Air tax 'will boost Scottish economy after Brexit'

8 February 2017, 07:19

Ryanair Plane

Business and tourism bodies have backed plans to cut air passenger duty (APD) in Scotland, stating the measure will help boost long-term economic growth after Brexit.

The Scottish Government wants to cut the tax by 50%.

The reduction will begin when a Scottish replacement to APD is introduced in April 2018, and will be delivered in full by the end of this Parliament.

Ministers hope reducing the levy, and eventually abolishing it, will increase the number of direct flights to and from Scotland.

Cuts to the duty have been welcomed by Scottish Chambers of Commerce, the Scottish Chambers of Development and Industry (SCDI) and the Scottish Tourism Alliance (STA).

The organisations are due to appear before Holyrood's Finance Committee on Wednesday to give evidence on the Air Departure Tax (Scotland) Bill - which will replace APD.

In a written submission to the committee, the SCDI said lower rates of Air Departure Tax will ``create a more level playing field with European competitors'' and give airlines confidence to invest in new routes.

Route development will strengthen links with the global economy, bring new opportunities for trade and investment, and increase visitor numbers, the SCDI suggested.

"Following Brexit, this will become even more important for long-term growth and prosperity, which, with the new fiscal framework, will increasingly determine revenues for Scottish public services,'' the organisation said.

"For example, an increase of around 90,000 seats on services between Scotland and North America has supported the sharp increase in visitors from North America to Scotland over the last year (14%), and their record spending level in the Scottish economy of #633 million (28% higher than the previous year).''

The STA said the UK's looming departure from the European Union means it is important to both grow tourism and set tax at levels that allow Scotland to be a more competitive and attractive place to do business in.

The organisation backed "at least halving or removing all together the current levels of APD on both European short-haul and long-haul flights respectively''.

It said: "This would in our opinion be a very positive statement of intent for the industry and to airlines and demonstrate to all that Scotland is open for business.

"Equally we would support removal of APD on flights to our islands, helping grow year-round tourism in a market that at times are challenged by ferry capacities and weather.''

In its submission, the Scottish Chambers of Commerce said: "We welcome the Scottish Government's long-standing commitment to reduce the burden of this tax by 50% and abolishing it when resources allow.''