Hampshire County Council has set out its strong opposition to the Government's proposal to withdraw their objection to lifting the 'no turnaround' grant condition on the City of Liverpool's Cruise Terminal (CLCT), citing unfair competition and inappropriate use of public funds.
This comes after Joe Anderson, leader of Liverpool City Council, recently admitted that his bid to see cruises start and finish in his city was back to square one after Transport Ministers said Liverpool's last offer was insufficient to reverse the current restrictions on cruises starting and finishing there.
The Merseyside city had specifically asked the Government to lift a ban on starting and finishing cruises at its £20m publicly funded Pier Head cruise terminal. As part of the deal, Cllr Anderson offered to pay back only £5.3m – over 15 years – and none of a £9m European grant.
Local Euro MEP Dan Hannan demanded back in January that the Government orders Liverpool to pay back all European funding in the state aid row over its turnaround cruises bid.
As well as unfair competiton and the inappropriate use of public funds, HCC has also opposed the move as having potentially damaging consequences for jobs and growth in the fragile South Hampshire economy and have claimed the bid would distort the market and undermine private enterprise and investment.
HCC Leader Ken Thornber has worked closely with the region's MPs on this, including Winchester & Chandler's Ford MP Steve Brine. Cllr Thornber said: "The UK Government has always sought to safeguard against unfair competition. It was for that reason the previous Government applied a grant condition in 2007, preventing CLTC from running turnaround operations, and why as recently as 2009 it rejected a request to lift the condition.
"Hampshire County Council does not begrudge Merseyside a fair share of Government regeneration assistance; but the County Council regards the latest proposal from Liverpool City Council to repay just 29% of the grant over 15 years as insufficient to justify any change in Government policy, and a clear example of unfair competition.
"Anything less than full repayment of the grant in advance of lifting the grant condition would mean that the Government had used public money to give one commercial operator a significant advantage over its competitors, all of whom rely solely on commercial funding to run turnaround operations."
In the consultation, the council accepted that if the grant is lifted, the Port of Southampton is likely to remain the leading UK port for the cruise market, but if the proposal were to go ahead it would jeopardise future local plans and distort the marketplace nationally.
Cllr Thornber continued: "No other UK port has received public finance to operate turnaround cruises, and the successful cruise sector is not in need of public subsidy. Therefore it would be entirely inappropriate for the Government to agree to this subsidy, especially when the country (including both Merseyside and South Hampshire) faces painful cuts in public spending, the loss of thousands of local jobs and severe financial strain for essential local services.
"The County Council understands the need to support the Merseyside economy; but the reverse impact of this proposal on South Hampshire, and indeed other areas, needs to be considered. If the Government were to change its policy and allow CLTC to operate turnaround cruises, the inevitable effect would be loss of business from Southampton's cruise sector. Evidence clearly indicates that this would have a negative impact on employment in the city and the surrounding area.
"It is important to remember that the Port of Southampton is located in the wider South Hampshire area, which includes significant areas of deprivation and unemployment. Alongside the deprived neighbourhoods in Southampton itself, the sub-region includes Gosport and Havant, which have more in common with Liverpool than with their own neighbours in the South East.
"Too often, the perception of homogenous prosperity spread across the South East has placed South Hampshire at a disadvantage, compared to its counterparts in the Midlands and North in terms of Government funding. It is worth noting that the gross weekly earnings in the Solent LEP area (excluding the Isle of Wight) are £5 lower than those in Liverpool... and that the area has fewer business start-ups than Liverpool."
Social deprivation is evidenced by the high number of people not in education, employment or training, and Southampton has the fourth-highest level of NEETs in the country, with neighbouring Portsmouth the second-highest.
Cllr Thornber concluded: "Overall, South Hampshire's economy performs significantly below that of the rest of the South East, in terms of GVA per capita, productivity and employment growth.Therefore, any contraction in Southampton's cruise ship market will only serve to make the socio-economic gap worse."