Travel trade cautious on plan to devolve Scottish APD

THE travel industry has given a mixed reaction to the news that Scotland could gain control over some of its taxes, which would include Air Passenger Duty (APD).

Meanwhile, speculation is mounting that Chancellor George Osborne will cut the tax for children under 12 in his autumn financial statement on December 3. Campaigners claim abolishing the tax would help families who face a hike in the cost of flying during school holidays, while costing the Treasury just £50 million.

The Smith Commission – set up by the UK government to look at devolving powers to Scotland following the referendum earlier this year – has recommended that the Scottish Parliament should have full control of income tax rates and bands, and APD.

Both the Association of British Travel Agents and the Board of Airline Representatives (BAR UK) said the move could further put England, Wales, and Ulster at a competitive disadvantage if the Scottish government decides to scrap APD.

BAR UK chief executive Dale Keller said: ‘The Scottish government has already indicated it would slash or scrap the world’s highest air passenger tax to stimulate the local economy. The right time is now for the whole of the UK to share equally in the benefits a phasing out of APD would deliver.’

Mark Tanzer, CEO of ABTA said: ‘Any inconsistencies between what a passenger pays flying from Scotland compared to elsewhere in the UK could create an uncompetitive and damaging situation for travel businesses.’

Flybe welcomed the news and said scrapping APD would allow new routes to open up for Scotland.

Go Holiday editor David Kernek comments: ‘This is a kneejerk – though not unexpected – reaction from the travel trade. It appears to assume that holidaymakers living in England, Wales and Northern Ireland will book flights from Scottish airports in order to avoid APD. But in many cases, the time, hassle, and cost of getting to Glasgow, or Edinburgh, or Aberdeen would be equal to, or possibly outweigh, the saving.’

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