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The North East speaks out against APD changes

A group of leading North East business figures have joined together to campaign against proposals for changes to a taxation system that they claim could have a damaging effect on the whole region.

The groups, made up of Aberdeen Airport, it’s Consultative Committee, ACSEF, NESTRANS, Aberdeen City Council, Aberdeenshire Council, the Chamber of Commerce, SCDI and airline Eastern Airways have written a joint letter to the Treasury – concerned about the possible impact to the region of changes in APD.

APD, or Air Passenger Duty, is a tax levied on passengers departing from UK airports. In March, following the most recent Budget announcements, the Government agreed to “delay” a rise in APD and to launch a new consultation into possible changes.

Among these changes, the potential inclusion of helicopters in APD, which it is estimated could cost the energy sector as much as £168 million a year*.

The group have submitted a regional response, to show the impact of such proposed changes on the whole region and not exclusively on particular sectors.

In the letter the group make it clear that they feel strongly that any helicopter serving the North Sea energy industry should be exempt and this should be written into the appropriate definition of business jets that is being sought. The response also points out that consideration should be given to a preferential aviation tax rate for regions in the UK without a viable alternative to air travel.

In the third of their specific points the group have called for APD powers to be devolved to the Scottish Government. The group stress that would come with a firm commitment that the Holyrood Government would utilise such new powers in the best interests of the Scottish passenger and with the aim of maintaining and then enhancing the competitive position of Scotland.

Aberdeen Airport Managing Director Derek Provan said: "A York Aviation report commissioned earlier this year warns of a potential drop of around 1.2 million passengers across Scotland over three years, should APD increase as it has been. A drop in demand on this scale could undermine the long term viability of some routes, and harm the prospects of further route development. This, in turn, will have implications for Scotland's business competitiveness and inbound tourism potential. The measures proposed by the Scottish Government would lessen this impact.”

Bob Collier, Chief Executive of Aberdeen & Grampian Chamber of Commerce said: “This is an issue which is causing widespread concern throughout the UK and we are in contact with colleagues from as far afield as Jersey and Northern Ireland chambers of commerce who are also dependent on air travel to sustain their economies. They are also responding to the consultation pointing out the adverse impact this will have. Regional airports already face enough problems in maintaining connectivity to the London hubs without an additional burden of more taxation.”

Gordon McIntosh, the Director of Enterprise, Planning and Infrastructure at Aberdeen City Council said: "Helicopters are effectively the offshore North Sea Oil and Gas industry's way to get to work and are a fundamental part of the North East of Scotland transport infrastructure".

Peter Smart, chairman of the airport consultative committee adds: ‘We were encouraged that the chairmen of all the main airport consultative committees in the UK agreed that off-shore helicopter flights should continue to be exempt from APD, when we met in Aberdeen recently.”

Chris Holliday, Eastern Airways’ Chief Operating Officer, said: “As the largest fixed wing operator at Aberdeen, we support the steps being taken by North East Scotland organisations, in terms of the ability to introduce favourable APD rates for regions in the UK without viable ground transport alternatives.

“The Government’s current proposals clearly also have unintended consequences with the inclusion of offshore helicopters under the heading ‘business jets’, as well as impacting on small airline services, which are not appropriate.”

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