Meeting of the Parliament

Meeting date: Tuesday, April 25, 2017

Official Report 1046KB pdf

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Air Departure Tax (Scotland) Bill: Stage 1

The next item of business is a debate on motion S5M-05283, in the name of Derek Mackay, on the Air Departure Tax (Scotland) Bill at stage 1.

16:27  

I am delighted to open the stage 1 debate on the Air Departure Tax (Scotland) Bill. The devolution of powers over air passenger duty to the Scottish Parliament was recommended by the Smith commission in November 2014. Following the passage of the Scotland Act 2016, the Scottish Parliament now has the power to legislate for air departure tax, which will replace APD in Scotland. In the programme for government, the Scottish Government announced that a bill would be introduced to establish a tax to replace APD in Scotland. To deliver on that commitment, the Air Departure Tax (Scotland) Bill was subsequently introduced on 19 December 2016.

Under terms agreed between the Scottish and UK Governments in the fiscal framework, APD will cease to apply in Scotland from 1 April 2018, the block grant will be adjusted downwards and, if the bill is enacted, ADT will replace APD from that date.

Separately, the Scottish Fiscal Commission will assume responsibility for producing independent forecasts of receipts from ADT for future Scottish Government budgets. Those forecasts will reflect the Scottish Government’s policy for ADT at that time.

The bill establishes the general structure and operation of ADT, which is a tax to be charged on the carriage of passengers on flights that begin in Scotland. The tax will apply only for the carriage of chargeable passengers on chargeable aircraft, and will be payable by the aircraft operator.

Revenue Scotland, Scotland’s tax authority for devolved taxes, will be responsible for collecting and managing ADT, which it has done efficiently and effectively since 1 April 2015 for Scotland’s other devolved taxes, which are the land and buildings transaction tax and the Scottish landfill tax. The bill as introduced also includes powers for Scottish ministers to set tax exemptions, tax rate amounts and tax bands through secondary legislation. I will say more on exemptions later. Setting tax bands and tax rate amounts in subordinate legislation is consistent with the approach adopted in relation to other devolved taxes.

The Scottish Government is seeking parliamentary approval for the bill in advance of the summer recess. With the core foundations of the tax in place, we will then set tax rates and tax bands through secondary legislation in the autumn. The secondary legislation will be subject to the affirmative procedure, which means that Parliament will have the opportunity to scrutinise tax bands and tax rate amount proposals at a later date. Those cannot come into effect without Parliament’s approval. In future years, tax bands and tax rate amounts—

Will the cabinet secretary take an intervention?

Of course, but after I make my point.

In future years, tax bands and tax rate amounts will be set as part of the budget process, which is consistent with existing practice for other devolved taxes.

At what point in the process will the cabinet secretary outline the cuts that will have to be made to the Scottish budget to take account of the up to £189 million less that will be in the budget as a result of the introduction of a policy of reducing ADT by 50 per cent?

I am coming to the policy intention and I will engage with the wider community, Parliament, political parties and the sector to understand and outline our position. However, it is clear that the Government has had a long-standing commitment to delivering a 50 per cent reduction in the overall burden of ADT by the end of the current parliamentary session, and to abolishing the tax when resources allow. That is a long-standing position to support our economy.

This is the central contradiction in the bill. The minister is now saying that he is going to conduct discussions with all the parties and economic analysis. Surely the Government should have done that before deciding what its tax policy is going to be. What on earth is the rationale for deciding on a tax policy before having a clue what its impact is going to be?

The Scottish Government has been clear. We support that position, and we have looked at the evidence. I have been asked to expand on the independent evidence and I have said to the committee that I am willing to do that.

The plans are a key part of the Scottish Government’s economic strategy, in particular in boosting trade, investment, influence and networks, which are especially important given the economic threat posed by Brexit. Scotland’s airports are competing on the world stage to secure new routes and capacity. Reducing the tax burden helps to ensure that there is a more level playing field with the many other European airports that are competing to secure the same airlines and similar routes. New routes will enhance business connectivity and tourism.

Today, we are proposing the foundations of the tax. I will return to tax rates and bands in due course, as is the case with other devolved taxes.

As is also the case with other devolved taxes, the Scottish Government has taken and will continue to take a consultative and collaborative approach to engaging stakeholders on how ADT should be structured and operated. We published a policy consultation last year that generated a range of views. Since then, we have worked carefully to refine our legislative proposals, reflecting on the responses that we received. In addition, in August 2015 we established a stakeholder forum, which I chair, to provide input into the development of our policy on and legislative proposals for ADT.

Revenue Scotland is also taking a collaborative approach to stakeholder engagement and is actively working with aircraft operators and others on matters relating to the collection and management of ADT, such as information and communications technology and guidance.

The Scottish Government has also listened to the responses that the Finance and Constitution Committee received during its consideration of the bill at stage 1, and I thank that committee and the Delegated Powers and Law Reform Committee for their detailed scrutiny of the bill and for the conclusions and recommendations in their stage 1 reports.

The Scottish Government welcomes the Finance and Constitution Committee’s support for the general principles of the bill. Last Friday, I responded to all the issues raised in the recommendations in the committee’s report. I will highlight some of the key aspects of that response. The Scottish Government agrees with the committee and stakeholders that it is important that our plans for ADT are supported by robust evidence and that the impacts are monitored over time. The Scottish Government has therefore commenced the commissioning of an independent economic assessment of the Government’s plans for a 50 per cent reduction in the overall ADT burden by the end of the current parliamentary session.

Will the minister take an intervention?

I will maybe take a further intervention after I have made some more progress.

The assessment will report in the autumn, no later than when the Government sets out its secondary legislation plans for tax rate amounts and bands. In addition to that analysis, a robust monitoring and evaluation framework will be put in place for assessing the economic impacts of ADT in the future.

The Scottish Government has listened to the environmental concerns about our plans that some respondents have raised and is already committed to undertaking a full strategic environmental assessment of our ADT reduction plans. The screening and scoping report, which is an example of good practice, openness and transparency, was made available last year for full public comment.

The next main step of the SEA process is to publicly consult on the Scottish Government’s plan for an overall 50 per cent ADT reduction along with an accompanying environmental report, which will outline the findings of the assessment of the plan against a wide range of environmental topics, such as climate factors, air quality and biodiversity.

As well as the SEA, the Scottish Government is currently undertaking quantitative assessments of the likely greenhouse gas emission and noise impacts of our overall 50 per cent reduction plan. The noise assessment will be published in the autumn, no later than when the Government sets out its secondary legislation plans for the ADT tax rate amounts and bands that will apply from 1 April 2018.

So far, the finance minister has not mentioned the fact that Transport Scotland has concluded that what has been proposed will mean 60,000 tonnes of carbon dioxide emissions going into the atmosphere every year. Is not that a rather important point that he seems to have omitted so far?

In giving further detailed evidence to the Finance and Constitution Committee and others, the Government has made it clear that we will need to work harder in other areas of the environment and in transport, recognising the policy’s impact on emissions, in aiming to achieve our very ambitious climate change targets.

Supporting information will be published for the SEA consultation on the Scottish Government’s approach.

I turn to exemptions and the Highlands and Islands issue, which is very important to many people.

Although there is a case for considering exemptions alongside tax bands and tax rate amounts—an exemption being a zero rate, in effect—the Scottish Government has listened carefully to stakeholders, the Finance and Constitution Committee and the Delegated Powers and Law Reform Committee, and we will lodge amendments at stage 2 that provide for passenger and aircraft exemptions.

I bring to members’ attention an important policy and legal matter concerning the introduction of an ADT exemption for passengers who fly from Highlands and Islands airports. A similar exemption has applied under APD since 2001. The Scottish Government strongly supports retaining a like-for-like exemption under ADT, and is interested in suggestions that have been made during stage 1 for enhancing the exemption. As ADT is a new tax devolved under the Scotland Act 2016, the Scottish Parliament is legislating for the first time on the matter. After careful consideration, the Scottish Government’s view is that such an exemption has to be notified to and assessed by the European Commission under state-aid rules before it is implemented in compliance with European Union law. The Scottish Government will work closely with the UK Government to resolve that matter. As the EU member state, the UK is responsible for notifying the exemption to the European Commission. I have spoken to the Secretary of State for Scotland and the Treasury about the matter, and I am exploring alternative solutions. I will, of course, ensure that Parliament and stakeholders are kept regularly updated on the issue.

In conclusion, taken together, the provisions in the bill provide the basis for a tax that is well understood by taxpayers and is simple and efficient to collect and manage. The secondary legislation powers in the bill, which are, in most circumstances, subject to the affirmative procedure, provide sufficient legislative flexibility to make future changes to the tax in order to support key Government policies or reflect changing market conditions, or to make changes in light of Revenue Scotland’s operational experience of collecting and managing the tax.

There is general support from stakeholders and support in the chamber for the principles of the bill and the establishment of a tax to replace APD in Scotland. I appreciate that, underneath that support, there is a range of views on whether the tax should be reduced and, indeed, how that tax reduction should be applied to maximise the economic benefit for Scotland.

The Government remains of the view that our approach of reducing the overall burden of the tax by 50 per cent by the end of the current session and then abolishing the tax when resources allow will deliver strong economic benefits for Scotland. I look forward to debating those and other issues this afternoon.

I move,

That the Parliament agrees to the general principles of the Air Departure Tax (Scotland) Bill.

I call Bruce Crawford to speak on behalf of the Finance and Constitution Committee.

16:40  

It is my pleasure to speak as the convener of the Finance and Constitution Committee. I put on record my thanks to my fellow committee members for the constructive manner in which they went about their deliberations on the Air Departure Tax (Scotland) Bill. I also pay tribute to the professionalism of the clerking team in assisting us with our scrutiny of the legislation and thank all of the stakeholders for their contributions.

The Air Departure Tax (Scotland) Bill marks another important step, a milestone or even—dare I say it—a new departure in the implementation of the Scotland Act 2016. In scrutinising the bill, the Finance and Constitution Committee recognised that it is essentially an enabling bill. That is, the bill provides the means to tax passengers departing from Scottish airports when the UK’s air passenger duty is disapplied in Scotland with effect from April 2018. Without this bill, passengers leaving from Scottish airports would be able to fly untaxed.

I know that some members will think that that is a good idea while others will not. Whatever views there are, the committee supports the legislation enabling such a tax to be levied in Scotland.

I am sure that the committee convener would recognise that it would be a more accurate description of the situation to say “if no such bill were passed”. We do not have to pass this bill. If this bill were to fall, the Government would be forced to come back with a better one.

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.

16:48  

I echo the Finance and Constitution Committee convener’s thanks to everyone who gave evidence to the committee and to the committee clerks and the Scottish Parliament information centre for all their assistance in the preparation of the stage 1 report. As we heard, the deliberations of the committee were, with a few notable exceptions, largely consensual.

As the convener pointed out, the background to the bill is the devolution of air passenger duty to Scotland as part of the package of devolution that is being put through by the current UK Conservative Government in response to the Smith commission report. That allows the Scottish Parliament to decide to take a different route in relation to the taxation of air travel, should it choose to do so.

The bill that is before us will simply create a mechanism for the collection of a tax. Were it not to be implemented, no tax on air travel from airports in Scotland would be payable from next year. It therefore makes sense to legislate to put in place a framework for the continued collection of a duty from air passengers.

The bill largely reflects the existing framework that is in place at UK level for air passenger duty.

On the face of it, I do not disagree with the basic description that Mr Fraser has given. However, can he recall any other situation in which a Government has proposed legislation to create a tax that that Government basically thinks ought not to exist?

I appreciate that Mr Harvie will be unhappy this afternoon, as the proposals combine two things that he likes least in the world: aviation and tax cuts. It must be horrendous for poor Mr Harvie to have to consider them together in one bill this afternoon.

The Scottish Government has not had much experience of dealing with taxation and, frankly, nothing would surprise me about the Scottish Government’s approach to taxation. However, we will learn more in due course.

Let me return to what I was saying before I was interrupted. The evidence that we heard from all interested parties, particularly the airline industry, which is responsible for the collection of the tax, is that they do not want a completely different framework established for Scotland; they want the mechanisms that are currently in place to be replicated as closely as possible. In taking evidence, the committee detected no appetite for creating a wholly new tax on a different basis from the existing air passenger duty.

Indeed, the only substantial difference seems to be that the tax has been given a different name. It is being called air departure tax rather than air passenger duty. Cynics might suggest that it is simply an exercise in changing the name for the sake of it rather than a reflection of any different approach having been taken in practical terms.

In general terms, the Scottish Conservatives are supportive of the bill and will be happy to vote for the general principles at decision time tonight. However, we raised one principal concern at stage 1, and it was raised by my colleague Adam Tomkins on a number of occasions when we took evidence, as is reflected in the stage 1 report.

Will Mr Fraser take an intervention?

I am going to make some progress. I will give way later if I have time.

As Bruce Crawford pointed out, the bill does not stipulate the exemptions to the definitions of “chargeable passenger” and “chargeable aircraft”. In other words, it does not identify which category of passenger and aircraft will not be subject to the tax. As the report says, that is unusual in tax legislation, where the scope of taxation is provided for in primary enactments. That is different from the setting of rates and bands, which is normally left to secondary legislation. The equivalent legislation at the UK level is contained in the Finance Act 1994, where the exemptions from APD are set out, and that is reflective of the approach that is taken with other devolved taxes such as land and buildings transaction tax.

As we have heard, the committee agreed by a majority that the Scottish Government should lodge amendments at stage 2 to insert detailed provision for exemptions from the definition of “chargeable passenger” and “chargeable aircraft”. I am pleased that the Scottish Government has indicated that it accepts the point and will lodge stage 2 amendments on that issue.

Much of the evidence that the committee took addressed the Scottish Government’s policy intent to pursue a 50 per cent reduction in air departure tax in order to stimulate economic growth. That point is not covered in the bill, as the setting of rates and bands will be contained in subsequent legislation. It was clear from the evidence that the committee took that there is a lack of an appropriate evidence base for the economic benefits of cutting ADT. Edinburgh Airport Ltd commissioned an economist’s report, which showed economic advantage from the reduction of the tax, but it is fair to say that, beyond that, there is a lack of independent economic assessment.

All those who gave evidence, on whatever side of the argument, agreed that such independent assessment would be welcomed, and the committee’s recommendation was, therefore, that independent economic analysis of the proposed reduction of ADT should be published at the same time as, or ahead of, the Scottish Government’s proposal of its approach to ADT rates and bands. The Scottish Government has accepted that point. The committee had similar views in relation to the environmental impact of cutting ADT, which should be addressed by the Scottish Government, and it has accepted that point, too.

The Scottish Conservatives would support an overall 50 per cent reduction in ADT rates, but our preference would be for the reduction to be targeted at long-haul flights, where we believe the greater economic benefits would derive. The evidence shows that those who travel long haul tend to stay in Scotland longer and have more money to spend. The economic benefit to Scotland would, therefore, be greater if we encouraged the growth of long-haul flights. Moreover, in cutting ADT, there would be the opportunity to attract more long-haul operators to base themselves in Scotland, avoiding the need for passengers to make connecting flights from Scotland to hub airports such as Heathrow and Schiphol. That, in itself, might prove an environmental benefit.

The committee heard evidence that, although reducing ADT on domestic or short-haul flights might well have a negative environmental impact by encouraging more of a shift away from surface travel towards air, the same would not necessarily be true of a reduction in ADT on long-haul flights. In its evidence, Virgin Trains told the committee of its concern that cross-border rail journeys between Scotland and London, in particular, would become less competitive with air travel if domestic ADT were to be reduced, but the company was not opposed to a reduction in long-haul ADT; indeed, it believed that encouraging more visitors to the UK through such a move would be complementary to the expansion of rail travel within the UK.

Come to a close, please.

Therefore, I believe that, for economic and environmental reasons, a cut in long-haul ADT as opposed to a cut across the board would make sense, but we accept the need for a stronger evidence base, and we look forward to the Scottish Government bringing forward that evidence when it sets out its case for rates and bands in due course.

16:55  

Every party that is represented in the Parliament is a signatory to the Smith agreement. As all the previous speakers have said, a commitment was given as part of that agreement to devolve to this Parliament power over taxing the carriage of passengers from Scottish airports. That commitment, which was supported by all parties, should be honoured, and it is for that reason that Scottish Labour will vote to allow the Air Departure Tax (Scotland) Bill to progress beyond stage 1.

As has been said, the bill is an enabling bill that is supported in principle by the Finance and Constitution Committee. It is required if we as a Parliament are to give the Scottish Government the authority to switch on a new air departure tax when air passenger duty is switched off in Scotland next year. For us, endorsing the bill at stage 1 means endorsing the principle that the Scottish Government should levy its own air departure tax, in line with the conclusions of the Smith commission. It does not in any way mean endorsing the Scottish Government’s approach to what the rates and bands of ADT should be. Scottish Labour objects to the Scottish National Party’s plans to cut air passenger duty in half and then phase out the tax entirely, and we will vote against cuts to ADT rates when the time comes.

We support the bill because we believe that there should be an air departure tax, but we oppose a tax cut for the aviation industry because it is the wrong priority at the wrong time. Across Scotland, our schools and local services are facing hundreds of millions of pounds of cuts. At a time when we should be protecting the services that people rely on and finding new ways to invest in our communities, it is absurd that a tax cut for the aviation industry should be the SNP Government’s priority, and it is unacceptable that the Scottish Government cannot tell us what the impact of its proposals to cut the tax will be on the budget.

Since 2011, this Government has cut £1.5 billion from schools and local services, with £117 million of those cuts falling in Renfrewshire, which the finance secretary and I represent. Across Scotland, SNP cuts threaten schools, care services, road repairs and more. There are public sector workers who cannot afford to make ends meet and there are many local services that our councils cannot afford to sustain, yet the SNP tells us that it can afford to make a business-class flight cheaper.

It is estimated that the value of the tax break could be as high as £189 million. As James Kelly said, the key question for the finance secretary to answer is what will be cut to pay for it. The axe will have to fall somewhere. Will it fall on schools or on hospitals? Will it take the form of cuts to bus passes for the elderly? It is time for the SNP to be honest about its plans. Alternatively, are we just set to see £189 million of unspecified cuts over the next few years?

A 50 per cent cut in APD will not make Scotland any fairer. Analysis from the Office for National Statistics indicates that halving APD would save the top 20 per cent of earners £73 a year while saving the poorest an average of only £4.50 a year. Those on higher incomes fly more often, so they will benefit the most from any cut.

A 50 per cent cut in, or the complete phasing out of, ADT will not make Scotland any greener, either. The Scottish Government accepts that it could lead to a 3 per cent increase in aviation emissions, which could have a severe negative effect on our climate. The leaders of every party that is represented here today signed up to the climate change agreement, which committed us to building a low-carbon transport system for Scotland. Incentivising air travel at the expense of cross-border rail will contribute nothing to the fight against climate change.

As has been said, the Finance and Constitution Committee has recommended that the Scottish Government publish an analysis of the likely increase in carbon emissions arising from the proposed tax break. The committee also recommended that amendments be lodged at stage 2 to place a duty on ministers to report every second year on the socioeconomic and environmental outcomes from the air departure tax. However, we should go further and ensure that stronger safeguards are written into the bill at stage 2.

The Scottish Government has not presented us with a convincing case that a tax cut will make Scottish aviation any more competitive. The Government decided on its policy before considering the facts and is only now commissioning research to back up its claims. However, we know now that changing the tax regime will not, in itself, boost connectivity or improve our infrastructure.

There was some discussion in the Finance and Constitution Committee about the Irish experience of abolishing APD, which is interesting. The growth in passenger numbers that is often attributed to the tax cut in Ireland actually coincided with growth in passenger numbers across Europe, including in Scotland, so it is not at all clear that the tax cut was a stimulus for growth. As Chris Day from Transform Scotland pointed out,

“It is noticeable that the upturn in flights at Dublin was in hand before Ireland abolished APD.”—[Official Report, Finance and Constitution Committee, 22 February 2017; c 25.]

Here in Scotland, Edinburgh airport recorded an 11 per cent increase in passengers in 2016 despite the existing APD regime being in place. We regularly see motions from MSPs across the Parliament welcoming new routes and record passenger numbers at their local airports, celebrating the success of the Scottish airports but, at the same time, undermining the minister’s case that an ADT cut is a necessity.

There is no evidence that the Scottish Government’s chosen approach to air departure tax will make Scotland fairer, greener or more economically resilient. Next to no evidence has been produced in support of the Scottish Government’s case. The Finance and Constitution Committee says unequivocally in its stage 1 report:

“there was considerable consensus across all spectrums of opinion that the evidence base underpinning the proposed reduction required development ... the proposed reduction in ADT currently lacks an adequate evidence base.”

The Scottish Government says that it intends to listen and consult before it sets ADT rates and bands later this year, but we already know from the existing Scottish Government consultation that there is widespread opposition to the proposed tax cuts. If, following a consultation, Mr Mackay finds yet again that there is opposition to an ADT cut, will he abandon his plans for an airline tax giveaway? We would welcome an answer to that question.

You must close now, Mr Bibby.

Will the finance secretary listen to the majority? It is not often that the SNP does that.

We will support the introduction of an air departure tax today, but we will not support the proposals to cut that tax, which the Scottish Government has been unable to justify for months.

You must finish, Mr Bibby.

Let us use the Parliament’s powers to create a fair, proportionate and stable air departure tax regime.

We move on to the open debate. We have no time in hand, so I ask for some self-discipline from speakers, please.

17:03  

As of next year, the Scottish Parliament will set the rates for a new Scottish air departure tax. That presents the Government with an opportunity to design a tax around the needs of the Scottish economy and to boost international connectivity and help to generate sustainable growth. Our current level of air passenger duty, as the UK tax is known, makes it one of the highest taxes of its kind in the world, and by far the highest of its kind in Europe. Our Government stood on a manifesto commitment to reduce the tax, which will put Scottish airports on a more even footing with many other European airports that hope to secure the same airlines and routes as our local airports.

I welcome the Scottish Government’s commitment to helping our airports to secure new international connections. I hope that we will be successful in securing new links with Europe, new long-haul routes and good connections to world hubs. That will show that Scotland is open and ready to do business on an international stage.

Many submissions to the Finance and Constitution Committee claimed that an ADT reduction would lead to increases in routes, capacity and passengers. Several airlines, such as easyJet and Ryanair, have confirmed that, as they are already making commitments to increase their presence in Scotland if such a reduction is implemented. That offers the prospect of a significant boost to our economy that will help businesses, create jobs and boost tourism. All of that should be welcomed.

In my region, and particularly in the islands, air travel is not a luxury but a necessity for businesses and communities. It is often the simplest and most practical way for people to get to where they need to be. For many folk in the islands, air travel is essential for both their professional and private lives. Many people who fly to and from the islands and other parts of Scotland do so out of necessity rather than choice. It was said in evidence to the committee that one in four passengers who travel on routes from Glasgow, Edinburgh and Aberdeen to the Highlands and Islands are funded directly by a public service such as a council or the national health service, which funds patients and staff who need to travel. When I worked for the NHS, I regularly had to fly from Inverness simply to be able to do my job. Choosing to fly to attend an education session in London represented the difference between one day off work and three.

Loganair alone carries about 500,000 passengers a year on routes that are exclusively in Scotland, and all bar one of those routes cross a body of water. On many routes, trains will not be a viable travel option, and all other alternatives to flying will often be significantly more time consuming and impractical. Even from an environmental perspective, particularly on those routes where trains are not an option—for example, between Edinburgh and Lerwick—to travel by car and ferry could generate more emissions than a direct air journey.

It is clearly important for the local economy that the current exemption under APD for flights departing from the Highlands and Islands is continued under the new tax. The exemption ensures that there is no added expense for that essential travel, so I am really pleased to see that the Scottish Government supports it in principle and hopes to implement it as long as it complies with state-aid law, as any exemption of that sort rightly should.

There is an obvious concern that a reduction in air departure tax will lead to an increase in aviation emissions due to the additional routes and flights operating in Scotland. I welcome the prospect of additional investment and economic activity as a result of a reduction. However, as someone who is committed to addressing climate change, I would be concerned by any suggestion of a significant increase in emissions. I am comforted by the fact that the Committee on Climate Change has found that any increase in emissions as a result of the change is likely to be manageable.

The Government’s consultation paper on ADT estimated that a 50 per cent reduction in the tax would lead to a maximum increase in aviation emissions of around 3 per cent, which would be an increase of only 0.1 per cent of total Scottish emissions.

I do not dispute the figures, but all of us, including all industries, have a responsibility to make a serious contribution to reducing emissions. Is there any other industry that the member would like to give a free pass to?

The short answer is no. I do not think that the policy is giving a free pass to the air industry. On the benefits, we have to look at the policy and at dealing with emissions in the round.

It is important to recognise that the increase would not be significant enough to affect the Government’s intention to reduce overall transport emissions by a third between 2014 and 2030. I welcome that ambition and I am glad that a reduction in air departure tax would not affect that target.

The Government has given both the environmental impact of the policy and its financial implications thorough consideration thus far, and it has given assurances that it will continue to do so as the policy moves forward. As the tax is newly devolved, this will be the first time that the Parliament has been able to make changes to this area of taxation, and it is vital that we consider any potential changes from all relevant angles before they are implemented.

17:09  

When travelling down on Sunday I was wondering what I could say about the Air Departure Tax (Scotland) Bill at stage 1. I thought—as is often the problem when following Murdo Fraser—“What more is there to say?”

The bill will introduce an air departure tax at the same time as the current APD tax is switched off, and it simply creates a mechanism for the collection of a tax. Do the Scottish Conservatives support the general principles of the bill at stage 1? Yes. However, there is more to say about what the bill does not say.

Last May, the Scottish National Party manifesto said of air passenger duty:

“When the power to do so is devolved, we will reduce the overall burden of APD by 50 per cent, with the reduction beginning in April 2018 and delivered in full by the end of the next Parliament.”

The finance secretary is on record as believing that cutting air passenger duty will boost growth and, when announcing the policy, Derek Mackay said that the proposed 50 per cent cut is

“a fundamental component of our efforts to boost Scotland’s economy through ... generating sustainable growth.”

The other week, I said in the debate on Scotland’s economy that we need a road map—a plan—to revitalise the Scottish economy. It is always dangerous to assume anything in politics, but I and the rest of the Finance and Constitution Committee members were pretty hopeful that the Government, and the SNP when setting its manifesto, must have had sufficient evidence to make such a bold assertion about the policy’s impact.

However, when the finance secretary appeared before the committee on 1 March and the convener asked whether the Government had

“undertaken any economic assessment of the impact of the 50 per cent reduction in the tax”,

the finance secretary’s answer was instructive. He said:

“To the best of my knowledge, we have not commissioned any independent research of our own, but we have certainly looked at all the reports that have been ... provided, and we have also looked at the experience in Ireland.”—[Official Report, Finance and Constitution Committee, 1 March 2017; c 5.]

The committee received a letter dated 21 April in which the Scottish Government stated that it had

“commenced the commissioning of an independent economic analysis of the ... 50% reduction”

plans, which would

“report in the autumn”

when

“the Government sets out ... the tax bands.”

That is good, but it is not good enough. In its totality, the bill is a major piece of legislation. There could be a major change to the airline industry, airports, the economy, the environment and the macroeconomic UK picture. Derek Mackay is probably right that a properly targeted reduction in the tax will boost Scotland’s economy. However, it is deeply troubling that the Scottish Government has to date done no assessment and commissioned no independent economic analysis of the plan’s economic or environmental impact. It is also troubling that the Scottish Government has based its plans on the reports that have been provided to it while extrapolating principally from a country whose situation is in many respects completely different from the Scottish situation.

The member says that the Scottish Government has done no economic analysis of its plans. What economic analysis has he done of his own plans?

Andy Wightman makes my point for me. We asked the Government to bring forward its plans, given that it made a manifesto commitment. We have looked at the extensive evidence that was provided to the committee, but we are not putting forward a policy.

I will address something else. As Maree Todd pointed out, there is an air passenger duty exemption for passengers who fly from Highlands and Islands airports. Derek Mackay talked of the Scottish Government’s strong support, as a principle, for retaining a like-for-like exemption and said that it wants to extend that. He has concluded that removing APD from air passenger transport in the Highlands and Islands is a good way to support the area economically.

David Horne from Virgin Trains warned the Finance and Constitution Committee of his concerns about modal shift should we start to do things with air passenger duty. The Scottish Government needs to be careful of modal shift in the central belt but, when the train is an unrealistic alternative or not the right means of transport for a local economy—such as in the north-east or the Highlands, as Maree Todd said—we ought to encourage flying, as people are trying to do in the Highlands and Islands.

The fact is that many of my constituents in the north-east have little option but to fly if they need to make journeys to London or the midlands. Aberdeen airport has suffered badly through the oil downturn, and passenger numbers are recovering only now following two years of month-on-month decline. When I asked in the Finance and Constitution Committee for an exemption to be considered for Aberdeen airport in the same way as for the Highlands, Mr Mackay told us that that would not happen and would not be considered. His view was that the best way to achieve the strategic objectives of boosting air connectivity and generating sustainable economic growth will be to apply ADT equally to all areas and airports and that a differentiated approach would be likely to increase complexity, administration requirements and compliance difficulties.

Those propositions clearly do not marry, and I find it deeply concerning that the Government will, for reasons of expediency and apparent ease, dismiss without investigation one proposition, while pursuing a differentiated policy that is fraught with complexity and EU red tape simply because that is the way it has always been and the assumption is that that is the way it should stay.

As I said at the outset, the Scottish Conservatives back the bill, and there is a clear reason why: there is not really much of substance in it to oppose. What is much more interesting—of course, I use that as a euphemism for “concerning”—is what is not included, and that is what has been assumed or decided without independent investigation.

17:15  

I am pleased to speak in support of the Government’s proposals to reduce and then eliminate air passenger duty, which is the tax that the UK Government imposes on people every time they fly. The UK imposes the highest air passenger tax anywhere in Europe—more than three times the rate that France applies and about double what Germany and Italy charge their citizens.

Since the tax was introduced in 1993 by the then Tory Government, the tax rate for long-haul trips in the lowest class of travel has increased by a spectacular 630 per cent. The tax raises approximately £3 billion a year. When Scotland reduces the tax, from as early as April next year, that will place us in a much more competitive position, and the rate for our version of the tax will be much lower than the rate in England and Wales.

Will the member give way?

Will the member give way?

I ask the members to give me a wee minute to develop my point, if they do not mind.

England and Wales will remain the most expensive countries for band B economy flights, while Scotland will drop to ninth in that category. The boost that cutting the tax—initially by 50 per cent—could bring to Scotland is significant. It will help us to achieve a more level playing field with airports in other European countries, and the shift to Scotland of many flights will have a significant economic impact.

I am happy to take an intervention from James Kelly.

Willie Coffey outlines all the money that will be saved in tax, but £189 million a year will be taken from the Scottish Government budget. Which areas will be cut in order to find additional revenue?

I thank James Kelly for raising that point. Labour seems to forget, or completely overlook, the economic impact that eliminating the tax will have.

I will speak about Prestwick airport in a moment. I hope that Labour and Mr Kelly support the investment in growth and jobs that that airport could bring to the Ayrshire economy. If they do not, that may explain to Mr Kelly why Labour has no MPs or MSPs in that county or in that part of Scotland.

EasyJet has said that it will increase capacity in Scotland to accommodate an extra 1.5 million passengers, and Ryanair has said that it will add a further 1 million passengers, on top of its 17 new routes, when the 50 per cent cut takes place.

The impact of abolishing air travel tax in Ireland has been significant, and not just for the city of Dublin. Since that tax was abolished in 2014, Dublin has experienced the highest rate of passenger growth in Europe, with year-on-year rises of approximately 15 per cent. As a direct response to the abolition of the travel tax in Ireland, Ryanair introduced 25 new routes and guaranteed an extra 1.2 million passengers each year. Dublin airport handles about 28 million passengers per year, which can be compared with Edinburgh airport at around 12 million and Glasgow airport at 9 million. Regional airports in Ireland have benefited, too, with an increase in the frequency of flights that serve Cork, Shannon and Donegal.

Dublin airport’s managing director said that

“The growth in passenger numbers”

has had

“a significant impact on the Irish economy”,

with higher visitor numbers and increased trade and investment coming in. According to Airlines UK, when the Netherlands abolished its aviation tax in 2010, it experienced an increase of 20 million in the number of passengers departing from Dutch airports.

The Edinburgh airport study suggested that, by 2020, the policy will have created nearly 4,000 new jobs and brought about £200 million extra to the Scottish economy. However, it is not just Edinburgh and Glasgow that will benefit from the cut in the tax. Prestwick in Ayrshire stands to benefit from the tax reduction, as the Irish regional airports have.

In 2014, I attended a meeting of the British-Irish Parliamentary Assembly at which Ryanair’s Michael O’Leary said that, if Scotland abolished what he described as a “mindlessly stupid policy”, he could double passenger numbers at Prestwick alone. Only a few weeks ago, Ryanair said that the scrapping of the tax will enable it to base more aircraft in Scotland, add more routes and create thousands of additional jobs. That is a huge opportunity for Prestwick and the wider Scottish economy.

Prestwick contributes about £60 million a year to the Scottish economy and it is well placed—as members will know—to become the front runner in the selection of a site for the UK’s first spaceport, because of its existing facilities infrastructure and the meteorological conditions. It would therefore be welcome if all parties in Ayrshire got behind Prestwick airport and distanced themselves from the comment of an Ayrshire Tory councillor that the airport should shut.

In its examination of the Government’s proposals, 10 of our 11 members of the Finance and Constitution Committee supported the bill’s general principles, while asking the Scottish Government to provide more analysis of the policy’s economic and environmental impacts. I am pleased to note that the economic assessment that all members sought will be carried out and published no later than the autumn of this year, as the cabinet secretary said in his opening speech.

I expect that other colleagues will want to focus on emissions a bit more closely, but we heard that the policy could give rise to an increase of 3 per cent in greenhouse gas emissions. That would represent about 0.1 per cent of total Scottish emissions and was described as “manageable” by the UK Committee on Climate Change.

The economic opportunities that the policy brings to Scotland and to Prestwick airport in particular are immense. The Irish experience is that, for every additional million passengers achieved, they have managed to create an extra 1,000 jobs. That would be a fantastic boost for Scotland and for Prestwick and I am delighted to back the Scottish Government’s proposals to reduce and then get rid of this travel tax.

17:21  

There are many competing priorities for any Government. There are so many areas of our society that need the urgent attention of Government and this Parliament. The public services that civilise our society are under huge pressure, with many at breaking point. Whether it is the school system that educates our children, the care service that looks after our elderly and vulnerable citizens, or the police who keep our streets safe, they are all under pressure like never before.

Those areas should be the priority of this Government and this Parliament, but clearly they are not. The First Minister says that her priority is education and closing the education attainment gap, yet she is cutting the budgets of councils and colleges year on year on year. This Government has overseen the loss of 130,000 college places and cuts to lecturing staff and has failed to implement national pay bargaining; we are going to see strike action. That has all been driven by more than £200 million in budget cuts to our colleges. Where is the bill or legislation to address those issues?

What about our local services? Since 2010, £1.8 billion has been cut from council budgets. That is a 16 per cent cut to our local communities, our social services, our schools and our environment. There has been no legislation—no bill—to address those issues.

Will the member give way?

Certainly, if the member wants to explain that.

Does the member welcome the commitments that have already been made by commercial airlines to bring more business to Scotland as a result of the policy?

If Maree Todd listens, I will move on to that point in a minute. However, my point is that all the issues that I have raised are down to the political choices that have been made—

Excuse me, Mr Findlay—could you move on to address the motion that is under discussion, please?

I am just coming to that, Presiding Officer.

Those issues are all down to the political choices that have been made by this Government. I would have expected bills to address those issues, but what bills have been introduced? There has been a bill on independence—surprise, surprise. Then there is the bill on air passenger duty—yes, there is a plan to set up a system and bureaucracy to administer it, but behind that there is a plan to cut the duty and then to eradicate it completely. That is the plan.

Our public services are crying out for investment, cuts are crippling services and jobs are being lost by the tens of thousands. What is the action of this Government? Is it to take a progressive position, raising money from those who can afford it to pay for services to help those in need? Is it to address the crisis in those public services? No. It is to rip another £200 million to £300 million of scarce revenue from those services while handing a £73 a year tax cut—at the minimum—to the wealthiest people and a £4.50 a year tax cut to the least wealthy.

On which planet is that progressive or fair? I will give way to the finance secretary if he wants to tell us how the policy that he is promoting is progressive. There you go—he is glued to his chair. The finance secretary cannot answer that, because he knows that the policy is not—

Will the member give way?

Oh—here is Merlin to tell us how it is progressive.

It says a lot that Mr Findlay has to invite me by making some sort of insult. Does Neil Findlay not care for the employees of, for example, Edinburgh airport, who are trying to make an economic success of it? It is part of our connectivity and economic success story, ensuring that we continue to grow our economy in a way that is good for everyone, not least those who happen to be employees of airports and airlines.

Mr Mackay defeated his own argument, because Edinburgh airport is hugely successful without the cut in APD. However, he did not champion the public services that are crying out for the investment that is going to disappear. There was no mention of that—he still has to tell us where the cuts will land.

On which planet is the 50,000 or 60,000—whatever it is—extra tonnes of greenhouse gases that will be pumped into the atmosphere consistent with the Government’s stated environmental policies? Again, it appears that some magic trick will be done, in which we can have all those increased flights and yet there will be no impact on the environment. Thirteen per cent of greenhouse gases come from travel, and the Government’s analysis shows that the effect of the cut in APD will be to increase air travel and the associated emissions by more than 50,000 tonnes.

The minister cannot explain how the policy is progressive, and he most certainly cannot explain how it is good for the environment. APD was introduced because the aviation industry was heavily undertaxed, not being subject to VAT, and yet this Government wants to give more tax giveaways to the industry. I am firmly of the belief that the Government is completely in the grip of the aviation sector.

There is no evidence that a cut in APD is beneficial to the economy—indeed, some people have suggested that there may be a loss of income from domestic tourism—and there is no evidence to support the cut. This is a Government that claims that it implements evidence-based policy—

You must come to a close, Mr Findlay.

—and yet the finance secretary is throwing away £230 million on a wing and a prayer. Is it any surprise that Murdo Fraser and the Tories support the policy? On a day when they want to rip tax credits from rape victims—

You must come to a close.

—they want to give a big tax cut to the aviation industry. Shame on you.

I remind members that they should always speak through the chair and not to each other.

17:28  

I echo the thanks of Bruce Crawford to our committee colleagues, the clerking team and support staff, and the witnesses during our stage 1 inquiry.

I did not expect to like this bill. I imagine that the cabinet secretary did not really expect me to like it, either. A few things have surprised me during the process. One surprise was the additional delicious irony of debating the bill at stage 1 just before a debate on earth hour, in which everyone will pat themselves on the back about the lovely little symbolic gestures that we are making. Over the past month, I have even seen press releases from airline companies, saying how great they are because they switched off the lights in their corporate headquarters for an hour, for the planet. They are good, are they not? No—they are hypocrites, and so is anyone else who takes that stance.

I was also surprised, in a way, that the bill is so close to being one that I could support. The reason for that is the confusion at the heart of the Government’s policy intention. Normally, when we see a Government bill, we see a policy memorandum that sets out the objective and purpose of the legislation. However, the only purposes that are given in the strategic objectives, in paragraph 8 and onwards in the policy memorandum, would be served by not passing the bill and by having no tax on aviation at all. If the strategic objectives that the Government has set are what it really cares about, it would not pass this bill—it would not even propose it.

This is a tax that is being legislated for by a Government that thinks that that tax ought not to exist. It is, therefore, understandable that we are looking at a bill that is bereft of meaning, intent and purpose. I think that there is good purpose in taxing aviation differently from other forms of economic activity, because it has disproportionate impacts on the environment and in terms of social inequality. We need to mitigate and manage those impacts in a way that is consistent with economic objectives, and tax is an important way of achieving that. A bill that was clear that that is the purpose of an aviation tax would be different from the one that we are looking at; perhaps it would not be radically different, but it would not give a free hand to ministers simply to say, “We’ll come back to you and let you know what the rates and bands are going to be and then you, as Parliament, will nod them through.” We will not have the ability to amend those proposals when they come forward. We will either nod them through or we will be told that we are giving the aviation industry an even bigger free gift by way of not taxing it at all.

A bill that I could support would constrain ministers somewhat to at least consider the factors that are important. Let us look at the economic factors. The Government and its back benchers—including some who are in the chamber today—have said that there will clearly be a really positive economic boost for Scotland from this. Evidence? Evidence we have seen none.

I think that Liam Kerr recognised in his speech the fact that the cabinet secretary has acknowledged that, to the best of his knowledge, the Government has conducted no economic analysis of its own. He referred to some pre-existing reports, which are based on outdated information about the labour market, unreliable information from the Government about the fiscal impacts of the policy and reports that simply cannot be depended upon as evidence, some of which came into the public domain after the SNP had adopted its policy, not before. We should make policy on the basis of evidence, not scrounge around to see whether we can work up some evidence after we have adopted a policy. The economic impacts are entirely unclear, and the Government should be undertaking that analysis prior to adopting a tax policy.

The environmental impacts have been spoken about, and I think that Maree Todd was the first to talk about the limited nature of the increase—apparently there will be only a small increase in our aviation emissions as a result of the Government’s policy. However, as far back as 2009, the UK Committee on Climate Change said not that we need to limit the increases but that we need to restrict aviation emissions and that, by 2050, they need to be reduced to 1990 levels. We need reductions in emissions, not modest increases. I note that representatives of the industry who gave evidence to the committee said not only that they could achieve that reduction back to 1990 levels but that they could achieve a 50 per cent reduction by 2050 relative to 2005 levels, which is an even more ambitious goal. I do not for a moment suggest that the industry is doing what is needed in order to achieve that, but, if it thinks that it can do that, we should lock it into that goal and we should say to the minister that he has to ensure that the tax rates are compatible with achieving that.

On social justice, the figures that the Scottish Greens have published today show that, of the more than £89 million that would be saved by UK leisure passengers, £33 million would go to the richest 10 per cent of households; £60 million would go to the richest 30 per cent of households; and just £8 million would go to the poorest 10 per cent of households.

All those issues—economic, environmental, fiscal and social—should be hardwired into the bill. The Greens will lodge amendments to do that. If those amendments are agreed to, we could support the bill at stage 3; if they are not, we will oppose it. Tonight, we will abstain, on the basis that the bill is fixable, and we will make every effort to persuade the Government that it needs to be fixed.

I give notice to closing speakers that I will have to shave some time off them. I call Mike Rumbles, to be followed by Kate Forbes.

17:34  

On 7 October last year, the First Minister said that the Scottish Government is committed to acting on climate change and

“limiting global temperature increases to ... below 1.5 degrees”.

The SNP website—I have been reading it—says:

“We hope the example can embolden the international community”.

On her recent self-publicity tour of the United States, Nicola Sturgeon added:

“We are not complacent about climate change and there is still much to achieve.”

She has not been listening to her SNP MSPs during the debate.

Analysis by Transport Scotland has concluded that a cut in air passenger duty of 50 per cent, which is what the SNP intends to do, will lead to an increase in emissions of carbon dioxide of up to 60,000 tonnes a year. That figure has hardly been mentioned in this debate. Where are all our environmentalists? Are not we all meant to be environmentalists now?

What is the Government’s response to that analysis? The SNP reaction is to say that it can offset that huge increase in emissions by making other changes in the transport sector. Really? That may be the Government’s aim, but I would not put too much faith in the transport minister being able to deliver that offset. That is especially so after he said to the Environment, Climate Change and Land Reform Committee that he simply accepts Transport Scotland’s other prediction of an increase in car use in Scotland by 27 per cent within the next 13 years and failed to come up with any real ideas on how to combat that. If you have an idea that you can mention to the transport minister, I am sure that he will be delighted to hear it—I would like to hear it, too.

Through the chair, Mr Rumbles.

In the interests of accuracy, I would like to challenge the words “huge increase”. It is only a 0.1 per cent increase in total emissions.

There we have it. The SNP believes that an increase of 60,000 tonnes of carbon dioxide is minor. I am glad to see that the transport minister is back in his seat. I am afraid that, as with so many policy areas, any reading of the situation shows that the SNP Government has no interest in doing what is right, only in doing what is politically expedient to its cause.

Air travel is the highest emitter of carbon dioxide per passenger kilometre. It is the only sector where emissions have risen significantly during the past two decades, and the SNP wants to add to that increase by cutting tax on air travel. Rather than apologising for their ministerial colleagues, SNP members should be asking them how pumping an extra 60,000 tonnes of carbon into Scotland’s environment and losing at least £125 million of revenue each year will help the Scottish Government to build a sustainable legacy for our children.

Scotland’s aviation sector is in good health and flourishing, with passenger numbers growing by 5 million in the past five years. On a personal level, I am delighted with that—my son is an airline pilot in Scotland, so it is great news. I know a little bit about the aviation industry. There is no good reason to give aviation a free pass. We need everyone to meet their carbon reduction responsibilities and pay their fair share.

As MSPs, we get many approaches from lobbyists giving us their views, and this debate is no different. I was particularly taken by the response from the Church of Scotland, whose comments I read with great care:

“The Church of Scotland is disappointed by the proposals on three grounds.

1. We believe they are inconsistent with Scottish Government commitments to reduce Scotland’s greenhouse gas emissions.

2. They promote inequality: those on high incomes fly most and will benefit most; while those living in poverty fly least and will benefit least, if at all.

3. They put pressure on the UK government to follow suit”.

Not only are the proposals simply the wrong thing to do to tackle climate change, but they leave a hole of at least £125 million a year in the public finances—a hole that needs to be filled. The Scottish Government will either have to raise those taxes another way—and where will that burden fall?—or it will have to reduce expenditure and cut budgets. If it does the latter, where will those budget cuts fall?

Those who say that the bill is simply an enabling bill—I have heard that, too—should look at part 3, where there is a whole section on tax rates without any mention of what those tax rates should be. Where is the policy memorandum? It does not exist. Section 10(3) simply says:

“Regulations under this section ... may modify this Act.”

In layman’s terms, if we pass the bill, Scottish ministers may change what they like in it. This is a terrible bill, which gives far too much power to ministers and not enough power to this Parliament. It deserves to be thrown out. I am with the Church of Scotland on this one. The Liberal Democrats will vote against the bill at decision time.

17:40  

I state that I am the parliamentary liaison officer to the Cabinet Secretary for Finance and the Constitution.

The Government’s motion asks Parliament to agree to the general principles of the Air Departure Tax (Scotland) Bill; the detail will come later. I generally support the devolution of air passenger duty and will set out why I believe that the Scottish Government should take advantage of that to bring the tax into line with international competitors, for the benefit of residents and small businesses in my constituency and across Scotland.

The Highlands and Islands have benefited enormously from air travel exemptions and would benefit even more from a Scotland-wide reduction. In the Highlands and Islands, the challenges of connectivity are exacerbated, yet our economy is dependent on movement: of goods and their import and export; of people and tourists; and of entrepreneurs scoping out and developing business opportunities. Air travel is a necessary part of free movement, which is why I have welcomed more flights into and out of Inverness and why I strongly support reopening the air strip in Skye for commercial flights. Better connectivity goes right to the heart of population retention, job creation and growth and resilience in the economy.

It stands to reason that, as a small island country of 5 million people, domestic and international travel and movement are critical. If we are ambitious for economic growth, which I am, we need new connections, more connections and attractive connections between Scotland and destinations around the world. That is more challenging when air passenger duty in the UK is one of the highest taxes of its kind in the world and by far the highest in Europe.

The international opportunities for businesses and jobs in my constituency are clear. An example of that is found in the food and drink industry. There was a huge increase in the value of food and drink exports last year, as food exports alone grew by 22 per cent to £1.5 billion. Fish and seafood, much of it caught by fishermen on the west coast of the Highlands, recorded the largest overall increase—a whopping £156 million.

Does Kate Forbes accept that prawns and whisky will never pay air departure tax? Does she further agree that the simplest way of reaching the Government’s goal of eliminating the tax would be not to waste our time here by passing a bill and just to let it fall?

In the Highlands and Islands, we need the opportunity to create jobs in order to retain our young people and our families. We need the increase in income that will be generated by those jobs. Any growth in businesses and anything that allows entrepreneurs to take advantage of new opportunities will contribute directly to retaining our population, which is one of my priorities.

Scotland’s food and drink industry is not done yet. Sourcing much of its fine fare in the Highlands, it is Scotland’s fastest growing major sector, with ambitions to grow further. What is really important is that it is not just the big businesses that are benefiting but the small and medium-sized businesses. To capitalise on that, we need to internationalise more. In doubling food exports since 2007, we have seen a transformation in growing markets such as Asia. The chief executive of Scotland Food and Drink has said that the game changer for food and drink over those years

“has been developing a national brand for Scottish produce in export markets, with industry and government working hand in hand to invest in overseas trade experts and activity ... this success story has much further to go.”

We know that smaller towns in rural Scotland are the most entrepreneurial in Scotland. In places such as Ullapool and Newtonmore, which topped the list, 17 per cent of the population are self-employed. Many of those small businesses are based on tourism or food and drink, which depend on travel and movement. Both sectors are doing well. Overseas visitor expenditure rose 23 per cent between 2005 and 2014.

How do those entrepreneurs and small businesses grow and develop? They do so by building relationships, ideally face to face, with partners, investors and customers. I appreciate that the Scottish Government is doing more to facilitate that. This month, the First Minister opened Scotland house in London as a platform for making connections and growing businesses. There is a wealth of opportunities in London, in Europe and beyond for Scottish business. That is the connection between Mallaig, Carbost, the Black Isle and overseas.

However, it does not matter how many opportunities are out there if we do not have good travel links, and that is why reducing air departure tax will make an enormous difference for travel to and from all Scottish airports and have a direct and positive impact on families in the Highlands.

17:46  

It has taken almost a year, but finally we have before us a bill at stage 1 to debate in Parliament. Finally, the powers that be have decided that focusing on issues other than a re-run of the same debate about Brexit is worthy of parliamentary time.

This is a debate about air departure tax and, as the chamber has heard, the Scottish Conservatives are supportive of the bill at this stage. The air departure tax will replace the current UK air passenger duty and will come into effect in 2018, if the bill is passed.

The Scottish Conservatives welcome Derek Mackay’s commitment to making amendments at stage 2 that will make detailed provision for exemptions from the definitions of “chargeable passenger” and “chargeable aircraft”. Exemptions are not present in the bill—the bill does not even say which category of aircraft will not be subject to the tax. Also, as the Finance and Constitution Committee has highlighted, evidence on social, financial and environmental impacts is needed before MSPs are asked to set the bands and rates.

The approach that was taken to the introduction of the bill, which took almost a year, was described as “odd” by Transform Scotland, because, without the full facts on the nature of tax and the bands that will apply under the bill, it is difficult to scrutinise.

The Scottish Conservatives want to see a more ambitious approach to our skies. Murdo Fraser has announced our proposal to remove the air travel tax on flights that are longer than 2,000 miles. That will incentivise airlines to provide new direct links from Scotland to America, China and other global destinations so that families and businesses do not have to travel via London’s packed airports. That is good for Scotland. It will promote Scotland as a visitor destination and as a business destination. Making Scotland easy to access makes it an easier place in which to do business and get out and see our sights.

That is all is part of our plan to get Scotland connected to the global economy. To put it into perspective, on the UK’s competitiveness in the current situation, “The Travel & Tourism Competitiveness Report 2015” by the World Economic Forum lists the UK as 137th out of 140 countries in terms of ticket tax and airport charge competitiveness. It is possible for Parliament to open Scotland’s doors wide, reap the awards and see millions more passengers come to Scotland.

The Scottish Conservatives will support the bill at stage 1. However, at stage 2 we hope to see amendments that make detailed provision for exemptions from the definitions of “chargeable passenger” and “chargeable aircraft”. We want to see the removal of the air travel tax on flights that are longer than 2,000 miles and an immediate freeze on APD for short-haul flights to the UK and Europe.

What I and, I am sure, members of other parties want to see is a bill come to this Parliament that can be fully scrutinised, with the full information available to do that. It has taken almost a year for the first bill to come before us and, despite that amount of time, we still do not have something that can be scrutinised appropriately. To quote Transform Scotland, that is slightly “odd”.

17:49  

The transfer of air passenger taxes to the Scottish Parliament, as part of the latest round of devolution, gives Scotland the opportunity to design and implement a tax system that will support our specific economic development needs.

The UK-wide air passenger duty will cease to apply in Scotland from next April, so the bill is necessary simply to put in place a replacement tax. The bill, as presented, will provide only the structure for that tax; the Government will propose the details of bands and rates later this year, and they will be subject to parliamentary approval. However, the Government has stated its policy objective to reduce the burden of ADT by 50 per cent. Therefore, although rates and bands are not detailed in the bill, the Finance and Constitution Committee took evidence on the shape and structure of the proposed 50 per cent reduction and the consequent economic and environmental impacts.

Scotland is an international, outward-looking nation, and our links to our European neighbours and countries further afield are critical to us. That is especially so in the context of the UK Government’s headlong rush towards a hard Brexit, which threatens those links. Scotland’s place in the world depends on our international connectivity. Direct international flights are a key part of that connectivity, and steps to increase that connectivity should be encouraged to boost business, including inbound tourism, further develop cultural links, and encourage free movement. It is therefore important that the policy focuses on the primary objective of enhancing economic growth. I am glad to see that the Government recognises that imperative. As the committee’s report states:

“The Scottish Government will design and structure ADT in a way that boosts Scotland’s air connectivity and economic competitiveness, encouraging the establishment of new routes which will enhance business connectivity and tourism.”

The committee has highlighted the need for robust economic data that will address the economic impact of any rates and bands that the Government will propose. That is critical to understanding the most effective way to use the tax lever to drive economic growth.

If Ivan McKee is right that analysis of the economic data is the effective way to decide how to use the devolved tax, why does he think that the Government has decided its policy of making a 50 per cent cut and then scrapping the tax so long before that data is available to it?

There is nothing unusual about having a policy. Did the Greens do a full economic analysis of their additional rate tax proposal? I believe that they proposed a 60 per cent rate. In any analysis, that would reduce the tax take. Did the Greens have an economic analysis of that?

There is an intent to reduce the ADT by 50 per cent. As the committee said, robust economic analysis is essential to understanding the shape of the reduction and how that would look. The ultimate objective must be to recover, from increased air activity and from economic growth, more tax than is lost through the cut.

We need to recognise, of course, that any data can be only an estimated projection of what the economic outturn will be. Indeed, anyone who has watched the committee’s investigations into the results of changes to LBTT will understand the challenges in assessing the economic impact of policy changes that have already taken place, never mind those that have not yet been implemented. Like the assessment of our old friend the counterfactual, unpicking policy impacts from wider economic trends is not always easy. Nevertheless, a thorough economic assessment in advance of changes to ADT policy, together with on-going assessments of impacts, is required to give substance to the policy. I therefore welcome the cabinet secretary’s commitment to return to Parliament with evidence on the economic and environmental impacts of the approach to ADT prior to making specific proposals on rates and bands. The committee also recommended that

“the economic and environmental outcomes arising from ADT”

should be evaluated and reported on to Parliament every second year.

The most effective use of reductions in air departure tax as a mechanism to drive economic growth will come through understanding that a one-size-fits-all policy is too blunt an instrument to maximise that objective. Although the committee heard that simplicity of implementation and operation of the tax is a factor in the design of a future ADT system, it is important not to lose sight of the primary objective and to deliver a reduction in the tax that recognises that reductions for some types of flights might deliver significantly more economic benefits than others—in other words, there should be a differential approach.

The committee heard about lifeline flights to communities in the Highlands and Islands where alternative transport solutions are limited. The need to support those communities is well understood, and measures to ensure that those flights are free of ADT should be a priority. However, flights from the central belt to London and other large English cities compete with rail routes with frequent and fast services, and there is an argument that ADT reductions in that context would do little to support the primary objective of maximising economic growth. Measures that encourage direct flights to European cities and beyond, on the other hand, can deliver significant benefits to our economy, particularly if they are targeted at locations where the scope for business and inbound tourism is greatest.

The UK has one of the highest rates of air passenger taxes in the world. That may make sense to maximise revenue from London airports, where demand outstrips supply, but in this area of UK Government policy, as in many others, what works for London and the south-east is not always the best policy for Scotland, and we need to derive a policy for ADT that makes the most sense in the Scottish economic context.

I look forward to receiving the Government’s economic analysis of its proposed rates and bands. I look forward to crunching the numbers and working through them in committee with the cabinet secretary and his officials, and I look forward to Scotland implementing an ADT policy that supports economic development and international links.

We move to closing speeches. I call James Kelly to wind up for the Labour Party.

17:55  

I start by reiterating the comments of other colleagues thanking the Finance and Constitution Committee clerks and SPICe for their excellent work in backing up the narrative that was produced in the stage 1 report.

The Labour Party’s position in this debate is that we support the general principles of the bill, as Neil Bibby outlined in his opening speech. The air departure tax is a logical conclusion of the Smith commission’s recommendation to devolve APD. We support the tax because it gives an additional lever to raise money from those who can afford air travel, to contribute towards the Scottish budget. We also support it from the point of view of seeking to reduce carbon emissions, so there is a logic in having the tax in place.

However, the Scottish Government’s reason for introducing the bill is to reduce the tax by 50 per cent and ultimately to abolish it. It has to be said that the evidence for supporting the policy that has been proposed in the bill by the cabinet secretary, Derek Mackay, is wholly inadequate. The policy memorandum clearly sets the objective to reduce the effect of ADT by 50 per cent by the end of this session of Parliament. As the financial memorandum states, by 2021-22, that would have the effect of reducing revenue to the Scottish Government by £189 million. We have not seen any analysis of how that money, which would be lost from the Scottish budget, would be replaced. Willie Coffey spoke about the economic benefits of the policy, but we have not seen anything from the Government to back that up.

When the Smith commission recommended the devolution of the tax, it also said that environmental impact studies should set out when it was going to be used, but that has not been done. As Patrick Harvie pointed out, the submissions that have provided some analysis, mainly from the airport operators, are not up to date, because they were all done before Brexit and take no cognisance of the impact of Brexit.

Derek Mackay has outlined his intention to complete stage 3 before the summer recess, and he has made it clear that any analysis would be done later than that, when the secondary legislation kicks in, so we will be asked to agree the bill before the summer and to agree the basis of the policy memorandum without any proper analysis or submission from the Government. That leaves us in a position in which, as Neil Findlay correctly pointed out, we must question the fairness of the policy. As the ONS outlined, the top 20 per cent of earners will be £73 better off, whereas the bottom 20 per cent of earners will be only £4.50 better off. That is not a progressive policy, and is wholly unfair.

We should look at other impacts on people who travel in Scotland. For example, a student who turns 19 no longer has access to the young Scot rail card and must pay full fare for their season ticket and incur substantial travel costs. Maree Todd said that air travel is a necessity for people in the Highlands and Islands, but for an apprentice who stays in Cambuslang and has to travel to their place of employment, where they earn less than the national living wage, travel is also essential if they are to complete their apprenticeship successfully. If the person must travel by bus from Cambuslang to East Kilbride, they will incur substantial costs which will bite heavily into their wages. We need to ask how such people will be served by the current priorities.

We also need to consider how the proposed approach lines up with the policy of seeking to reduce carbon emissions, as other members said. I have heard minister after minister, not just in this chamber but at receptions and media events, declare proudly that the Scottish Parliament passed world-leading climate change legislation. That is absolutely correct, but the logic of the air departure tax policy is that air travel will increase, which will increase carbon emissions. It seems to me that a reduction in air departure tax is not consistent with the Scottish Government’s policy approach.

Will the member take an intervention?

I am sorry. I am running out of time.

The Government’s policy approach is incoherent and it has submitted inadequate evidence to back up its policy. It is time for the Government to think again; it must bring forward more substantive evidence before we get to stage 3.

18:01  

This is a welcome, if somewhat rare, opportunity to discuss a bill in the Parliament.

We have heard a range of views on how the Parliament can use its powers in respect of air passenger duty, or air departure tax, as it will be known. Although each party has different views on the future of ADT, the debate has centred around three main issues: concern about the lack of detail in the bill, with questions asked about when and how we will get that detail; the objectives of the proposals and what the Government is trying to achieve; and the next steps that will be required to take the bill forward, in particular the level of parliamentary scrutiny of any secondary legislation.

Liam Kerr, James Kelly and others highlighted the lack of detail in the bill at stage 1 in a number of important areas. The bill fails to set out the basis of liability for the proposed new tax, which is a fundamental issue in any tax legislation. It also fails to identify which category of passengers or aircraft will be exempt from the tax. There are no details of the tax bands and rates that will apply, and there has been no independent assessment of the economic, financial and environmental impact. As Rachael Hamilton said, that lack of detail led the Delegated Powers and Law Reform Committee to express

“disappointment that the legislation has been introduced in the absence of full development of the Scottish Government’s policy”.

Given all that, we urge the finance secretary to undertake a full analysis of not just the policy’s economic and environmental impacts but how it will work in practice, thereby avoiding a repeat of what happened with the disastrous introduction of land and buildings transaction tax, the methodology for which was described today, in a study that the Government itself commissioned, as “ill-suited”.

On the objectives of the bill, we support the overall direction of the policy to reduce air departure tax. However, if we are to proceed with a reduction, our preferred approach would be a targeted reduction for long-haul flights, with the aim of increasing Scotland’s global connectivity with major economic hubs in the United States, China, India and south-east Asia.

Our approach differs from the less targeted proposals of Mr Mackay, who is advocating a blanket 50 per cent cut to ADT, including for short-haul flights. The Finance and Constitution Committee heard evidence that cutting ADT for short-haul flights would not necessarily deliver economic benefits. According to the Scottish Association for Public Transport, cutting ADT for short-haul flights would merely lead to growth in domestic flights at the expense of rail travel.

Given all that, we welcome the Government’s agreement to undertake a full and independent economic, financial and environmental analysis of its plans, and we urge that analysis to look at the following issues. It should look at the benefits of cutting ADT on long-haul flights compared to the benefits of cutting it on short-haul flights. It should also look at how the policy can increase tourism from around the world. Scotland welcomes fewer than 50,000 tourists a year from China, compared to the more than 1 million Chinese tourists who visit London alone. The average long-haul tourist spend in Scotland is over £650 per visit, which is significantly higher than the level of air departure tax per passenger that would be forgone. Therefore, an increase in tourism would be a welcome boost to the economy, but the analysis must show a link between reducing ADT and increasing tourism. As Kate Forbes highlighted, we need to look at how we can capitalise on having more direct long-haul flights to increase our exports to the rest of the world, which have increased by 75 per cent over the past 10 years. Finally, we need to look at how we can minimise the environmental impact of the proposals.

Other parties have expressed their outright opposition to any cuts to ADT. Labour’s view, as summarised by Neil Bibby and others, is that it is a tax on those who can afford to fly, and that cuts would come at the expense of public spending. However, that is looking at the wrong end of the equation. We are suggesting that, if it is targeted properly, a reduction in ADT will boost Scotland’s global connectivity and, if implemented properly, should result in a boost to the economy, more people being encouraged to do business in and with Scotland, more visitors to Scotland and more investment in Scotland.

The SNP’s proposed airline tax break will cost £189 million. If the member supports the SNP’s proposal, will he tell us where the cuts will fall? The SNP has not told us where those cuts of £189 million are going to fall. What would the Tories cut to fund the policy?

Last year alone, tourism was worth almost £2 billion to the Scottish economy. If we were to increase tourism by 5 or 10 per cent, that would result in a much-needed boost to the Scottish economy.

Will the member give way on that point?

No, I need to make progress.

We are not looking at cutting spending; we are looking at growing the economy and growing the Scottish Government’s budget in years to come.

We have heard from others about legitimate concerns surrounding the environmental impact of any reduction in ADT. We agree that, to address those concerns, a strict environmental impact analysis will be required. We look forward to debating that when it is published by the Government.

I will conclude by highlighting to Mr Mackay the next steps that are required to take the legislation forward. The Government must produce supporting evidence of the economic, social, financial and environmental impacts of the proposal. We need that evidence to be made available before we debate the tax rates and bands or ADT in the future. We also suggest that, before any reduction in ADT is made final, the Government should work to reach agreement with the airlines that they will commit to expanding their routes in response to any cut in ADT, as has happened in other countries. Finally, we need an assurance from Mr Mackay that he will listen to the Parliament, the Finance and Constitution Committee and the independent analysis before implementing the proposals, thereby avoiding a repeat of the disastrous implementation of land and buildings transaction tax.

I call Derek Mackay to wind up the debate.

18:08  

How long have I got, Presiding Officer?

Members: Two minutes. [Laughter.]

You have until 20 past 6.

Thank you, Presiding Officer. I heard the Opposition’s demand for more time to continue the debate for enthusiasts who are listening at home.

It has been a consensual debate. I really mean that. Many suggestions that I will reflect on have been made from around the chamber. I hope that the Finance and Constitution Committee’s response shows that I have engaged with the committee, listened to cross-party points of view and responded positively to a number of recommendations in good time for the stage 1 debate. I do not want to lose any of the consensus that exists in support of the bill.

Nevertheless, it was interesting to hear Dean Lockhart lecture me about air departure tax and APD, because the Conservatives are converts to the principle of a reduction in that tax. But, hey—I will not be churlish about that. I welcome the Conservatives’ change of position.

I turn to things that I thought that I would never hear other members say. It does not necessarily surprise me that Mike Rumbles remains opposed to the bill, although I will reflect on the fact that a request for an extension of tax cuts for airlines has been made by his islands colleagues, who want to extend the air discount scheme—of which I have experience, as a former Minister for Transport and Islands—to businesses and others. Indeed, as transport minister, I increased that scheme, so I understand the request.

I welcome the Labour Party’s position, but I will not take it as read that support for the general principles of the bill represents support for our policy proposition on tax rates and bands, or other matters. I agree with James Kelly and Neil Bibby—those are not words that I say often—that the bill is enabling legislation that provides a framework to allow the tax to be collected when the UK Government switches off air passenger duty in April next year.

One of the key questions that the cabinet secretary has been asked by all the Labour members who have taken part in the debate is where the £189 million of cuts that will be needed to fund the cut in ADT—in the event that he gets his tax break through—will be made.

The Government has set out its policy intention to introduce a tax reduction to stimulate economic growth, to improve connectivity, to support tourism, to sustain the routes that we already have and to secure new routes to Scotland, which can be achieved by Scotland being on a level playing field and having advantage in some areas. I will, of course, work with other parties as the bill works its way through Parliament: I must engage with other parties in order to find compromise to ensure that the proposition on tax rates and bands is approved by Parliament.

Will the cabinet secretary give way on that point?

I want to make some progress, because I have a number of important points to make. It would be wrong to say that the bill will transfer power to ministers because, ultimately, Parliament will have to approve the tax rates, bands and exemptions that will apply in Scotland. That is why I have reflected on a number of points and will lodge amendments to the bill at stage 2 to address them: I refer to points that have been made on, for example, monitoring and evaluation to assess the impacts of the policy, on exemptions and on independent economic analysis.

The Government is not alone in believing that a tax reduction would stimulate economic growth—the Scottish Chambers of Commerce and the Confederation of British Industry Scotland share that belief. The point to make is that the bill is about the principles and the framework to enable the tax to be collected. Other matters—not least, exemptions—will be determined in committee through use of affirmative procedure. I know how important the exemption is for the Highlands and Islands, which is why I am working with the UK Government to ensure that we have continuity of like-for-like exemption for the area, and that that exemption is compliant.

I think that the fact that the Government is embarking on independent economic analysis should be welcomed. It is true that we are taking forward our policy aspirations on the basis of evidence that we have seen from elsewhere, but a valid point was made about there being a degree of cynicism about some evidence, given who paid for it. The point of our independent analysis is that we arrive at an evidence-based decision by taking a methodical approach and looking at modelling. Having commissioned that analysis, we know that we will be in a good place to make the right decisions on ADT in Scotland, in keeping with our policy intention, as we approach the switch-off of APD next April.

I have listened to what the other political parties have said about their positions. The bill is about successful transfer of a power; it is about devolution and delivering on the deal that was achieved. That is why I think that the Liberals would be wrong to oppose the bill, at this stage. We must embark on the decision making in a timely fashion in order to deliver efficiency, certainty and clarity on the tax rates and exemptions in the future.

Patrick Harvie surprised me most, when he said that he believes that the bill could be made better and that it is “fixable”, given the Greens’ opposition to the policy intent. The Greens would like the tax to be collected in Scotland, which is one of the reasons why I think that the principles are worthy of support. There will be further engagement on the tax rates and bands.

I have set out some principles that I think should be behind the bill in order to ensure that ministers give due consideration to social, economic, fiscal and environmental factors in setting their tax policy. Is there any reason why the cabinet secretary would be anxious or uncomfortable about having to give due consideration to those factors before he comes back to Parliament on the bill? What would be the objection to amendments that would put principle into the bill?

I have been able to outline to the Finance and Constitution Committee a positive response to a number of suggestions that were made by the committee, one of which was about on-going analysis and monitoring of the impacts of our policy. Of course we will take a close look at the impacts of the decisions that we make as a Government and as a Parliament. We have been balancing issues of affordability, economic growth and environmental impact, and we will also be informed by further environmental analysis, including the strategic environmental assessment that will inform decisions about air departure tax.

We must look at the issue in a balanced fashion and continue to engage with the other political parties, recognising that the tax represents a transfer of power that we want to be successful. We also want to use the tax in a way that will stimulate the economy and support connectivity—in particular, in the light of the economic challenges that are coming from the Brexit situation. We want to use the tax in a way that will support the economy, while we also address the environmental concerns that have legitimately been raised, and look at the wider transport envelope. A number of members focused on environmental concerns. The Government is, of course, delivering on its environmental targets, and we will set out further actions through our climate change efforts. The Scottish Government’s record on delivering ambitious climate change targets is strong.

Will the cabinet secretary give way on that point?

I am almost ready to conclude, but I thank Mike Rumbles for his offer to intervene further to oppose the bill, which seems to have consensual support from across the chamber.

There will be further engagement by the Government at stages 2 and 3 on how to take the bill forward. I listened closely to what the Conservatives and others had to say around sharing further evidence and analysis in good time to inform decisions about rates and bands, and to address exemptions in the way that I outlined.

A number of members said that the bill is the first that Parliament has considered in this session, but that is not the case. It might be a surprise to some members, but we approved the Budget (Scotland) Bill, which went through its various stages to become law as the Budget (Scotland) Act 2017, and which is delivering hundreds of millions of pounds of extra investment in the public services of Scotland.

Following this consensual debate, I look forward to engaging with all members to progress the Air Departure Tax (Scotland) Bill to ensure that we deliver the tax competently, clearly and in keeping with Adam Smith’s principles. We want also to ensure that the tax follows the success of the previously devolved land and buildings transaction tax and landfill tax, and that it supports the economy and delivers on the policy objectives that have been outlined.

I invite Parliament to approve the general principles of the Air Departure Tax (Scotland) Bill.