Island Transport

– in the Scottish Parliament at 4:40 pm on 26 March 2003.

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Photo of George Reid George Reid Scottish National Party 4:40, 26 March 2003

The final item of business today is a members' business debate on motion S1M-4003, in the name of Tavish Scott, on island transport.

Motion debated,

That the Parliament recognises that reliable, regular and affordable air and sea transport links are vital to the social and economic well-being of the Scottish islands; welcomes the proposal from the Highlands and Islands Strategic Transport Partnership for improved air services in the Highlands and Islands backed by public service obligations; believes that the introduction of public service obligations provides an opportunity to ensure that the specified air services' timetables link in with those for ferry and bus services, and considers that the Scottish Executive should take this opportunity to provide the islands with a properly integrated transport service.

Photo of Tavish Scott Tavish Scott Liberal Democrat 4:48, 26 March 2003

I have a desperate desire not to be the most expensive MSP on our annual list. Thankfully, the Daily Mail is read by few people in Shetland—

Photo of Tavish Scott Tavish Scott Liberal Democrat

Indeed. When that newspaper prints rough articles with me at the top of the list, I accept that as part of politics. However, the cost of flying to and from the islands of Scotland is painful for my constituents in Shetland and, indeed, for constituents in other islands. I lodged my motion for consideration by Parliament on that basis. There can be no doubt that, without regular, affordable and reliable air services, the islands of Scotland suffer. The current lifeline services do not meet the affordability test. Furthermore, they have shortcomings in terms of regularity and reliability.

The cost of travel to my constituency is high. An investigation of British Airways ticketing prices shows that fares range between £138 and £299, without taxes, for a return between Sumburgh and Aberdeen. That is a cost on business. For example, a seafood business that wanted to export or to make contacts at the Brussels seafood exposition every year would face exorbitant travel costs. Travel adds to the cost of doing business in the islands.

Photo of Margaret Ewing Margaret Ewing Scottish National Party

I agree with what the member says. Does he realise that one could have a fortnight on a Greek island in a self-catering apartment for the cost of travelling to Shetland?

Photo of Tavish Scott Tavish Scott Liberal Democrat

I have had that holiday on a Greek island in self-catering accommodation—with my wife, I may add—for the cost of flying to Shetland. As Margaret Ewing said, such high costs are faced by residents of the island and by business. However, they are also faced by the public sector, at public expense. NHS Shetland's bill for travel by patients and staff to the Scottish mainland is some £1.5 million every year. For all the islands together, the national health service bill is some £4 million. If councils, enterprise companies and the rest of the public sector are included, the take from the public purse rises to some £6 million.

Mrs Ewing's example of a holiday is relevant. However, I feel as strongly, if not more so, about the people who have to travel—at short notice—to a family funeral. That is particularly distressing. The cost, when added to the inevitable difficulties of those circumstances, is significant.

Tourism is also constrained by the cost of flying to and from the islands. At a time when I see economic change in my constituency—as across the Highlands and Islands—it is particularly important that tourism be grown and energised. That involves reducing the cost of flying and enabling people to travel more easily and more affordably to the islands.

Public service obligations, which have been part of the debate for some time, can and do address the issues of reliability, regularity and affordability. The case has been made, extremely well, in my view, by HITRANS, the Highlands and Islands strategic transport partnership—many members were at its recent presentation in Edinburgh. HITRANS found that the existing services are "marginally profitable", but only at the expense of fares that are

"holding back the social and economic development of Scotland's peripheral regions."

For me, that alone is reason enough for us to consider carefully the HITRANS proposals, specifically on the use of public service obligations.

HITRANS set out in its proposals a plan to use PSOs to specify increased services, providing better links right across the Highlands and Islands. It calculates that, to reduce the average fare by 33 per cent and to improve the service, the Scottish Executive would have to provide an annual subsidy of just under £10 million. However, I suggest to Parliament and to the Deputy Minister for Enterprise, Transport and Lifelong Learning that, if one deducts the cost of existing PSOs on west coast services and takes into account the savings on the public sector travel bill and the extra passenger revenue, the net extra cost to the public purse would be considerably less. I have long argued that, if fares come down and services improve, more people will use those services, which will increase the revenue and therefore the amount of money available within the services.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

I entirely agree with the virtuous-circle argument that Tavish Scott has advanced. Does he accept that the granting of a PSO to secure the Inverness to London Gatwick connection would support and facilitate the creation of such a virtuous circle?

Photo of Tavish Scott Tavish Scott Liberal Democrat

That is a different issue and concerns the use of PSOs to guarantee slots. Mr Ewing and other members have made that argument, which is a fair one. My belief has always been that we should have a link with Heathrow, but that is probably an argument for another day.

The other advantage of the HITRANS proposals is that they provide a fare structure that would be open and transparent. That is palpably not the case at present. We could therefore remove the anomaly whereby Loganair, to its eternal credit, offers half-price fares for children, whereas British Airways currently does not. In addition, the timetable could be specified to suit the needs of passengers. A day return to many of the islands could be created for people who have to travel at short notice, whether for a hospital appointment or for business. Through that mechanism, Government could provide the service that islands need. HITRANS has shown that, with a comparatively modest annual subsidy, a reduction in the burden on island life could be achieved. That logic has convinced me and my party—I certainly plan to fight the forthcoming election on the basis of those proposals, which are firm, solid and well worked out.

I have two final points, the first of which relates to shipping and livestock transport. I am sure that I have made this case to the minister until he is fed up to the back teeth of my making it, but I hope that, in winding up, he will say something about livestock shipping to the northern isles, particularly with reference to stock boats. I hope that he will talk about the proposals that I know the shipping companies have made to the Executive, as that could allay the concerns of crofters and farmers in the northern isles about the availability of those boats.

Secondly, the stock movement system for the northern isles could be brought forward without great delay on the basis of a specification that considers issues such as affordability, welfare standards and routes. Measures could be taken forward with local crofters and farmers in the northern isles.

I commend the motion on the basis that we should all support an integrated approach to transport.

Photo of Maureen Macmillan Maureen Macmillan Labour 4:56, 26 March 2003

I am an MSP for the Highlands and Islands and therefore have probably travelled the islands from Unst to Islay and Skye to Stornoway more than most. Doing so has certainly brought home to me how crucial air and ferry services are to the economic and social life of the islands, albeit that, because I come from Argyll, I was always aware that they were crucial.

As a reporter on the tendering of the Caledonian MacBrayne ferry services, I was deeply involved in taking evidence on reaction to the proposals from the Clyde to Stornoway. It was clear that the contract for the service would have to allow for continuing growth and enhancement to the service and that it would have to be flexible and responsive to the needs of the islanders. I do not doubt that islanders have greater expectations about what their lives should be like and that they have greater aspirations about contact with the mainland and making the journeys that other people make. They do not want to make those journeys at vast expense or to take three or four days for a round trip.

We hear horror stories—recently, there was a story about schoolchildren being left behind on Oban pier and missing a whole weekend at home—but there are also good news stories. For example, the enhancement of the Mull to Kilchoan ferry was recently announced, which will include vehicle provision during the winter months as well as during the summer. That will make a great difference to both of those communities.

I thought that Tavish Scott would say plenty about the northern isles ferry service, so I did not plan to speak about it. There are problems with it, but I am aware that there are superb new ships on the route. I hope that ferry service problems in the northern isles will soon be resolved.

However, shipping services are not enough. We would all like air services to the islands to be expanded—in particular, an expansion of air services to the Argyll islands is needed. No matter how the ferry services are reconfigured, some islands remain disadvantaged. People must travel to meetings or to dental or hospital appointments and a three-day round trip is not acceptable in this day and age. I would like there to be an air hub in Argyll, based in Oban, a Highland hub based in Inverness and an airport in Skye. If—or when—the Skye bridge tolls are abolished, Skye's transport problems will not be solved. It is quicker to travel to the Western Isles than to travel to Skye, which is surely an anomaly.

I realise that the HITRANS proposals have many hurdles to surmount, which Tavish Scott talked about at length, but I hope that the new Executive will consider seriously how the European Commission might be brought on board to grant public service obligations for a single bundle of air routes. That will not be as easy as Tavish Scott or HITRANS have made out—it was extremely difficult to secure the CalMac bundle, so it will not be easy to secure a bundle of air routes over the Highlands.

Some individual air routes are obviously profitable, such as the route to Stornoway. Operators, such as British Midland Airways Ltd, that happen to have a free plane are considering running passengers on those routes at a profit. It is not easy to say, "Right, let's bundle all the routes and put them to the European Commission and the EC will be sure to grant us a PSO." Things are not as simple as that. However, I would like us to try to make the case for that and thereby to make travel more affordable. I would like the Executive to consider seriously the proposal and to see whether it can be brought forward; it would certainly be of great benefit to the Highlands.

Photo of Duncan Hamilton Duncan Hamilton Scottish National Party 5:00, 26 March 2003

I congratulate Tavish Scott on securing the debate. I should also say that I agree with just about everything that he said, which is a strange, but nonetheless welcome, position for me to find myself in.

It was interesting that Tavish Scott started by telling us that he was somewhat disconcerted to find himself top of the list in the Daily Mail. I suspect that when some members consider the coming election they would give their left leg to be at the top of any list, although perhaps not the one that he mentioned.

PSOs have dominated the agendas of many Highlands and Islands MSPs—it is interesting to note that questions 8 and 9 at Executive question time tomorrow are about the issue. George Lyon has a question about the Campbeltown ferry service and I have a question about the Barra air route. The matter has been put on to the political agenda.

I will take the hint from the motion that is before us, which refers to the sea and the air, and I will make a couple of points about those routes and on PSOs in general. A very disappointing announcement was recently made about the Campbeltown service, to the effect that none of the bids had been progressed, which I am sure members throughout the chamber regret. The issue is of massive importance to the town, but for reasons of commercial confidentiality, we cannot get into the nuts and bolts of the tender and the offer.

Photo of Dr Winnie Ewing Dr Winnie Ewing Scottish National Party

In my past life in the European Parliament, there was tremendous agreement among the Irish MEPs from the north and south and from all parties and people like myself that a port in the Republic of Ireland should be added to the Campbeltown route, which would thereby attract cross-border funding. If that had been done, the route would have been much more secure: it would have been good for tourism, both in Ireland and in our country. There could have been a four-point route, but that did not happen—I suppose for the usual reason that there was a need to match funding.

Photo of Duncan Hamilton Duncan Hamilton Scottish National Party

I am grateful for that intervention.

The point that comes out of that is that whether it involves working with the Republic of Ireland, Ayrshire or anywhere else we must be creative about what we do to secure the future of that ferry route, because in many ways it is the final hope for Campbeltown. George Lyon will remember well that it was the big issue in Campbeltown in 1998 ahead of the elections; we are talking about the same issue as we come to the elections in 2003, so I urge the Executive to focus on the issue.

It will come as no surprise to members that I will mention the Barra air route, which is about more than Barra. We had a debate not long ago about the future of PSOs and what was being shown by the debate about Barra. Members will note that the review period has been extended by two years, but it is only an extension of the review period. In the context of the motion, the question that is before us is: what is being reviewed? Is it the potential of PSOs? What is the point of the review? We have been told that it is about value for money, but if it is about value for money and there is to be a transport appraisal—I hope there will be; there has not been one in the past—Barra and other communities, whether Campbeltown, Tiree or elsewhere, are worried about the prospect of the principle of PSOs being diminished at the very time when the report to which Tavish Scott referred is arguing for the reverse. It argues for an expansion of PSOs, so the idea that that principle should be in any way under review leaves us with a great deal of doubt.

The report makes the obvious point, which is worth reiterating, that achieving the appropriate frequency of services and reduction in the cost of travel might in the shorter term require additional funding. However, the point is that the routes themselves—never mind the economic spin-off on either side of the routes—will be of benefit to the communities and the public purse. I welcome the HITRANS report.

This morning, we discussed the powers that the Parliament might in the future have over economic development. There are many things that Parliament cannot do, but the expansion of PSOs is something that we could do. The impact that we could have on our remote, rural and island communities by securing those routes and by multiplying the number of routes to get nearer to or above the European average is a matter on which the Executive could take a lead. That would be a positive step that would not require additional powers; it would require merely the will to take the step. If today's debate has given us the opportunity to put forward that proposal on a united basis, I welcome the debate for that reason.

Photo of Jamie McGrigor Jamie McGrigor Conservative 5:05, 26 March 2003

I congratulate Tavish Scott on securing the debate. I agree that the Scottish Executive should take the opportunity to provide the islands with a properly integrated transport system. I know that Tavish Scott's friend John Firth would also agree about that.

The debate is a bit late; to be frank, a cynic might be forgiven for saying that the timing of the debate makes Tavish Scott's motion nothing more than a blatant vote-buying dodge to mask the Labour and Liberal Executive's transport failures over the past four years, particularly with regard to the islands. I hate to say this, but Tavish Scott should apologise to his Shetland constituents and his ministerial colleague, Jim Wallace, should apologise to his Orkney constituents for the way in which the people of those islands have been disadvantaged by the Liberal-Labour Executive's flagship partnership, NorthLink Orkney and Shetland Ferries Ltd.

Photo of Tavish Scott Tavish Scott Liberal Democrat

Will Jamie McGrigor say which new boats the Tories brought into service during their 18 years in power?

Photo of Tavish Scott Tavish Scott Liberal Democrat

I mean boats for the northern isles.

Photo of Jamie McGrigor Jamie McGrigor Conservative

All I know is that P&O Scottish Ferries provided a better service than NorthLink Orkney and Shetland Ferries Ltd does. That company has hardly been a success for Orkney and Shetland: boats do not fit piers and run at the wrong times; there has been a huge increase in cancellations; and the company has ignored the islands' lifeline requirements.

There was also confusion over the cassette system for animal transport, which is yet to materialise, and Shetland has been forced to make alternative unsubsidised arrangements that are now being ground down by discriminatory state-subsidised competition. It is all too familiar an example of Liberal-Labour Scottish Government bungling. The building of piers, in particular the new Scrabster pier, is way behind schedule.

Photo of Jamie McGrigor Jamie McGrigor Conservative

No.

The new ship that should be servicing Orkney is tied up at the pier in Leith beside the offices of the Scottish Executive.

What does Tavish Scott mean by an "integrated transport service"? In the past, Shetland and Orkney had a fully integrated transport system; Tavish Scott and Jim Wallace's achievement over the past four years has been to replace an integrated system with a fully disintegrated transport system.

It is not only Shetland and Orkney that have suffered. I remember Sarah Boyack's declared intention of having an integrated transport system for Scotland. She went, and the system never materialised. Despite many promises, the much-promised Campbeltown to Ballycastle ferry is yet to materialise, which is a huge blow to the people who live on the Kintyre peninsula. The vehicle service that was provided by Caledonian MacBrayne from Gourock to Dunoon has also been removed, even though Dunoon was hailed as being one of the gateways to the new Loch Lomond national park. The transport facility has been taken away, so Dunoon is not much of a gateway, is it?

We have also had the Executive's attempt to remove the air service from the isle of Barra. I am glad to say that that was foiled by the hard work and persistence of the people of that island, who descended on Edinburgh. They appear to have succeeded in saving the air service that they have enjoyed for more than 70 years. As a member of the Rural Development Committee, I remember well the committee trip to the beautiful island of Colonsay. That trip made me realise the huge disadvantage that the people of that island face because of an inconvenient and infrequent ferry service.

The main problem that is faced by the northern isles and the Western Isles is their geography. Those islands depend on sea and air transport rather than on the arterial roads, motorways and railways that are enjoyed on the UK mainland. Surely the islands are entitled to some form of equality when it comes to support and investment for transport infrastructure. There should be more support for air and sea communications to those islands, not only to encourage business and to support health and education lifelines, but also to show that there are benefits that island inhabitants can enjoy which make up for the possible disadvantages of living off the beaten track. A return flight from Inverness to Shetland is £350, which is far too much by any standard.

Proper integration of transport involves, for example, the passenger taking an aeroplane, which is met by a bus, which takes them to a ferry, all without endless delays. That is what happened before nationalisation in 1948, so surely with a little intelligent forethought such a system can be made to work again under devolution. There is no doubt, however, that the Liberal-Labour Scottish Government has failed the islands and the nation when it comes to transport—they will not easily be forgiven.

Photo of Jim Wallace Jim Wallace Liberal Democrat 5:09, 26 March 2003

Jamie McGrigor's speech was strong on rhetoric but light on facts. He should find out more about the subject on which he is speaking before he starts to make speeches like that.

There were never any new boats for Orkney and Shetland in the 18 years that the Tories were in Government—only under this Executive have we got new vessels. It is certainly not the Executive's fault that the Hamnavoe is tied up at Leith; neither is it the Executive's fault that Scrabster pier has not been completed. The minister visited Scrabster this week and I am sure that he will want to say more about that and about the money that the Executive is allocating to the temporary arrangement, so that the Hamnavoe might come into service.

Jamie McGrigor's speech was also light on any mention of a solution to what he was talking about. At least Maureen Macmillan and Duncan Hamilton followed Tavish Scott's initiative and talked about HITRANS and the possibilities of a public service obligation for air transport. On air travel, it is important to acknowledge that Kirkwall and Stornoway have had brand new air terminals opened under this Liberal Democrat-Labour Administration. Anyone who goes by Kirkwall airport will see the extensive work that is being undertaken in establishing the instrument landing system for the airport. I campaigned for that for a long time but did not get it from a Conservative Government. It is now being delivered by the Executive.

Transport is vital to the islands because so many aspects of the islands' economic and social life depend on good, integrated, reliable and affordable transport, from getting our exports out of the islands and bringing in raw materials, to tourism and attracting people to the islands. Transport is also important to families from the islands who want to go away and spend a holiday in Greece, as Margaret Ewing mentioned. Those families would probably spend more on a flight to the Scottish mainland than they would spend on a flight to go on holiday.

Transport to hospital services is also important. A number of patients from the islands have to fly to the mainland—mostly to Aberdeen, although sometimes to Inverness—and the cost of high air fares is borne by the health service. One of the difficulties that we have always faced is the fact that the airlines that are servicing those routes do not receive any public subsidy, so it has always been difficult to have any leverage over them about services. To be fair, some of the services have improved over the years and we should not decry the improvements that have been made; nevertheless, we should welcome the HITRANS proposal. That proposal was produced following detailed study of the demand for better services and of the effects that fares have on the social and economic life of the islands. The proposal has given us material that we can pursue. The exciting part of the proposal is not the prospect of lower fares, but the development of routes that will give people more choice over when to travel.

Earlier this month, I was approached by a constituent who was trying to book a break over Christmas and the new year—members will note that that is some nine months away. The first fare that he was quoted was about £300 for a return flight from Kirkwall airport to Edinburgh. When he tried to get a cheaper fare, he found that he could not get one on any of the days on which he wanted to travel. One of the difficulties is that although cheaper fares exist, they are not always available on the days when people want to travel, so people might have to incur the expense of an extra overnight stay. One of the advantages of pursuing the PSO idea would be that we could build into it not only provisions regarding the cost of flights, but regarding reliability, regularity and route development. I confirm what Tavish Scott said by repeating what I said at the Liberal Democrat party conference: the commitment to pursue HITRANS's idea and proposals will form part of the Liberal Democrat manifesto, which will be launched next month.

We should look constantly for ways in which we can improve on what has been done over the past four years to modernise our transport system. We all accept that more can be done and that more needs to be done. I congratulate Tavish Scott on securing the debate; it has allowed at least some of the parties that are present to put forward positive proposals—even if, as usual, we cannot depend on the Conservatives to say anything positive about the transport links to the islands.

Photo of Fergus Ewing Fergus Ewing Scottish National Party 5:14, 26 March 2003

Along with other members, I attended the presentation at Edinburgh City Chambers that HITRANS gave on its imaginative and ingenious proposals. The presentation was truncated from an hour to 30 minutes, perhaps to take into account the average attention span of MSPs.

The basic idea was that if we can increase the frequency of flights between islands in the Highlands and Islands and from there to Edinburgh, Glasgow and, indeed, London, there would be an increase in passenger numbers, which would be likely to bring down the price of tickets for flights. Moreover, flights would be available at times that were more convenient, as the motion points out. We could then have something that more closely approximated an integrated transport system and we could create the virtuous circle to which Tavish Scott referred.

My understanding is that the next step for HITRANS is to discuss the proposal with the carriers. It will be interesting to see what emerges from that, because I suspect that it might be difficult to persuade the carriers that the ingenious HITRANS model would be workable.

The implementation of the proposals would require the application of PSOs. I disagree with the notion that that would create an insuperable difficulty. If that were the case, how does France manage to have so many PSOs while Scotland has so few? It is relevant to argue that a prosperous and successful Highlands and Islands Airports Ltd would help to ensure cheaper and more frequent flights within the islands and from the islands to the mainland. If HIAL can increase its revenue and reduce its costs, that would enable the whole operation to work more efficiently and effectively.

I have two further points. First, I referred in a speech during an earlier debate to the private finance initiative. I will not repeat what I said, except to refer to two matters. The Enterprise and Lifelong Learning Committee made comments and recommendations on PFI in paragraphs 210 to 214 of its tourism report, but we are still waiting for a response from the Executive. However, Lewis Macdonald told me just this afternoon that the Executive has ruled out buying out the HIAL PFI. Will he say whether the Executive is considering buying out the offending PFI clauses, so to speak? The first of those clauses punishes success, because PFI repayments increase as passenger numbers increase. The second clause prevents HIAL from developing the retail opportunities in Inverness airport. Is the Executive contemplating, in the Labour manifesto or otherwise, buying out those clauses and replacing the rising annual payment with a flat-line payment that would give certainty and the possibility of better investment for the future?

My second point is that the Civil Aviation Authority has lumbered HIAL with a wholly inappropriate regulatory regime. It is shocking that nothing has been done about that. I have two examples. Inverness airport was closed not so long ago because it had one airport traffic controller too few. One would think that bringing in an ATC from Aberdeen or Wick would solve that problem, but that is not the case. An ATC from those airports would have to do a three-month induction course even to be an assistant ATC at Inverness. Because it was short of one ATC, Inverness airport was closed for a day, which is ridiculous. One can understand the induction rule being applied at an airport like Heathrow, but not at one like Inverness. Why does Inverness airport have the same rules as one of the busiest airports in the world? I know that a review is taking place, but the current position is crazy. Why do we have to await the outcome of a Department for Transport review?

My second example concerns Stornoway airport, which now must have two fire appliances to deal with the arrival of a new jet. The new jet has 50 seats, whereas the previous jet had 66 seats. Given that there are fewer passengers, why are two fire appliances needed instead of one? If Alasdair Morrison were here, I am sure that he would be keen to make that point. It seems that two fire appliances are needed because, although the new jet has fewer seats, it is slightly longer. The requirement for two fire appliances costs a huge amount of money—hundreds of thousands of pounds extra a year. The SNP would be determined to ensure that such inappropriate and unduly burdensome rules were removed. We could use the extra money to develop the additional routes for which members rightly argue.

Photo of John Farquhar Munro John Farquhar Munro Liberal Democrat 5:18, 26 March 2003

I thank Tavish Scott for bringing the debate to Parliament. This is one of the last debates that we will have before Parliament closes down tomorrow evening. I am sure that the problem will not be solved by this debate, but we are at least attempting to push matters in the right direction.

Rural Scotland has for many years suffered from limited transport links. Those that exist are at best expensive and at worst not affordable. Several attempts have been made over the years to address that situation, but they have had little success. We have been unable to establish an integrated transport system that has an appropriate timetable. That is an important issue. It is no use having a transport system unless people know what time a train or a ferry arrives or a bus leaves. Timetables must meet the needs and aspirations of the travelling public and all modes of transport—air, sea, rail and bus—should be geared to a common timetable.

Recently, we were visited by a delegation to promote the aims and objectives of HITRANS. The partnership has an ambitious programme and is attempting to establish more frequent inter-island and short-hop flights to many destinations on the mainland. I agree with its suggestion that that would attract more fare-paying passengers, provided that fares were sensibly priced and that flights followed an agreed timetable.

I appreciate that those proposals could take time to work through the system of various approvals, particularly licence approvals. For example, the local authorities of the Highlands and Islands, supported by all the public agencies in the Highlands, have attempted for eight years to secure a PSO on a direct route from a London hub airport into the Highlands. Despite their best efforts, that has still not been achieved. Securing such a link is critical to the continuing well-being of air transport into and from the Highlands.

Perishable freight to and from island communities is another continuing problem. Many small producers on the islands depend on getting their products to the mainland markets in the quickest time, to achieve the optimum price. That is difficult when only one or two flights operate a day at weird and wonderful times that do not suit the producer.

Reliable and affordable integrated transport is the key to the economic well-being of Scotland's island communities. Failing to deal with that will inevitably lead to a gradual down-turn in our rural economy, which will please nobody and which we do not want. Rather than having many competing air, ferry and bus links, travellers must have the maximum choice of routes and times. That would benefit island communities by reducing the costs for local businesses and, more important, by lowering produce costs. It would also make those communities and islands more accessible and affordable for tourists.

Photo of George Lyon George Lyon Liberal Democrat 5:22, 26 March 2003

I, too, congratulate Tavish Scott on securing the debate, which has been constructive, apart from one speech, which was inappropriate to a members' debate. Surely even Jamie McGrigor, who occasionally appears slightly tired and befuddled, does not fail to remember the track record of the Conservative Government. I will describe two matters that he should remember.

The Conservative Government tried twice to close down the subsidised Dunoon to Gourock service and to give it to a privatised monopoly. That Government also took the ridiculous decision to give the Campbeltown to Ballycastle service to Sea Containers rather than Caledonian MacBrayne, for no more good reason than the Tory ideology of the free market. That had nothing to do with the needs of the people of Campbeltown. When Jamie McGrigor starts handing out attacks, he should remember the track record of his party when it was in power.

A great hope for the Parliament when it was established was that it would address the concerns of Scotland's remote areas. That was the fundamental reason why many in the Highlands and Islands supported the Parliament's establishment. Affordable transport is the key issue that confronts most of the areas that many members in the chamber—including me—represent.

In the past three or four weeks, I have visited 10 island communities in my constituency. The first items on the agenda for discussion in those communities are the cost and frequency of ferries and the cost of air transport. My constituents could sit round a table and discuss timetables all night when it comes to the bit, because transport affects every part of their lives. The cost of transport to the islands affects the cost of every item in the shops. The ability to get off and on, the ability to attend hospital and the ability to have key public services delivered are all predicated on the cost of transport to the islands.

If our island communities are to be regenerated and if the alarming decline in the population of many of the islands—certainly those in my constituency—is to be halted, the Parliament must focus clearly on improving the accessibility of those communities, on which such regeneration hinges. That means lowering the fares and increasing the frequency of the services.

Those are the fundamental issues that confront many of my island constituents. That is why the proposals that HITRANS has made grab so many of us as an exciting way forward. The use of PSOs to lower fares, coupled with a dramatic increase in the frequency of services to a minimum of three per day, is the sort of step change that would have the full support not only of my constituents in the islands but of those in north Argyll. The HITRANS proposals would affect more than the islands. The upgrading of Oban airport to key destination status would bring huge benefits to mainland north Argyll. If we are to achieve the vision of growing Oban into a key regional centre that is able to attract new companies and civil service jobs to the area, the development of the airport is fundamental. Therefore, new investment must be made in the airport. I am delighted that Highlands and Islands Enterprise has put significant money into enabling the airport to operate with a proper air service.

The HITRANS proposals and costings are, of course, predicated on a significant increase in demand on the routes as a result of the reduction in fares and the increase in frequency. Like Tavish Scott and others, I have no doubt that that demand exists. It should be possible to validate the assumptions that are contained in the consultants' report.

Our colleagues in southern Ireland are already using PSOs and increased frequency to open up air routes to the west coast of Ireland. Therefore, I hope that the next Executive will take the report seriously as a matter of priority and that it will engage as a matter of urgency with our counterparts in southern Ireland and learn the lessons from that country's experience.

Photo of Lewis Macdonald Lewis Macdonald Labour 5:27, 26 March 2003

I congratulate Tavish Scott on securing the debate and will reflect on the comments that have been made.

The Scottish Executive is fully committed to maintaining essential lifeline air and ferry services to Scotland's island communities. That commitment underpins the substantial and increasing financial contribution that we are making to that end.

Last year, the Parliament debated the initial HITRANS report, which gave an overview of PSO practice throughout Europe. The report represented the first phase of work on the issue and it was clear at that stage that a more comprehensive assessment was needed of the implications of an extended use of PSOs. The potential scenario envisaged in that report—

Photo of Fergus Ewing Fergus Ewing Scottish National Party

Why is it that countries such as France implement PSOs without such an endless series of reviews?

Photo of Lewis Macdonald Lewis Macdonald Labour

Far from being in the midst of an endless series of reviews, we are in the midst of a large-scale consultation on aviation strategy not only for Scotland and not only for now but for the entire United Kingdom and for the next 30 years. Mr Ewing will be familiar with that consultation. Given our position in the air transport networks of western Europe, it is clearly vital that we make a full contribution to that consultation. It is also vital that the case that we make for our aviation priorities be married with the case made for the priorities of the rest of the UK.

However, I am not arguing against change. There has been a long-standing commitment on the part of Scottish ministers and island authorities to support a number of services that are not commercially tenable but which are vital for the economic and social well-being of the communities served. The imposition of PSOs on air services that were previously run on a commercial basis has not happened anywhere in Britain to date.

We have supported the case for such a PSO on the route from Inverness to Gatwick. As with other matters, that case has been subsumed by the wider consultation on air transport during which new services from Inverness have come on stream. We are happy that UK ministers take their time in considering a Gatwick PSO and that they should do so in the wider context of regional access to London-system airports and the future development of air transport throughout the UK as a whole.

Photo of Margaret Ewing Margaret Ewing Scottish National Party

Obviously, I support the case for the PSO between Inverness and Gatwick. Is there any indication in the consultation and reviews that are being undertaken of any possibility of restoring the Heathrow link?

Photo of Lewis Macdonald Lewis Macdonald Labour

I would look to a wide range of opportunities for aviation links from Inverness and other places in the Highlands and Islands to places furth of Scotland. We should pay attention to the results of the review—although the consultation will not be completed until June—and to the market, and recognise that the market has produced additional services in the recent past. The potential to build on that is still significant. The proposed Inverness to Gatwick PSO is not intended to deliver subsidy, whereas the proposals from HITRANS envisage a cost to the public purse of several million pounds a year.

The timing of the latest HITRANS report, which fleshes out the original proposals, is useful. The current consultation process on air transport will lead, perhaps towards the end of this year, to the production of a UK white paper that will outline policy proposals. Once the consultation ends in June, we will engage in detailed dialogue with Department for Transport officials on what we want to appear in that white paper for Scotland's interests. I have no doubt that discussion of PSOs will take place in one form or another in that context.

The Scottish air transport consultation document, which was issued jointly by ourselves and by the DFT, addressed specific issues with regard to Highlands and Islands air services. That document has been only one aspect of the consultation process, however. We have held a series of events in the Highlands and Islands to address issues such as infrastructure and route development. That dialogue is continuing, and my officials are scheduled to meet representatives of HITRANS at the end of the month to discuss PSOs and the latest information. Many of the people who attend that meeting will go on to the third international forum on air transport in remoter regions, which is to be held in Cork next week, and which will address some of the issues in a wider, European context.

Once we have received the supporting cost model for the HITRANS proposals, we expect to scrutinise the costs and we will take into consideration both the additional number of passengers that Tavish Scott has suggested might be generated and the extra infrastructure costs that might require to be met.

The potential for extended PSOs would have to be considered by any Executive in the context of the existing commitment to Highlands and Islands Airports Ltd and to Highlands and Islands air travellers, which currently stands at about £30 per passenger, and which represents support for the airport operator to reduce the cost to passengers. My party would certainly be disinclined to move away from that approach as the centrepiece of our support for air passengers.

Photo of Tavish Scott Tavish Scott Liberal Democrat

I take the minister's point about the commitment equivalent to £30 per passenger, but does he accept that if the full fare from Shetland to Inverness, for example, is £350, we are not achieving an awful lot through that mechanism?

Photo of Lewis Macdonald Lewis Macdonald Labour

I would certainly not dispute the fact that there are issues around fare levels on a number of routes. Those issues require to be addressed and the market can assist us, as recently happened in the case of Stornoway routes. Clearly, however, more requires to be done.

Fergus Ewing mentioned the regulatory regime. That comes under the consultation, and so is reserved to the UK Government, but we will be discussing the matter with UK Government officials. Indeed, we are already doing so.

On the PFI at Inverness airport, a review is under way between HIAL and the owners of the PFI, and that has our full support. The review aims to explore whether there are ways in which that PFI can better deliver the aims that we share with the operators.

Lifeline ferry services are obviously an important part of the support that we provide to our island communities.

Photo of Duncan Hamilton Duncan Hamilton Scottish National Party

Before the minister leaves the subject of air services, will he say something about the announcement that he made about the Barra air service? Will the extension of two years allow him to give Parliament a commitment today that the full requirements of the Scottish transport appraisal guidelines will be implemented before any decision is taken?

Photo of Lewis Macdonald Lewis Macdonald Labour

As I was pleased to say earlier, an additional contract will be let from April next year, which will allow a full review. It will be for ministers to make clear then the basis on which that review will be conducted. We will wish to consider the future of the Barra to Glasgow air service. There are some serious issues around that, with which Mr Hamilton is familiar, and those issues require to be addressed for the long-term future in consultation with the community and its elected representatives.

Given the shortage of time, I must move to some of the shipping issues that were raised in the debate. Over the past six years, we have doubled the level of subsidy to CalMac for west coast ferries. That significant investment has already enabled CalMac to introduce two new vessels, and a further two new vessels will come on stream shortly.

I announced earlier that we will upgrade the CalMac winter service between Tobermory and Kilchoan from the passenger service that was announced last year to a passenger and vehicle service. That service will operate to an enhanced timetable and will be introduced in October this year.

Likewise, in the northern isles we have tendered for the 2002-07 contract and have put in place a new operator that provides three new vessels at a cost of more than £100 million. That provides improved fares and journey times as well as a better timetable. We have made significant investments in the harbours that serve those routes. As Jim Wallace mentioned, I was in Scrabster earlier this week, where I visited the harbour. I confirmed our commitment to an interim solution to allow the Hamnavoe, which is one of those splendid new vessels, to dock in Scrabster from 21 April this year.

Livestock transportation arrangements for the northern isles were mentioned in the debate. I can confirm that we have, indeed, reached agreement in principle with NorthLink on plans for this autumn's peak livestock season, which will involve the use of chartered vessels. The precise details have still to be settled and will be announced shortly when that happens. However, I think that that will give some reassurance to the farming and crofting communities.

Photo of Lewis Macdonald Lewis Macdonald Labour

I am afraid that time is against us.

Clearly, future long-term solutions will require further pursuit. However, this is a time of expansion for ferries and harbour infrastructures on the west and north coasts of Scotland. Members with an interest in those areas should welcome that.

I welcome the HITRANS report on air services as a useful and constructive contribution to the air transport consultation process and the debate on transport in the Highlands and Islands generally. I have no doubt that that will be debated in some detail over the next few weeks. In my view, and in that of my party, it is clear that further work must be done to ensure that the decisions that are taken about the future of policy in that area are soundly based. I look forward to continuing dialogue with the islanders and their elected representatives on those matters.

Meeting closed at 17:37.