- 28 Feb 2019
Attendees and apologies
- Roy Bogle, Loganair
- Inglis Lyon, Highlands and Islands Airports Ltd
- Nicholas Sobey, Highlands and Islands Enterprise
- Neil MacRae, Hitrans
- Stewart Nicol, Chambers of Commerce
- Trudy Morris, Chambers of Commerce
- Fraser Grieve, Scottish Council for Development and Industry, Inverness
- Michael Craigie, Shetland and Zettrans
- James McLellan, SG Tax Division
- Sacha Rawlence, SG Tax Division
- Michael Bratcher, Transport Scotland
- Sarah Skerratt (by phone), Scotland’s Rural University College
- Fiona Thompson (by phone), Scottish Rural Action
- Brian McClean, AGS Airports
- David Richardson, Federation of Small Businesses (FSB), Highlands and Islands region
- Emmanuel Moine, FSB member
- Willie Cameron, FSB member
- Richard Gerring, Highland Council
- Moya Ingram, Argyll and Bute
- Gavin Barr, Orkney
Items and actions
Welcome and policy update
James McLellan welcomed all attendees, and thanked HIE for hosting the third meeting. The minutes of the second meeting were agreed, and progress was reported on the completed action points.
An update was provided on progress since the previous meeting. SG had followed up with Group members on evidence they had provided, notably the HITRANS report and the SRUC/ SRA report which has been presented to Ministers. Evidence produced by the Group has been helpful as an independent assurance of the importance of the exemption, and outputs of today’s meeting may inform future discussions with UK Government.
Highlands and Islands survey report
Sacha Rawlence welcomed the substantial addition to the evidence base, which adds a detailed insight into residents’ views, and noted that the breadth of views expressed meant that some of the suggestions made went beyond the scope of tax and hence the Group’s remit. Michael Bratcher (Transport Scotland) added that the report would also be helpful for future policy development beyond the current tax issues.
The report had been circulated to Group members in advance. Sarah Skerratt presented the key findings including the demographic characteristics of respondents, how they benefit from access to air travel (e.g. maintaining social connections, access to educational and health services), barriers (led by cost) and anticipated disadvantages of reduced access to it (at both individual and community levels).
JM thanked both authors, and confirmed that this report complements other business and economic evidence from the group about the importance of air transport.
Observations from group members included the following:
- that aviation should be seen not in isolation but rather as part of the wider transport network
- that the H&I respondents’ focus on social connections and health would likely differ from the priorities of Central Belt or wider UK residents
- that price sensitivity and economic impacts have been explored elsewhere e.g. in the HITRANS and Airlines UK reports, and in SG’s discussions with individual airlines
- respondents perceive linked benefits in health, social and economic terms, and do not compartmentalise the benefits into different categories
- that H&I residents might feel more disadvantaged if ADT were abolished, as this would not reduce costs of flying in the H&I but it would appear more expensive compared to other Scottish airports – though it was noted that they would benefit in multi-leg journeys
- Group members to comment on or approve the draft report, alongside approval of draft minutes
- SG and authors to discuss publication, after which Group members will be encouraged to disseminate and make use of the report
Outcomes, criteria and options
JM expanded on the previous meeting’s discussion of the outcomes that the SG seeks to support though the ADT work and the criteria that Ministers have set for the assessment of options, and then discussed the options that the SG has previously considered and the trade-offs between the criteria.
Members observed that the issue is not limited to the H&I region, but is of interest to all airlines and airports in Scotland; this ties in with the broader economic, community and health outcomes in the paper. It was noted that whilst the outcomes of Brexit remain uncertain, the preferred option is for continued access to the single market which would entail adherence to the State Aid rules.
In small groups, members first discussed their views on the range of outcomes presented, and then discussed the options that have previously been considered and proposed new ideas.
Action: SG to circulate a note of group discussions for comments and approval from Group members
The Group had been scheduled to conclude following this third meeting. It was noted that once the write-up of the small-group discussions has been agreed, SG will consider whether it would be helpful for a further full meeting of the Group to be convened to discuss the options further. JM thanked all members for their time and contributions, and noted that SG would not want to lose the forum to test future ideas.
Members asked for clarification of timescales for next steps, with regards to Brexit. This was outlined in the meeting, but SG will follow up in writing. Airlines emphasised that they sell tickets 11 months ahead, so clarity in advance of that would be important in ensuring the tickets reflect the correct tax rate.
Action: SG to circulate a timeline of steps that would be taken if an option could be found and agreement reached with UKG to introduce ADT