UK Government urged to reconsider devolving Air Passenger Duty to Scotland


By a Newsnet reporter
The SNP will today lead calls for the UK Government to rethink the budget hike in air passenger duty (APD) and devolve control of the tax to Scotland.
The party has tabled amendments to the Finance Bill expected to be considered in the House of Commons during committee stage debates.

The devolution of APD is supported by all four of Scotland’s largest airports and by the Scottish Chamber of Commerce.  It was also recommended by the Calman Commission on Scottish Devolution, although it was left out the Scotland Bill.

Westminster Transport spokesperson Angus MacNeil MP called the hike in APD a short term “budget air raid” which would have long term costs for the Scottish economy.

Calling for the power to be devolved to Scotland, Mr MacNeil said:

“There is overwhelming evidence that Air Passenger Duty should be devolved to Scotland, to give our aviation industry the competitive edge that it needs.

“Given the times and distances involved in travelling, Scotland is disproportionately hit by hikes in air passenger duty – we need to take control of this tax to give our businesses a fighting chance to compete.

“The Scottish Chamber of Commerce has called for it, airport operators have called for it – even the Calman Commission called for it.”

Chancellor George Osborne has already confirmed plans to devolve APD to Northern Ireland, which also benefited from a cut in the tax last November.

Speaking in December 2011, Jim O’Sullivan, managing director of Edinburgh Airport, said: “APD is already costing Scotland passengers and having an impact on tourism revenues.  We know from discussions with our airline partners that it is a major factor in their decision to connect further routes to Scotland.

“We would urge the Westminster Government to see Scotland as it does Northern Ireland and understand the need to both reduce and devolve this unfair and damaging tax.”

Amanda McMillan, managing director of Glasgow Airport, also backed calls for the power to be devolved: “On the question of devolution of APD, Glasgow Airport has always been supportive of this proposal given the Scottish government’s more progressive approach to aviation and its greater appreciation of the role the industry plays in supporting the growth of the Scottish economy.”

Mr MacNeil demanded equal treatment for Scottish air passengers and added:

“The Chancellor has already announced plans to devolve the tax in Northern Ireland.  That’s great news for them – but Scottish passengers must be given equal treatment.

“Devolution of APD would enable the Scottish Government to incentivise airlines to provide new direct international routes, providing Scotland’s passengers with enhanced options as they go about their business more freely and more effectively.

“The best interests of Scottish air passengers are not being served by Westminster control.  According to figures from the Minister of State for Transport, there are currently just four international non-EU routes from Scotland.  Compare that with the similar sized nation of Denmark – connected to emerging markets like Russia, Japan, China and 24 other non-EU destinations.

“The Scottish Government is better placed to serve Scotland’s interests . The Treasury needs to sit up and listen – its refusal to devolve control is extremely damaging to Scotland’s air industry.”

Speaking last month, Scottish Chambers of Commerce chief executive Liz Cameron said: “Current rates of APD seem more suited to controlling capacity constraints at Heathrow than they do with the needs of regional airports, and devolution of this tax would afford the Scottish Government the opportunity to create an air transport package for Scotland designed to improve our direct international connectivity.”