Current status: Answered by Shona Robison on 22 August 2024
To ask the Scottish Government, further to the Transport Scotland paper, Aviation Statement and Key Priorities, on what date it began work to explore all options for the implementation of its proposed Air Departure Tax (ADT); for what reason it has reportedly not yet made a referral to the Subsidy Advice Unit at the Competition and Markets Authority (CMA); whether it has had any discussions with the CMA regarding this, and whether it has undertaken any work to prepare options for ADT, other than maintaining the current rates and bands.
The introduction of Air Departure Tax (ADT) was deferred due to state aid issues raised in relation to replicating the existing Highlands and Islands exemption that currently exists under Air Passenger Duty. As of January 2023, Scottish Ministers have a responsibility to ensure all subsidies – including tax exemptions – comply with the UK Government’s subsidy control regime introduced in the Subsidy Control Act 2022.
A referral to the Subsidy Advice Unit at the Competition and Markets Authority (CMA) is necessary where a subsidy has a greater potential to lead to undue distortion and negative effects on competition or investment within the UK, or on international trade or investment. The Scottish Government has not yet had any specific discussions with the CMA regarding a future referral of a prospective Highland and Islands exemption but has had high-level discussions regarding the process through which a referral could be made. Prior to introducing ADT, the Scottish Government will assess whether a prospective Highlands and Islands exemption requires a referral to the CMA.
The Scottish Government continue to explore all options to implement ADT in a way that protects Highlands & Islands connectivity and complies with the UK Government’s subsidy control regime. The UK-wide Air Passenger Duty will continue to apply in Scotland until ADT is implemented.