Air Passenger Duty ‘won’t be devolved’

DOWNING Street sources last night played down suggestions George Osborne’s budget would contain plans to devolve Air Passenger Duty (APD) to Holyrood.

A British Airways plane lands at Edinburgh Airport. Picture: Ian Rutherford

The SNP has made repeated calls for control to be handed to Edinburgh arguing this would enable the Scottish Government to abolish the controversial duty, which can cost passengers between £13 and £376 a flight depending on distance and class of travel.

Yesterday a Westminster source described speculation that the Chancellor would meet the SNP’s demands as a “kite being flown by the Lib Dems”. The source added: “As far as we are concerned it is unlikely that the kite is going to fly.”

Meanwhile speculation was mounting that in his last budget before the referendum Osborne may bow to pressure to scrap the whisky duty escalator, to which many Scottish MPs object, claiming Scotland’s national drink is taxed at a far higher rate than either beer or wine.

Around 80 per cent of the price of a bottle of Scotch whisky can be accounted for by excise duty and VAT. The whisky duty escalator automatically raises duty by 2 per cent above inflation.

A survey of 2,000 people across the UK, published today and conducted by One Poll, found that 67 per cent believe the escalator should be axed. David Frost, Scotch Whisky Association chief executive, said: “We urge the Chancellor to listen to that large majority of the population who believe the escalator is simply unfair to a major Scottish, and British, industry. People are still under financial pressure and scrapping the escalator and freezing duty would help ease some of that pain.

“An overhaul of the alcohol duty system would support not just the Scotch Whisky industry, but also the wider hospitality industry, which provides employment across the UK.”

Commenting on Osborne’s plans, SNP Finance Secretary John Swinney said: “In his final budget before the referendum the UK Chancellor may be tempted to offer Scotland a series of promises, but no number of budget bribes can compensate for the impact of the austerity agenda or the decades of Westminster mismanagement of our economy.

“The current system is fundamentally flawed – yet for as long as Scotland remains governed by Westminster our economy and public services will have to face the consequences of budget decisions made by a government Scotland did not elect.

“While we are now seeing promising signs of growth, the fact that the Chancellor is planning to impose a further £25 billion of cuts and austerity on Scotland underlines the failure of the UK approach and continues to put our recovery at risk.”