LIZ CAMERON

One important issue for Scottish businesses which straddled either side of the Scottish Parliamentary Elections was the Scottish Government’s consultation on the devolution of Air Passenger Duty (APD) to Scotland in April 2018. Launched in March this year, the consultation closed last week and Scottish Chambers of Commerce have made a strong case for this tax to be reduced immediately, with a clear timetable towards its abolition.

This is a tax on Scotland’s connectivity, a tax on Scotland’s ambitions and a tax on the growth of our businesses. Report after report from the likes of PwC, Edinburgh Airport and the British Air Transport Association have shown that the reduction and elimination of this tax would have a positive benefit, not just for the aviation industry but for the wider economy, with gains of up to £200 million a year in Scotland. In addition, the experiences of other countries that have axed their air travel taxes has been consistently positive, for example, when Ireland abolished its (much lower) aviation tax in 2014, passenger numbers increased by 7% that year, with substantial increases in services to the US, UAE, Belgium, the Czech Republic, Finland and Ethiopia, to name a few.

However the results of the Scottish Parliamentary elections have thrown the Scottish Government’s long standing pledge to reduce this tax into some doubt, as all of the opposition parties campaigned against the Scottish Government’s strategy of cutting APD. With the Scottish National Party losing its overall majority in the Scottish Parliament and returning to the role of a minority administration, it no longer has the required number of MSPs to guarantee that this much needed tax cut will be implemented.

I would urge Scotland’s opposition parties to consider the case for reducing APD very carefully. Scotland’s future lies in internationalising our businesses and our geography means that we are naturally reliant on air transport to reach key destinations and markets across the globe. Economic reports have estimated the benefits of reducing this tax to be up to £200 million each year. Environmentally, increases in air passenger numbers need not mean an increase in pollution: between 2009 and 2012, aviation emissions fell by an average of 0.7% annually, despite a growth in passenger numbers over this period, with a further reduction of 0.6% in 2013, despite a 4% growth in passenger numbers over the same period.

The Scottish Parliament is gaining more powers that will enable the Scottish Government to deliver a real competitive advantage for Scotland. Let’s start with cutting APD and growing our connections to the world.

Liz Cameron is chief executive of Scottish Chambers of Commerce