Air tax plans to reward Scotland's richest - report

Plans to cut aviation tax in Scotland are 'predominantly a tax giveaway for Scotland's wealthiest households and corporations', according to a new report.

Air departure tax is set to come into force in Scotland from April 2018 if passed by parliament, replacing air passenger duty. Picture: Ian Georgeson

The study by the Fellow Travellers campaign group against environmentally damaging air travel found 70 per cent of Scotland’s wealthiest households stand to benefit from the Scottish Government plans to cut and then abolish air tax, compared to 30 per cent of the poorest.

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Air departure tax is set to come into force from April 2018 if passed by parliament, replacing air passenger duty.

The SNP administration wants to cut it in half by the end of this parliamentary term, with the charge to be scrapped when resources allow, claiming it will improve connectivity and create economic benefits.

The report found businesses would take 29 per cent of the benefit, £47.3 million the first year, while 8.3 per cent (£13.5 million) goes to leisure passengers in the richest 10 per cent of Scottish households and 2.4 per cent (£4 million) to the poorest 10 per cent.

Researchers estimate the average per journey saving for a passenger is £54 on a luxury jet, £20 in first class and £8 in economy.

Based on official figures, halving the tax will lead to £189 million in lost revenue for Scotland by 2021/22, the study found.

The report states: “The SNP’s commitment has fired the starting gun for a race to the bottom on air passenger taxes in Great Britain. Any competitive advantage conferred on Scotland’s airports from a reduction in these taxes will be short-lived.”

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It continues: “This is predominantly a tax giveaway for Scotland’s wealthiest households and corporations.”

Report co-author Leo Murray said he hoped the “woefully under-informed” policy would be reconsidered.

He said: “Our analysis shows clearly that cutting and then scrapping taxes on air travel will primarily reward corporations and Scotland’s richest households for choices that will set us back in the fight against climate change, at the same time as damaging domestic tourism and the rail sector.

“The single biggest outcome of this change, if it is made, will be more wealthy Scots flying to London to spend their money there.”

The report was published by the Greens who plan a final attempt to amend the Bill in parliament next week.

The party’s Andy Wightman said: “Most Scots will lose out if this cut goes ahead, and it’s grossly misleading of ministers to try to sell this as about families when the overwhelming winners from this policy are wealthy frequent fliers and their businesses.

“SNP and Tory MSPs have combined to block changes to the Bill and it will be disappointing if they do so again at this week’s final vote. This is nothing short of a bung to business, will deprive public services of vital funds and do nothing to reduce inequality or tackle the climate crisis.”

A Scottish Government spokesman said it was committed to a “progressive, fairer tax system” and its air tax plans are a “fundamental component to improving Scotland’s international connectivity and providing a real boost to our economy”.

He added: “UK APD is the most expensive tax of its kind in Europe and one of the highest in the world and continues to act as a barrier to Scotland’s ability to secure new direct international services and maintain existing ones.”