The UK Government has confirmed that North Sea energy firms will not be hit with a new levy for sending workers offshore by helicopter – and has also not ruled out devolving tax on other flights to Holyrood.
The Treasury announced its response to a consultation on Air Passenger Duty yesterday, after repeated calls for oil industry helicopters to be exempted, and for the Scottish Parliament to be given overall control of the tax.
Business leaders and politicians reacted with fury in May after the Press and Journal revealed the duty could be levied on offshore helicopter flights – at a cost of almost £200 for every worker flown offshore.
Ministers subsequently backtracked on the plans, and confirmed yesterday that helicopters would not be the subject to the duty.
Meanwhile, the Scottish Government and airports in the north and north-east have put pressure on the Conservative-Liberal Democrat coalition at Westminster to devolve the tax.
Yesterday, the UK Government said it would “explore the feasibility and likely effects of devolution of the duty to Scotland”.
Chancellor George Osborne said last week it would rise by 8% rise from April, and Britain’s biggest airlines attacked the government yesterday.
In a statement, the bosses of easyJet, Ryanair, Virgin Atlantic and British Airways, said the consultation had been “a sham” and that the tax was damaging the UK’s economic recovery.
Aberdeen Airport managing director Derek Provan said: “It is encouraging to see that our argument for the exemption of North Sea helicopters from the new regime has been heeded.
“However, the rest of our concerns appear to have gone unaddressed.
“We will continue to push for a fairer tax system for aviation and for the duty to be devolved to Scotland, just as it has in Northern Ireland.”
Western Isles MP Angus MacNeil, SNP transport spokesman at Westminster, said: “The Treasury has already reduced duty for passengers flying from Northern Ireland, and Scotland deserves equality of treatment. There is no reason for this to be delayed.”
Bob Collier, chief executive of Aberdeen and Grampian Chamber of Commerce, said: “We welcome the government’s decision to explore the feasibility and likely effects of APD devolution to Scotland.
“We would welcome the devolution if it enabled a reduction in costs for businesses in the region.
“The decision to exempt helicopters from the duty is excellent news and shows commitment from the UK Government to the oil and gas sector which depends on helicopter travel as its only means of transporting staff to and from work.”