK's public transport network, Cal Mac remains in public hands – at least for now. In part, that's because there isn't much profit to be creamed off when you're obligated to run year-round sailings to far-flung islands where the entire population could probably fit in one room. But over the past decade, a gradual process has been afoot which both ferry workers and the islanders who rely on the lifeline services alike fear could lead to its privatisation.

Earlier this month, that seemingly moved a step closer, after it emerged that Serco are Cal Mac's sole competitor to take over the £1 billion contract, beginning in 2016. Serco, who run everything from school inspections to immigration detention centres, have been caught up in a number of controversies in the UK over recent years, including an investigation by the Serious Fraud Office. The tendering process is set to take a year, with the Scottish Government attempting to rush through changes to employee pensions prior to the new contract starting. Another union, the TSSA, is now also balloting its workers on strike action, meaning a summer of unrest could be ahead on Scotland's ferry network.

"The feeling among the workforce is that they're caught up in what can only be described as a debacle of a tendering process," explained an RMT union rep at Cal Mac that I spoke to. "The Scottish Government allege this to be necessary to comply with European legislation."

The services run by Cal Mac were initially opened to competition between 2005 and 2007, although the only private bidder then dropped out. The effect of this was that £15 million – then more than half the annual subsidy for the ferry network – was spent on a complex tendering process that resulted in the Scottish Government effectively awarding a contract to themselves, all in the name of competition.

Months ahead of the decision, Cal Mac's operation was portioned off into different segments, with the human resources arm offshored to Guernsey – a tax haven. It might seem crazy that the Scottish Government – at the time a Labour/Lib Dem coalition – would register their own employees in another tax jurisdiction to avoid National Insurance payments, but it was argued that Cal Mac had to do this to properly compete with private sector shipping companies, all of whom have similar arrangements.

However, some have questioned whether the tendering process has ever been necessary, even under rigid European competition laws. Both the RMT union and a leading economist, Professor Neil Kay, have stated that there are loopholes which could be exploited to ensure Scottish ferry services remain in public hands. At the very least, it's argued, the Scottish Government could mount a challenge to the legislation, based on precedents elsewhere in Europe.

Cal Mac workers picketing (Photo courtesy of the RMT)

The current set-up means that every few years the routes will be open to competitive tendering, a process which is likely to see the service end up being run by a private operator, or even a foreign government, eventually. The alternative is that the Scottish Government keep awarding it to themselves in perpetuity, which raises the question of why they bother going through with it in the first place.

SNP Ministers have found themselves in an awkward trap. Having recently positioned themselves as "united" with trade unions against Tory austerity and attacks on employment rights, they're now accused of ducking the issue when it most matters, and hiding behind EU legislation. The Scottish Government have even insisted that handing the contract to Serco wouldn't amount to privatisation, because the vessels and piers would be state-owned and leased out, and the operator still answerable to ministers. In effect, though, not owning any assets would leave Serco free to up sticks and walk away if it felt it wasn't going well, as National Express did on the East Coast railway in 2009. In such a scenario, the lifeline island services could be thrown into chaos, with Cal Mac having presumably dissolved by that point, given it wouldn't have any ferries to run.

"It looks like the whole tendering process has been created to help the private operator step in. Many of our members feel that what Serco wants, Serco gets. They got the Northern Isles contract and the Caledonian Sleeper contract," explained the RMT rep I spoke to, referencing two transport contracts that the Scottish Government have awarded Serco over the past few years. The first of these, the North Link Ferries service to the Orkney and Shetland Isles, was awarded to the outsourcer in 2012 over the existing operator Cal Mac. Last month, it was revealed by the Shetland Times that Cal Mac's bid for the service, reported to have been the cheapest, wasn't even considered – it was returned unopened on a technicality.

It's Serco's record in running the Orkney and Shetland service which has Cal Mac staff fearing for their jobs. "On day one of them taking over the Northern Isles contract, they announced 36 redundancies from quite a small workforce", said the RMT rep. "They then tried to attack pensions, and it was only when the RMT balloted [for industrial action], that they backed off."

Cal Mac are by no means perfect, and moaning about them – whether it's ferry fares, timetabling or cancelled sailings whenever it's a bit windy – is part of daily life in every one of the communities they serve. But they're also a service that people rely on year round, connecting some of the most isolated parts of the country, and play an essential part in island life. Often, crew members go above and beyond their duties when it comes to public service, like earlier this year when a stranded ferry crew opened up their ship to a storm hit village on Harris, that had been without power for two days.

Whether Serco – an outsourcer which has been accused of mismanaging public services – is up to running the contract is now for an impenetrable tendering process to decide on. Conveniently for the SNP, the winner won't be announced until next June, avoiding any backlash ahead of May's Scottish elections.

@parcelorogues

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