Labour MP joins SNP in fight against APD

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  By Anne-Marie O’Donnell
 
Labour MP Brian Donohoe has joined efforts from the SNP to tackle Air Passenger Duty problems putting airlines off using Scottish airports and damaging the national aviation industry.
 
Speaking on BBC Radio Scotland’s Good Morning Scotland, Mr Donohoe said he was “working hard” to “overcome” problems caused by APD in a bid to help Ryannair increase direct flights between Scotland and London Stansted.

The move from Donohoe follows a long-running campaign by the SNP in Scotland to have APD reduced in order to reverse damage caused to the aviation industry by Westminster hikes. Increases in APD rates began in 2007 and rose again last year by eight per cent.

Prestwick Airport was hit hardest by the changes and suffered a 14 per cent loss of traffic. Passenger numbers dropped from a high of 2.4 million in 2007 to just over a million a year, and the airport has been running at an annual loss of £2m. In October last year, the Scottish Government announced it would nationalise the airport in a bid to save it after owners Infratil struggled to sell it.

Mr Donohoe’s comments appear to indicate a change in view after an interview he gave last year to the BBC in which he said removing APD would not help in terms of routes.

Donohoe speaking last year

Commenting on the support from the Labour MP, SNP MSP Stuart McMillansaid:

“Air Passenger Duty is a misguided tax and it is great that our plan to reduce it now has the backing of Scottish Labour MP Brian Donohoe,” he said. “In a year when tourism spend is increasing in Scotland – up 20 per cent on last year – and Foreign Direct Investment is at the second highest level in the UK after London according to Ernst &Young, we must make the most of the attractiveness of visiting and doing business in Scotland.

“This attractiveness is set to rise – a report from Barclays in May found Scotland set for a major tourism boost worth £2.3bn by 2017, with spending from overseas visitors set to rise highest in Scotland at 40 per cent compared to 34 per cent across the rest of the UK. After a Yes vote, this predicted boom will be boosted even further when we will cut APD, abolishing it completely in the longer term.”

He went on: “While Labour and the No parties are all over the place on APD – with Ruth Davidson’s support for scrapping it was overruled just last week by boss David Cameron – the SNP in Government has been clear and consistent: with a Yes vote, we will cut and then abolish APD. This will allow more airlines than ever to invest in Scotland, cutting the cost of family holidays and opening up more destinations across the world to Scots.”

The airline industry has been vocal in its support for independence because of the expected benefit to the aviation industry. In 2012, Prestwick Airport boss Tom Wilson said there was no reason “particularly under independence” that Scotland couldn’t have a thriving air industry, while British Airways boss Willie Walsh this year said that Scottish independence would be a “positive development” for the industry.

Ryanair chief Michael O’Leary agreed that most airlines would support the position of the Scottish Government in relation to the abolition of APD, a tax he said caused “untold damage to Scottish tourism”. He predicted that a drop in APD would double business visitors to Scotland over a 5-10 year period and provide jobs in the tourism sector.

Edinburgh Airport boss Gordon Dewar described APD as a “fundamentally stupid tax” and supported the Scottish Government’s position.

“We’re very keen to get rid of APD because most of our European competitors don’t have it or have a very much reduced rate – in face the closes to us is less than half the current rate of the UK,” he told BBC Good Morning Scotland.

“All the analysis shows that in Scotland alone we’re missing two million passengers as a result of this – airlines that could be operating out of Scotland and out of the UK are simply not here because they can’t make the economics stack up,” he added.