Letter to Secrtetary of State for Transport
Mr M Harper
Secretary of State for Transport
House of Commons
London
SW1A 0AA
Dear Mr Harper,
I write to make you aware of the increasingly detrimental social and economic impact the Isle of Wight is suffering at the hands of our two primary ferry operators, specifically the largest operator, Wightlink Ltd (WL).
Since 2005 three Private Equity Firms (PEFs) have had control of WL. The sale of an unregulated public transport service 3 times over to a PEF has inevitably led to a reduction in daily crossings and ferry fares that have become unaffordable for too many. This weakens Islander’s economic opportunities and isolates them from the mainland UK. Conversely, I hear much about those who would like to invest in or visit the Island, but excessive ferry fares bar them from doing so, especially when ferries to Spain and France can often be more competitive options.
As our Transport Minister, you will be aware that affordable, timely travel connections are directly linked to the national and regional prosperity of the UK. The Isle of Wight has been identified as a region that lacks prosperity and needs significant levelling up investment. Reducing the financial barriers that prohibit even those on middle incomes from connectivity to and from the mainland and returning to more frequent crossings would bolster growth and open up more economic opportunities supporting the levelling up objectives. Of course, this can only be achieved by putting an end to the stranglehold the owners of our ferry services have over the Island. Much like other transport sectors this is best achieved by regulation from your department.
This matter is not unknown to the Department for Transport, but in the past it has drawn conclusions from an observer’s perspective, citing no market failures and a range of services that compete for passengers. However, I believe there is evidence that has not been considered which indicates a correlation between the ferry owners’ debts and ferry fares.
In my attached published article, I explain how PEFs have taken financial advantage of WL and created a loan debt of £400,000,000. Interest payments alone are nearly equal to half of WL’s annual revenue. This raises the question of how much of that debt is attributed to the price we pay for our ferry fares. I have reviewed WL published group accounts, which has raised further suspicions that, in line with PEF business practices, the owners have taken out unnecessarily large loans against WL in order to pay themselves a dividend through loan repayments.
I write to you today to ask for a meeting where I can present more detailed evidence, which I hope would be sufficient to authorise a forensic analysis of WL’s group accounts and reveal the true extent of the financial engineering that has overburdened our Islands lifeline and the HM treasury.
The Isle of Wight is currently the biggest constituency in the UK. As you might imagine, Islanders place a high value on affordable links to the mainland and so, naturally, this matter has become one of the main social issues on the Island. Islanders have become so incensed they are even protesting through organised events via a newly created organisation called the Wightlink User Group, which already has over 4,000 members. Therefore, I hope you will give this matter the attention it deserves and meet with me, a WL commuter for over 18 years.
Finally, I draw your attention to the four principle priorities of the Department for Transport, namely, boosting economic growth and opportunity, building a One Nation Britain, improving journeys, and safe and secure and sustainable transport. I will end this letter by asking you to give a little thought to considering what direction our ferry operators are taking our region in relation to your department’s priorities.
Yours sincerely,
Karl Hunter
