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BA boss: air passengers will go to Scotland to avoid paying duty BA boss: air passengers will go to Scotland to avoid paying duty
(35 minutes later)
The boss of British Airways has said he expects hundreds of thousands of people to drive from England to Scotland to avoid air passenger duty (APD) if Scotland become independent.The boss of British Airways has said he expects hundreds of thousands of people to drive from England to Scotland to avoid air passenger duty (APD) if Scotland become independent.
Willie Walsh, the chief executive of BA-owner International Airlines Group (IAG), said he expected people to drive from the north of England to Scottish airports to avoid APD, which will cost UK passengers up to £388 from April.Willie Walsh, the chief executive of BA-owner International Airlines Group (IAG), said he expected people to drive from the north of England to Scottish airports to avoid APD, which will cost UK passengers up to £388 from April.
The Scottish government has promised to prioritise a 50% reduction in APD, with a view to eventual abolition if it wins the referendum on independence in September. The Scottish government has promised to prioritise a 50% reduction in APD, with a view to eventual abolition if it wins the independence referendum in September.
Walsh said people will "just drive across the border to avoid" APD in the UK. He said those in the north of England would be most likely to drive across the border to avoid the charge. "If there is an independent government in Scotland they have made clear they will abolish it [APD] – which is damaging the economy -– people will move away from the north of England airports," he said. "Newcastle will suffer to airports like Edinburgh." Walsh said people will "just drive across the border to avoid" APD in the UK. He said those in the north of England would be most likely to drive across the border to avoid the charge. "If there is an independent government in Scotland they have made clear they will abolish it [APD] – which is damaging the economy – people will move away from the north of England airports," he said. "Newcastle will suffer to airports like Edinburgh."
Asked whether it might be quite a long drive to avoid the charge, which will range from £13 a passenger for short-haul economy flights to £388 for long-haul premium tickets, Walsh said: "You'd be surprised what people will do to avoid it. Asked whether it might be quite a long drive to avoid the charge, which will range from £13 a passenger for short-haul economy flights to £388 for long-haul premium tickets, Walsh said: "You'd be surprised what people will do to avoid it. Anyone who thinks that [APD] isn't a factor is a fool."
"Anyone who thinks that [APD] isn't a factor is a fool." He said about a million people a year drive from Northern Ireland to Dublin to avoid the charge. The Republic charges €3 a passenger, a flight, but is abolishing the charge from April. In Northern Ireland, the APD charge is £13 for short haul, while the charge for long haul has been abolished.
He said about 1 million people a year drive from Northern Ireland to Dublin to avoid the charge. The Republic charges €3 per passenger, per flight, but is abolishing the charge from April. In Northern Ireland, the APD charge is £13 per passenger per flight and the charge has been abolished on long-haul flights.
Walsh said BA would continue to fly to Scotland regardless of whether it becomes independent, and said the number of Scottish flights could be increased because of the APD change. But he said it was unlikely the airline would introduce new long haul routes from Scottish airports. He said overall independence would probably be a "positive development" for the company's business.Walsh said BA would continue to fly to Scotland regardless of whether it becomes independent, and said the number of Scottish flights could be increased because of the APD change. But he said it was unlikely the airline would introduce new long haul routes from Scottish airports. He said overall independence would probably be a "positive development" for the company's business.
Walsh's fillip for Alex Salmond's campaign was tempered when the industry body Scottish Engineering warned its members had "major concerns" about the risks over a post-independence currency, tax rates, cross-border transaction costs and EU membership. Walsh's fillip for first minister Alex Salmond's campaign was tempered when the industrial body Scottish Engineering warned that its members had "major concerns" about the risks over a post-independence currency, tax rates, cross-border transaction costs and EU membership.
Brian Buchan, the chief executive of Scottish Engineering, said it was helping companies make contingency plans for independence because the Scottish government had failed to address their anxieties. Its chief executive, Brian Buchan, said it was helping companies make contingency plans for independence because the Scottish government had failed to address their anxieties.
He said he was not aware of anything as dramatic as Standard Life's disclosure on Thursday that it was setting up English companies as a contingency because of worries over currency, regulation and taxation. However, he added: "We're seeing activity and we, as a body, are participating in assisting companies with contingency plans, particularly in those companies which are foreign owned." Buchan said he was not aware of anything as dramatic as Standard Life's disclosure on Thursday that it was setting up English companies as a contingency because of worries about currency, regulation and taxation. However, he added: "We're seeing activity and we, as a body, are participating in assisting companies with contingency plans, particularly in those companies which are foreign owned."
Buchan said he had no hard evidence that investment decisions were being affected, but said: "It's going to be much more difficult to pitch a case for Scottish business to a multinational when they're competing with a business that might be, say, in Germany or in Ireland, where there's a great deal of certainty over the next five years … we're placed at a disadvantage just now." Buchan said he had no hard evidence that investment decisions were being affected, but added: "It's going to be much more difficult to pitch a case for Scottish business to a multinational when they're competing with a business that might be, say, in Germany or in Ireland, where there's a great deal of certainty over the next five years … we're placed at a disadvantage just now."
In its independence white paper, the Scottish government promised it will "prioritise a 50% reduction in APD, with a view to eventual abolition" – a policy backed by the chief executives at Glasgow and Edinburgh airports. Buchan told BBC Radio Scotland: "Major concerns lie around the currency issue – what's our currency going to be? Are we going to have some sort of ad hoc relationship with the pound?
From April, APD rates for the UK, excluding Northern Ireland, will range from £13 per passenger for short-haul economy tickets to £388 for long-haul premium tickets.
Buchan told BBC Radio Scotland: "Major concerns lie around the currency issue – what's our currency going to be? Are we going to to have some sort of ad hoc relationship with the pound?
"Of even more concern is what would happen with the rest of Europe: will we have EU membership and will we have free access to these markets.""Of even more concern is what would happen with the rest of Europe: will we have EU membership and will we have free access to these markets."
The status of APD has been the focus of repeated tussles in the debate over Scotland's constitutional future, since the duty could be cut or abolished in Scotland if more powers were devolved to the Holyrood parliament while remaining in the UK.The status of APD has been the focus of repeated tussles in the debate over Scotland's constitutional future, since the duty could be cut or abolished in Scotland if more powers were devolved to the Holyrood parliament while remaining in the UK.
With APD rates for long-haul flights devolved to Northern Ireland and set at 0% to help the Stormont government compete with Irish airports, Salmond's government began pressing for APD to be devolved to Holyrood before the independence referendum.With APD rates for long-haul flights devolved to Northern Ireland and set at 0% to help the Stormont government compete with Irish airports, Salmond's government began pressing for APD to be devolved to Holyrood before the independence referendum.
Despite being vigorously opposed by the Scottish Green party, the Scottish National party's junior partner in the Yes Scotland independence campaign, Salmond's government has made phasing out APD one of its main offers to Scottish voters. Despite being opposed by the Scottish Green party, the Scottish National party's junior partner in the independence campaign, Salmond's government has made phasing out of APD one of its main offers to Scottish voters. The policy is backed by the chief executives at Glasgow and Edinburgh airports.
Keith Brown, the Scottish transport minister, insisted that only independence would give Scotland the power to control APD and said Walsh's remarks increased pressure on the UK government to discuss his government's plans for a currency and banking union. Keith Brown, the Scottish transport minister, said only independence would give Scotland the power to control APD.
"Mr Walsh's comments further underline the UK government's duty to engage properly with the issues of the independence debate," Brown said. He added: "Mr Walsh's comments further underline the UK government's duty to engage properly with the issues of the independence debate.
"Instead, the self-styled Project Fear [the no campaign] are intent on wasting time engaging in their 'dambuster' strategy of scaremongering and attempting to bully people in Scotland to vote no." "Instead, the self-styled project fear [the no campaign] are intent on wasting time engaging in their 'dambuster' strategy of scaremongering and attempting to bully people in Scotland to vote no."