Barnett and Tax Credits

prime-minister-david-cameron-makes-a-speech-on-the-big-society-to-social-entrepreneurs-in-london-765586696-1379604Confused by the Barnett and Tax Credit debate? Kimberley Cadden attempts to clarify it all.

Recent tax credit proposals by Scottish Labour are outdone in their lack of detail only by the lack of scrutiny they have received by the ever subservient Scottish mainstream media; who incidentally seem intent on demonstrating both the ineptitude and humiliation of forever being a flunkey. To most of them, it seems, regurgitation is journalism.

Well I am someone who has had to live on tax credits much of the time and indeed have been on and off them for years, so the detail of this policy actually matters to me, and it increasingly seems as though people who live in poverty like myself have to start scrutinising for ourselves. This is due in no small part to the fact that the realities of our lives are largely lost in superficial point-scoring politics, and indeed the egos of narcissistic newspaper editors. So in frustration I decided to look at the detail of what the Labour party has said they are going to do for people like me.

The first crucial point is that Labour have been clear they are not talking about mitigating cuts like the Scottish government have been doing, but rather have promised to ‘reverse’ and ‘restore’ tax credit cuts in full; including for those who have completely lost entitlement at UK level. Indeed this has been backed up by vow-insurer Gordon Brown, who has said that tax credit cuts can now be ‘repealed’ and thus the vow has been delivered; apparently confirming part of the purpose of the vow was to force the Scottish government to pay for more with less, screwing not just them but the Scottish people over in the process.

Since the UK government have confirmed they intend to allow the Scottish government to reverse tax credits via amendments they made to the Scotland Bill permitting the creation of new benefits (and assuming the new powers do in fact actually allow this) the pertinent question is, then, whether or not we can afford to pay for it; and to understand how Scottish Labour plan to do this, we have to look at their recent policy proposals.

Kezia Dugdale announced that Labour would commit to a 50p top rate of income tax in Scotland, which is a policy the IFS has said would only bring in roughly £8 million per year (they projected £100 million for the UK as a whole) although this was in the event that the UK as a whole adopted the policy. Indeed Kezia herself acknowledged that introducing this measure solely in Scotland may not even bring in a penny, and yet she has proposed that it would pay for a £78 million ‘fair start fund’.

Then we move on to Air Passenger Duty, which the SNP has committed to cutting by 50% in Scotland in 2018. Kezia has claimed that by not cutting APD, £250 million in extra cash would be freed up, of which she said the following in Holyrood Magazine:

“we also have an additional redistributive mechanism which we would use for education, which is to scrap the APD measure which would bring £250 million and we would spend that on educational inequality”.

Confusingly she has since gone on to say that these funds would solely go towards paying for the reversal of tax credit cuts. The problem with this, besides the fact she has spent the same money twice, is that not cutting a tax doesn’t create additional funds; in order to create additional funds it would have to be a reversal of a tax cut that had already been made – i.e. a tax increase.

To make this as clear as possible it’s important to look at how our block grant will be revised in the first year after we receive our new powers.

Both the Smith Agreement and the Scotland Bill make it clear that neither party (the Scottish parliament nor the UK parliament) will be at a loss as a result of the new devolved powers. They further clarify that as a result, revenue removed from the UK due to the transfer of tax powers will be taken off the Scottish block grant pound for pound. In addition, expenditure removed from the UK as a result of the transfer of spending powers will be added to the block grant, pound for pound. Since those revenues and expenditures are based on UK policies, whether or not we can increase income to the Scottish parliament via tax receipts after the transfer of powers will depend on the policies we inherit and indeed the scope they leave for tax increases.

As things stand we will inherit APD at its current level (i.e. the level Scottish Labour wishes to keep it at), a higher tax rate
threshold of £43,000 (which comes into effect from April 2016 and is again the level at which Scottish Labour wishes to keep it) and a 45p top rate of tax. Therefore whoever the Scottish government is in 2016 (and thus the governing party when the new powers are transferred in 2017) they will be unable to create any additional cash of any kind through simply continuing these policies. Professor Jim Gallagher confirms this: “If a Scottish government leaves tax rates unchanged, the only changes to its revenue will be from how much more or less the Scottish tax bases…grows compared to the same UK tax bases. Over time, that could be significant, but over the first few years will not be large”. Thus the only way to bring in significant additional cash from these taxes in the course of the next parliament will be to raise them and indeed the only tax here that Labour proposes to raise is the top rate of tax, which – as outlined above – will bring in anything from zero to a measly £8 million.

Although the higher rate tax threshold is set to rise to £50,000 by 2020 in the UK, it’s doubtful that this will have gone up considerably, if at all, before the transfer of tax powers in 2017; therefore as things stand, based on current UK policies and what they will mean for our choices post the devolution of our new powers, Scottish Labour proposes that £768 million worth of policies (£78 million ‘fair start fund’, £250 million for ‘educational inequality’, and £440 million for tax credit cuts ‘reversal’) will be paid for with anything from zero to £8 million. Even if we get lucky and the higher rate threshold is raised a little between 2016 and 2017, this still wouldn’t raise a substantial amount of money if it were reversed, and certainly nothing like what Labour needs for their policies.
This isn’t only a disaster for the credibility of Scottish Labour’s policy platform. Their false statements regarding APD (which the UK government has no policy to change at present) can only be down to either a failure to understand how Barnett works (which would be rather incredible) or that they are deliberately lying to the Scottish public, exploiting the hardship of people like me in order to make political capital by proposing invalid policies purely to win votes; despite the fact that their failure to account for themselves only creates more distress in those whose hopes they initially raised. This is damning.

It’s worth mentioning here that cutting APD is a SNP policy aimed at stimulating economic growth. An in-depth Edinburgh Airport study suggests that a 50% decrease in APD will result in increases in tourism as well as the creation of around 3,800 jobs. According to their analysis, when the amount lost due to forgone APD is compared to the economic benefit of the policy (GVA), in the first five years the Scottish economy stands to benefit by £350 million. Of course this would also lead to higher tax receipts in the form of income tax, VAT and likely lower spending in the form of savings on devolved welfare. It remains to be seen whether the benefits actually live up to those which are projected, however what we cannot at all take as certain at this point is that a cut in APD will lead to less revenue for the Scottish government and indeed it could well lead to the opposite; but what we can know for certain is that the measure will grow our economy.

For anyone doubting the credibility of a study carried out on APD by an airport, PwC – one of the ‘big four’ auditors – undertook an even more in depth study for UK and Irish airliners on the outcome of abolishing APD in the UK and they came to very similar findings, not least of which was that income from resultant increases in income tax, corporation tax and VAT receipts would more than cover the loss in tax receipts from foregone APD. This highlights one of the many inadequacies of the Scotland Bill; whilst our economy stands to benefit greatly from cutting APD (that is if these studies are even remotely correct) we cannot reap some additional rewards of our policy as some of the increases in VAT receipts and all of the increase in corporation tax receipts will go to the UK government, which the Tories can then spend as they please. Therefore being in the UK without the full devolution of tax leads to this situation where some of the most significant benefits of our growth policies will go towards the Tory project of a budget surplus (which itself will only increase private debt) rather than back into public services and investment in Scotland; or indeed towards helping with the mitigation of welfare cuts.

Without much in the way of overall additional revenue via rising tax receipts (due both to inadequate tax powers and minimal scope for raising taxes) if the Scottish government is to mitigate welfare cuts it will likely still have to find most of the money from other parts of the budget where funding has already been cut and money is extremely tight. In the case of tax credits, if any Scottish government were to reimburse for the cuts in full, this would cost hundreds of millions of pounds, not just in terms of covering lost benefits, but in administering a completely new and complex claims system. This is presumably why the Scottish government have been clear for months now that whilst their efforts will always be to mitigate cuts as much as possible, it will take much time and investigation to figure out how fully any further cuts can be covered. And of course they have known for less than a week that they can create new benefits, which is necessary if cuts to tax credits are to be mitigated anywhere close to in full.

However the SNP did present what would be a good solution to this during the Smith negotiations, where they argued for the devolution of welfare. This of course isn’t happening due to the unionist parties who continue to argue against it, despite the fact that the SNP have had a clear mandate to pursue this on behalf of the Scottish people since May 2015. Thus, unsurprisingly, the SNP have since called for the specific devolution of tax credits.

Why is this a better option? Crucially, due to the way Scotland will be compensated for additional expenditure, by taking control of tax credits we will receive funds to administer the benefit. Indeed the Smith Commission agreed “(For spending powers, an increase to the block grant would be made) equivalent to the existing level of Scottish expenditure by the UK Government, including any identified administrative savings arising to the UK Government from no longer delivering the devolved activity, and a share of the associated implementation and running costs in the policy area being devolved, sufficient to support the functions being transferred, at the point of transfer”.

In other words, by taking control of tax credits we will have much more money to mitigate the cuts by not having to also find money in our budget to cover what would be the substantial operational costs of creating a new benefit of this kind in Scotland. Indeed we would have the costs of administering around £3 billion worth of benefit added to our block grant, so then all the money we could find in our budget to mitigate cuts would go directly to claimants, rather than much of it being used for managing their claims, thereby either reducing what we could mitigate, or further reducing other Scottish budgets. And of course there would also be considerable scope for making efficiency savings. This is clearly, then, the best option available if your most important goal is to be best placed to help the poorest as much as possible.

Thus at this point I must arrive at the conclusion that this is not the goal of the Scottish Labour party. Not only do they exploit the circumstances of the very people they claim to wish to protect, but they voted against the one amendment that would have given the Scottish government the most money to mitigate tax credit cuts, and would have ensured that any mitigation didn’t end up reducing universal credit payments from the UK government, thus cancelling out their Scottish benefit; and they did this to protect the union (and likely also because they don’t want the Scottish government to look good). This is why Labour cannot be trusted.
Being in favour of the union doesn’t simply mean Labour had to campaign for a no vote in a referendum over a year ago; it means that they have to prefer options at each and every turn that are bad for Scotland; options which incidentally have nothing to do with solidarity across these islands and everything to do with making sure power resides at Westminster, available only to two parties. Not devolving tax credits isn’t an act of solidarity – it doesn’t benefit tax credit claimants in the rest of the UK; rather it’s an act of spectacular political selfishness, and it’s people like me who will pay for it. And as long as Labour are a unionist party in this United Kingdom, it will always be thus.

Whereas the SNP are free to always campaign for the best option for Scotland, and this is why they are advantaged and will very likely be our government until Independence; people tend to vote for parties who genuinely try to protect them. Of course their continued success will be in spite of the hostility of our largely unionist media, who have utterly failed to scrutinise Scottish Labour’s proposals and instead have found a more superficial level of engaging with Scottish politics than I had previously even thought possible.
The sheer number of mainstream journalists who don’t understand how the block grant works and/or who are simply happy to collude in Labour’s duplicity is one thing; but the fact that there are journalists across the political spectrum who choose to denote a party’s left wing credentials not by its actions, nor by the validity of its policies, but simply by what it says on the tin, is utterly confounding. In this case it’s also the equivalent of speaking to an empty room. The left in Scotland is alive and kicking; debating with itself, working in many ways to contribute to a new, hopefully before too long independent, Scotland. Labour simply isn’t part of the conversation, and neither are people who think Labour are left wing simply because they decided to say whatever they think it takes to win votes. And this isn’t down to any form of exclusion; it’s down to irrelevance.

Until such journalists show more interest in seriously scrutinising our political parties than they do in preserving the union, or taking a partisan line, or finding the easiest angle; or indeed in spending their time ridiculing every ordinary person on Twitter who happens to disagree with them and dares to express it; they and their publications will continue to talk about shadows on the wall while the real world changes without them.

Comments (26)

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  1. imacg says:

    An excellent article, and of course the Scottish media will toe the labour lie line…

  2. John S Warren says:

    What a splendid piece from Kimberely Cadden. It is precisely because somebody who can present such a thoroughly assembled and trenchant argument, and write so well (far beyond anything even attempted by the apparartchiks and machine politicians of Labour), yet is obliged to rely on Tax Credits to live their life and make their contribution here, that provides the pressing need for change in Scotland. Something is wrong.

    Change is required that goes far beyond the tepid prevarications, if not gross cynicism; the sheer political vindictiveness of Labour to connive with the Conservatives to form the fillibustering forces of neoliberalism, to avoid detailed debate over hundreds of new amendments to a Bill in the limited time that was allotted; that has now been displayed in the passing of the Scotland Bill in the House of Commons (and people wonder why there is any need for a second, revising chamber in Westminster). Did they really think that nobody would notice?

    The principal purpose of the Scottish Bill is not the better governance of Scotland, but is purely party political; to undermine the SNP in Scotland. They are prepared to reduce the government of Scotland to an impenetrable, unusable, incomprehensible Gordian Knot in the process. The Scotland Bill will make it very difficult for the public to understand what is happening, or what the financial consequences might be when any public policy is pursued. We can only believe this is deliberate; it is certainly political folly of the highest order. It is a strategy designed that appears designed by the Westminster Cartel to leave the Scottish Government with a succession of impossible tax and spend dilemmas and hopeless paradoxes of policy.

    1. Scotty13 says:

      If indeed the Scotland Bill is very difficult for the public to understand, than all political parties should be seen as responsible for this failing. All parties were partly involved in its creation, so all should be active in finalising its final draft. Content and ease of use should both be a built-in given. Complex abstractions need to be avoided. ‘Never use a long word where a short one will do’ was Orwell’s advice. His adage is equally relevant in writing draft proposals today.

      For the electorate to be fully engaged you need politics to be both understandable and transparent. At present our government is neither.

      The buzz word that the FM still likes to use to describe her government’s attitude is ‘progressive’. For what time she has left in office, lets see her try to achieve this for everyone’s sake.

      1. John S Warren says:

        The principal responsibility for drafting the Scotland Bill is Parliament in Westminster, and the Conservative Government, whose Bill it remains. I am not sure quite why the FM appears to take centre stage in you critique, when she is not even an MP. Furthermore, the time given to debate in the House of Commons and the hundreds of amendments tabled, many at the last minute and inadequately reviewed or interrogated (and certainly not in the scrupulous way you suggest) actually defeated the prospect of public clarity and understanding. I consider this failing to be at least in part, deliberate; and part incompetent.

        The Scotland Bill was not the right way to do this; it never was – what was required was a Bill that fundamentally reformed the Union and developed a new quasi-federal structure for the UK in the 21st century. The Scotland Bill was designed by a particularly stubborn, obtuse and reactionary form of Unionism, that for political reasons prefers a bad Bill to good governance.

        It is true that the SNP participated in the Smith Commission and therefore accepted its conclusions; pragmatically, and they are pragmatic, in the circumstances of the time the SNP could scarcely do other than (in principle at least) accept any further powers offered Scotland.

        Look back now at the political framework of the Smith Commission; it is now a political irrelevance, representing political interests, three Unionist Parties, that have – as representative of Scotland – virtually been eliminated from the Parliament that is now passing the Bill. This should have led to a serious rethink; but it didn’t, for fairly obvious reasons. Meanwhile, the electorate in Scotland has moved on a long way (see the General election, 2015) – the Scotland Bill has not. Furthermore, the Smith Commission is now completely out-of-date; it provided an anachronistic representation of a brief, febrile period in Scottish political history after the Referendum when Unionism was in confused disarray (where it clearly and doggedly remains), and represents nothing that offers political credibility, or anything substantive, or carries any real political weight. It is, like Calman before it, redundant before it is even Law.

  3. Jim Bennett says:

    I thought that this was an excellent deconstruction of the Labour Party position. Thank you.

    Re Air Passenger Duty – I’m not sure that the SNP have it right. If we leave aside the issues of carbon, then the cost is estimatedat £250 m. If the GVA is £350 m (a big if) then the total tax take from that is likely to be around 40% – £140m. However, that would be across all UK taxes. Let’s say that Scotland takes (a generous) 50%, or £70m of this. That makes the total loss to the Scottish budget £250 m minus £70 m, or £180 m.

    The author did excellent work in explaining the deficiencies of Labour. But I think the SNP position on APD leaves many questions. t

    1. Broadbield says:

      I have mixed feeling about APD. First, I would prefer the SG to leave tax alone until Independence when there should be a root & branch overhaul of taxation in all its forms. Second, I’m not happy about the carbon implications, as (along with inequality) anthropogenic climate change is the biggest issue facing humanity. We need to cut down on air travel, not increase it. I know there are economic arguments for increased air travel, but we need to find other ways of travelling, or not travelling, particularly by business users going to meetings.

      1. John S Warren says:

        We live in the northern corner of an island off the northwest coast of Europe. Access and transport is one of Scotland’s major constraints on both economic growth and well-being in a complex world. If we are going to turn our back on air travel, then we can wait for HS2 (2050 if ever, or reliance on direct access through the Channel Tunnel – which will be never); or a viable east coast ferry connection – slow, unlikely and so far nobody has made a commercial success of it. You can only do so much through Skype; in any case a virtual substitute is only ever a substitute for reality – well, so far. All economic growth is being sucked into London (the UK Black Hole that takes all the light); if we give up on transport connections then I suspect we are coming close to giving up; period.

        1. Broadbield says:

          I take your points, but I still have reservations re climate change and the fact that air travel is heavily subsidised (FullFact).

          1. John S Warren says:

            I understand, but I take a completely pragmatic view. Rail travel is subsidised; the energy ‘market’ is subsidised – nuclear, Hinkley Point is subsidised to the eyeballs. Most big infrastructure projects require to be publicly funded, it is another illusion of neoliberalism that all new ideas and developments are private sector. They aren’t.

            In fact “free markets” are often the exception, not the rule – of capitalism which has great strengths but also significant weaknesses, as 2007-8 demonstrated beyond equivocation; another phony proposition of neoliberalism that largely represents not free enterprise, but the sweeping triumph of the politically subsidised cartel or monopoly: would there were legions of free markets, but in fact capital often does not like taking risks and for really big investments the public sector has to step in, and is then cut out of the upside. The key lesson neoliberal from 2008 was that the banks discovered that they could take big risks (and never on anything socially or industrially worthwhile) but if it went badly wrong the public sector would step in; then sell the business the public sector back to the market at a big discount. This isn’t capitalism of any sort – it is a kind of made-up corporatised communism.

            We should be investing much more in the endless power and predictability of tidal energy; and far more in the Pentland Firth experiments than we are currently, but we prefer subsidising nuclear.

          2. John S Warren says:

            “sell the business the public sector saved”; sorry, writing too hastily.

    2. Mike says:

      The SNP position does indeed leave many questions simply because the SNP has to work within the constraints of Devolution and not Independence.
      No Scottish Government can work any policy at its peak of efficiency while constrained within the limitations of this devolved constitutional setup. For policy to work at all there has to be the full freedom of FFA and Full application of power and authority to balance each policy and budget with each other policy and budget and Government would wish to implement during a term in office.

      1. Broadbield says:

        John, I agree entirely – as Mazzucato has argued re innovation the state provides the funds, takes the risks and private business reaps the rewards. Same as the banks, socialise the risks, privatise the profits – and spirit the gains and obscene pay off to tax havens, with the willing cooperation of the City of London.

  4. Broadbield says:

    Agreed – a clear and surgical dissection of the issues. It is sad to see SLab sink so low, especially given the role of Scots in the Labour movement.

    The “Vow”, Smith and the Scotland Bill are part of a trap in which to catch and destroy the SNP, as John says. Of course, they thought that by allowing a referendum it would all be put to bed and Labour and Tories could live happily ever after with Scotland returned to colonial rule. Didn’t quite work out like that.

    Swinney has said that he would not recommend acceptance of the Bill to the Scottish Parliament if it was to the detriment of Scotland. As this article, and others, have shown, that’s precisely what it is. I hope it will be rejected and that the SG embark on a public education exercise to explain exactly why it will make things worse for Scotland – the Gordian Knot alluded to above.

  5. Macart says:

    Superb post and pretty much nailed the whole fiasco.

  6. Paul Codd says:

    Why not go the whole hog? Give everyone a “universal basic income”. No means testing, no tax credits, no housing benefit, no unemployment or income support, no incapacity benefit. Everyone gets a basic living income of say 1,000 pounds per month from which to live, pay rent etc. Any money people earn is of course on top of this, retaining the work incentive. It could start at say a proportion of minimum wage and be increased from there to smooth the transition.

    As there is no means testing the bureaucracy would be minimal and would eliminate the need for entire government departments dedicated to welfare red tape. Everyone would get the money, whether rich or poor. We would remove the stigma of “claiming” which would increase self-esteem of the poorest people, who are often some of the most vulnerable to mental health issues. As mental health correlates with higher crime, violence, substance abuse and prostitution we might expect reduction in those indices too.

    This has been tried in an area of Canada, and is being given serious consideration in many European countries at the moment including Holland, Switzerland and Sweden. Whether it would be cheaper or more expensive would depend on the amount paid to each person, and the specifics of each country but the real benefit in my opinion is something that is very difficult to measure before hand without conducting trials.

    Many people, especially millennials, and independent workers, would love to set up a business or start a project but can’t get off the treadmill to invest the time and energy to get it started. For others it would give the opportunity to retrain or go to university to those that can’t afford their living expenses without working full-time. The economic benefits might take a few years to materialise, but there should be early indicators right from the first year.

    1. Broadbield says:

      You may know Anthony B Atkinson has proposed this and something similar appears in his latest book: Inequality: What can be done? There’s also a website you may know: BasicIncome.org

    2. Laura Vivanco says:

      A Citizen’s Income is part of Scottish Green Party policy. You can see more details of what’s proposed in this policy document and the longer briefing here.

      If the links don’t work, the full urls are:

      https://branches.scottishgreens.org.uk/resources/docs/other-policy-documents/Policy_summary_2015.pdf/view

      https://www.scottishgreens.org.uk/wp-content/uploads/downloads/2014/08/Citizens-Income-Briefing-Note.pdf

  7. Alex Beveridge says:

    Very well written Kimberley. However, if you are waiting for so-called journalists, and their media outlets, to change tack
    I’m afraid it will be a long wait.

  8. Alf Baird says:

    “Labour cannot be trusted”

    The Scottish people finally got that message, hence 1 Labour MP in Scotland.

  9. Wul says:

    “..the Smith Agreement and the Scotland Bill make it clear that neither party (the Scottish parliament nor the UK parliament) will be at a loss as a result of the new devolved powers”

    So, if I understand correctly, every pound that Westminster cuts from Scottish people’s income, can now be replaced by a pound that the Scottish Government takes from some other Scottish people.?

  10. punklin says:

    Thank you so much for the article – now I get it! Instinctively – or at least from bitter experience – I felt Labour were playing games. Now, thanks to this kind of clear analysis, we can see precisely how.

    Though not everyone will have a chance to see this kind of detail, people are not fooled. Roll on next May!

  11. ScottieDog says:

    Good article and interesting comments. It’s just distressing how labour will accept the huge collateral damage to people’s lives in order to pursue the destruction of the SNP. Where is Mr Corbyn on this? surely it goes against his principles?

    The basic income idea is very interesting. I believe ideas like this should go hand in hand with research into alternative currency and mutual credit clearing systems. There are many examples of these around Europe.

    Swiss WIR for example has been going since the end of the Great Depression and is probably the biggest example of mutual credit clearing between businesses.

  12. ScottieDog says:

    Meant to post link to WIR info…
    http://p2pfoundation.net/WIR_Economic_Circle_Cooperative

    Throughout history people have had to innovate due to actual or perceived scarcity of money and it’s time we did the same.
    Of course the idea that there can be a scarcity of fiat money is a fallacy.

    1. John S Warren says:

      A good discussion. “People …. have to innovate”. People. That is us. We have to innovate.

      The first three words of Madison’s great American Constitution: “We the people….” (probably written by Morris). What a way to begin a constitution. Everything relies on you. Make the world.

  13. Anton says:

    I’m unclear about the thrust of this post. As far as I can work out, Kimberley Cadden believes that the top tax rate for the wealthy should not be increased to 50% on the grounds that the advantage would be marginal. Fair enough, it’s also George Osborne’s view, and is the reason he gave for cutting the top rate of tax in the first place. So no disagreement there.

    APD is a little more complicated. No doubt a reduction in APD would attract travellers from the North of England, with consequent benefits to Scotland and disbenefits to the English North. It might then be that in response (who knows?) England might also reduce APD to an even lesser level in a straightforward race to the bottom.

    Who gains? No-one.

    1. John S Warren says:

      Why do you assume the cut in APD would only produce visitors from the North of England? The “race to the bottom” idea at everyone’s cost is an attempt to resuscitate mercantilism; it is a business-shrivelling approach. Furthermore, to assume London would follow a tax cut probably exaggerates the significance of Scotland to the London airport colossus.

      Cuts in APD reduce the cost of travel for all visitors. Demand generally will increase and even if England follows that simply implies the policy works; indeed it would suggest it was a triumph.

      At the same time there is no reason to assume that the whole market will produce a price war and return to the position ex-ante; for the total market will have grown; there is room for all. And as a matter of fact there are supply pressures on slots to land/take-off in London that will become more acute (hence the 3rd London runway etc, etc; or new airport).

      APD is currently a high tax for two reasons; it holds the peripheries like Scotland back and enhances the power of the (principally London) hub, and the demand in London is such that it can carry a high tax without seriously damaging travel, at least to London. Scotland is relatively remote and feeds the hub, therefore anything that makes Scotland a cheaper and more competitive destination is good for business and tourism in Scotland. The stimulus to trade and business will be worth much more to Scotland than the lost tax.

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