Enterprise and Lifelong Learning Committee, 25 Feb 2003

Meeting date: Tuesday, February 25, 2003

Official Report 216KB pdf

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BAA (Correspondence)

Item 4 concerns correspondence from Donal Dowds, who is the managing director of BAA Scottish Airports. When I receive correspondence about a report that the committee has produced, I normally reply adhering to the committee's line. However, the tone of Donal Dowds's response was such that I thought that other members of the committee might want to comment before we respond.

My view is that Donal Dowds's tone was a bit hysterical, to say the least, and that he totally missed the point. The point was that we took evidence from some people who believed that the BAA monopoly was damaging to the aim of encouraging more direct flights into Scotland. We took evidence from other witnesses, particularly those from BAA, who clearly did not believe that the position was damaging. My view is that when we reply, we should point that out and emphasise that we were not saying that BAA is damaging to the Scottish economy, but that we had sufficient evidence to justify a request for an inquiry by the appropriate body—in this case, the Select Committee on Scottish Affairs—to investigate the matter thoroughly. BAA will clearly come up with its evidence and others will come up with contrary evidence.

I think that we should simply reply to Mr Dowds, emphasising that point and recognising that BAA has announced a substantial investment programme in Scotland. That is clearly welcome, but the key issue that we were trying to address was whether the monopoly position—in Scotland as well as in London—was damaging to the Scottish economy, and whether, if it is damaging, appropriate action can being taken. We did not reach a view or conclusion on the matter; we simply raised it as an issue to be addressed.

Given the tone of the letter and the statements that were made by Donal Dowds the other day in relation to Prestwick airport, I question whether he is sufficiently independent to be a member of the board of VisitScotland. If boards are made up of people with vested interests—which Mr Dowds clearly has, as his primary job is to defend the interests of BAA—the question arises whether such people should be members of the board of the main tourism body in Scotland. I am not suggesting that the committee should comment on that or take any action at this stage, but I raise that as a question that is in my own mind.

The convener is, if nothing else, entitled to express his view, which is personal. I agree in principle with the proposal for dealing with the letter, but must confess that I was unclear about one or two facts when I read it. Perhaps other committee members or the clerks can help. I do not recall BAA's £60 million route development fund emerging as a critical piece of its evidence. I simply want to ascertain whether it was in BAA's submission or emerged during oral evidence.

To be honest, I cannot remember whether it was in BAA's submission or oral evidence, but it was mentioned.

It was mentioned, but not as a significant part of BAA's submission. It was only mentioned.

That would be open to interpretation.

That brings me to my next question. Do we know what BAA has achieved on new routes on the back of that route development fund? Did that emerge in evidence?

I do not remember the detail being presented. BAA made a clear assertion. We questioned BAA closely on the matter. It clearly believes that it is making the investment to get direct flights into Scotland. It believes that, far from damaging the prospect of direct flights, it is investing heavily. Perhaps an inquiry would find that that is indeed the case and that, without BAA's monopoly and consequent investment, such flights might not take place. However, Donal Dowds has missed the point that we did not come down on one side or the other. We said that there was enough concern to justify an inquiry.

I would want the committee to make clear in its response that it does not doubt the veracity of BAA or any of its representatives who gave evidence, but that there are differing interpretations of the situation. If I recall correctly, the operators gave evidence that, at best, conflicted with BAA's evidence. That is a perfectly natural situation, but it requires the committee to make some sensible suggestion about how to determine a way forward from conflicting evidence from two sources.

If issues of monopoly and competition were devolved matters, we would, no doubt, conduct the inquiry ourselves. However, as they are reserved matters—I make no comment on whether that should be the case; the committee can guess my position on that—we have to refer it to the Westminster Select Committee on Scottish Affairs, which would be the appropriate body.

My recollection is that BAA gave evidence with representatives from Glasgow Prestwick International Airport Ltd and Highlands and Islands Airports Ltd. The evidence, particularly from Prestwick airport and BAA, inevitably conflicted. The committee therefore had to reflect and come to a view on what was said on that day. I seem to remember that our reflections were pretty vigorous and that that made for a livelier meeting.

If BAA takes our report as a firm prod for it do better, so much the better. That makes it a more effective organisation in the context in which we hoped that it would be more effective.

I agree on the practical issue of our recommendations. It is for another body to act on them. I do not agree on Donal Dowds having a conflict of interest. It could be argued that Peter Lederer has a conflict of interest. I recollect that we recommended that the industry bodies' structure—not that we got into structural issues, which was right—should reflect the four sectors that are involved in tourism: retail, accommodation, visitor attractions and transport. It would be inconsistent to argue that Donal Dowds should not be a VisitScotland board member when we rightly argued that the structure of our industry-led bodies should include those four sectors.

There is a practical issue. One of the points that we made to VisitScotland, and which VisitScotland has made, is the need for more joint marketing with companies such as Ryanair that operate out of Prestwick airport. When the VisitScotland board discusses such matters, should Donal Dowds absent himself? It seems to me wholly inappropriate for him to know about, let alone be involved in, any such negotiations.

I am sure that you and I have been in situations in which we have had to do exactly that, so I presume that that is the practice. However, if VisitScotland were to reconstitute the industry bodies' boards in the way in which the committee has gently suggested that it should—

They would be elected.

They would be, but one would hope that other representatives would be included to reflect the broader spectrum of industry issues.

Absolutely.

I did not comment directly on the convener's suggestion on the position of Mr Dowds on the VisitScotland board.

I agree with what Tavish Scott says. The board of VisitScotland should be able to act autonomously. It is not for the Government, the Parliament or any other political process to interfere with that. However, that implies that the board should be widely based, so that it can make sensible decisions about how it represents issues and is sensitive to the possibility of there being a conflict of interest on certain occasions.

I will write to VisitScotland in a personal capacity, to seek assurance that the interests of Prestwick airport and of non-BAA operators are not being compromised in any way. Given Mr Dowds's attack on Prestwick in the press two days ago, it would be wholly inappropriate if he were to be directly involved in negotiation.

I support that position, as I have a local interest in Pretwick airport, which has been doing a great job in attracting new routes and direct air links.

Let us not forget that BAA ran a campaign to close Prestwick 10 years ago.

I want to distance myself from those comments. We should not get into a dispute with BAA or with Donal Dowds. We have no evidence to suggest that he does anything other than a fine job for VisitScotland. I hope that, when the convener writes to VisitScotland, he makes it clear that he is doing so in a personal capacity, rather than on behalf of the committee.

I was concerned about the way in which we singled out BAA in our discussions. However, I was happy to go with the wording that we came up with for our report, not only because some members of the committee felt strongly about the issue, but because we were drawing the attention of the Department of Trade and Industry to a possible perception of BAA's position. I did not share that perception.

In our response to Donal Dowds's letter, I urge that we do not repeat his tone. We should adopt a calm and moderate tone. I am sure that that would be the convener's instinct.

The convener will not draft the letter.

The member must remember that Brian Fitzpatrick has described me as a calming influence. I would be quite happy to circulate the draft reply to committee members, if they would like to see it before we send it. Is that course of action agreed?

Members indicated agreement.