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Air tax review will take account of needs of island communities

May 20, 2011 12:09 PM
Originally published by Scottish Liberal Democrats

Orkney and Shetland MP Alistair Carmichael has today welcomed news that a crucial tax exemption for flights to the Northern Isles is set to be maintained.

Mr Carmichael was commenting after receiving written confirmation from Ministers that the government has no plans to withdraw the existing Air Passenger Duty (APD) exemption from flights in the Highlands and Islands. Ministers are also seeking views on devolving this particular tax to Scotland as part of an ongoing consultation on proposed reforms to the current system of air taxes.

Mr Carmichael had told the Treasury of his concern about the potential impact of a shift towards a per-plane system of air taxes on lifeline services to and from the Northern Isles. His intervention followed reports that a change to a per-plane system could drive ticket price increases.

Commenting, Mr Carmichael said:

'I have always maintained that the needs of people in the Highlands and Islands should be central to any reform of the existing system of air taxes. In more remote areas, the availability of affordable air travel can be the crucial factor in allowing local businesses to thrive, generating jobs and boosting the economy.

'Changes to the current APD regime could also have a significant impact in places such as the Northern Isles which have a sizeable tourist industry. This is something that will need to be considered carefully as the consultation process continues.

'Whether individuals are flying for business or pleasure, we need to work to keep costs down. Confirmation that the government has no plans to remove the existing APD exemption for the Highlands and Islands is positive news indeed.

'This confirmation is particularly welcome in light of the recent SNP decision to exclude business travellers from the Air Discount Scheme championed by Tavish Scott when he was in government at Holyrood. This move has been bad enough for businesses but I was alarmed to learn recently that local charities have also been hit hard by the change.'

Notes:

In her letter to Mr Carmichael of 14 May, Treasury Minister Justine Greening said:

'The Government does not plan to remove the APD exemption for the Highlands and Islands, but does invite views on devolving APD to Scotland…….Also, in extending APD to business jets by reducing the minimum at which APD is applied, the Government recognises there may be social and economic reasons for exempting a number of flights e.g. lifeline flights, that are likely to fall outside what might be regarded as business jets.'