The Airport Operators Association (AOA), the trade association that represents over 50 UK airports, has responded to the Government discussion paper on Air Passenger Duty (APD), published by the Treasury alongside the recent Budget, and has once again stressed the need for a consistent rate of the tax across the whole of the United Kingdom, in light of the announcement made last week by the Scottish Government that it plans to start reducing the tax north of the border by 50% in 2018.
The Scotland Bill – a Bill that will allow the Scottish Government to set its own rate of APD – is currently making its way through the House of Commons, and is expected to enter the statute book early next year. The Scottish Government has pledged to reduce APD by 50%, starting in 2018 and to be completed “by the end of the next parliament”. In response, the UK Treasury published a discussion paper to consider how it might respond to such an outcome to ensure that airports across the country are not disadvantaged and that competition in the aviation market is not distorted.
Ed Anderson, Chairman of the AOA, said: “Airports across the country are understandably concerned about the distortionary effects of a reduction in APD in Scotland, and the impact that this will have on their businesses and on the regions in which they serve. We now have a concrete commitment from the Scottish Government that it plans to start reducing APD by 50% from 2018 onwards. The UK Treasury will not be able to say that they were not warned that this is going to happen. In light of the promises that both the Prime Minister and Chancellor of the Exchequer made during the recent general election campaign that they will not allow airports and regions to be adversely impacted by the devolution of APD, it is incumbent upon them to ensure that action is taken sooner rather than later, so that the industry can start planning for the future with a degree of certainty. Doing nothing is simply not an option.
“With respect to what decision the Government ultimately takes, the AOA maintains that any reduction in APD in Scotland should be matched, immediately, by a cut everywhere, so that no part of the UK is disadvantaged in any way.”
