Air Passenger Duty a ‘stealth tax’ on Scottish business

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by a Newsnet reporter

A report published this week showed that Air Passenger Duty (APD) cost Scottish business almost £24 million in the past year.  The report, carried out by the Fair Tax on Flying Alliance, a grouping of travel agencies, airlines and airport operators, said that the tax is a huge drag on Scottish businesses.

Over half a million flights from Scottish airports are classed as business travel, representing a large percentage of air travellers.  Annually the tax costs Scottish business travellers £12.4 million, and adds £11 million annually to the costs of  foreign travellers visiting Scotland to do business.

The airline industry has raised concerns that the Westminster tax was damaging the Scottish economy as it struggles to maintain growth during globally difficult financial times.  In a statement, Simon Buck, chief executive of the British Air Transport Association, said:

“It beggars belief that the UK government can hit business in Scotland with a tax of this magnitude.  Businesses here in Scotland are being dragged down by this stealth tax on wealth generators.”

Amanda McMillan, Managing Director of Glasgow Airport, has already added her voice to a growing list of business people calling for the power to be devolved to Scotland.

She said: “The UK currently has the highest rate of aviation tax in Europe and there is no indication that this will be capped or lowered to help improve our competitive position.”

She added: “Due to Scotland’s geographic location we are particularly reliant on air services, however, the increasing burden of APD is already proving a significant barrier to attracting new routes. There is no question that the ability of Scots to travel for business or leisure will suffer unless there is a fundamental review of APD.”

The Coalition government is believed to be considering a further rise in the tax, plans have been mooted to raise APD by 10% in April 2012.

SNP MSP and Scotland Bill Member Stewart Maxwell said that the report proved that Scotland ought to be able to set Air Passenger Duty in the best interests of Scottish business, passengers and the environment.  Mr Maxwell made a renewed call to devolve the power to the Scottish Parliament saying:

“If the UK Government doesn’t want to listen to the SNP on APD it should at least listen to these fears from the Fair Tax on Flying Alliance.  There are no clearer signs that APD should be devolved than the details of this latest report.”

“At the moment the UK Government is suiting itself on APD and not considering the effects felt in Scotland.”

“It is extremely worrying to hear from the British Air Transport Association that APD hits Scotland hard resulting in businesses finding it difficult to compete abroad and even a loss of business to Scotland.”

“We have to balance the need for flights and a competitive business environment with protection of the environment itself and the best way to do this is for Scotland to take the lead on air taxes in Scotland.”

“We cannot let this go on any longer and I urge Westminster to devolve APD to enable us to do what is best for Scotland.”