SNP Air Passenger Duty cut passes stage one debate
The Air Departure Tax (Scotland) Bill passes first hurdle, despite fierce criticism from environmental and poverty campaigners
Airplane - image credit: PA
The SNP’s plans to cut air passenger duty in half have passed their first hurdle after receiving majority backing in the Scottish Parliament yesterday, despite fierce criticism from environmental and poverty campaigners.
The Air Departure Tax (Scotland) Bill passed the stage one debate after 112 MSPs voted to back the general principles of the bill, four voted against and six abstained.
The bill will see Air Passenger Duty, devolved to Scotland as part of the 2016 Scotland Act, replaced by an Air Departure Tax from April 2018, which will be set at half the current rate.
Ministers then plan to abolish the tax – which generates around £150m per year – “when circumstances allow”.
The legislation will now move to the committee stage, with the finance committee calling on ministers to provide more information on the effect of the cut, which has faced severe criticism from environmental and poverty campaigners.
Writing for Holyrood last year, Mike Robinson, Royal Scottish Geographical Society chief executive, questioned the logic of cutting the tax in a time of austerity.
He said: “With tax revenues as stretched as they are (and even worse are forecast to become), local authorities are cutting back right left and centre. And above all else we are choosing to give a £300m tax break to aviation. But why single out aviation? It always seems to get special treatment, as if it is the only industry capable of creating economic stimulus.”
The Church of Scotland yesterday warned the proposals were “likely to widen the inequality gap, as well as increase carbon emissions”.
Church of Scotland climate change officer Adrian Shaw said: “As a way to tackle poverty it is difficult to see how this tax cut would have any real benefits other than a possible boost in employment within the Scottish tourism industry or other sectors of the economy.
“Evidence for this comes primarily from the aviation industry which cannot be treated as impartial.”
Introducing the bill, Derek Mackay said: “The plans are a key part of the Scottish Government’s economic strategy, in particular in boosting trade, investment, influence and networks, which are especially important given the economic threat posed by Brexit. Scotland’s airports are competing on the world stage to secure new routes and capacity.
“Reducing the tax burden helps to ensure that there is a more level playing field with the many other European airports that are competing to secure the same airlines and similar routes. New routes will enhance business connectivity and tourism.”
The Scottish Conservatives prefer limiting the tax cut to long-haul flights, in an attempt to encourage more direct long-haul flights from Scotland.
But while opposition parties agreed that power over the tax should be devolved, they rounded on the SNP’s plans for a tax cut, with analysis from the Scottish Greens showing that the richest 10 per cent of households stand to gain four times more than the poorest 10 per cent from the cut.
Scottish Green co-convener Patrick Harvie vowed to make amendments to the bill at the next stage.
He said: “The SNP is proposing a tax break for the only transport industry that is already free of fuel duty. They’re happy to see people’s daily train and bus fares rise, but they’re trying to convince us we’ll all be better off if occasional holiday flights are a few pounds cheaper. They say they’ll belatedly carry out an economic analysis instead of relying on the industry’s spin, but they’ve already decided what the tax policy will be, before those facts are in.
Harvie added: “In effect this tax will take cash from public purse and hand it to the wealthiest; just the kind of thing the SNP rightly condemn the Tories for doing at Westminster.”
Labour MSP Neil Bibby said: “Rather than focusing on stopping cuts to local services, protecting the bus pass, closing the attainment gap or the crisis in our NHS, SNP ministers instead want to give a tax cut to first-class passengers. It’s the wrong priority at the wrong time. They need to come clean about what they’re going to cut to pay for this airline tax cut.”
Scottish Liberal Democrat transport spokesperson Mike Rumbles MSP said: “A cut in Air Passenger Duty is inconsistent with Scottish Government commitments to reducing Scotland’s greenhouse gas emissions, pumping an additional 60,000 tonnes of CO2 into our atmosphere.
“The Scottish Government has already missed its annual climate change targets four years out of five and now it plans to fly a Boeing 747 through its through our climate change commitments”.
In June parliament voted to replace Air Passenger Duty with a new Air Departure Tax, which is expected to be substantially lower
The bill will see Air Passenger Duty, devolved to Scotland as part of the 2016 Scotland Act, replaced by an Air Departure Tax from April 2018, set at half the current rate
Draft climate change plan sets out the Government’s emission reduction strategy over the next 15 years
The Finance Committee session came after Virgin Trains warned that axing APD could see Edinburgh to London rail journeys fall by around a third