22 Nov 2019
Here’s a quote that I re-read whilst thumbing through Scotland’s export strategy. ‘Businesses that trade internationally tend to be more innovative, more productive and more competitive. Exposure to global competition and international standards drives business improvement.’
These are the words of Minister of Trade, Investment and Innovation Ivan McKee MSP, arguing the rationale for supporting a target for increasing exports from today’s 20% of GDP to 25% by 2029.
I could not agree more. Poor productivity growth is arguably the most concerning weakness in the Scottish economy as it is across the wider UK, and since growing international trade is as close to the core mission of a Chamber of Commerce as you can get, it probably isn’t a surprise that Mr McKee’s words ring so true for me.
Just last week the Chamber held an evening session with Virgin Atlantic to discuss both the role of the Heathrow third runway and the proposals Virgin have for opening up more competition in air travel for Scottish business. For me, Scotland’s export strategy, A Trading Nation, published in May this year with Ivan McKee’s ministerial introduction, provided a helpful context to that discussion. Expanding international trade from an island nation and in a city with industries as global as engineering or whisky relies on good air connections.
So the Chamber has a fairly simple position on Heathrow. Our first choice is for new direct flights and we do all that we can to help the team at Glasgow Airport secure and retain as many new destinations as they can get. But we recognise that a small country with a limited passenger market must also depend on hub airports to get to most of the destinations we need to reach.
Schiphol, Dubai and Frankfurt are all important examples but by far our largest hub is Heathrow. There are no less than 324 weekly flight connections between Glasgow and London simply because of the intensive economic relationship between our two cities and it’s the sheer depth of those links that makes London the most effective location for a hub airport. For every passenger using Heathrow as the hub to an overseas destination there are three that are heading for London itself.
That’s why there are so many flights between the cities and why it’s difficult to see how any other hub airport can ever be as effective as Heathrow. Heathrow needs to expand to allow for new overseas destinations especially in the fast growing markets in Asia. That’s why our second priority for expanded air connections is to see Heathrow’s third runway delivered
But ever since bmi withdrew from Glasgow in 2011 we have depended on British Airways to connect us to Heathrow. Much as we love BA we are also enthusiasts for competition. We want there to be more slots made available at an expanded Heathrow for other operators to fly in from Glasgow.
Virgin Atlantic were explaining the scale of the pitch they are making to secure a bigger share of the new slots and there was clear sympathy amongst the Chamber members for the case they were making.
Nor was the climate change issue ignored. This is one of the fundamental dilemmas facing us in business today. If we are to ensure a healthy economy we have to trade successfully and trade means transport connections. Arguing against air travel directly attacks our ability to trade. So for us the answer has to be technological innovation to drive down the emissions involved in air travel.
Better designed planes, bio-fuels and offsetting arrangements are all being actively progressed by the air industry and both Virgin Atlantic and Glasgow Airport were explaining their own strategies to reach net zero emissions.
As the Chamber increases its efforts to support growing international trade to our priority markets like Germany, Italy, the United States and China we will continue our support for improved air connections and we will be strengthening our relationships with Glasgow Airport and as the airlines most engaged with our city.
And those like Virgin Atlantic that are showing a serious interest in expanding their routes.