There will now be a ministerial statement on the Scottish city region deals

Image source, bbc

Scottish Lib Dem leader Willie Rennie says he is pleased ADT is not being reduced.

Mr Rennie says by making this announcement he is recklessly damaging the future of the reduction.

Mr Mackay says he has been transparent and have kept parliament up to speed.

The finance minister says there is risk but the UK government wants the Scottish government to assume that risk.

Mr Mackay says the timetable in terms of what the Scottish government can do is in the hands of the UK government.

The finance secretary says it would be difficult to ever convince the Greens of this policy.

He agains says it is for the UK government to resolve this.

Image source, bbc

Scottish Green Party co-convener Patrick Harvie says it is clear the government have not even attempted to build a business or social case for this policy.

Mr Harvie says the minister must have known this lay ahead of him.

He asks if it would be better just to confirm now that ADT will not be reduced in this coming year.

Image source, bbc

Finance Secretary Derek Mackay says the most important point in that question was that the exemption must continue.

As it stands it cannot and the UK has not found a solution to that, he says.

The minister says it is the doing of the UK government.

He says this is in clear breach of the no detriment clause in the Smith Agreement.

Labour MSP Neil Bibby says the Highlands and Islands exemption must be continued.

Mr Bibby says today we see the SNP use a convenient matter to kick a bad policy into the long grass.

Mr Bibby asks how the cut can be justified and asks for the minister to guarantee that it will not be introduced in the lifetime of this parliament.

Image source, bbc

Finance Secretary Derek Mackay says this is an issue of the UK government's making.

Mr Mackay says he is very surprised Mr Fraser is not aware that the Scottish government cannot pass legislation contrary to EU law and regulations.

He says the APD policy remains the same.

Mr Mackay says: "This power is in a defective state."

Tory MSP Murdo Fraser says the Scottish government's policy of reducing ADT is a long standing one and has his party's support.

"The Scottish government seems to be weaseling out of its commitment," he says.

Mr Fraser suggests that a cynic may suggest this is an attempt by the Scottish government to "cosy up" with the Greens again to get its budget through.

He says the Highlands and Islands exemption has existed for 16 years and questions why this has become an issue now.

The Scottish Government has proposed an alternative financial solution to the UK government that would enable the Highlands and Islands to be exempted from Air Departure Tax (ADT) .

Finance Secretary Derek Mackay says this was done after the UK government placed unacceptable conditions on notifying the exemption to the European Commission.

An exemption from Air Passenger Duty for flights from the Highlands and Islands has been in place since 2001.

Image source, bbc

Transferring the exemption to the new Air Departure Tax requires notification to and assessment by the European Commission under State Aid rules, in compliance with EU law.

Mr Mackay said that the Scottish government would not put the economies of the Highlands and Islands at risk and outlined an alternative proposal, which would use tax rates and bands to provide the same benefit for all Highlands and Islands flights including connecting flights.

The finance secretary highlighted the flaws in the devolution of APD and called on the UK government to act in line with the fiscal framework to ensure there is no detriment to the Scottish government as a result of the costs required to enable the tax to be properly transferred.

The UK government has suggested delaying the transfer of the tax indefinitely in the absence of a solution.

Mr Mackay says delay is not his preferred option and he calls on the UK government to adopt his proposed option.

Mr Mackay says to match the exemption for all the Highlands and Islands funds the Scottish government would have to forego £320m.

The finance minister says the block grant adjustment does not take into account the Highlands and Islands exemption.

He says the UK government has suggested the Scottish government defer the exemption which is feasible but not the Scottish government's first choice.

Mr Mackay says he would urge all stakeholders and parties to encourage the UK government to reach a satisfactory solution.

Image source, bbc

Mr Mackay says correspondence from the UK government says the Scottish government would have to accept the liability for the full risks, including the historic risk of APD.

The finance secretary says he is clear the obligation was on the UK government to allow the new tax to operate.

He says this government will not put at risk the economy of the Highlands and Islands or take on the risks of the UK government.

The minister says the government has considered many options.

He says the only option that does not require notification to the commission to secure the benefit to the Highlands and Islands through the exemption would be through bands and rates.

Mr Mackay says aviation is critical to the Highlands and Islands region.

The finance minister says only the UK government can take this matter forward to the EU Commission.

He says the UK government's response so far has been disappointing.

Image source, bbc

Finance Secretary Derek Mackay says the government is committed to cut Air Passenger Duty by 50% when resources permit.

In July Holyrood voted to replace the tax paid by passengers on flights from Scotland's airports.

MSPs voted by 108 to 11 to replace Air Passenger Duty (APD) with a new devolved Air Departure Tax (ADT) in Scotland from April next year.

But the rate at which is the tax is set is likely to be more controversial when it is decided later this year.

Mr Mackay raises the issue of the Highlands and Islands exemption of APD.

He says the government and parliament cannot act in a way that is compliant with EU law.

Labour MSP James Kelly raises a point of order saying the details of the statement are available on BBC online and Scotsman online.

Mr Kelly says parliament has been disrespected saying Mr Mackay has broken parliamentary rules.

Presiding Officer Ken Macintosh says he takes the matter very seriously and he says announcements should be made in the chamber.

Image source, Getty Images

• Air passenger duty is charged on all passenger flights from UK airports
• The rate of tax varies according to where the passenger is going, and the class of travel
• It was introduced in 1994, and was originally just £5 per person for short-haul flights, and £10 elsewhere
• The tax has been increased by successive UK governments, and brings in about £3bn a year
• From 1 April this year, flights of 2,000 miles or less saw APD charged at £13 for passengers in economy class seats, and £26 for all other classes
• For flights of more than 2,000 miles, the rate is £75 for economy class, and £150 for any other class
• No APD is charged for direct long-haul flights from Northern Ireland, or for flights from airports in the Scottish Highlands and Islands
• Children under 16 are also exempt from paying APD on economy flights

Image source, Getty Images

Plans to replace air passenger duty with a discounted alternative may have to be delayed.

The Scottish government wants to replace Air Passenger Duty (APD) with a new devolved Air Departure Tax (ADT) in Scotland from April next year.

However, it said plans to continue exempting journeys from airports in the Highlands and Islands required EU approval under state aid rules.

It is understood that getting this approval could take longer than Brexit.

Read more here.

Image source, bbc

Finance Secretary Derek Mackay will now deliver a ministerial statement on Air Departure Tax.

Finance Secretary Derek Mackay will deliver a ministerial statement on Air Departure Tax at 2pm.

Image source, Getty Images

The Scottish government will then deliver a ministerial statement on Scottish City Region Deals.

Image source, AP/BBC

MSPs will then debate the Wild Animals in Travelling Circuses Bill before voting on its general principles at decision time.