THE UK government must deliver on its responsibilities when it comes to air passenger duty excemption in the Highlands, a local MP has argued.
SNP MP, Drew Hendry made the comments today during a Westminster debate on Airport Passenger Duty.
He said the Scottish Government plans to reduce the tax which is one of the highest of its kind in Europe by 50 per cent, to benefit the Scottish economy and to encourage more flights at Scottish Airports.
But he claims that implementation of this had to be delayed because the way such duty has been devolved by the UK government, putting at risk the long standing Highlands & Islands exemption.
Highlands and Islands airports have been exempt from Air Passenger Duty (APD) since 2000, because of the area’s low population density as a definition of its peripherality.
Even with this exemption in place, air fares to and from the region remain higher than many other areas of the UK.
Mr Hendry said that in the current form APD has been devolved, it is likely that the existing exemption would need to be assessed by the European Commission, under EU State Aid rules and can only be resolved through UK Government intervention.
During the debate, Mr Hendry told Exchequer Secretary to the Treasury, Robert Jenrick, the UK Government had devolved a power not fit for purpose.
Commenting, Mr Hendry said: “Air Passenger Duty is one of the most expensive taxes of its kind in the world and hampers Scotland’s ability to secure new direct international routes and maintain existing ones.
“That is why the Scottish Government remains committed to a 50 per cent reduction through its new Airport Departure Tax and want to get on and deliver it.
“However, the Scottish Government cannot do this, until the issues around Highlands and Islands exemption have been resolved.
“The Scottish Government recognises how crucial this exemption is to the Highland economy. Even with the introduction of new flights our air connections remain some of the most fragile across these isles.
“The Smith Commission was very clear when it stated that: ‘the power to charge tax on air passengers leaving Scottish airports will be devolved to the Scottish Parliament. The Scottish Government will be free to make its own arrangements regarding the design and collection of any replacement tax’, yet, as we have seen time and time again with this Government, the arrangements on offer, limits the ability of the Scottish Government to make changes to benefit the Scottish economy.
In his response to the Highland MP, Mr Jenrick confirmed that his department was willing to work closer with the Scottish Government to find a solution to the problem, recognising the commitment outlined in the Smith Commission.
Responding after the debate, Mr Hendry said: “I am glad that the UK Government recognises it has failed to hand over APD in a workable way, and that Airport Departure Tax cannot be implemented by the Scottish Government without a solution to this problem.
“I hope that the assurances from Mr Jenrick today, are followed up by meaningful action from the UK Government, to enable the Scottish Government to introduce its reduced Airport Departure Tax, while protecting the Highlands and Islands exemption."