Total exemption from airport tax on flights in the Highlands and Islands has not been ruled out.

Scottish Industry Minister responsible for transport, Lord James Douglas-Hamilton has stressed that he and other ministers concerned are giving the matter their fullest consideration.

Lord James was responding to pressure from the Scottish Council Development and Industry whose Highlands and Islands Area Manager Ewen Gabriel said the fight would go on to have the tax abolished for the people of the area.

The Scottish Council's Chief Executive Alan Wilson has written to top Government representatives including Chancellor of the Exchequer Kenneth Clarke; Secretary of State for Scotland, Michael Forsyth; Scottish Industry Minister George Kynoch as well as Lord James seeking full exemption from the tax for the Highlands and Islands.

Supporting the stance taken by the SCDI are Air UK-Ltd, British Airways, Highland Health Board, Highlands and Islands Airports Ltd, Highlands of Scotland Tourist Board, Inverness Airport Consultative Committee, Loganair and the island councils of the Western Isles, Orkney and Shetland. At the time of going to Press, the Highland Council were expected to also support the campaign.

SCDI point out that when the £5 air passenger duty was imposed in 1994, they felt that it was inequitable and would have far reaching detrimental repercussions to island life and the local economy. This had been the case, they said.

Said Mr Wilson in his letter to the Government representatives, "It is appropriate to record here that The Scottish Council believes that the Government intended to recognise the special needs of the island communities by granting exemptions to passengers in small aircraft."

He referred to the Budget statement recorded in Hansard in November 1993 which stated, "most flights between the Scottish islands will not bear tax".

Says Mr Wilson, "In reality, all island/mainland flights are subject to the duty and only two inter-island flights are exempt. Surely the position should now be rectified by granting total exemption."

He also points out that while the amount to be raised from November 1997 by The Exchequer nationally from the airport tax is expected to be around £700 million in a full year, the amount in the Highlands and Islands is expected to be less than £2 million.

"In national terms," says Mr Wilson, "the Highlands and Islands tax take is insignificant, but to the region it represents a very substantial penalty resulting in an unacceptably greater adverse effect on the local economy."

The Scottish Council firmly believe that, in relation to tax and travel, the islands of Scotland are a 'special case with the natural boundaries of mountain and sea making air travel a social and business necessity, and in many instances a lifeline service with no acceptable alternatives in road or rail'.

Mr Wilson says it is contradictory for the Government on the one hand to press a case for Objective One for the Highlands and Islands to lower transport costs and on the other to raise them by applying a new tax.

He points out that airline operators recognise the island air services to be the 'most sensitive in the UK' as a result of the fragile economy and low profit margins of business.

"Price increases immediately reduce passenger levels which threaten services as a result of airlines continually evaluating already marginal flights," says Mr Wilson.

He points out that since the imposition of the airport tax of £5 two years ago, Highlands and Islands Airports Ltd were already identifying a less than projected increase in air travel in the region 'which can be directly attributable to the duty'.

The SCDI say that without exemption from this tax, the fragile economy of the will suffer in two areas.

"Firstly, it will increase the additional cost to businesses located in this peripheral area and will be a significant disincentive for new businesses to invest and locate in the area. Secondly, it will damage the strategic plans for attracting visitors to the area, seriously undermining the tourism industry which is recognised as a core driver of the local economy," say the SCDI.

Meanwhile prospective SNP candidate for the Western Isles Dr Anne Lorne Gillies this week urged the parties to fight against the Tory's proposals to increase the tax from £5 to £10 on flights.

She was backing SNP leader Alex Salmond's bid for total exemption of the tax for air travel to and from the Western Isles and the Northern Isles.

Said Dr Gillies this week, "It is an anti-Scottish tax - and certainly an anti-islands tax. I am hoping that other parties will join us and fight against this. It is an opportunity for all interested parties to come together."

Original article Stornoway Gazette Jan 31 1997.