It may look like another piece of cynical political expediency, but Nicola Sturgeon and her cabinet will be engaging in some group hand-wringing over the decision to reverse a manifesto pledge made to the airline industry.
A cut in air departure tax (ADT) was demanded as a key measure to help stimulate the industry and the wider economy. It was supported by, among others, the tourism sector and the government gave numerous assurances that it would be implemented once a legal issue was resolved.
Make no mistake, abandoning this pledge would not have been easy. Reversing a tax plan can be embarrassing, and needs careful handling. Chancellor Philip Hammond’s decision to withdraw his planned increase in national insurance payments for the self-employed is a case in point. His search for fairness was understandable, but flawed. In the end there was an overwhelming view that it was more harmful than helpful which made his change of mind more palatable.
The ADT case is made more contentious because there are strong and equally powerful counter-arguments. A tax cut aimed at boosting the economy by putting more passengers in more aircraft would do nothing to help the government meet its commitment to reduce carbon emissions.
Put simply, Nicola Sturgeon and her ministers were damned if they did, damned if they didn’t. In the end, the climate issue won, not least because there is a greater moral duty to save the planet than provide more opportunities for the public to travel to and from Scotland.
Inevitably, business leaders were unhappy, though the reaction was considerably more aggressive than the normally moderate expressions of disappointment. After long months of waiting for a promise to be delivered, Edinburgh Airport’s Gordon Dewar felt let down, while Liz Cameron of the Scottish Chambers of Commerce was particularly vocal in saying the decision would have a damaging impact on the economy.
Are these reactions valid? After all, even with the ‘punitive’ duty in place Edinburgh Airport has enjoyed admirable growth and has not been slow to issue statements boasting about a succession of monthly passenger records and the expansion of the terminal into a busy retail and leisure experience. Perhaps Mr Dewar protests too much.
However, Norwegian Airlines gave the delayed tax cut as a reason for pulling its North America flights. The test will come with evidence that other airlines are staying away or cutting flights as a direct result of this decision. It can be guaranteed that when they do Mr Dewar will not be slow in making his views known.
Ms Sturgeon and her Cabinet will be consoling themselves in the knowledge that it is hard to argue against policies that improve the air we breathe. What was lost in today’s statement was that the government is also empowering local councils to introduce workplace car parking levies, another move aimed at cleaning up the environment.
The SNP leader nailed her colours firmly to the environmental mast when she declared a climate emergency at the party’s spring conference. She knows that there is no going back and that her own, and her party’s, reputation would be shot to bits if there is another reversal. This is unlikely, with more climate measures to be announced in the coming weeks.
If the reversal of the ADT cut has taught the SNP anything it is that combating climate change and expanding the economy is a difficult circle to square, but one it will need to achieve if it hopes to maintain the support of two competing interests.
For the aviation industry it is a setback that could yet prove costly and one that will test the SNP’s claims to be supporting business growth. And therein lies the crux to this dilemma. The consequence of tackling climate change is asking business to change direction (as we have seen with the oil and gas sector’s shift to renewables) or do something that does not come naturally – slow down. There is a fine line in business between growth and greed and we all have to ask if we really need more planes, more tourists, more overseas holidays. Or whether it is time to start saying enough is enough.
Alternatively, the aviation industry has to accelerate the introduction of cleaner technologies. A simple response from the SNP in explaining its u-turn would be to tie any future tax cuts to evidence that putting more traffic through airports will not fill the air with more noxious gases.
Ms Cameron claimed in her statement that the ADT decision does nothing to reduce emissions. Others will disagree. Friends of the Earth say that if the tax cut had gone ahead it would have pumped 60,000 tonnes of carbon into the air. What is not in doubt is that emissions must be reduced. That means tax cuts need to be calibrated with carbon output, rather than encouraging more holidaymakers to head off to Tenerife. In other words, if the SNP tied its tax cuts to pollution controls rather than saving travellers £13 on a ticket, then it could satisfy both camps. Everybody wins, and that’s surely the secret to all successful negotiations.