Grant Shapps wades into Isles of Scilly ferry row

The defence secretary has written a letter to the chairman of the Council of the Isles of Scilly

Defence Secretary Grant Shapps has intervened in a row over the decision by the Isles of Scilly Steamship Group (ISSG) to pick a French shipbuilder for its new fleet.

In a letter, Mr Shapps said he was "dismayed" by the actions of the group.

The ferry operator opted to use French shipbuilder Piriou for the multimillion-pound contract.

The ISSG said using private finance meant it would introduce new vessels in 2026 using its preferred supplier.

The Scillonian III has taken passengers between Penzance and the Isles of Scilly since 1977

Isles of Scilly Councillor Steve Sims said the letter from Mr Shapps was "quite surprising".

He said: "I've seen lots of ministerial letters and this was very, very forthright."

In the letter, written in his capacity as the government's shipbuilding tsar, and addressed to the the chairman of the Isles of Scilly council, Mr Shapps said he appreciated "how vital the lifeline passenger and freight services" were to the Isles of Scilly's communities and businesses.

The Scillonian III and freight services are in need of replacement, and Harland and Wolff (H&W) and ISSG both have plans to provide replacement passenger and freight ferries.

Harland and Wolff announced its plans in August 2023 to build new ferries to run between the islands and Cornwall

H&W wants to build and operate two vessels using £48.4m of levelling-up money that has not yet been allocated.

Meanwhile, ISSG has taken out a private £33.6m loan to pay for three new vessels.

Last year H&W made an approach to buy the existing operators, the Isles of Scilly Steamship Company (ISSC), which was "unequivocally rejected".

'Huge, huge issue'

Mr Sims added: "People are quite worried, because you know, it's quite a visceral thing this.

"People would like to know what's happening and when it's going to happen, so they can put their minds at rest really."

He said this was a "huge, huge issue" for the Isles of Scilly.

The ISSG said: "Following the government's funding route would have delayed delivery of the vessels by two years to 2028; potentially opened up the whole process to legal challenge and further delay; limited our ability to cross-subsidise Skybus, leading to a potential 25% increase in air fares and would mean the route being tendered every five years, making long-term planning difficult and not providing security to our 200-plus employees."