The government and the Steam Packet company this week argued about inflation figures.

The Steam Packet is disputing inflation figures for the 12 months to July 2022 released by the Cabinet Office – but the government hit back after the ferry company spoke out.

According to the July report, inflation as measured by Consumer Price Index (CPI), stands at 10.8%, up from 9.2% in June 2022 and includes a 104% increase in sea transport prices during this period.

However, the company has labelled the method behind the calculations as ‘misleading’ and said that ‘that no product fares (excluding fuel surcharge) had increased by more than 3.1% in the 12 months to June’.

A spokesperson said: ‘Under the Sea Services Agreement, standard fares cannot increase by more than the published Manx CPI [consumer price index] increase for August of each year.’

It said that bosses had told the Cabinet Office this.

The spokesperson added: ‘The anomaly in the headline figures arises due to the comparison of the average price for June 2022, which reflected the high demand for TT 2022, with that of June 2021 when, due to Covid, traffic volumes were just 10% of 2022 levels. As a consequence, the mix of fares was not representative of normal trading nor of typical average prices.

‘The Steam Packet Company acknowledged that total fares had been affected by steep rises in marine fuel costs which had more than doubled since January, however, fuel surcharge increases of £2.25 for foot passengers and £1.50 for vehicles were a relatively small component of the total fare.’

The company also said that it had absorbed an ‘additional £2.5 million pounds of fuel costs to date, partly due to the company holding TT 2022 bookings at 2019 price levels in order to retain TT business during the pandemic’.

In its publication of the figures, the Cabinet Office said that the high rate was ‘due to data being collected over a period of significant demand’.

The government subsequently published a stronger challenge of the Steam Packet’s statement.

It rejected the idea that inflation figures for the 12 months to July 2022 were ‘misleading’.

The Cabinet Office said the figures were ‘correct and have been calculated in line with established methodology’.

It said that the introduction to the report highlighted that the unusual figure was due to the data being collected ‘during a high demand period’.

The report also states what inflation would be without transport fees.

The July inflation figure was calculated using a methodology that was devised in consultation with the Steam Packet, with data provided by the company.

A government spokesperson said: ‘Government firmly rejects the assertion that the method used to calculate these figures is misleading.’

While the Steam Packet is now owned by the government it operates at arm’s length.