APD and a sense of the truth

By | Category: Travel rumblings
"what do you expect from politicians?" © Dan Sperrin

“what do you expect from politicians?” © Dan Sperrin

Yesterday there was a debate in the Scottish Parliament about APD –Air Passenger Duty – and the fact that if Scotland votes to be separate from the rest of the UK, the SNP plans to cut the tax by 50% immediately and “to seek to abolish it when public finances allow.”

That it was a debate typical of the time in that everything seemed to come down to pro or anti independence rather than a reasoned debate which will surprise no-one other than possibly the politicians involved.

What was intriguing was that so few MSP’s understood the implications of the subject. To repeat my personal view, I believe the UK government will retain APD until it can be shown that the tax yields less than is the amount lost to the treasury by people not flying out of or into our countries. The sum that it generates is so large that it would provide a sizable hole in the government revenues so no chancellor will lightly remove it.

The debate was opened by the Scottish transport minister, Keith Brown, whose grasp of his brief was found lacking last week. This week he quoted old data which could do with updating because new data might support his argument that Scotland is suffering from having the same rates as the rest of Great Britain. Remember Northern Ireland has different rates because they can pop over the border to the republic and get vastly lower rates. Everywhere else in the UK has to cross water to get lower rates.

He said that people have seen – as a result of the tax –  “the cost of their air travel go through the roof” and he is generally right. But a large part of that is due to airlines trying to maximise their profits now that economies are recovering. But that story doesn’t fit his argument even if it is the truth.

For Labour, Mark Griffin confused me by seeming to say that if the tax went more people would holiday out of Scotland and domestic tourism would suffer. Is Labour pro or anti the tax? I’m not sure.

But the most telling comment came from another SNP member, Graeme Dey who gave three examples showing airfares cheaper from Dublin compared to flights to the same destinations from Edinburgh. Except when I ran prices from Edinburgh to Paris, New York and Philadelphia, then the same from Dublin, Amsterdam and Heathrow, I got widely different results.

Why should that be?

Because pricing changes by the minute and Mr Dey might have been right with his figures on the day that they were run but I suspect that they don’t tell the whole story. Amsterdam has no APD yet the costs of a flight to New York from there was £83 more than a flight from London ( and that included flying to London to catch the flight whereas a direct service cost £129 more. From Dublin it was £125 cheaper than London and Edinburgh was £4 cheaper than a London flight.  What it shows is that airlines adjust their pricing to what the market will bear and that APD seems to play a smaller role in pricing. But it still might be a deterrent because of the publicity given to it. My suspicion is that we still haven’t reached the price that will alienate travellers from flying out but because of the industry shouting, the argument seems to have more support than it might have.

For Colin Keir of the SNP to say that APD “is trying to make their businesses uncompetitive in an incredibly difficult market” seems wide of the mark in that easyJet has announced bumper profits and the other airlines are doing well with the exception of Ryanair who haven’t got their business model right in a new world for them is plainly flirting with fantasy. But can the SNP really say that it wants to remove APD so that non Scottish businesses can make more profits?

Alex Johnstone for the Conservatives produced figures to show that passenger numbers going through the Glasgow and Aberdeen were increasing so, by inference, what was the effect of APD? But that failed to consider an economic upturn which would trigger greater passenger numbers. Little help was offered by the only Liberal Democrat to attend the debate who skewed her speech to discussing childcare rather than APD and the Greens seem to believe that it is still an environmental tax whereas realists know that ceased years ago and has been said as such.

The debate in the Scottish Parliament about APD did no-one proud since each party member peddled just the “facts” that suited their party line. But then what made me every believe that I should see fair-mindedness  and an understanding of the case from politicians.

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