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Tax cut for aviation poses threat to sustainable transport budgets

Published 14 December 2016 by Jamie Wylie

In advance of the Scottish Budget for 2017-18, Transform Scotland has released a briefing expressing concern over the Scottish Government’s fiscal priorities for transport.

The briefing, issued ahead of tomorrow’s Scottish Budget, focuses on the Government’s pursuit to cut Air Passenger Duty (APD) by 50% and highlights a number of worrying negative consequences which could arise from such a cut to APD.

The key points made in the briefing are:

  • Successive Scottish budgets have prioritised unsustainable, polluting modes of transport at the expense of public transport and active travel (i.e. walking and cycling)
  • The Scottish Government’s desire to make cutting Air Passenger Duty (APD) a fiscal priority will negatively impact the Scottish economy and goes against Scotland’s legally-binding commitments to tackle climate change
  • Pursuing a tax cut for the aviation industry will disproportionately benefit those on high incomes. We are concerned that the Scottish Government will focus cuts on investment in bus services, a mode of transport disproportionately used by lower income groups. Such an eventuality would seriously damage the Scottish Government’s standing on equalities issues.

Commenting on the potential impact of a cut to APD, Colin Howden, Director of Transform Scotland, said:

If the APD tax cut comes from the transport budget, the only obvious area of big revenue spend that could be cut is on bus services in the form of the Bus Service Operators Grant. If BSOG is cut then bus operators will be forced to either increase fares or reduce services; this would impact disproportionately on low income households.

“If, in addition, local authority funding is reduced, councils will have less money at their disposal to fund any routes which are not commercially viable.”

To read the briefing, see here.