The prob­lem with griev­ance politics

The SNP’S U- turn over Air Pas­sen­ger Duty was not the re­sult of any sup­posed en­vi­ron­men­tal virtue,

The Scotsman - - SCOTTISH PERSPECTIV­E - writes Brian Wil­son

The Scot­tish Gov­ern­ment’s dis­cov­ery that cut­ting and then abol­ish­ing Air Pas­sen­ger Duty is “no longer com­pat­i­ble” with its en­vi­ron­men­tal ob­jec­tives is ris­i­ble – but tells us a lot about how Scot­land is run.

When was the pol­icy ever “com­pat­i­ble” with any en­vi­ron­men­tal im­per­a­tive? Was it com­pat­i­ble a fort­night ago when min­is­ters were still as­sur­ing busi­nesses that the 50 per cent cut would go ahead, once a few wrin­kles had been sorted?

Did the re­quire­ment to cut car­bon emis­sions sud­denly spring into view, hav­ing been en­tirely missed by the ge­niuses in St An­drew’s House for whom this has been a flag­ship com­mit­ment for the past decade, to jus­tify the de­mand for the tax to be de­volved?

In truth, the chaotic aban­don­ment of the pol­icy has pre­cious lit­tle to do with the en­vi­ron­ment. Rather, it is the cul­mi­na­tion of a process which dic­tates so many of the head­line- grab­bing ini­tia­tives which come to noth­ing or very lit­tle.

First you have the griev­ance. The fact APD was on a UK- wide ba­sis fig­ured high on the list of com­plaints about what could be done bet­ter if only, if only, Holy­rood had the pow­ers – de­nial of which demon­strated an­other White­hall con­spir­acy to hob­ble our ini­tia­tive, our cre­ativ­ity, our po­ten­tial. How many headlines and ( as it has now proved) false prom­ises were gen­er­ated around that nar­ra­tive?

Yet it al­ways seemed a slightly odd pri­or­ity, even by griev­ance stan­dards, since it so ob­vi­ously ran counter to all the fine talk about the en­vi­ron­ment. Ever since it was in­tro­duced by Ken­neth Clarke in his 1993 bud­get, APD has had a clearly stated en­vi­ron­men­tal ra­tio­nale – it was a “green tax” be­fore the term had been coined.

Fly­ing was un­der- taxed com­pared to other forms of trans­port be­cause there was no VAT on avi­a­tion fuel. Fur­ther­more, a mod­est tax would slow the growth in pas

sen­ger num­bers. As taxes go, it was a hard one to ar­gue with – which ex­plains why the Trea­sury has never shown the slight­est in­ter­est in abol­ish­ing it.

Changes along the way brought an im­proved de­gree of eq­uity. Gor­don Brown in 2000 switched the bur­den to­wards long­haul and busi­ness fly­ing while re­duc­ing the tax for or­di­nary hol­i­day flights. Crit­i­cally from a Scot­tish per­spec­tive, a dero­ga­tion was cleared with the Euro­pean Com­mis­sion to make flights from High­lands and Is­lands air­ports free from APD – good prac­ti­cal politics.

As part of the Smith Com­mis­sion pack­age in 2015, APD was de­volved to Holy­rood. Only then did it dawn on the Scot­tish Gov­ern­ment that the loudly pro­claimed prom­ises to re­duce and then abol­ish the tax were a lit­tle trick­ier to de­liver than they had as­sumed. Grievances are rarely

ac­com­pa­nied by home­work. The big­gest prob­lem was with the dero­ga­tion. It be­came clear that any new scheme would need to go back to Brus­sels for ap­proval – and there had been one very sig­nif­i­cant change in cir­cum­stances, namely the sharp rise in pas­sen­ger traf­fic through In­ver­ness, not least be­cause of the APD ex­emp­tion.

Since 2015, we have had Holy­rood leg­is­la­tion, work­ing par­ties, thou­sands of civil ser­vice hours ... all to be blown away overnight in a puff of sup­posed en­vi­ron­men­tal virtue with the prob­lems un­re­solved.

Just as im­por­tant, air­lines have been se­duced into Scot­land on the ba­sis of an un­de­liv­er­able prom­ise – and are now pulling out again.

In­ci­den­tally, the In­ver­ness is­sue will not go away. Ev­ery pas­sen­ger there is now sub­sidised by over £ 30 through APD ex­emp

tion plus Scot­tish Gov­ern­ment grants to High­lands and Is­lands Air­ports. Oth­ers, par­tic­u­larly Aberdeen, are un­likely to ig­nore that hor­net’s nest, now it has been dis­turbed.

It’s worth re­mem­ber­ing that there was an­other way. Be­tween 2002 and 2007, the then Scot­tish Ex­ec­u­tive ran a very suc­cess­ful Air Route De­vel­op­ment Fund which shared the risk with air­lines un­til the vi­a­bil­ity of routes was es­tab­lished.

The hugely in­flu­en­tial Glas­gow- Dubai ser­vice was one of its prod­ucts and it also breathed life into Prest­wick for a few more years.

That too was an ex­am­ple of good prac­ti­cal gov­ern­ment us­ing the avail­able pow­ers. Com­pare and con­trast with the pro­tracted griev­ance, the blowhard prom­ises and the ul­ti­mate re­treat which is now the story of APD. Which does Scot­land pre­fer?

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