Scottish Government defies Westminster and insists it will cut airline tax

Air Passenger Duty from Scotland will be halved from 2018

Taxing travel: short-haul passengers pay £13 APD, long-haul travellers £73 (Simon Calder)

At present every economy-class passenger over 15 pays £13 for a short-haul flight or £73 for a long-haul flight originating in the UK. The long-haul rate is to increase by £2 next April. APD levels are doubled for premium economy, business and first class.

In its 2015 manifesto, the SNP promised “a reduction of 50 per cent and longer term plans to abolish APD completely”, in order to encourage more direct flights to and from Scotland.

Chris Grayling, the transport secretary, told the Airport Operators Association annual conference: “I don’t actually yet firmly believe the Scots will do this.”

But Drew Hendry MP, the SNP Westminster group leader, told The Independent: “Obviously the Parliamentary arithmetic has to work to get the vote through, but the Scottish government are absolutely committed to halving APD.”

He said the cut would take effect in April 2018. Airports in northern England, especially Newcastle, are concerned that passengers would be tempted north of the border to benefit from the lower rate of tax.

The British Infrastructure Group of MPs said the “deeply uncompetitive nature” of APD ran counter to Government plans for seeking markets beyond Europe. In a report ahead of the Autumn Statement, it said: “Despite the Prime Minister’s ambitions, Britain simply cannot become the world’s greatest free-trading nation if it has the world’s highest air passenger duty”.

But the managing director of Butlin’s has called the prospect of lower APD to help poorer families “ridiculous”.

Writing for The Independent, Dermot King said: “This suggested cut in APD is a very odd way of showing that the Government is on the side of those struggling families. UK residents already spend £14bn more on foreign holidays than is spent on tourism in the UK and our government should be supporting businesses in this country not businesses in France, Germany or Spain.”

Neil Pakey, chair of the Regional and Business Airport Group, called for a temporary suspension of Air Passenger Duty to see if it generated more income for the nation. He was chief executive of Shannon airport in Ireland when the Dublin government carried out a trial, which later led to the tax being permanently dropped.