SCOTTISH Government plans to slash air passenger duty do not make sense for Scotland’s economy and climate, says Tom Ballantine.
AS part of new tax powers being transferred to Holyrood in the Scotland Act, the Scottish Government will soon be in charge of collecting air passenger duty (APD).
Aviation is the most polluting form of transport, with one return flight to Florida producing about the equivalent carbon dioxide to a year’s motoring. That’s why we believe aviation should be expected to pay its fair share of tax.
Under APD, every time we take a flight in the UK, a small levy is paid to the government. This raises a massive £3 billion every year for the UK exchequer, about £300 million of which would come directly to the Scottish Government when powers are transferred.
This is a great opportunity to use new tax powers to help deliver Scotland’s social and environmental goals. After all, aviation is the most polluting form of transport, with one return flight to Florida producing about the equivalent carbon dioxide to a year’s motoring. That’s why we believe aviation should be expected to pay its fair share of tax.
However, the Scottish Government has taken a surprising stance, and in response to calls from industry, has instead proposed to slash APD by 50 per cent, and ultimately phase it out.
This is bad news for the climate. Only weeks after the Scottish Government committed to upping its game and increasing climate targets to a 50 per cent reduction by 2020, its own assessment predicts a cut in APD will cause 60,000 tonnes of new greenhouse gas emissions every year. Most of these emissions are expected to come from short-haul flights, where we should be investing in making train travel more affordable, rather than giving airlines a further “leg-up”.
It’s also bad news for the economy. At a time when £300m a year could do so much, industry argues the tax cut will be offset through more business travel to Scotland. This is a big risk with so much revenue at stake, and there is scant evidence it will pay off.
There’s even a chance that it will have the opposite effect – Office of National Statistic figures consistently show that more aviation results in a net loss in tourism income, because people spend more on their holidays abroad than visitors spend here. Giving up this revenue, which could pay for a year of childcare for every baby born in Scotland in 2015, or buy solar panels for every home in Dundee, is a massive risk in a time of UK-wide austerity.
We also need to ask whether these plans are fair. Aviation is one of the least taxed industries in the world – exemptions from fuel duty and VAT result in a tax break of roughly £10bn every year. Other industries have to pay their way, so why not air travel?
It seems that from every perspective, cutting air passenger duty is a “flight of fancy” that just does not make sense, either for Scotland’s economy, or for our climate.
• Tom Ballantine is chair of Stop Climate Chaos Scotland