 We continue with the next item, which is a statement by Humza Yousaf on Northern Isle's ferry procurement. The minister will take questions at the end. If anybody wishes to ask a question, I would encourage you to press your requested speak button sooner rather than later. I call on Humza Yousaf. On 2 February 2017, I announced a policy review on the future approach to be taken to the procurement of Scottish Government's publicly funded lifeline ferry services. I followed up that announcement on the 20 December last year by publishing an interim report into the emerging findings of that policy review. The interim report confirmed that a direct award to a tackle-compliant in-house operator under the procurement regime would be compatible with the maritime cabotage regulation, subject to further consideration of how we will, in practice, satisfy the TECO control test—something that we consider is very much achievable. The report also confirmed the need to satisfy the state aid rules, in particular the four alt-mark criteria. In so doing, the report clearly set out our plans to continue our positive engagement with the European Commission in order to build a case to satisfy those very rules. We remain fully committed to building that case, and that is something that we would aim to achieve in advance of the existing contract for the Clyde and Hebrides ferry services ending in September 2024. In the meantime, the Clyde and Hebrides ferry services will continue to operate under full public ownership and control under the existing terms of the existing contract. The interim report also stated that the decision on the future approach to the procurement of the Northern Isles ferry services should be taken in the spring of 2018. I said that I would engage further with the Northern Isles communities and key business stakeholders before making that decision. I also said that I would consider progress made in our continued engagement with the European Commission on our ability to build a case that would satisfy state aid rules in the event of a direct award to a tackle-compliant in-house operator. I have since written to local community representatives and business stakeholders groups and I met them on my recent visit to Shetland and Orkney on 27 April. My recent engagement has led me to conclude that there is not the same strength of feeling for making a direct award to an in-house operator that currently exists across the Clyde and Hebrides communities. In fact, some concerns have been raised about doing so for many quarters, particularly worth mentioning the seafood industry in Shetland. Most Northern Isles community representatives are clearly of the view that the tendering of the existing contract has delivered benefits and improvements to the ferry services and are keen to ensure that the level and quality of service that is provided in the future is fully aligned with the community's needs and projected growth in the island's economy. Although a minority were generally agnostic about the process for procuring the ferry services, the majority of local community representatives and key business stakeholders expressed a strong preference for the next Northern Isles ferry service contract to be tendered. On the second matter of building a case for a tackle-compliant direct award under the state aid rules, I wrote to the European Commission about the very subject on 24 January this year. I informed the commission of the emerging findings from our policy review and proposed that our respective officials meet to discuss and agree the key principles that would form the basis of a case that we would hope to satisfy the four altmark criteria. The commission's response reiterated their position that it would be significantly challenging to meet the fourth altmark criteria, which requires that, in the absence of a public tender, the in-house operating company must constitute a typical and well-run undertaking in line with market conditions. The commission's response, a copy of which I will place in Spice, also introduced a new dimension, one that we will have to take into account in our work to satisfy all four altmark criteria in future. The commission referenced a judgment in the European Court of Justice on 1 March 2017 on what is generally known as the Corsic and Ferries case. The commission's interpretation of that judgment is that it confirms the validity of three-step tests of manifest error used by the commission to define a public service obligation in the case of services of general economic interest. In layman terms, it is perhaps easier for me to quote the commission's response, and I quote that now, where the member state has the choice between a public service obligation scheme open to all operators and a public service delegation entrusted to one or few operators only, it must opt for the solution that will least distort the freedoms necessary to the good functioning of the internal market. The considerations and the need to demonstrate the existence of a market failure would also be relevant in the case of a planned direct award to an in-house operator of the maritime transport services to the Scottish Islands. We therefore need to give further detail consideration to the commission's response. That will most certainly lead to more protracted, more complex discussions with the commission before we can reach a definitive position on whether it would be possible to make a direct award if it satisfies the state-aid rules. However, it does not change my intention to do so. We will continue to build our case for making a direct award to an in-house operator that satisfies the state-aid rules and certainly well in advance of the existing Clyde and Hebrides contract ending in 2024. I have always been clear that local communities and key business state golden views will be central to any decision on the future approach to the procurement of the Northern Isles ferry services. I have taken full cognisance of the views expressed to me during my recent visits to the Northern Isles. I have also given very careful consideration to that most recent correspondence from the European Commission. I have also considered the importance of maintaining and securing services to the Northern Isles. The Government had previously secured an 18-month extension to the Northern Isles contract. That is the limit of the extension that we are able to give without taking action. That makes it imperative that a decision is taken now and prevents me from waiting for the Work on Direct award to complete, given its complexity. For those reasons, I have concluded that the next Northern Isles ferry service contract should be tendered as soon as practically possible. Taking the decision to tender the Northern Isles ferry service now provides sufficient time to complete what will be a high value and complex procurement before the current extended contract aspires in autumn 2019. Delaying the decision would only serve to put the continued delivery of the ferry at risk, something that I am simply not prepared to do. In reaching that decision, I emphasised this Government's record in supporting and investing in the Northern Isles ferry services. We have recently purchased the three ROPAX vessels from the Royal Bank of Scotland, the savings of which, generated from which, will assist us in delivering our promises and commitments on RET to the Northern Isles. We have also recently published a comprehensive transport appraisal study in line with STAG guidance. The study identified a number of options that will help to inform the specifications for the next Northern Isles contract. The study also recognises the additional demand and capacity pressures that may arise as a result of introduction of lower fares on the Northern Isles routes. We will continue to engage with local community and key business stakeholders on these issues during the development of the specifications for the next NIFS contract. In doing so, we will ensure that a tender delivers a ferry service that provides the required level of service to support the island's future social and economic prosperity. I would also take this opportunity to emphasise that the decision to tender the next Northern Isles ferry service does not change my position on the future approach to be taken to procurement for our ferry services. As previously mentioned, I remain fully committed to building a case for a direct award to an in-house operator that would satisfy stated rules before the existing Clyde and Hebrides ferry services contract ends on October 2024. That commitment extends to subsequent contracts for other lifeline services, including future Northern Isles contracts. I should also add that this Government's future approach to public sector ownership and control of key transport services, including building the case for a technical compliant direct award to an in-house operator, is reflected in our commitment to establish a public sector operator to bid for the next ScotRail contract. In conclusion, my statement today ensures the continued protection and delivery of a vital lifeline ferry services to Shetland and Orkney Islands communities, who rely on them for their social and economic sustainability. It continues our commitment to secure the direct award of ferry services in the west coast. In the future, I fulfil my commitment to act in line with community considerations in the Northern Isles. It is a responsibility that I and this Government take very seriously. The decision to tender the next Northern Isles ferry services contract enables me to fulfil that responsibility and demonstrate that this Government continues to support for an investment in those ferry services. Thank you very much. The minister will now take questions for the next 20 minutes. Jamie Greene is filled by Colin Smyth. Jamie Greene. First, I thank the minister for advance sight of his statement, but also for seeing sense in this matter. After repeated calls from those benches calling on the transport minister to listen to local communities and to do the right thing, his confirmation that the Northern Isles services will go to tender is a very welcome announcement. The tender process, not just in the Northern Isles but across Scotland, offers a transparent procurement model that allows for a healthy, open competition, ensures value for money, encourages growth and innovation on the route and, frankly, keeps incumbents on their toes. The Government has simply failed to convince the EU that state intervention will not distort the market and it could not demonstrate that there is market failure. Why? Because government intervention will distort the free market and there has been no collapse of the market. The only thing stopping the minister pursuing his agenda is the EU and a legal block. Presumably, if he could take it in house, he would in the face of opposition to do so. If the services of users of the service in Orkney and Shetland have little appetite for this nationalised and centrally controlled service, why does the minister insist on dogmatically pursuing that agenda? He said that he is building a case for a direct award. How much civil service time and energy is going into this and being wasted on this? How much legal resource has gone into this and will continue to go into this obsession? Can I ask the minister today to confirm that the tender process will be an open and transparent one? When does he expect the tender to open? How long will the process take? Will the minister commit to Parliament today to take the nationalisation agenda off the table once and for all? Minister. It is not dogmatic. It is principle. This Government has a principle whereby we believe in our preferences to directly award lifeline ferry services to an in-house operator. I cannot do that regrettably because of what I have outlined in my statement, but it is by and large because the European Commission still needs to be satisfied, still needs to be convinced, and that is a complex discussion and negotiation. However, I would say gently to the Conservative member that his party is not dogmatically opposed to the side. Of course, it was his transport secretary, Secretary of State, that just last week, of course, took in-house the east coast mainline as well, where it was practical and pragmatic to do, and it was a private failure. He is absolutely right to say that it was a failure of the private market in that regard. This is not about dogmatism. It is about my principle, our Government's ideology, which is better, of course, to do that. However, we did say that we would also take the community's views into account, and I did that. I travelled to Orkney and Shetland, I listened to business owners, particularly the seafood industry. As I said, they were very, very pleased with the decision that we have come to today, but that does not preclude me from a future NIFs contract if we are able to satisfy tecle, if we are able to satisfy stated rules, then directly awarding that, potentially, in the future. To answer his question, yes, I can give him the absolute guarantees that this will be an open and transparent tender. I will also give him that promise that we will engage in terms of the specifications in a very open manner. In terms of the milestones and when the tender will be ready for our FRAGTT and so on and so forth, those milestones I will make sure that he is kept up to date in that regard. Colin Smyth, we follow by Richard Lyle. I thank the transport minister for advance sight of his statement. It is clear that the basic principle that public transport is an essential public service, not an opportunity for private profiteers, and there is one that is not shared by the SNP today. We have promises of again jamming sometime in the future. Last week, just before the UK Government confirmed that it would operate the east coast mainline route through an operator of last resort, the transport minister said that he was agnostic about the contract returning to public hands and stated that he does not have a preference for either public or private ownership. It is clear today that a pattern is developing when it comes to this Government's commitment to public ownership. They simply do not have one in practice. Having dragged its heels and today rolled out bringing in the northern elsewhere services under public control, will the minister guarantee a level playing field during this tender process, and will he ensure that there will be a strong public sector bid that, unlike the previous bid from CalMac, will actually be opened this time? I can make a couple of points to Colin Smyth of clarification. First of all, when it comes to the public sector bid for the railways, which he started his question on, can I remind him that it is this Government, of course, that changed the law so that a public sector rail bid can come forward—not the Labour Party—for the years and years that they were empowered? Of course, he hot on that. In fact, he went all the way to put all the efforts in blocking full devolution of railway powers to this very Parliament, so I shan't take any lectures from Colin Smyth on railway powers. Can I also remind him that, of course, when Labour were empowered, they also tendered ferry contracts to the west coast as well. He is also, I should say, a really out-of-step with the communities in Orkney-Shetland. I don't know if the member in his capacity has travelled to Orkney-Shetland. I suspect probably not, because if he had, he would have heard directly from the communities, the business owners, the community councils, the councils, in fact, the local authorities themselves, that this is not what they are wanting. I agree with him that that is not the only consideration to take. The other consideration, of course, for us to take is whether or not we can satisfy the European Commission. I am not prepared to put this service at risk simply because the Labour Party wants me to do so. I do not rule out for the future. Of course, that is something that we could do in the future if we satisfy TECL, if we satisfy state aid rules. If the Labour Party had any sense, they wouldn't, of course, put this Northern Isles ferry service at risk either. I remind members to ask their questions and then listen to the answers. It's not a conversation. Richard Lyle, to be followed by John Finnie. Thank you, Presiding Officer, and I, for one thing, think the minister is doing an excellent job. I very much welcome the minister's statement. This SNP Government has a strong record in supporting Scotland's ferries and communities that depend on them. Could the excellent minister set out just how much this Government has invested in supporting ferries in Scotland? Minister, how is he using it? My friend is as kind as he is wise. That was kind of him to say that. It is an important point, of course. We have invested very heavily when it comes to our lifeline ferry services. That is £1 billion that, of course, we invest in our ferry contracts since 2007. On top of that, of course, we have cut fares for the west coast, which has led to a real boom in the island economies. We are looking to the same in Orkney and Shetland later this year and in the summer. We have made progress in tackling underinvestment in ships. We have added eight new ferries at a cost of £118 million to the Government. We know, of course, that Ferguson is also building 200-metre drill fuel ferries contract-worth at almost £100 million. We have just purchased the three ROPACs vessels and so on. A significant amount of financial support, and I say that from the party to ask me the question previously, much more investment than the previous Administrations also. John Finnie to be followed by Tavish Scott. Thank you, Presiding Officer. I thank the Minister for Early Sight for his statement, which I found extremely disappointing. We had in the Green Party hoped that the purchase of vessels would mean the first step to public ownership. Minister, you have lost a real opportunity to deliver a public loan service operating exclusively in the interests of the islands, not for the benefit of private shareholders. That is hardly the response of a progressive Government, as far as I am concerned. You allude to the letter that you circulated. Thank you for that, too. You would be significantly challenging. Is this Government not up for significant challenges? Where does this leave us in regard to the challenges around ScotRail? If it is a direction of travel, it is a very depressing direction of travel. Minister. I will say a couple of things to the member. I urge him to look at that letter that I have put into Spice in the European Commission. I spoke to Mick Cash from the RMT earlier today and also said to him that it is worth looking at that letter because what essentially the member is asking me to do, if I was to directly award the Northern Isles ferry contract, is to put that up to a significant legal challenge, which would put at risk the delivery of that service. That is just something that I am not prepared to do. If he has a different legal opinion, then of course, as I said to Mick Cash at the RMT, I am always open minded to looking at those other bits of legal advice, but what he is asking me to do is to put it under no illusion whatsoever. What he is asking me to do is to put that service under significant risk, and I really cannot do that. The second point that I would make to give him some reassurance, one is that my officials are working hard to ensure that, for the west coast, we can directly award that contract when that contract expires in 2024. Secondly, that does not preclude me from directly awarding a Northern Isles ferry service in the future. I hope that that gives the member, although I note his disappointment, some element of reassurance. Tavish Scott, to be followed by Jamie Halcro Johnston. Thank you, Presiding Officer. I thank the minister for his statement and also agree with it, because this is the right decision. The one point that I wish him to clarify is that when he says that the principle is how the operation is to run, my principle would be what is in the best interests of the islands, and I hope therefore that he would recognise that for the future—I applaud his decision today, but for the future—I hope that the island needs particularly to be about to pass an islands bill would be absolutely uppermost in the mind of whoever is the Government at that time so that that decision is taken in that light. For the specification that he is about to embark upon, would he undertake to meet with the seafood industry that he rightly mentioned, the council and other players to make sure that specification is right, particularly in the context of whatever decision he is about to make on RET, because capacity is the issue, capacity for the future will be the issue, and making sure that there is enough capacity for the islanders to use and for the freight industry to export the goods to the mainland that they need to do. Minister. I thank Tavish Scott for following Richard Lyle's lead in recognising this and thanking me for this important decision that has been made. Everybody knows where Richard Lyle leads, everybody else follows, of course. On a serious point, of course, he is absolutely right. I did say that we would look at the state aid and tackle implications of any decision, but we would absolutely also look at what would be in the best interests of the community and what the community's needs and preferences were. I have done that and demonstrated that in this case. For a future decision on a future NIFS contract, that would also be a part of a significant part of a decision, not the only factor in a decision that had to be made, of course, but a significant factor in that decision that we have made for a future NIFS contract. In relation to his request, I can give him an absolute assurance and an absolute guarantee that the discussion on the specification will be a very open one. I am more than happy to take his suggestions on who to meet when I travelled to Shetland and, of course, Liam McArthur's suggestions on who to meet when we travelled to Orkney. I thought that the seafood industry in Shetland, when I was last there, made some very important and vital points to me about capacity issues, ones that I am cognisant of indeed. I have also given an undertaking to John Finnie previous in this Parliament that we have talked about specifications. The unions will also be very much a part of that conversation. I am happy to put that on the record also. Jamie Halcro Johnston, to be followed by Stuart Stevenson. Thank you very much, Presiding Officer. First, I declare an interest as a partner in the business of Jay Halcro Johnston's sons. Can I thank the minister for the advance sight of the statement? While I welcome this out to come in the short term, it also appears that, while the minister claims to have listened to local people, he simply had his hand forced by the European Commission. As the minister has made clear, he still wants to take the Northern Isle service into state control, despite today's recognition that there is clear local opposition in the Northern Isles to that approach. Will he continue to push for an outcard that is clearly not what local people want and if the future of tendering remains under review, will he commit to engaging fully, not only with local representatives, but directly with the people of Orkney and Shetland on the future of our lifeline ferry links? I absolutely will. I will go back over my notes, but I am not sure that I had representation from Jamie Halcro Johnston on that very point. I appreciate him making it in the chamber, but I have engaged fully with the communities and the business leaders in Orkney and Shetland. Anybody who is there, anybody who represents those two islands would be fair in saying that I have been up there, I have talked and I have listened to what they have to say. There are two factors in my decision. One is the community interest and the community needs and preferences. The other is very much the European Commission. When it comes to a future NIFS contract, yes, I can give him an absolute assurance that again I will listen to what the community has to say. Clearly, where we are with Brexit, what the state rules are, etc, etc, by the time of the next contract will also be a part of that consideration. I would say to Jamie Halcro Johnston that, yes, this Government has said that we will listen to the Northern Ireland communities and clearly today's decision has demonstrated that we are very much listening to what they have to say. I still have eight more questions that I would like to get in. Stewart Stevenson to be followed by Rudi Grant. Minister, I wonder if, in view of the importance of the £0.5 billion seafood industry, important to my colleagues on the left and myself on the north-east, whether you will also take account of the interests of the other end of the ferry and the north-east who depend on the link and indeed continue to work to ensure that we have friction-free access to the European Union for a high-value seafood because it will be no good landing out in Scotland if we can easily sell it in Europe and the Tories put that at threat. Well, the member is absolutely right to raise that. When it comes to the specification, I will of course engage with communities in the north-east as well. When the Conservative members collectively one after another stand up and demand that we listen to the community's interest, it is, of course, the Brexit shambles, which is the biggest threat to our seafood industries. No decision has been taken by this Parliament or, indeed, by the people of Scotland. Rhoda Grant, to be followed by Stuart McMillan. Thank you, Presiding Officer. This is a disappointing decision, especially at a time when councils are asking for help with their inter-island ferry routes. Surely consideration should have been given to how to build economies of scale with all those services, and this should have been considered before starting to make this short-sighted decision. Minister. I'm really disappointed by Rhoda Grant's intervention. She obviously hasn't spoken to the local authorities in either Orkney or Shetland, because I spoke to both leaders just before coming to this Parliament. Of course, they were both in agreement with the position that the Government has taken, so she needs to go out there, meet the communities and engage with them and indeed the local authorities when they can. I've done that. When it comes to internal ferries, the Cabinet Secretary for Finance is rightly reminding me for the lifeline that we provide for those services. The Labour Party, of course, voted against internal ferry funding. They would have had he-hawd, they would have had zilch, they would have had nada if Rhoda Grant was in charge here, so at least we're not only listening but we're supporting lifeline services in Orkney and Shetland. Stuart McMillan, to be followed by Edward Mountain. Thank you, Presiding Officer. I welcome the minister's commitment to building the case for an in-house operator going forward and he spoke about the review in his statement. How is the review looking at options for a tender and secure, sustainable and affordable way, which gives long-term confidence to the ferry users, the communities and also to the employees? Minister. Just as briefly as possible, the way to do that will be to have a very open engagement with stakeholders right across the board. I think that the member's right to mention all those sectors of society, be it the communities, be it the businesses, be it the unions, be it employers and others, we will engage with all of them in a very open way. Now, when it comes to specifications, there will be obvious constraints that we have, but we will look to be as flexible as possible and make sure that engagement is as wide as possible. Edward Mountain, to be followed by Kate Forbes. Thank you, Presiding Officer. It's interesting to be talking about ferries with the minister today, less than eight days since he addressed the Wreck Committee on many issues to do with ferries, but not about this particular subject. Can the minister confirm that now SeaMal now owns the ferries and CalMac will be encouraged to tender? If CalMac are unsuccessful, in their tender, the existing ferries will remain on the Northern Isles routes? Minister. On the committee's point, I'm not in charge of the questions that the member asks. For me, I simply answer the questions that I am asked by committee. When it comes to the question around CalMac, yes, I can give them an absolute assurance. Clearly, we have to have and we have to ensure that we have separation between CalMac, which is owned, of course, by the Scottish Government, as a majority shareholder, and, of course, the actual procurement process and that separation, we've shown how we can do that with our Clyde and Hebrides routes. Yes, the intention of securing those vessels was very much that for the future of the Northern Isles to be secure with those vessels. Of course, going back to Tavish Scott's question, which I thought was very fair, was that clearly the expectation of islanders is that we have to look at how to increase that capacity where possible. Kate Forbes, to be followed by Lewis MacDonald. Thank you very much. The minister has touched on this already, in part, but could he explain further what risk there might be to community services if we push forward with a direct award without first satisfying ourselves and the European Commission that such an award would be lawful under Techel and the state aid rules? Minister. I think that it's a really important point here because there are some members who've already said to me that you should just go ahead with it. If we are not satisfied legally on the Techel and the state aid side, particularly the Altmark IV criteria, then what we are doing is, first of all, going against legal advice, which the minister cannot do, but secondly, of course, we are putting that service at risk. If that service was challenged by a private operator, we would have not have a leg to stand on. Therefore, that delivery of that service would be in jeopardy, would be at risk. Then, of course, it would be those same members who would be hauling me in front of the Parliament quite rightly, of course, asking me why on earth I took that legal risk in the first place. It's a prudent thing to do, of course, as well as progressing with the tender that will secure those services in the long term. Lewis Macdonald is followed by Angus Macdonald. Thank you very much. The minister will know that there are people working on the existing contract who are not covered by trade union collective bargaining agreements and indeed he will also know that seafarers on some of the vessels chartered to deliver those services have not been covered by minimum pay and employment legislation. When he consults the trade unions, as he has said he will do, will he undertake to ensure that all jobs on those services in the future will be covered by those protections? Yes, I gave that assurance around union engagement and I gave that assurance again. On the issue of minimum pay and minimum wage, he knows us a matter that is reserved to the Government in the UK and we should be pushing collectively for that. What I would say is that it was my intervention. I know Lewis Macdonald took an interest in this but it was my intervention, of course, that managed to negotiate with SeaTruck that we got those vessels from the Northern Isles here that we could pay them and ensure that Serco paid them above of course the minimum wage. It was my intervention that led to that in terms of what we can do in the contract for fair work and fair pay. Of course we will explore absolutely what is in our gift. My point simply is that the law in this still remains reserved to the UK Government. It is something that collectively I would be happy to work with any member to try to get them the UK Government to change tack and see sense. Angus Macdonald will be filled by Lee MacArthur. Thank you, Presiding Officer. Clearly there are always challenges to us regarding keeping ferry fleets up to date. Can the minister advise the chamber what the Scottish Government is doing to ensure the future provision of suitable vessels for the Northern Isles? I have touched on this, I will be very brief, but the future of the three ROPAX vessels serving the Northern Isles has been secured. The deal agreed for Seamall on behalf to purchase the vessels out-ride from loan funding from the Scottish Government. The Hamnavo, the Horesay, the Atland, which have previously been leased from the Royal Bank of Scotland are now owned by Seamall. On behalf of the Scottish Government, Seamall will then charter the vessels to the ferry operator on a bare boat basis. The specification for the tender will also set out a vessel requirement for the transport of passengers' car and freight for the duration of the next contract. I welcome the statement and the decision to tender the services. I also encourage the minister not just to take full cognisance of the views expressed during the recent visit to Orkney and Shetland now, but in future decisions as well. Perhaps you will be aware of the concerns that I have already raised about the previous tender process and the lack of transparency. As well as taking on the meeting suggested by my colleague Tavish Scott, will he ensure that there is confidence in the councils and key stakeholders as the tender process continues to ensure that what emerges at the end of the process meets the needs of both communities? I will also make sure that I have a conversation with Liam McArthur and Tavish Scott to ensure that they feel that we are engaging with all the right people, community organisations and business leaders. I should say that we need to press immediately, because we know that the contract expiration date is autumn 2019 and there are a number of milestones to go through in any procurement. That engagement will start at Ernest in the summer and I will look forward to engagement with the constituency MSPs to make sure that we are engaging with all the appropriate stakeholders. Thank you very much to the minister and members that concludes our statement on the Northern Ireland's ferry procurement. The next item of business is a debate on motion 1, 2, 3, 2, 4, in the name of Bob Dorris. We will just take a few moments for members to make their decisions.