Opinion: The country is united – all for one on APD

Opinion: The country is united – all for one on APDDevolving Air Passenger Duty to Scotland is fine if reductions in the tax are mirrored elsewhere, otherwise it’s unfair, says Tim Alderslade of the Airport Operators Association  and voters agree

With the general election less than three months away, the Airports Operators Association (AOA) has today published polling data from marginal seats on the issue of devolving Air Passenger Duty (APD) to Scotland.

This polling, conducted by ComRes, shows there is clear public support for matching any APD reduction north of the border with an immediate similar level of reduction everywhere in the UK.

Politicians seeking to respond to public opinion should take note.

As a sector, UK aviation welcomed the recent Government reforms of APD. Abolishing Bands C and D for the longest flights and axing APD on children under 16 by next year will undoubtedly deliver a much-needed boost to outbound and inbound tourism, and make the UK a more attractive destination for business travel.

Airports and airlines across the country will do everything they can to ensure passengers are aware of these changes, at home and overseas.

However, even with these reforms the UK still levies far and away the highest rates of APD in the world – double those of its nearest challenger, Germany, and the APD take is scheduled to increase in future years.

The Government itself estimates that by 2017-18 total revenues will reach an eye-watering £3.8 billion. To put this into context, in 2006-07 APD raised less than £1 billion for the Treasury.

The AOA and A Fair Tax on Flying, the industry coalition we campaign with on APD, believe a fundamental change in thinking is needed.

The fact that such a change is set to take place in Scotland, care of the Smith Commission’s proposal to devolve responsibility for APD to the Scottish Government, shows just what is possible.

The Commission’s recommendation – accepted by all the main UK political parties – would result in APD rates north of the border coming down by 50%, with the intention to abolish APD altogether eventually.

Draft legislation granting the necessary powers has been published and is due to be taken through the House of Commons by the next UK Government, to become law by next year.

Today’s polling data, reported in Travel Weekly, shows the aviation sector has the UK public on its side when it says all parts of the UK should benefit from the same cut in APD which Scotland is due to get.

The vast majority of voters polled in marginal constituencies – where the general election will be decided – believe APD rates should be consistent across the UK (78%), and more than half strongly agree with this statement.

A similar proportion agreed that if passengers in Scotland were to pay a lower rate of APD, this would be unfair to passengers in the rest of the UK (75%).

Around two thirds of voters of all main parties think the UK Government should commit to match a reduction in APD should the Scottish Government halve current rates (68%), with 40% strongly agreeing.

Airports and airlines need to be able to plan for the future with certainty. The former develop infrastructure for future passenger numbers years in advance. The latter set out their route schedules many months in advance.

The UK Government and politicians of all political hues should take heed of these polling results.

The results mirror growing concerns that allowing one part of the UK to levy substantially reduced rates of APD would not only be unfair to our sector and to passengers, but could also distort the market in terms of where airlines decide to fly to and from.

All those in the aviation and tourism sector should call for the main political parties to set out their thinking ahead of the UK general election, and to publish plans on how they intend to ensure no airport or passenger is disadvantaged by the devolution of APD.

With public opinion clearly supporting the idea that an APD cut in Scotland should be matched immediately by a cut everywhere in the UK and with a general election due now is the time press the case.

Sourced from Travel Weekly

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Cut in APD confined to Scotland ‘unfair’ say voters

Cut in APD confined to Scotland ‘unfair’ say votersImage via Shutterstock

A poll published this morning suggests a majority of voters see plans to cut rates of Air Passenger Duty (APD) in Scotland without matching cuts throughout the UK as unfair.

A ComRes poll on behalf of the Airport Operators Association (AOA) in the UK’s 40 most-marginal constituencies found three out of four voters (75%) agree a lower rate of APD in Scotland would be unfair to passengers in the rest of the UK.

Two thirds (68%) thought that if the Scottish Government reduces APD by 50%, as promised, the UK Government should match this immediately across the country.

A majority (78%) agreed APD rates should be consistent across the UK, with more than half (54%) agreeing strongly.

The Scottish Government made a commitment to cut APD on flights from Scottish airports by half, as a prelude to abolition, after the Smith Commission on devolution recommended APD raised at Scottish airports be devolved to the Scottish Government in November.

The main political parties have accepted this, and the travel industry coalition A Fair Tax on Flying – of which the AOA is a member – has called on the Government to commit to matching any reduction in APD in Scotland across the whole of the UK.

An AOA spokesman said: “We cannot have a situation where the Scottish Government is able to undercut the rest of the UK with respect to air taxation.

“The Chancellor is on record saying that he will not allow airports in the rest of the UK to be disadvantaged by Scotland being able to levy a substantially reduced level of APD.

“As HM Revenue and Customs has already concluded, this would distort competition and result in passengers and airlines relocating to airports north of the border.”

He said: “We call upon all political parties to work together to ensure that devolution to Scotland does not unfairly penalise communities and passengers in the rest of the UK.”

Pollster ComRes surveyed 1,000 UK adults in early February.

Sourced from Travel Weekly


Government confirms APD devolution to Scotland

Government confirms APD devolution to ScotlandImage via Shutterstock

Abta and the Airport Operators Association (AOA) have responded to Government publication of plans to devolve Air Passenger Duty (APD) to Scotland this morning by demanding consistency across the UK.

The Secretary of State for Scotland issued extensive plans for the devolution of powers to the Scottish Parliament today in a document entitled Scotland in the United Kingdom: An Enduring Settlement.

Its publication follows recommendations made by the Smith Commission on devolution set up following Scotland’s referendum on independence last September.

The document includes a draft devolution bill and proposes the next Government “take the clauses forward in a Scotland Bill during the first session of the new Parliament”.

Abta chief executive Mark Tanzer said: “Future reductions in APD planned by the Scottish Government will be good news for passengers flying from Scotland and for Scottish airports and travel businesses.”

But he pointed out: “This will come at a cost to the competitiveness of regional airports in the north of England and to consumers elsewhere in the country who will be paying some of the highest flight taxes in the world.”

Tanzer said: “A cut in one part of the UK is unacceptable and the most competitive rate should be matched for the benefit of the whole of UK plc and all UK consumers.

“Abta is calling for the UK Government to ensure rates of APD are consistent and competitive across the UK.

“We urge the UK Government to take the initiative now, review the impact of this damaging tax and cut it to bring it in line with our neighbours.”

AOA chief executive Darren Caplan noted “the long-stated ambition of the Scottish Government to reduce APD by 50% in the short-term, to be followed by eventual abolition” and said: “The proposals have far-reaching consequences for airports across the UK.

“It cannot be right that one part of the UK is able to levy a substantially reduced rate of APD compared to other areas, disadvantaging not only our airport members but companies and travellers too.

“A cut anywhere should be matched immediately by a cut everywhere.”

Caplan said: “We call upon the main UK political parties to work together to publish a plan, before the general election, setting out how this will be delivered.”

Sourced from Travel Weekly


Potential APD cut in Scotland should be matched elsewhere, says airports trade body

Potential APD cut in Scotland should be matched elsewhere, says airports trade bodyA cut in Air Passenger Duty in one part of the country should be matched by a cut everywhere, according to the Airport Operators Association.

The call came ahead of the government setting out draft legislation on plans to devolve responsibility for APD to the Scottish government.

The airports trade body wants the Treasury to ensure that no parts of the country are disadvantaged by any potential reduction in the tax in Scotland.

The Smith Commission published proposals in November to devolve APD powers to Scotland.

AOA chief executive Darren Caplan said: “The Smith Commission’s proposal to devolve APD to Scotland – and the decision of the main UK political parties to support this recommendation – is a genuine game changer, given the long-stated ambition of the Scottish government to reduce APD by 50% in the short-term, to be followed by eventual abolition in the future.

“Now that the Scottish government plans to follow our European competitors in taking action on this tax, the Treasury should think seriously about the impact that this will have on the rest of the UK.

“We continue to believe that a cut in APD anywhere should be matched, immediately, by a cut everywhere, so that no parts of the country are disadvantaged in any way, and we urge the Treasury to publish a plan that sets out how and when this can be delivered.

“We also continue to urge all political parties to support the setting up of a comprehensive macro-economic study, led by the Treasury, that can consider the UK’s APD regime in its entirety, so that all future decisions on reform of this tax are evidence-based.”

He said that UK levels of APD continue to be the highest in the world, “representing a growing barrier to trade, investment and tourism”.

“The Treasury has recognised this fact by making a number of welcome reforms to the APD regime over the past 12 months – such as removing the levy for both the longest-haul travel (bands C & D) and children under the age of 16 – but the fact remains that at a time when our international competitors are either abolishing or at least freezing their respective air taxes, overall rates of APD in this country are increasing year after year, and now stand at record levels,” Caplan said.

Sourced from Travel Weekly


APD changes needed for Scotland, says Salmond

APD changes needed for Scotland, says SalmondImage via Shutterstock

Major changes to the way Air Passenger Duty is levied will be required if Scotland is to attract more direct long-haul flights, first minister Alex Salmond argues.

The aviation industry says reducing or abolishing APD would strengthen the business case for new international routes from Scotland.

Salmond said: “We’re actually inhibited by the concentration of international flights at Heathrow, where they can’t cope because of huge congestion problems.

“It would be far better to have an effective devolution of Air Passenger Duty which would allow us to attract more direct international flights into Scotland and, indeed, the north of England.”

His comments came as tourism bosses warned that Scotland is losing out on millions of pounds in spending by visitors because of a lack of flights to Heathrow.

Senior executives from Heathrow and Gatwick have been in Glasgow in an effort to win Scottish support for their rival bids for a new runway.

But VisitScotland chairman Mike Cantlay warned that the Scottish tourism industry is facing more immediate problems, due to a lack of connections to Heathrow.

His comments follow Virgin Atlantic’s recent decision to axe its Little Red domestic services from Aberdeen and Edinburgh to Heathrow from next autumn.

That will leave Scottish tourism heavily reliant on British Airways, part of the Oneworld alliance.

Cantlay told BBC Scotland: “We want to make sure that every major airline servicing London and every major airline alliance, in particular Star Alliance and SkyTeam, get easy access to Scotland through London.”

Heathrow’s new Terminal 2 is used by Star Alliance, which includes United and Singapore Airlines.

It is designed to handle up to 20 million passengers a year, but Virgin’s decision will leave it without any flights to Scotland.

Heathrow chief executive John Holland-Kaye said: “If we expand Heathrow, we will actually need more flights from other parts of the UK to support the 14 new long haul routes that we’ll be trying to attract.

“That will mean we’ll need more flights from Aberdeen, Glasgow and Edinburgh as well as flights from cities like Inverness.”

Sourced from Travel Weekly


Scotland’s largest airports made a joint submission yesterday (28th October 2014) to the Smith Commission calling for Air Passenger Duty (APD) to be devolved to the Scottish Parliament.

 

Scotland’s Airports call for Devolution of Air Passenger Duty

Glasgow Airport, Aberdeen International Airport, and Edinburgh Airport put together a case for the Scottish Government to take control of Scotland’s APD for the reduction and eventual abolishment of the passenger tax.

APD is the highest passenger tax in the world, and raised £2.9 billion for the UK treasury for the period 2013-14.

However, according to the report released by the airports, APD costs Scotland two million passengers per annum and £200 million pounds. A 2012 report commissioned by the airports warned that by 2016, APD would cost Scotland up to £210 million in lost tourism spend per year.

The airport group argues that the abolishment of APD in Scotland would pay for itself- with the increase in tourism, and tourism spend creating the funding lost from the abolishment of the APD tax.

The UK is just one of five countries in Europe to levy a passenger departure tax, and it is reportedly damaging areas of the economy. For example, the Republic of Ireland’s equivalent of APD was a mere €3 per passenger in 2012. The APD in the UK in 2012 was anywhere between £13-£92, dependant on the length of flight, and this contributed to passengers travelling from Northern Ireland to Dublin Airport to travel.

More than half a million residents in Northern Ireland used Dublin Airport in 2012, and this figure is growing now that the tax in the Republic of Ireland has been entirely abolished. Although Dublin Airport boasts more routes, the APD in Britain has also risen, costing passengers up to £194 for long-haul flights.

Amanda McMillan, managing director of Glasgow Airport said: If Scotland is to attract and sustain the routes that will enable it to compete effectively in the global marketplace, then it is imperative that the issue of APD is addressed.”

If APD is abolished in Scotland, it could however have an effect on English Airports such as Newcastle Airport which is just over an hour away from the Scottish border. The Emirates Dubai – Newcastle route alone raised a total of £8.5 million for APD in 2012, and the devolution of APD in Scotland could attract routes away from English and Welsh airports to Scottish airports as a cheaper alternative.

Gordon Dewar, Chief Executive of Edinburgh Airport said that Scotland’s airports unanimously agree that air passenger duty is damaging to their industry.

“Ryanair has already committed to delivering over one million new passengers in the event of APD being abolished so it’s obvious that airlines support our argument. They’re already indicating the size of the prize that’s just beyond our grasp,” he said.

Aberdeen Managing Director, Carol Benzie said there is already a near-political agreement across a number of parties, as well as support from the public and from businesses.

“The calls to completely reform this tax regime have been growing steadily louder over the years and are now almost unanimous north of the border,” she said.

Scheduled Annual Departure Capacity fromScheduled Annual Departure Capacity fromScotland’s Three Largest AirportsScotland’s Three Largest AirportsAberdeen(ABZ)Edinburgh(EDI)Glasgow(GLA)2004200420052005200620062007200720082008200920092010201020112011201220122013201320142014002,000,0002,000,0004,000,0004,000,0006,000,0006,000,0008,000,0008,000,000YearYearAnnual Departure SeatsAnnual Departure Seats

Year Aberdeen (ABZ) Edinburgh (EDI) Glasgow (GLA)
2004 1693014 5037060 4352578
2005 1789060 5611416 4919759
2006 1972869 5775174 5028697
2007 2161811 6022013 5326433
2008 2034233 6192306 4802982
2009 1838978 6015478 4187624
2010 1753398 5965171 4131967
2011 1866051 6074698 4137606
2012 2002951 5911857 4347870
2013 2078140 6296963 4545936
2014 2256736 6234489 4513872

Data provided by OAG

Our data above demonstrates the scheduled annual departure capacity from Scotland’s three largest airports between 2004-2014. It indicates that all three airports faced a slight decline between 2008-2010, although all have sufficiently welcomed more passengers since 2004.

A press release issued by British Airways revealed that the APD tax is 20 years old this week, and is the fastest growing tax in the UK.

The annual revenue from APD is nearly ten times as much as in the tax’s first full year, and in total, air passengers in the UK have paid more than £26 billion in APD since 1994.

According to City analysts PwC, abolition of APD would boost Britain’s economic growth by 0.5 per cent within a year and lead to the creation of 60,000 new jobs without reducing the Treasury’s net revenues.

Willie Walsh, chief executive of British Airways’ parent company IAG, said: “Twenty years on, APD has snowballed out of control and become a tax that works against people wanting to visit relatives and friends, go on holiday or grow their business to create jobs. 

Sourced from Routes Online


Tourism VAT cut ‘would benefit’ independent Scotland

An independent Scotland should cut VAT on tourism in order to stimulate the sector, MPs and trade associations have said.

The current rate is set at 20% but the Cut Tourism VAT Campaign would like to see it reduced.

The Scottish Tourism Alliance, the British Hospitality Association (BHA), and several others have all expressed the view that Scotland should cut the rate of VAT on accommodation and visitor attractions from 20% to 5%.

Graeme Dey, MSP, said: “The VAT rate on tourism in Scotland and the refusal of the UK Government to cut it, is just one of many examples of why Scotland’s interests would be best served by being an Independent country.”

Mike Weir MP, who is SNP Westminster spokesperson on Business, Innovation & Skills and Energy and Climate Change, said: “At present VAT is controlled from Westminster which has steadfastly refused to implement a cut, despite the fact that VAT on tourist related business is lower in most other EU nations.

“With Independence, we would have the powers to set VAT rates to benefit our tourist businesses and to focus on a boost for our rural economy.”

Campaigners believe that reduced rate of VAT would enable hotels, visitor attractions and other related tourism businesses become more competitive. It is hoped that this would lead to increased sales and more employment opportunities. The loss of VAT would then be recouped by greater revenues from tourism.

Graham Wason, chairman of the Campaign for Reduced Tourism VAT, says: “If Scotland opts for independence and subsequently cuts VAT on tourism; it would benefit significantly at the expense of the rest of the UK.

“It would also attract more visitors from abroad, so earning export revenue and improving its balance of payments. In these circumstances, the mistake by the rest of the UK in not cutting tourism VAT would be exposed.”

BHA chief executive Ufi Ibrahim said: “Whether or not Scotland opts for independence, there is no doubt that over the medium and long term, its economy would benefit substantially from a cut in tourism VAT – and that conclusion is supported by the Treasury’s own model.

“The consequence of Ireland’s VAT cut was an increase in overseas tourist numbers and revenue which helped to create up to 25,000 new jobs.”

Sourced from TTG Digital