Scottish Government admits air tax cut could be delayed

Edinburgh Airport is one of the leading supporters of an air tax cut. Picture: Ian Georgeson
Edinburgh Airport is one of the leading supporters of an air tax cut. Picture: Ian Georgeson
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Planned cuts to Scottish air taxes could be delayed from next April for up to three years, finance secretary Derek Mackay is expected to tell MSPs today.

The news came as three opposition parties called on the minority SNP Scottish Government to ditch its proposals to halve the current air passenger duty (APD) rates in its new air departure tax (ADT).

Aviation sources said the hold-up was over the need for the European Union to agree to continue the current APD exemption for Highlands and Islands airports as part of the new tax.

However, ministers also face difficulties in getting the tax cut approved because of the need for opposition support.

Ministers had wanted to start the reduction when ADT replaces APD next April and complete it by the end of the current Holyrood term in 2021, followed by abolition "when resources allow".

Last night, the Scottish Government had insisted it remained on course.

It said: “Our aim is to reduce the burden of ADT by 50 per cent and to abolish the tax altogether when resources allow."

A spokeswoman told The Scotsman, when asked why the 2018 date had been omitted from that statement: "No changes to any dates. The 2018 target still stands, as you will hear again tomorrow."

However, in a revised statement today, she said: "The introduction is 2018 and remains 2018. The tax cut is over the lifetime of this parliament.

"The date still stands but the date should be the lifetime of this parliament, not 2018."

APD is levied on flights departing UK airports, at £13 per passenger for shorter trips and £78 for those over 2,000 miles.

Opponents include the Scottish Greens, whose support is seen as crucial for getting ministers' budget plans approved - including the air tax reduction.

Ministers face a further potential hurdle in reaching agreement with the Scottish Conservatives, who want the tax cut only on long-haul flights.Greens finance spokesman Patrick Harvie said: “For years, Greens have argued against this tax cut as it will benefit the wealthy jet-set rather than families going on an annual holiday, deprive our public services of much-needed funds and do irrevocable damage to our environment.

“Ministers must set the first rates and bands soon, and if it amounts to a tax cut for the airlines, they cannot expect to sit down with Green MSPs to agree a budget that implements those cuts.”

Scottish Labour said the tax cuts, which would cost £189 million, would help frequent flyers at the expense of other spending.

Transport spokesman Neil Bibby said: "Cutting the ADT will not make Scotland fairer or greener - all it will mean is less funding for hard-pressed public services while the richest few get yet another bonus.

"When working class kids aren’t getting the skills they need to get on in life, it shouldn’t be the SNP Government's priority to make a business class flight cheaper.

"The public agree with Labour – the SNP need to dump plans to cut ADT.”

Scottish Liberal Democrat energy spokesman Liam McArthur said: “The Scottish Government needs to stand up to the aviation industry and change course over their reckless plan to slash airline taxes and pump tens of thousands of tonnes of additional emissions into the atmosphere.”“

However, Scottish Conservatives transport spokesman Jamie Greene said: "The Scottish Government, inevitably, and unsurprisingly, might be looking for an escape route to back track on its promise to the Scottish aviation industry and travellers ahead of its budget approval dilemma.

"They know only too well the Greens will not support their plans on ADT and have been looking for an excuse to lurch to the left and back track on a policy that they know will have a positive impact on the Scottish economy, trade and tourism.

“The Scottish Conservatives have submitted our own sensible recommendations and proposals on changes to the duty in terms of rates and bands which would be fair to travellers, to business and considers the environmental aspect of the debate."

A Scottish Government spokeswoman said: “Improving Scotland’s air connectivity is one of our top priorities - it will help build strong business links and provide a real boost to our tourism industry.

“We will continue to promote Scotland as a destination which can sustain more direct air services and better global hub connectivity, and will work with Scotland’s airports to achieve these objectives.

“Our aim is to reduce the burden of ADT by 50 per cent and to abolish the tax altogether when resources allow."

“The Cabinet secretary will update Parliament on development of the ADT tomorrow [Thursday].”

Airports and airlines have also argued that the tax cut would boost the economy by increasing the number of flights and range of destinations.

Edinburgh Airport chief executive Gordon Dewar has said halving the tax would "encourage airlines to schedule an increase in flights beyond existing rates of growth.

"It will deliver jobs, prosperity and opportunity for Scotland’s economy."