Scotland: Smith Commission

Lord Shipley Excerpts

Thursday 27th November 2014 Lords Chamber

[Lord Wallace of Tankerness]

I agree with the noble Lord, Lord Soley, who I know has had a strong interest in these issues and how they affect not only Scotland but other parts of the United Kingdom. I repeat that the Government have made it clear that they will consider proposals for the establishment of a convention. As my noble friend Lord McConnell, who is sitting beside the noble Lord, knows, a convention is not necessarily a quick answer, but nor should it be an excuse for kicking things into the long grass.

[Lord Shipley (LD)]

I ask the Minister a specific question about air passenger duty. I refer to paragraphs 86 and 95 of the Smith commission report. Paragraph 86 gives the Scottish Parliament the power to charge tax on air passengers leaving Scottish airports, or it can decide to abolish it. That is the existing policy under the Scottish Parliament. However, the abolition of APD in Scotland but not in England would give a huge competitive advantage in the cost of air fares to those flying from Scotland compared to those flying from the north of England. I wonder whether, in line with the no-detriment principle in paragraph 95, the Government have any plans, should Scotland abolish APD, to abolish APD across the north of England.

[Lord Wallace of Tankerness]

My noble friend makes an interesting point, which I am sure my colleagues in the Treasury will note. I recall considering APD during the Calman commission. First, there is no guarantee. My noble friend says that the current policy of the Scottish Government is to abolish it or change the rates, but if they reduce one tax, they have to find the money for some of their spending commitments, which are not small, somewhere else. Therefore, I do not think we can necessarily be sure how that power, when devolved, will be used. Many other factors will come into a passenger’s choice of airport other than APD. If one was travelling, let us say, from Hull, I am not sure that one would want to take on the extra journey to go to Edinburgh, bypassing Newcastle, to start a journey. APD is only one part of a passenger’s choice.