Commission Approval For Discounts Welcome But Not Enough For Economic Growth

16 May 2006
The European Commission has approved the use of aid of a social character, and cleared the way for the Scottish Executive to offer a 50% reduction to residents for two years from 2006 to 2008. However MEP Alyn Smith and Highlands and Islands MSP Jim Mather also highlighted a statement from the European Commission that the discounts would not bring economic development.

While they welcomed the news they also specifically welcomed the fact that the Commission has openly agreed with the SNP view that this initiative will not help economic growth.

In response to a parliamentary question from Mr Smith the Commission stated: "The Commission considers that the objectives of economic development referred to by the Honorable Member are normally met more easily through the imposition of public service obligations on specific routes."

Speaking from Strasbourg today Mr Smith said "The discount scheme is great for residents of the islands and Caithness and Sutherland. I only hope it is extended beyond 2008 - for a two year period seems far too short.

"What we need for the islands is something that not only makes travel cheaper for residents but that allows Highlands and Islands business to flourish and tourism to grow. Unfortunately this initiative will not achieve that."

"As the Commission states PSO's would have enabled fares to be reduced for all travelers to the islands bringing in people, business and helping to boost the economy - it's a shame that opportunity has been missed."

His comments were echoed by Highlands and Islands MSP and Shadow Enterprise Minister Jim Mather who said "Fostering economic growth in these areas is an even more strategic way of assisting all local residents.

"Travel cost is crucial factor for the Highlands and Islands, as current costs reduce visitors and investment.

"And we believe that the provision of PSOs would be a better option as they would benefit local residents twice - once in terms of lower personal travel costs and secondly more economic activity due to increased competitiveness.

"Furthermore we are still waiting to here if the Executive will extend the discounts to students now residing outside the highlands and islands - I am sure they can, the question is if they will."

"While I welcome the discounts and the benefit they will bring residents they will not bring growth and that is the problem. This is an opportunity the Executive have missed."

Note for Editors

The Commission announcement on the discounts can be found here