The Fair Tax on Flying

[Aviador]

Scottish referendum: ‘Yes’ vote would end APD in Scotland

The Scottish National Party (SNP) has confirmed a ‘yes’ vote in this week’s referendum will mean the end of Air Passenger Duty (APD) in Scotland.

It said scrapping the tax, which is the highest in the world, will benefit Scottish tourism as around two million visitors a year are currently deterred by APD.

Read more: http://buyingbusinesstravel.com/news/15 ... d-scotland

I'm intrigued as to how SNP propose to pay for everything. Free university tuition; Increased spending on NHS; Free prescriptions; Scrap Air Passenger Duty (APD). Seriously, the list is endless! Surely Scotland can't afford to give everything away for free, the world doesn't work like that. Thoughts...??

 

[TheLocalYokel]

I think that Scotland is on to a winner whichever way the vote goes. If Yes then APD will be scrapped. If No all the main UK political parties have vowed to devolve a lot more powers to Scotland which will doubtless include taxation with probably APD in the mix. Wales will likely get much the same as will Northern Ireland.

This means that England will be governed by the Westminster parliament with Scottish, Welsh and Northern Ireland MPs having a say on matters that only affect England. The chancellor will not reduce or scrap APD which will put English airports at a disadvantage to airports in the other parts of the UK.

It's not just APD. England will be in thrall to Welsh, Scottish and Northern Irish MPS on a range of matters.

 

[TheLocalYokel]

Government and CAA urged to help small airports by cutting APD

The government and the Civil Aviation Authority (CAA) are being urged to do more to help the airports sector by cutting Air Passenger Duty (APD).

The call comes from the Airport Operators Association (AOA) on the day that the final commercial fights operate from Blackpool airport before it shuts.

Full article at http://www.travelweekly.co.uk/Articles/Details/49753

The call has been made before and has some merit in my view, although what constitutes a small airport is always going to be a matter for argument.

Maybe those handling fewer than one million passengers a year might be classed as such for APD help. They would be small enough not to significantly distort competition elsewhere.

 

[Aviador]

Airline boss calls for APD to be cut or abolished for children

I think there is a sense of realism now because APD has been going for too long hence why airlines are now thinking up new proposals to put to the three main political leaders to consider. It is widely acknowledged that Air Passenger Duty (APD) is a cashcow for government coffers. I don't think anybody expects this government or the following government that will be elected next May will stop the APD tax altogether. The idea of stopping the APD tax for children might have more weight behind it as governments try to become more family friendly. Stopping the tax for children would be a far better idea than regional variations which could potentially damage neighbouring airports depending on where in the country a reduced levy would be introduced.

 

[TheLocalYokel]

I agree that different rates of APD across the country could bring about unexpected and inequitable consequences. Abolishing APD on youngsters across the board would at least avoid that.

But, as you say, APD brings in a lot of money. Maybe the government should have a look at the multi billion pounds annual overseas aid budget and trim that so it only helps countries truly in need. The reduced APD income might then be absorbed.

There is also a powerful argument that reduced or abolished APD would create more jobs and wealth in this country which in turn would feed more income tax and other taxes into UK Plc.

 

[Aviador]

Air Passenger Duty on flights for children set to be axed, slashing plane tax for an average UK family in half

Well according to the Mail Online it would seem David Cameron is giving the green light to the idea of axing APD for children. This will be a huge boost for the aviation industry if it gets announced.

 

[TheLocalYokel]

Smith Commission

The above was set up by PM Cameron to look at ways of increasing the power of the Scottish Parliament in the wake of a No outcome to the Scotland Independence referendum.

The Commission has published its recommendations today and they include the devolution of full APD powers to Scotland.

It remains to be seen whether the Westminster government will accede to all the commission's conclusions but indications are that they will be taken very seriously.

If Scotland gets APD powers along with Northern Ireland there seems a good chance that so too will Wales, with the owners of CWL (the Wales Assembly Government) setting their own APD rates.

The Scottish government and the Wales Assembly leadership have already indicated that APD would be substantially reduced in those countries, even to a nil band or abolished.

That would leave a situation where English airports' APD would be set, as now, by the Westminster chancellor with MPs representing Welsh, Scottish and Northern Irish constituencies having a say on what would be a purely English matter, whereas English MPs would have no say on APD in the other countries of the UK.

 

[TheLocalYokel]

It does seem that APD will be devolved to Scotland with the Scotland Bill published today. All the main parties seem committed to the thrust of the bill so it appears it will become law whoever wins the general election in May.

The Scottish government is committed to abolishing APD but may not be able to afford to do so immediately; however, a significant reduction is likely.

George Osborne, the chancellor of the UK exchequer, told a Commons select committee this week that northern airports, especially Newcastle, would be impacted by a lower APD rate in Scotland and ways should be found to ensure they were not disadvantaged. However, he came up with no suggestions as to how this might be achieved.

The obvious answer is to abolish APD throughout the UK which puts airports, airlines and passengers on a level playing field.

 

[Aviador]

Senior minister tells industry 'APD raises money'

A senior member of the government defended Air Passenger Duty yesterday after coming under sustained attack at a major travel industry conference.

Education secretary Nicky Morgan told the UKinbound convention in Leicester: "APD raises money. As education secretary I like having money to spend on schools."

Read more: http://www.travelweekly.co.uk/Articles/ ... money.html

Sums it up really. There's little chance of Air Passenger Duty stopping altogether because as the education secretary has proven, APD is a cash cow for the government. Mention additional spending on health, education or policing using APD revenues and most of the general public will accept APD has to stay.

 

[TheLocalYokel]

Sums it up really. There's little chance of Air Passenger Duty stopping altogether because as the education secretary has proven, APD is a cash cow for the government. Mention additional spending on health, education or policing using APD revenues and most of the general public will accept APD has to stay.

I think what many people in England (and at the moment in Wales) believe is that the desperate scramble by all the main political parties to promise Scotland the Earth in return for not voting for independence leaves the UK in an unfairly unbalanced position.

Scotland is being given yet more tax raising powers including APD so if that government can reduce it by 50% and ultimately abolish it (which is their stated intention) how is it that the UK government says it's so important that it must be kept?

If Wales also gets the devolved APD power and increased taxation powers generally as well (which seems certain if a Labour Government is returned that relies on the support of the Scottish Nationalists and Plaid Cymru) then England will be the only part of the rapidly becoming Ununited Kingdom that is lumbered with what many believe to be a regressive and draconian tax in APD. Not only that but Westminster MPs representing Scottish, Welsh and Northern Irish constituencies will have a say on purely English matters including APD but English MPs won't have a similar right to vote on these matter in those other countries.

These are not questions aimed at you Aviador because I know you are merely making a pertinent comment following this minister's statement.

 

[Aviador]

Flybe calls for end to air passenger duty

Part of me thinks the government might forced to abolish the APD tax in England.

If the Scottish government and the Welsh Assembly go-ahead with plans to scrap the APD, it could be extremely harmful to English airports potentially leading to service withdrawals from airports close to the borders such as Bristol and Newcastle airports.

 

[Ray Finkle]

Below is the Discussion paper on options for supporting English regional airports from the impacts of air passenger duty devolution.

I've not had time to have a read yet.

A quick summary:

The government is undertaking a review in response to concerns expressed by regional airports in England about the potential impacts of air passenger duty (APD) devolution to Scotland and Wales on their business. As part of the review, this discussion paper explores options to support regional airports from the impacts of APD devolution. These options are to devolve APD within England, vary APD rates within England and provide aid to regional airports within England. The paper sets out how these options could work, and highlights key points for consideration.

https://www.gov.uk/government/publicati ... devolution

 

[TheLocalYokel]

May thanks for that link, Ray

The whole thing is a dog's dinner.

Devolving APD Within England

Local authorities or combinations of local authorities would be given the power to set APD, either all of it or long haul (as they chose). It's full of snags: the first would be establishing the area served by an airport and working out which local authority or authorities would be the designated APD setter; the Westminster governments grants to these authorities (or authority) would be reduced by the amount that central government receives in APD from that airport's flights; the entire scenario is mired with EU regulations and it's not certain how legal any of this would be anyway.

Varying APD Rates Within England

EU regulations make such variance very difficult (if not impossible) to achieve and one idea might be to base rates on congestion at airports. Again the legality of such a move is not known (attempts are being made to clarify the situation) and it's believed by many that there would be winners and losers amongst the airports in England.

Providing Aid To Regional Airports Within England

Next to impossible for airports with a throughput of 5 mppa and above and hedged in restrictions for those airports less busy than this (yes, those EU regs again!).

Because it was so anxious to stop Scotland voting for independence the Conservatives (as did the other main political parties) made all sorts of extravagant promises to Scotland re tax raising and other powers if the voters elected to remain within the UK. The likely results of this panic-stricken action were not thought through with the impossible situation eventuating in which we now find ourselves.

None of the three options has a cat in hell's chance of bringing parity to England's airports if Northern Ireland, Scotland and Wales are allowed to go their own way.

 

[TheLocalYokel]

The Scottish Government has set out its plans for the future and APD features as follows:

We are committed to replacing Air Passenger Duty (APD) with a more competitive regime that better supports our goal of boosting international connectivity and business growth.

We have established a forum, with membership from the airline industry, Scotland's airports, environmental groups, business organisations and tax professionals. This forum will support the development of our policy proposals, including helping us to shape a policy consultation on a Scottish APD which we plan to launch this October. The Scottish Parliament will be able to legislate for a replacement Scottish tax only once the new Scotland Bill has been passed by the UK Parliament.

We will reduce the burden of APD by 50% with the reduction beginning when we introduce a Scottish APD in 2018 with a view to abolish it completely when resources allow. We are currently consulting with stakeholders on the best way to apply that reduction across new and existing routes.


http://www.gov.scot/Publications/2015/09/7685/4

So their previous promise to initially reduce APD by 50% will be carried through in 2018 with the aim of abolishing it entirely when 'resources allow'.

At least it will have the potential effect of reducing the tax on southern sectors of flights between Scotland and England. If Wales gets the same power it has vowed to abolish APD completely. It's easier to do it there because the 'take' is very low compared with Scotland and massively lower than in England.

 

[Ray Finkle]

Match Scotland's air levy cut in England and watch Newcastle Airport grow, say North East chiefs

Newcastle and Durham Tees Valley airports are among eight airports calling on the Government to protect them from unfair competition

http://www.chroniclelive.co.uk/news/nor ... 10216#ICID

The other airports aside from the two mentioned are Bristol Airport, Birmingham Airport, Exeter International Airport, Liverpool John Lennon Airport, Norwich Airport and Doncaster Airport.

Devolving the APD in Scotland would no doubt hit DTV and NCL hard but there are potential ramifications elsewhere. I'm sure Wales would soon be asking for something similar for Cardiff which could potentially have a massive negative effect on Bristol. Manchester have also asked for local powers to vary/scrap their APD meaning airports such as BHX, who are trying to build a long haul network, would be at a big disadvantage.

 

[TheLocalYokel]

I'm sure Wales would soon be asking for something similar for Cardiff which could potentially have a massive negative effect on Bristol.

The Wales Assembly Government has certainly demanded that APD be amongst the taxation powers they want devolved to them.

The Prime Minister said earlier this year that the Westminster government would consider such a move. A couple of years ago the Westminster government conducted a survey into devolving APD powers to Wales, Scotland and Northern Ireland. Following this they put the issue into the too-hard-to-do basket although Northern Ireland long haul rate was reduced to short haul to compete with Dublin.

Subsequently, the government said APD would be devolved to Scotland as part of the tax raising sweeteners used to encourage Scotland to remain within the UK.

The suggestion for England from the government is either (1) devolved APD to local authorities or combinations of local authorities (2) vary APD rates within England but still controlled fROM Westminster (3) provide aid to regional airports in England.

None of these options is of much use practically as my post of 8 July this year suggested.

 

[TheLocalYokel]

http://www.travelweekly.co.uk/articles/ ... -in-budget

The Airport Operators Association (AOA) is demanding clarity on APD when next month's Budget is delivered.

Their spokesman stated, “The prime minister was quite clear during the 2015 General Election campaign that he would not allow unfair tax competition to damage UK airports."

“We need to see him honour this commitment. A reduction in APD in Scotland should be matched by the equivalent cut everywhere so no part of the country is disadvantaged.”

The article states that the three options put forward by the government to mitigate the effects in England of APD devolution to the rest of the UK attracted almost universal criticism.

No surprise there: one was probably illegal under EC rules; one applied only to airports with a throughput below 3 mppa; one relied on groups of English local authorities coming together to form some sort of local nucleus to administer the tax.

 

[TheLocalYokel]

APD in Scotland

The Scottish government will get the power to regulate APD when the current Scottish Bill passes into law. They had said they would reduce it to 50% of the current rate from 2018 but now it seems the reduction may be phased in between 2018 and 2021. A final decision has yet to me made on phasing.

Their long term aim is still to reduce APD to nil in Scotland.

The ubiquitous travel 'expert' Simon Calder was on the lunchtime BBC News and told viewers that the entire APD issue is becoming a mess with parts of the UK being allowed to set their own. He said that English airports will be clamouring to have their APD reduced as well.

Nothing new there and he has said the same thing before. He also repeated that APD is such an easy tax for any government to collect - the airlines do it for them.

Currently UK APD brings in around £3 billion per year with Scotland contributing about ten percent of that total.

 

[Coathanger16]

I've just read a post on one of the forums suggesting that the way airlines are taxed should be given an overhaul with one of the reasons being given as trying to encourages airlines to either shift flights from London/SE to the regions or to start up new services to the regions.

On the other hand, we have airlines, airports & businesses all calling for reductions or even the abolition of APD. This currently stands as £13 for flights less than 2000 miles, and £73 for flights over 2000 miles. That generally covers economy passengers whilst premium passengers pay £26 and £146 respectively. Its frequently been claimed that the UK has the highest level of this kind of tax - more so than any other country.

At the other end of the spectrum, we have campaign groups against aviation expansion calling for more taxes with one novel idea of an increasing tax with every flight you take (i.e. your 1st flight of the year would be taxed £0, 2nd flight would be taxed £50, 3rd flight would be taxed £100, etc). The group claims that 15% of the UK population take 70% of all flights in the UK and that this tax system would act to reduce the number of flights that "frequent flyers" are taking, whilst making flights more affordable to people with low incomes and thereby allowing them to fly when they previously couldn't afford to. Read more here http://afreeride.org/

Was just interested in seeing what people on here think - more tax, less tax, different tax?

 

[Aviador]

It has been discussed at great length on here. I'm not sure whether it should be more, less or different but one things for sure is it's almost certainly here to stay in one form or another.