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commonweal
07.05.19

The Bumpy Landing of a Flighty Case

Common Weal’s Head of Policy & Research, Dr Craig Dalzell welcomes the Scottish Government’s announcement that it will scrap their proposed cuts to air passenger duty.

My involvement with the proposed air passenger duty cuts goes back quite far into my history of political activism. My second policy paper for Common Weal was on the subject and I followed it up with a more detailed one which took into account the potential impact of Brexit.

My argument was an economic one. The case made FOR the cut stated that reducing ticket prices would attract more tourists to Scotland. Those making that case neglected to account for the number of Scots who would leave Scotland for foreign holidays and when these numbers were taken into account the net number of tourists and tourist trips in Scotland was found to be likely to drop. More outbound tourists would take advantage of cheaper prices to fly abroad than would be replaced by additional tourists.

It should be to no surprise that those pushing hardest for the tax cuts were the airports themselves. Edinburgh Airport commissioned the main source of evidence cited by the Scottish Government and few SNP members could forget the money lavished on the party’s annual conference by Heathrow airport (at a time when grassroots activists and third sector organisations were being priced out to the point that it was cheaper for us to hold a whole parallel conference than it was to get inside the SNP one).

Of course, it matters little whether you are coming or going to an airport for them to get your custom so the additional tourists would have benefited these airports whether they were inbound or outbound.

Compounding this was the problem faced by the Scottish Government over the handling of exemptions from the tax granted to the Highlands & Islands. Briefly, when the UK Government brought the tax in and granted an exemption to flights to the islands, it should have applied to the EU for a derrogation from State Aid rules. It did not do so though the EU never bothered to enforce the rule either. Fast forward to the present and the proposal to devolve the tax to the Scottish Government. The process of devolving the power involved scrapping Air Passenger Duty in Scotland then giving the Scottish Government the power to implement a brand new tax called Air Departure Tax. But this brand new tax meant a brand new State Aid issue. Again, the UK Government would have to apply for a derrogation and now, with Brexit looming, it seemed less likely that the EU would turn a blind eye should the application end up at the wrong departure gate.

But the UK Government refused to ask for the derrogation unless the Scottish Government accepted full liability for any fines or back-fees owed should the derrogation be denied not only for ADT but also for the historical omission over APD. The Scottish Government, understandably, refused to take on the liabilities for the UK Government’s possible past mis-steps despite the ADT cut being a firm manifesto promise that they seemed unwilling to back down on.

This led to an impasse which would have been solved by Brexit – particularly a hard Brexit which took the UK out of the customs union and the reach of EU State Aid rules – but, as we know, Brexit has been delayed and delayed. Time is getting tight for the Scottish Government to pass legislation in time to get it on the books before the end of the current Parliamentary session.

And now there comes the Green New Deal. With a “climate emergency” announced by the First Minister shortly before the SNP conference, the possibility of a serious look at a Scottish Green New Deal has ramped right to the top of the political agenda and is being held there by tens of thousands of activists – particularly younger folk who will have to live in the world we leave for them.

Within days of that announcement, Scottish Government ministers started making statements of policy which seemed utterly at odds with a Green New Deal. Mike Russell commented on Debate Night that he felt that new oil extraction could continue – prompting this response from Robin McAlpine – and Stuart Stevenson claimed on Scotland Tonight that carbon offsetting was more important than stopping emissions.

It didn’t take long for more policies to come under the scrutiny of the environmental lens and the First Minister has stated that she is minded to do so.

Whether today’s announcement really is part of this re- examination of the policy suite of the Scottish Government or whether the climate emergency has proved just one barrier too many on an already flighty case, it seems now that air passenger duty will stay where it is for now.

I hope the former case is true. We could do with more examination of this kind. Indeed, I recently floated the idea of applying a carbon emissions count to all policies, justifying those emissions where they are net-positive and, if justified, costing in the price of fixing the damage. Think of it as a policy calorie count.

The Green New Deal is vital now. We simply have no more time left to wait for politicians to do nothing or to make the problem worse with policies that increase emissions even further. We need to get on with reductions. Common Weal is shortly going to embark on a program of papers – co-ordinated with groups across many sectors of the Scottish economy – to produce a costed roadmap to a net-zero emissions Scotland. More than just offering a date for when this target should be reached but actually showing what needs to be done every year from now till then to get there. It is going to cover as much as we can in Energy, Housing, Agriculture and – indeed – Transport. This last category (and several of the others) must include a re-examination of how we fly in and out of Scotland. I’m glad that the Scottish Government’s announcement today removes one barrier from our goal and gives a glimmer of a sign that they are listening and are up for the challenges ahead.