IT is absolutely shocking.
That was the verdict from Southampton politicians last night after a dramatic European Union ruling granting the public funding of the Liverpool cruise terminal.
In a bitter climax to the notorious ‘cruise wars’ between the two cities the EU Commission last night announced the £17.8m granted to Liverpool to build the complex is in line with state aid rules.
Southampton initially lobbied its rival to hand back the Government and EU money in 2011 – four years after the £21m terminal was completed in 2007.
This followed outrage from Associated British Ports (ABP) which runs Southampton Port and claimed that the private owners of Liverpool Port – Peel Ports – should not receive taxpayer subsidies.
Liverpool has already paid back £8.8m of the £9.2m British taxpayers cash used to fund the project, which was topped up with £8.6m from EU Structural Funds.
Now the EU has said both subsidies meet the union’s transport policy objectives without “unduly distorting” competition in the Single Market.
It is unlikely that Liverpool will be able to reclaim the money it has already paid back.
But Southampton City Council Tory opposition leader Cllr Royston Smith, said: “It is absolutely shocking that the EU thinks it is acceptable for public money to be used in this way.
“This is the worst possible outcome we could expect and really wrong.
“This tells us everything that we need to know about the need to renegotiate our position with the EU or leave it all together.”
But he insisted Southampton will retain its pride as Europe’s top cruise port and said: “Yes it will damage our competitive edge but it won’t knock us off.”
Southampton Itchen MP John Denham, promised to do all he could to challenge the ruling and said: “It’s very surprising that the EU isn’t calling for taxpayers money to be repaid.
“All we’ve ever wanted is a level playing field between Liverpool and other cruise ports in the UK and there shouldn’t be unfair competition.”
The European Commission said the UK carried out an in-depth financial analysis showing that the terminal operator’s income from the use of the infrastructure would be insufficient to cover the investment costs over a period of 20 years.
They stressed public funding was limited to the minimum possible for its completion.
In a statement the Commission said: “The potential distortions of competition triggered by the public funding will be limited because the terminal will have a small market share, both in the EU and UK markets.”
It said the positive effects of the project will “outweigh potential distortions of competition”.
It concluded it was in line with rules which allows state aid for the development of certain economic activities, “provided that it does not unduly affect trade and competition in the Single Market.”