Scrap air tax or risk being left behind, report warns

Scotland should cut and then scrap air passenger tax or risk remaining out of step with the rest of the EU, according to a think-tank.

By The Newsroom
Friday, 19th August 2016, 9:27 am
Updated Friday, 19th August 2016, 10:33 am
John Swinney meets with Gordon Dewar. Picture: Julie Bull
John Swinney meets with Gordon Dewar. Picture: Julie Bull

Reform Scotland said just four other EU countries have a similar tax.

The think-tank has published a briefing paper reinforcing the Scottish Government’s pledge to cut and then scrap air passenger duty (APD) once it is devolved.

Labour claims it is the “wrong move at the wrong time”, while the Scottish Greens see it as a “bizarre priority”.

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Reform Scotland said Scottish residents would save on air fares if the tax was dropped, and endorsed a previous study carried out on behalf of Edinburgh Airport which said revenue lost from halving and scrapping APD could be at least matched by increases from sources such as job growth, productivity growth and tourism expenditure.

The think-tank’s chairman, Alan McFarlane, said: “Reform Scotland believes that the Scottish Government should proceed with its plans to cut the tax.

“Countries across Europe, including Ireland, Belgium, Holland and Denmark, have scrapped their air passenger tax in recent years. By retaining ours, we are out of step with the rest of the EU.

“This is not an ideological issue, it is an obvious and simple economic case. The economic benefits of cutting or scrapping the tax will outweigh the cost of doing so, which will benefit everyone.

“We encourage all political parties at Holyrood to support the cut in APD. If they fail to do so, it will be up to them to 
justify why they oppose a measure which a wide range of voices argue will help promote economic growth.”

He said the plans are backed by parts of the business community and tourism sector.

Edinburgh Airport chief executive Gordon Dewar said: “Cutting APD will be a strong demonstration of Scotland’s international ambitions and be better value for travellers.

“It will send a powerful signal to the global airline market that Scotland is open for business, and crucially will lead to the creation of new direct routes.”

But Scottish Labour transport spokesman Neil Bibby said: “Across Scotland, our schools, NHS and police force are facing hundreds of millions of pounds of cuts – it shouldn’t be the SNP government’s priority to make a business class flight cheaper.”

Greens climate change spokesman Mark Ruskell said: “The costs to the public purse and the environment are too great for an economic benefit which may be marginal at best and at worst could undermine domestic tourism and rail.”