PINSTRIPE
The SNP Government appears to be hesitating regarding the implementation of probably its most sensible pro-business manifesto commitment - the halving and then abolition of Air Passenger Duty. Perhaps it is afraid of upsetting its new best pals, the Greens.
Although there are a growing number of destinations served by direct flights from Scottish Airports these are, in the main, leisure rather than business destinations. To be effective for business there really needs to be more than one flight a day every day to a destination. Beyond the London airports, Schiphol, Paris and (three cheers for Emirates) Dubai , I am struggling to find business destinations which meet these key needs of regular, frequent, direct flights. This matters, Scotland is on the periphery of Europe and far away from America let alone the rapidly growing markets in Asia.
Connectivity with the wider world which is not just adequate but good is a necessity for a successful Scottish economy, it is not an option. Strong links by air will not only help our companies’ trade with the wider world but bring business people and tourists to us - the value to our economy if we can improve this is significant.
APD can represent a large proportion of the price of a journey - easily over half the cost of a short haul flight, removing it would undoubtedly increase the demand for flights and make marginal routes viable leading to a virtuous circle of more direct flights, more often to more places which creates prosperity, jobs and choice. The revenues foregone from APD will quickly be exceeded by the economic benefits which additional international air traffic to and from Scotland would bring.
The Scottish Government consulted on its plan to halve then abolish APD and predictably got a mixed response. No surprise that the Greens were against it - presumably they believe our exporters can either walk to Beijing or should go through Heathrow, creating more pollution, rather than having the direct flights we need. They have a legitimate “Green” point about avoidable air travel but a sense of perspective and reality is needed.
Labour were against it because, sadly, they are now against almost everything sensible. The Scottish Conservatives have actually come up with some pretty good suggestions. The LibDems would probably like to be sensible but a number of their members still wear sandals so they cannot be. To cap it all up pops Richard Branson who tells us that reducing, let alone eliminating, APD will devastate our railway links with England - or was it spoil Virgin’s profits? - one of the two, I can’t recall which.
From my perspective the common sense solution which is good for business and good for Scotland as a whole and around which a consensus should be achievable seems pretty obvious. APD should be retained for flights from Scotland to within the UK mainland - so encouraging Greener Transport options including rail travel where those are actually practical and APD should be abolished for all flights to the Scottish islands and from Scotland to beyond the UK mainland. We need to get on with this. The SNP must have the courage to pursue something it promised and the wit to find common cause with other parties to get a sensible deal done.
This is an opportunity for the Scottish Parliament to do something sensible - lobby your MSP!
Pinstripe is a senior member of Scotland's financial services community.
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