MSPs respond to Virgin Trains' APD concerns
 |
A Scottish Parliament committee has responded to concerns raised by Virgin Trains about proposed changes to airline departure taxes.
The Finance and Constitution Committee called on the Scottish Government to take these concerns into account when setting out detailed plans for the new Air Departure Tax (currently known as Air Passenger Duty) later this year.
David Horne, Virgin Trains' Managing Director on the east coast route, gave evidence to the committee in February, stating that a third of the southbound rail market could be lost to air if APD rates are abolished on domestic routes where trains and planes compete.
The committee has now published its Stage One report on the Air Departure Tax (Scotland) Bill. The report can be read in full here: https://sp-bpr-en-prod-cdnep.azureedge.net/published/FCC/2017/4/1/Stage-One-Report-on-the-Air-Departure-Tax--Scotland--Bill/5th%20Report,%202017.pdf.
In its report, the committee states:
Lastly, the impact of increased use of air travel within the UK upon rail travel and a potential conflict with public policy objectives seeking a modal shift from air to rail was also highlighted in evidence to the Committee. For example, David Horne of Virgin Trains stated—
We know that rail competes strongly with the aviation market and we know that initiatives that we have launched in the past year have been successful in attracting customers from airlines to rail, as well as in having boosted Scotland’s connectivity.
We know that the market is competitive, which is why we are extremely concerned that a reduction in the tax that is paid by air passengers will result, on domestic routes, in a switch from rail to air, which will fundamentally undermine the investment in the rail routes between London and Scotland.
The Committee invites the Scottish Government to note the above evidence in finalising its proposals for the rates and bands.
The Scottish Government is due to set out its plans for the different rates and bands that will apply under the new ADT tax later this year.
|
|
