Air Passenger Duty: the unwanted Christmas present

Mr Brown visited Edinburgh Airport today to highlight calls for action on APD - one of the key transport plans outlined in Scotland’s Future: Your guide to an independent Scotland.

The Scottish Government plans to cut APD by 50 per cent in an independent Scotland, with a view to the eventual abolition of the tax when public finances allow.

A family of 4 flying from Edinburgh to visit Santa in Lapland this Christmas would pay £104 in APD. Under the Scottish Government’s plans, that would reduce to £52.

The current situation is set to worsen, with Chancellor George Osborne using last week’s Autumn Statement to announce plans to increase APD on long haul flights.

Mr Brown said: “Travellers flying to and from Scotland this Christmas should be looking forward to seeing family and friends, not worrying about the cost of this unfair tax.

“We have long argued that Scotland should have power over APD. It was recommended by the Calman Commission in 2009, but the UK Government has failed to take action.

“It’s clear that the current APD situation puts Scotland at a competitive disadvantage when it comes to attracting visitors and businesses from overseas.

“It’s the most expensive aviation duty in Europe, adding significantly to the cost of flying to and from Scotland.

“Airlines and airports repeatedly cite the UK’s APD as one of the major obstacles when it comes to securing new routes, as well as maintaining existing ones.

“A recent study by York Aviation estimated that APD will cost Scotland more than £200 million a year in lost tourism spend alone by 2016. In addition to the direct losses to the Scottish economy, a report earlier this year by PWC showed that reducing APD would increase other tax receipts, such as VAT.

“In an independent Scotland, a competitive aviation taxation regime will stimulate new and existing direct international connections, bringing a major boost to the national economy.

“More direct routes will enable travellers to and from Scotland to avoid flying via airports in London or on the continent, encouraging business travel and reducing costs for families on holiday flights from Scottish airports.

“Given the increasingly competitive nature of the aviation industry, we must take action to ensure Scotland remains an attractive destination and continues to build on its international reputation.”

Gordon Dewar, Chief Executive of Edinburgh Airport, said: “We welcome this policy from the Scottish Government and we would like to see APD not only halved but abolished completely.

“We’ve had a successful year at Edinburgh Airport but it is clear from our discussions with our airlines that Scotland could be far better connected without the iniquitous yoke of APD. It puts our country and importantly our vital tourism industry at risk. People and airlines will go elsewhere.

“We reiterate our call for governments to support our economy and abolish this unfair tax.”

Amanda McMillan, managing director of Glasgow Airport, said: “Aviation plays a critical role in supporting the growth of the UK economy and this role is even more profound in Scotland given the country’s location on the periphery of Europe. Travelling by air is not a luxury but an essential element of business and family life, yet we continue to have the highest levels of taxation in the EU. It was extremely disappointing, therefore, that despite repeated representations to the UK Government the Chancellor in his Autumn statement opted to further increase levels of APD.

“APD is already proving a significant barrier to attracting new routes and unless there is a fundamental re-think, I have no doubt that Scotland’s domestic and international connectivity will suffer. Thankfully, there is broad cross party support in Scotland for action on APD and we welcome any moves which would address the issue and stimulate further growth.”

Managing Director of Aberdeen Airport Carol Benzie said: “What is becoming increasingly clear are the implications of this tax on UK businesses. Put simply APD adds to the burden of running a successful company. 65% of our passengers in Aberdeen are traveling in a professional capacity and ultimately the responsibility for paying APD in each and every one of these cases is being passed back to their employer.

“Firms in Aberdeen are connected globally with links in emerging and existing markets. These businesses are paying APD twice if they chose to use a hub airport in the UK, and are taking their business elsewhere in increasing numbers to avoid this tax.

“Ultimately APD which we are told is helping get Britain back to growth is actually doing more harm than good.”