Scottish airports disappointed by decision not to devolve APD
Because the government agreed to cut APD rates in Northern Ireland, Scottish airport operators are dismayed that contol of APD had not been devolved to the Scottish government. Scottish aviation says if APD were devolved they could provide the means to incentivise airlines to provide new direct international connections to Scotland. The UK Treasury said it had not ruled out devolving APD to Scotland and Wales in the future.
Scottish airport operators have said they are dismayed and disappointed that the control of air passenger duty (APD) will not be devolved to Scotland.
The UK government gave Northern Ireland the power to reduce the level of the tax because it said it had a special economic case.
That prompted calls from Scottish and Welsh airports for similar treatment.
The UK Treasury said it had not ruled out devolving APD to Scotland and Wales in the future.
A report published following a consultation on reform of APD said the government at Westminster would “continue to explore the feasibility and likely effects of devolution to Scotland and Wales”.
Earlier this year Chancellor George Osborne announced the duty would be cut for direct long-haul routes from Northern Ireland airports, and he would devolve control over the tax to the Northern Irish Assembly.
The move came in response to fears that some routes could be scrapped due to competition from Irish airports where APD is much lower.
Commenting on the UK Government’s decision not to grant the Scottish government similar powers for now, Jim O’Sullivan, managing director of Edinburgh Airport, said: “APD is already costing Scotland passengers and having an impact on tourism revenues.
“We know from discussions with our airline partners that it is a major factor in their decision to connect further routes to Scotland.
“We would urge the Westminster Government to see Scotland as it does Northern Ireland and understand the need to both reduce and devolve this unfair and damaging tax.”
Amanda McMillan, managing director of Glasgow Airport, said: “On the question of devolution of APD, Glasgow Airport has always been supportive of this proposal given the Scottish government’s more progressive approach to aviation and its greater appreciation of the role the industry plays in supporting the growth of the Scottish economy.”
Scottish Transport Minister, Keith Brown said the case for devolving APD was “compelling” and had been backed by all four of Scotland’s biggest airports, and recommended by the Calman Commission.
He added: “We need to be able to deal with the competitive and connectivity disadvantages that Scotland faces and if APD were devolved now we could provide the means to incentivise airlines to provide new direct international connections to Scotland, benefiting our aviation industry and our passengers and supporting the growth of the Scottish economy.
“The UK government needs to listen to the many voices in Scotland who clearly want to see full devolution of the policy on APD.”
page 16 of the Treasury report says:
3.37 The Government recognises that airports in Northern Ireland operate in unique circumstances within the UK. Northern Ireland shares a land border with the Republic of Ireland, where the rate of aviation duty is substantially lower. In recognition of this, the Government announced in September that from 1 November 2011, APD rates for passengers travelling on direct long-haul routes departing from airports in Northern Ireland would be cut to the lower short-haul rate – currently £12 per passenger in economy and £24 for business and first class passengers. To provide a lasting solution in Northern Ireland, the Government has launched a parallel process to devolve aspects of APD to the Northern Ireland Assembly. Legislation to achieve this will be introduced as soon as possible.
3.38 The Government will continue to explore the feasibility and likely effects of devolution of APD to Scotland and Wales.