Scotland

Transport minister calls for transfer of air tax power

Glasgow and Edinburgh Airports Image copyright PA

Transport Minister Derek Mackay has called for control over air passenger duty (APD) to be devolved to Holyrood immediately.

Mr Mackay wants a transfer of powers "to maximise the industry's potential".

The Smith Commission, set up to agree further devolution to Scotland after the independence referendum, has recommended the duty should be devolved.

Mr Mackay said: "UK APD is the most expensive tax of its kind in Europe."

Air passenger duty is charged on all passenger flights from UK airports. The rate of tax varies according to where the passenger is going, and the class of travel.

The tax raised £2.9bn in 2013-14, with approximately £200m coming from Scotland.

However, Scottish airports claim the tax is a significant barrier to growth and damaging to tourism.

Glasgow, Edinburgh and Aberdeen airports claim Scotland's location and the fact its economy is particularly reliant on aviation means that any loss of connectivity would have "a significant impact on the country's competitiveness".

Long-haul services

APD rates on direct long haul flights from Northern Ireland were devolved to the Northern Ireland Assembly (NIA) in 2012, which then set the rates at £0.

The Republic of Ireland scrapped its equivalent of the tax in 2013, meaning the UK is one of five European countries to levy a tax on passenger departure.

Over the past 12 months, long-haul services have begun between Scotland and destinations such as Doha in Qatar and Chicago in the US, while new routes to Abu Dhabi and Halifax, Nova Scotia, have been announced for next year.

Other new links have been established to Dublin, Marrakesh and Geneva, as well as London City and the Isle of Man.

Mr Mackay said: "I congratulate all our airports for their successes this year, which come despite an air passenger duty regime that clearly holds them back in comparison to their competitors around Europe.

"Airports and airlines repeatedly cite it as one of the biggest obstacles when it comes to securing new direct international services and maintaining existing ones.

"By devolving APD to Scotland we could unlock the country's full potential, bringing significant opportunities for airlines, Scotland's airports and passengers."

Mr Mackay added: "It's time for Westminster to act - there is no reason why powers over APD should not be transferred to Holyrood immediately so we can get to grips with this unfair tax and allow our airports to maximise their potential."

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