The Liverpool cruise terminal is owned and operated by Liverpool city council. It receives port of call visits from major cruise lines. The construction of this terminal was funded by grant from the European regional development fund and the North West Development Agency. The original grant decision was made on the basis of the benefits to local tourism from port calls, normally lasting a day. It was assessed that there was unlikely to be any significant distortion to competition in the market for port of call cruise services resulting from the provision of grant. It was however judged at the time that changing the use of the terminal to permit turnaround cruises to operate from that location could raise competition issues in relation to other ports operating in this market. Accordingly a condition of the funding was that change of use could only be permitted with the agreement of the right hon. and noble Friend the Secretary of State for Transport.
Earlier this year Liverpool city council sought advice from Department for Transport on the possibility of such a change of use to permit turnaround cruises and the Department undertook a further competition assessment. The Department has now completed this further assessment and has concluded that the proposed change of use would be likely to have an unfair and adverse effect on competition between Liverpool and other cruise ports. Officials have informed Liverpool city council of this decision.
In making the competition assessment, account was taken of information from a number of other ports which provide cruise opportunities on a similar scale to Liverpool and serve overlapping customer markets within Britain. The evidence demonstrates that it would be unfair to allow one port to benefit from a publicly funded development when competitors have found, or would have to find, private money to achieve the same objective.
Liverpool city council has had considerable success in developing its cruise terminal to attract some of the largest cruise ships in the world. I hope this business continues to thrive. The market for supplying turnaround cruises is, however, a different and highly competitive one. It is right that that business within this market should go where customers get best value without distortion of the market by subsidy. It is for the port of Liverpool to consider whether there are options to develop the turnaround cruise business at Liverpool on a purely competitive basis.