I am grateful for the general welcome for the new undertaking, and I hope that it will live up to the expectations which all hon. Members—even my right hon. Friend the Member for Argyll (Mr. Noble)—have expressed.

The hon. Member for Edinburgh, East (Mr. Strang) asked why the subsidy had been reduced, if it had been reduced, and what the situation would be about capital and revenue grants. The principle for the reduction in the subsidy is the reduction in the cost of the conventional cargo service, which has been losing a great deal of money. This is connected with the comment made by the hon. Member for Western Isles (Mr. Donald Stewart) about the cargo service schedule being changed to once every 10 days. As he says, the service has not been able to keep to the schedule.

The roll-on/roll-off service is a desirable innovation. The previous pattern of cargo services had become uneconomic. Often the ships were taking only a small amount of cargo. It has been possible to save a considerable amount of money by rationalising these services.

In future, revenue grants will be based on the requirements for each service. We have no specific aim either to reduce or to increase the subsidy level. If the need is proved for a subsidy on a particular route, that subsidy will be provided, and there is no ceiling on it. We have no capital grants in mind at present. It will be for David MacBrayne Ltd. to discuss its need with us if and when it wishes to have capital grants.

The undertaking provides for payments to be made for research, but no capital grants are at present in payment. I was also asked what would happen if a subsidised service covered by the undertaking became viable in future. The intention is that it would move from the subsidy arrangements to ordinary commercial operation and the service would be transferred from David MacBrayne Ltd., which is the company that runs the subsidised services, to Caledonian MacBrayne, the company that runs the commercial services. There is no question of MacBrayne having exclusive rights over any route, or of excluding other operators which may wish to come in on a route.

Charges by footage instead of weight are being introduced on services as they go over to roll-on/roll-off operation. A good number of services will remain on the old tonnage basis, but we hope to move all services on to the footage basis as soon as a full roll-on/roll-off service is provided.

My right hon. Friend the Member for Argyll made several criticisms of the way in which the services affected his constituents. I well appreciate that he has a great many complaints from his constituents. He always raises them with me, and I always do my best, within the proper limits, to investigate them. On normal operational matters it is best to take up complaints directly with the Scottish Transport Group, and I am always prepared to give my right hon. Friend any help I can in that.

My right hon. Friend asked about charges. I give him the assurance for which he particularly asked in regard to the undertaking services. We shall still be able to exercise influence over the level of charges on these services, and it will be our general aim to see that they do not rise above the generality of charges on the other services.

I am sorry that my right hon. Friend is worried about the concern of some of his constituents about the provision of a boat to take livestock for the Christmas sale in Oban. I have some reasonably good news for him. I understand that the "Bute" called for the livestock in question yesterday. The sale took place successfully today, and 91 cattle and 553 sheep were shipped without any trouble. That may have been due to the fact that he raised the matter.