Sleepy Scottish Government are years late on air tax reform

Scottish Liberal Democrat leader Alex Cole-Hamilton has today warned that Scottish Government plans to reform air taxes have stalled after it was revealed that in eight years ministers have only changed the name.

The power to set air passenger taxes was devolved in 2016, legislated for in 2017 and then shelved in 2019 after the Scottish Government was told by the Climate Change Committee that their plans were not compatible with climate targets.

Scottish Liberal Democrats have urged the government to use devolved powers to deliver a reformed air departure tax while providing an exemption for lifeline flights to Scotland’s remote and island communities.

Under the UK Government’s Subsidy Control Act (2022), which replaces European Union state aid rules, public bodies are allowed to establish subsidy schemes such as tax exemptions based on local needs, meaning it is entirely within Scottish Minsters’ powers to set up a Highland & Islands exemption to Air Departure Tax.  

However, when subsidies or tax relief are being considered for ‘sensitive industries’ such as aviation, the Act does recommend the public body implementing the subsidy/relief to refer it to the Competition and Markets Authority as a “Subsidy of Particular Interest”.  

In response to parliamentary questions, Public Finance Minister Tom Arthur said: “The Scottish Government has not made a referral to the Subsidy Advice Unit at the Competition and Markets Authority” and “All viable options identified by the Scottish Government will be subject to full consultation at the appropriate time.”

Mr Cole-Hamilton said:

“For years Scotland has missed its emissions targets but rather than redouble their efforts the government is attempting to scrap them.

“I think that taxation that increases as people fly more and fly further makes sense. The UK Citizens Assembly on the Climate agrees and MPs have asked the UK Government to begin work on this. At the same time it is important that we retain support for lifeline services in highland and island communities who would otherwise find themselves isolated.  

“We’ve had four Prime Ministers and a global pandemic since the SNP admitted it got this wrong, yet Scottish ministers still haven’t done the groundwork necessary to get fresh plans off the ground. In eight years, the only thing SNP ministers have actually changed is the name.

“To make matters worse, the SNP Government still has a contract backing the building of a new runway at Heathrow – an expansion that would produce more emissions than some small countries.

“While they stall, the planet heats up. Sleepy ministers should get the long overdue highlands and islands exemption sorted and then press ahead with efforts to make this tax fairer and ensure the worst polluters pay the price.”