Meeting of the Parliament 25 April 2017
I cannot deny that logic—there is no point having a fight about something that no one would disagree with.
The committee made a wide range of recommendations in its stage 1 report. I will not have time to address all of them in my speech, but I want to comment on three specific issues that emerged during the committee’s scrutiny of the bill and areas where the committee considered that improvements could be made. The issues are: the evidence base for the proposed 50 per cent reduction in ADT during the current parliamentary session; how outcomes will be monitored; and how the exemptions to ADT will be dealt with.
Although it is not part of the bill, the committee considered the Scottish Government’s stated policy intention to reduce ADT by 50 per cent and ultimately to abolish ADT when resources allow. It is fair to say that, during our deliberations, the lack of the required level of evidence regarding the economic impact of the proposed 50 per cent reduction was a recurring theme. As a result, the committee recommended that the Scottish Government commission an independent economic impact analysis of the proposed reduction in ADT. I welcome the fact that the cabinet secretary’s response to the committee confirms that the Scottish Government has commenced the commissioning of such an independent economic analysis.
To date, the Scottish Government has not set out the tax rates and bands for ADT that it intends to apply. The committee recommended that, as well as publishing the proposed tax rates and bands, the Scottish Government should publish the forecast of the impact of the proposed 50 per cent reduction on the Scottish budget to 2021-22. I therefore welcome the Scottish Government’s response that it will provide a forecast of the economic impact on the Scottish budget at the same time as it sets out its secondary legislation plans for the ADT tax rates and bands that will apply from April 2018.
In a similar vein, the Scottish Government is required to publish a strategic environmental assessment alongside the tax rates and bands. We considered that the Scottish Government should publish an analysis of the likely increase in carbon emissions arising from the proposed 50 per cent reduction as part of the strategic environmental assessment. Again, therefore, I welcome the cabinet secretary’s announcement that a quantitative assessment of the greenhouse gas emissions will be published alongside the environmental report, as part of the strategic environmental assessment.
The committee heard a wide range of evidence from witnesses on examples from countries where taxation on air travel has been reduced or abolished. The committee welcomes the cabinet secretary’s previous commitment to provide further information on the experience of the Republic of Ireland and in particular the regional impacts within Ireland of the decision to abolish aviation tax.
An issue that relates to the economic impact of the proposed 50 per cent reduction in ADT is how the socioeconomic and environmental outcomes would be monitored. It is fair to say that there was a range of views on the committee on the outcomes that might result from the proposed reduction. However, the committee was unanimous in recommending that the socioeconomic and environmental outcomes in relation to ADT should be regularly evaluated and reported on to the Parliament every second year.
In evidence to the committee, the cabinet secretary indicated that the Scottish Government also thinks that it would be helpful to consider an evaluation of the outcomes that arise from a reduction in ADT. The committee recommended that the Government lodge amendments at stage 2 to place a duty on the Scottish ministers to that effect. I note that the Scottish Government does not intend to lodge such amendments, but I welcome the fact that the independent economic impact analysis will include consideration of the best way to design a robust monitoring and evaluation framework to assess the socioeconomic and environmental impacts of ADT.
Finally, on the absence from the bill of detail on the exemptions to ADT that the Scottish Government intends to apply, the Scottish Government has indicated that it intends to deal with the issue via secondary legislation. There was a range of views in the committee about the most appropriate legislative route through which to address the issue. The committee recommended—albeit by division—that the Scottish Government bring forward at stage 2 the detail of the exemptions that it intends to apply. I therefore welcome the cabinet secretary’s commitment that the Scottish Government will lodge amendments at stage 2 that detail the exemptions to the definitions of “chargeable passenger” and “chargeable aircraft” that the Scottish Government intends to apply.
I understand that it will not be possible to bring forward an amendment that relates to passengers who fly from all Highlands and Islands airports, as such an approach would require to be notified to and assessed by the EU under state-aid rules.
I put on record the committee’s appreciation of the constructive engagement that we have had with the cabinet secretary and his officials in supporting our scrutiny of the bill. I welcome the commitments that the cabinet secretary made in his opening speech and in his letter of 21 April in response to the committee’s report.
The committee supports the general principles of the bill.
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