An EU Commission ruling on the ‘cruise wars’ between Southampton and Liverpool, which declared that a £17.8 million public funding grant to Liverpool did not break state aid rules, Southampton politicians are in uproar! Associated British Ports (ABP) who operate Southampton port had claimed that Liverpool Port’s private owners, Peel Ports, should not have received taxpayer subsidies, lobbying their rival to hand back the Government and EU money in 2011 – a full four years after the terminal was completed!
In fairness, Liverpool Port has already paid back £8.8 million of the £9.62 million of British taxpayers money which was used to fund the project, and was supplemented by £8.6 million from EU Structural Funds; but now the EU has said that both subsidies meet the Union’s transport policy objectives without “unduly distorting” Single Market competition, it is unlikely that Liverpool will be able to reclaim the money they’ve paid back.
Cllr Royston Smith, Southampton City Council Conservative opposition leader, said: “It is absolutely shocking that the EU thinks it is acceptable for public money to be used in this way.” He went on to call for the need to “renegotiate our position with the EU or leave it all together”, and insisted that Southampton will continue to be Europe’s top cruise port. MP for Southampton Itchen, John Denham, noted his surprise that the EU wasn’t asking for taxpayers’ money to be repaid, and that they would be doing all they could to challenge the ruling.
The European Commission confirmed that their decision came after an in-depth financial analysis showed that the terminal operator’s income from the use of the infrastructure would be insufficient to cover the investment costs over a period of 20 years, pushing the point that public funding was limited to the minimum possible for its completion, and that the positive effect of the project will “outweigh potential distortions of competition”. Therefore, they concluded that the funding was in line with rules that allow state aid for the development of certain economic activities “provided that it does not unduly affect trade and competition in the Single Market”.
We haven’t heard the last of this battle; but does it really need to continue? Both ports are successful; both operate efficiently with their market share; and they are located a fair distance apart! Surely it’s time to put the bad feeling behind and lay the feud to rest?