New Labour, no extra salvage tugs

One of the less endearing characteristics of politicians is to say one thing while out of office but do the opposite on assuming power. New Labour appears to fit the mould.

While in Opposition, Labour was highly critical of the Government's failure to implement key recommendations in the 1994 Donaldson report on marine pollution prevention and clean-up. Commissioned in the wake of the loss of the oil tanker Braer off the Shetlands in 1993, the report advocated the provision of five permanent, powerful salvage tugs around the UK coast.

The report also recommended the interim stationing of three tugs in the most high-risk areas during the winter until permanent provision was made. The interim tugs should be paid for out of public funds, it said, but the five permanent tugs should be funded by a new levy on shipping.

The Government appeared to accept the recommendations for three interim winter tugs, but then introduced only two, in the Dover Strait and north-west Scotland. The third should have been in the Western Approaches, where it would have been well placed to assist in the Sea Empress salvage operation.

That fateful omission was a massive embarrassment for the Government. So was its failure to act on the Belton report - a cost-benefit assessment of Lord Donaldson's proposals - which Transport Ministers received more than six months before the Sea Empress disaster. The report backed the provision of permanent tugs in the three high-risk areas, and recommended winter cover in the Shetland area and south-west Scotland (ENDS Report 254, pp 3-4 ).

The recommendations of both reports were twisted and distorted by Transport Ministers as they attempted to cover their blushes after the Sea Empress disaster. To the extent that they understood the issues, Labour's spokesmen were not slow to make political capital out of the affair.

Labour had a chance to make amends soon after taking office. The raw material for a decision on permanent provision of tugs was a further cost-benefit analysis by the Coastguard Agency which took account of its experience in running two winter-only tugs, along with a third placed in the Western Approaches at the end of 1996.

The Agency believes that the tugs have proved their worth. Over the three winters to 1996/97, they were called out on 180 "taskings" - an average of 25 per winter each. In most of these incidents they stood by vessels which had broken down and were in danger of grounding or collision. In a few cases their towing and fire-fighting capabilities proved vital in averting potentially serious incidents. The total cost of the experiment was £5.7 million.

The new cost-benefit study altered some of the assumptions of the Belton report. First, the cost of hiring tugs on the spot market has been on a rising trend. The Donaldson report estimated that five permanent tugs would cost £5 million per year. The Belton report put the figure at £10 million. Today's price would be £12 million - clearly making it more difficult to justify the investment.

Secondly, no attempt was made in the Belton report to place money values on recreational losses causes by oil pollution or to put a price on "non-use" environmental assets such as wildlife. In the new report, the recreational benefits of avoiding oil pollution are estimated, using an average figure of £7.50 per person per day for the use of unpolluted beaches which was drawn from other valuation studies.

The results in a central scenario showing that a net benefit would occur solely with winter-only tugs in the three areas in which they are currently stationed. However, when recreational benefits are included, net benefits are predicted for year-round tugs in the Dover Strait and Western Approaches - a more positive conclusion than the Belton report's - as well as a winter-only tug in north-west Scotland.

On 10 February, Transport Minister Glenda Jackson announced the Government's response in a parliamentary answer. Winter-only tugs are to be stationed in the three current areas for the "next few winters". Matthew Taylor, the Liberal Democrats' environment spokesman, branded the decision a "disgrace" and urged the Government to implement the Donaldson report's recommendation for the costs of providing salvage tugs to be recovered by a levy on shipping.

The Government's failure to offer any explanation of how it interpreted the findings of the cost-benefit analysis certainly does it no credit. The decision implicitly places no value on the benefits to recreation of avoiding oil pollution, as well as on the avoidance of damage to wildlife and other environmental assets, on which the study itself placed no value. A study of the Sea Empress disaster for the Environment Agency has concluded that damage to the latter "non-use" assets accounted for more than half of the costs involved - and possibly considerably more, depending on the valuation techniques used (see box, p 27 ).

Moreover, even if no recreational or environmental benefits are taken into account, the Coastguard Agency's study makes it clear that only minor changes in key assumptions in its central scenario would justify year-round tug provision in the three areas. Reductions of 5% and 12% in tug hire rates, for instance, would justify year-round provision in the Dover Strait and Western Approaches, respectively. An 11% increase in the assumed oil spill prevention would do the same in north-west Scotland. And, with recreational benefits included, a winter-only tug would be justified in south-west Scotland with only an 8% reduction in the costs assumed in the central scenario.

There are, of course, other ways of reducing costs than cuts in tug hire rates. One is income from salvage awards to the Coastguard Agency - but this was not considered in the study.

A second was advocated by the Belton report. This pointed out that salvage tugs could be used for a wide range of official duties - such as hydrographic surveys, fisheries patrols, and a miscellany of Ministry of Defence work - without prejudicing their availability for emergencies. "Considerable" scope exists to offset the cost of the tugs in this way, the report said.

This recommendation has been disregarded as well - most probably because other Departments and agencies do not want to share their maritime responsibilities and budgets with the Coastguard Agency. The consequences are an inefficient use of public money, and a smaller provision of salvage capability than would otherwise be possible for the same funds - just the sort of thing that the National Audit Office was set up to investigate.

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