We have increased the subsidy by 17·5 per cent. and we have offered to review the situation in the summer to make certain that if P and O's estimates are wrong—we believe that they may well be —we can make some form of arrangement to ensure that the full subsidy is paid—in line with the hon. Gentleman's request.

As for a different type of subsidy, I made it clear to the islands council representatives that if they want to put forward proposals we shall examine them carefully. This system has served the islands well in the past.