WITH plans to devolve Air Passenger Duty to Holyrood, Scotland is now in a position to abolish this tax, a move that could give the nation a real economic boost.
While UK passengers pay amongst the highest departure tax in the world, research by PwC found that significantly reducing or abolishing APD would increase GDP and create of tens of thousands of jobs across a broad range of sectors. It also found that reducing or abolishing the duty would actually increase the revenues to the Treasury from other taxes to the extent it would pay for itself.
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It’s therefore no surprise that the Smith Commission included APD within its proposals to devolve further tax powers to the Scottish Parliament.
Scotland’s three main airports, Glasgow, Edinburgh and Aberdeen, all called for the tax to be devolved to Holyrood and eventually abolished.
Although the duty raised £2.9 billion in the UK in 2013-2014 with approximately £200 million coming from Scotland, the three airports claim the tax is a significant barrier to growth and is damaging to tourism.
In their joint submission to the Smith Commission, the airports claimed that APD is resulting in 2m fewer passengers travelling to Scotland and is impacting on the country’s competitiveness.
Gordon Dewar, Edinburgh Airport’s chief executive, has also stated his own opposition to the duty, claiming that Ryanair alone has already committed to delivering more than 1m new passengers if it is to be abolished.
Let’s hope Westminster will follow through on its proposed timetable to ensure a speedy transfer of this power to the Scottish Parliament and, in turn, MSPs then take prompt action to get rid of it all together. While abolishing APD in Scotland could put airports in the north of England at a disadvantage, this will be a matter for their politicians to address.
After all, these choices are what lie at the heart of devolved decisionmaking.
Given the mounting evidence against APD, taking control of and ultimately scrapping this tax could prove to be a hugely beneficial development for Scotland’s economic prospects going forward.
• David Robertson is a consultant at Colpitts World Travel