Written evidence from Aberdeen City and
Shire Economic Futures (ACSEF) and the North East Scotland Transport
Partnership (Nestrans) (TE 72)
1.0 WHO IS
PROVIDING THE
EVIDENCE?
1.1 This evidence is provided by Aberdeen City
and Shire Economic Futures (ACSEF) and the North East Scotland
Transport Partnership (Nestrans).
1.2 ACSEF is a public/ private partnership covering
the geographic region of Aberdeen City and Aberdeenshire Councils,
roughly 10% of Scotland's population and 10% of its land mass.
It is a partnership between the two local authorities and North
East businesses with a board consisting of 13 business leaders
and the two Council Leaders.
1.3 Nestrans is the statutory regional transport
partnership for the same region. It has four senior Councillors
from each Council and four non-councillor Board Members and is
charged with developing and delivering a regional transport strategy.
2.0 THE IMPORTANCE
OF THE
NORTH EAST
SCOTLAND ECONOMY
TO THE
UK EXCHEQUER
2.1 The North East of Scotland economy is a vital
part of the UK's economy having raised income for the country
in both tax and foreign trade well beyond that which would be
expected for its population size. The principal industry helping
to achieve this is the energy sector.
2.2 Some important facts about the North East
of Scotland economy:
- The UK continental shelf has improved the UK
balance of trade by £27 billion (2009).
- The North East of Scotland is an internationally
important global energy hub.
- £440 billion of investment has been made
in the last 40 years.
- £276 billion has been paid in taxes.
- 440,000 direct and indirect jobs (45% of these
are in Scotland) are supported by the energy sector.
- The North East of Scotland Exports £5-6
billion per annum in oilfield goods and services to over 100 countries.
- 10th highest GDP/ head of population in Europe,
3rd highest in the UK.
- In 2008-09 the UK oil and gas industry, largely
resident in North East Scotland, contributed 28% of the UK's total
corporation tax.
2.3 This industry has and will continue to contribute
very significantly to the UK exchequer for the foreseeable future.
Some important facts about the future:
- There are 300 producing fields with 400 undeveloped
discoveries.
- The proportion of international sales has increased
steadily for the last 10 years.
- Capital investment will rise above £5 billion
in 2010.
- 35 + new platforms over next five years.
- Production will extend to 2040 and beyond.
2.4 However the business community and the public
sector in the North East of Scotland have been looking to the
future with ambitious plans to make our region the European energy
hub building on our reputation as the Europe's oil and gas capital.
This will be done by growing our international markets boosting
our exports of product and services and expanding into the renewables
energy sector where we have people with transferable skills.
2.5 Our region has the ability to lead the way
to economic growth boosting the economic prospects of the UK.
2.6 Work with our business community has identified
what needs to be done to achieve this:
- Positive retention of key elements of the current
Oil &Gas capability.
- Key Contractors, people, academia, supply chain
& technology, etc.
- Build on these strengths.
- Attract more of the right people/talent - focus
on careers & lifestyle.
- Attract more technology - create a differentiated
financial environment for new-starts.
- Globalise the strengths.
- Extend (the capability of) & Internationalise
the Supply Chain - whilst retaining a local focus!
- We can develop the technology that we don't know
we need yet.
- Radically improve infrastructure & transport
links.
3.0 THE REMIT
OF THE
INQUIRY
3.1 The Inquiry remit asked us to provide evidence
in relation to reducing congestion in urban areas, on key inter-urban
corridors and at key international gateways in relation to whether
these were the key priorities to deliver growth, both nationally
and regionally.
3.2 The final bullet point in paragraph 2.6 provides
the link between an improved North East of Scotland economy and
the Transport Committee's Inquiry.
3.3 Although transport and infrastructure within
Scotland are largely devolved issues beyond the remit of the UK
Parliament a number of issues still remain within the UK Parliament
purview. This paper considers these issues.
4.0 TRANSPORT
ISSUES AFFECTING
THE NORTH
EAST OF
SCOTLAND'S
ECONOMY
4.1 The main issue of importance, within the
remit of the Inquiry and the non-devolved powers, is access to
London. As more of our economy becomes international, and our
long term plans for the future depend on this aspect, this increases
the need for access not only to London itself as a major business
centre but also to Heathrow as the UK's hub airport.
4.2 For the North East of Scotland the issue
of congestion in urban areas, in the context of this report, is
about access to the key international gateway of London and Heathrow.
4.3 Aberdeen is the same distance from London
as Geneva is from London. We have three through train services
per day (plus an overnight sleeper service). These services take
over seven hours to reach London from Aberdeen. Access for business
in London and for onward world travel is therefore reliant on
good access by air to Heathrow.
4.4 There are three areas to bring to the Transport
Committee's attention, air access to Heathrow for the peripheral
regions of the UK, High Speed Rail and through trains on the conventional
rail network.
5.0 AIR ACCESS
TO HEATHROW
5.1 As we have seen, conventional rail travel
for business is not a viable option simply taking too long with
too infrequent services. This is particularly an issue as the
companies we are trying to anchor in the North East of Scotland
and the companies we are trying to attract here literally have
the world to choose from for their location. Access to our skilled
workforce is a strong asset but that workforce has to be able
to move easily both within the UK and the wider world.
5.2 Heathrow, just prior to the recession, had
reached its capacity for aircraft movements. This leads to pressure
on landing slots with airline companies and BAA keen to see more
long haul international business to grow their own businesses.
This has resulted in a steady and significant reduction in the
number of UK airports being served from Heathrow as landing slots
are re-allocated to more lucrative routes.
5.3 It is argued, very reasonably, that short
haul flights should in any case be replaced by train travel. Experience
elsewhere has shown that where the rail journey time can be reduced
to three hours or so then around 60% of passengers will transfer
to rail. This covers much of the UK population including, with
High Speed Rail, to the central belt of Scotland. However the
North East of Scotland will always fall on the wrong side of this
threshold and air travel will remain the only viable business
alternative.
5.4 The Government has ruled out the construction
of a 3rd runway at Heathrow and recently announced it wouldn't
review the previous Government's decision to leave the runway
operational conditions unchanged. We would not wish to amend these
decisions. However we believe that a short period (2-3 hours)
of mixed mode operation of Heathrow's runways per day could provide
some relief to the runway capacity problem whilst still maintaining
noise relief for residents. We ask that this limited amendment
to operational rules be examined.
5.5 We also noted with interest Lord Mawhinney's
comments in his report to the Secretary of State on access to
Heathrow for High Speed Rail where he discussed the possibility
of the UK Government discussing the allocation of land slots with
the European Union. We would endorse these comments and have previously
pressed the Department of Transport on this issue as we believe
these discussions could include the possibility of reserved slots
for peripheral airports beyond to the three hour rail threshold
having access to the hub airports.
6.0 HIGH SPEED
RAIL
6.1 The Government are taking forward proposals
for a High Speed Rail network including the option of extending
this to Scotland. In reality what this means is extending to the
central belt of Scotland serving Edinburgh and Glasgow. It is
unlikely that the costs and benefits would justify taking High
Speed Rail north of the central belt. This is an argument that
is understood in the north of Scotland. Our area does though support
High Speed Rail recognising the significant benefits it can bring
to the country.
6.2 We do though believe that such a significant
investment by the country should result in benefits for the whole
country. In our case the conventional rail journey to the central
belt is of the order of 2½ hours. The high speed rail benefit
is therefore somewhat negated when you take into account this
journey plus change over time to be added to the now faster central
belt to London journey.
6.3 We would therefore like to see the High Speed
trains travelling through to Aberdeen on the conventional rail
system. We believe that this would be best achieved by ensuring
that the Scottish Government proposals, already included within
their Strategic Transport Projects Review, for the electrification
of the rail network from the central belt to Aberdeen are completed
in time to match the completion of the High Speed network to Scotland.
6.4 One of the major benefits of the proposed
High Speed Rail network is the transference of passengers from
air to rail reducing CO2 emissions. This reduction
in air traffic particularly between Manchester, Edinburgh and
Glasgow to Heathrow will release landing slots at Heathrow. We
believe that some of these released slots should be reserved to
allow Heathrow to serve the peripheral regions of the UK, including
Aberdeen. This ties in with our comments on Lord Mawhinneys report
at para 5.5 of this report.
6.5 It is our understanding, from Network Rail,
that the economic benefits of High Speed Rail are only fully realised
when the line through to London reaches Scotland and that a very
significant proportion of passengers will be travelling on the
Edinburgh/Glasgow to Manchester section.
6.6 Whilst High Speed Rail between London and
Birmingham is proposed to relieve a capacity issue, for Scotland
the issue is one of journey time. Proposals are being taken forward
for the London to Birmingham section with the thought that the
line would extend north from there. We would like to see some
consideration given to the benefits of making the central belt
of Scotland to Manchester section being the second tranche with
trains using the conventional rail between Birmingham and Manchester
meantime.
7.0 THROUGH TRAINS
TO LONDON
ON THE
CONVENTIONAL RAIL
EAST COAST
MAIN LINE
7.1 It is recognised that any High Speed Rail
proposal will be implemented in the longer term. In the meantime
our rail access to London is via the East Coast mainline where
we have three through trains a day, as discussed at para 4.3.
These through trains are currently being examined as part of the
proposals to investigate value for money options for the Intercity
Express Programme as part of Sir Andrew Foster's suggested review.
7.2 Given that some people taking these trains
will have made a journey of considerable distance to access the
train or may have already changed trains to do so, the journey
time through to London, of over seven hours, makes the "through"
train aspect of this journey very well appreciated.
7.3 An additional aspect of this is that these
trains provide a high percentage of the seat capacity between
Aberdeen and Edinburgh.
7.4 Many of the current transport strategies
in the UK, Scotland, regional and local are currently stressing
the need to reduce emissions. Ours in the North East of Scotland
and the Scottish national transport strategy also have this as
a major plank in strategy. There is a considerable effort being
made at all levels to reduce emissions.
7.5 Part of our strategy in this regard is to
increase train usage, for local, regional, Scottish and UK travel.
These through trains provide a very good service for travel between
Aberdeen and Edinburgh with a service significantly superior to
the local trains. They also make a good choice for those for whom
a train trip is a suitable alternative to air or road for journeys
to Newcastle, York or London.
7.6 Edinburgh Waverly does not make a good change
over station. Some of the platforms used for these trains (significantly
longer than the local trains) are very narrow and are regularly
congested, with disembarking passengers and embarking passengers
competing for space in areas where due to station layout it is
difficult to increase moving space.
7.7 There is no doubt that the strength of feeling
generated about this review shows that the loss of a through train
service would be perceived as a very detrimental impact on the
choices that people would make resulting in a reduction in train
usage, an increase in air usage with the consequent impact on
emissions.
7.8 Perhaps of greater concern would be to the
perception of peripherality. The early paragraphs of this paper
highlighted the attempts to ensure that this region helps to lead
the UK recovery from recession and generates significant economic
growth.
7.9 This growth is dependent on keeping companies
in the north east of Scotland, and attracting new companies here.
These are companies who literally have the world to choose from
when deciding where their location of choice is. The final bullet
point in paragraph 2.6, coming from these companies, highlights
that the transport issue, including the peripherality perception,
is extremely important in our efforts to maintain and improve
economic growth.
8.0 CONCLUSION
8.1 The Transport Committee asked for views on
whether the current priorities were still valid in today's changed
economic world. This paper has shown that for our region, one
which can help lead the UK out of recession into a period of strong
economic growth, the concentration on reducing congestion particularly
at key international gateways is still of great importance. However
included within this we would suggest that as high a priority
as reducing congestion should be that of improving connectivity.
8.2 Maintaining and improving access for this
part of the world to "the world" will be key to keeping
and attracting investment in this area and this in turn is key
to maintaining and improving the UK's economic health.
September 2010
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