Tuesday 11 May 2004

In support of the world's cheapest airline

The Ryanair boss has been visiting my favourite airport to open his new maintenance base. Mr O'Leary has built his airline by cutting costs to the bone. At Prestwick, he was trying to reduce costs further:
But he warned Ryanair would halt all further job creation at the facility until a row over "ridiculous rates" was settled.

The airline boss said a rates bill of £110,000 from South Ayrshire Council had put future investment and job creation at risk.

He said: "The local council will tell us it's not their fault, it's the government's and the government will tell us it's not their fault, it's the local council.

"But somewhere in the middle is us and we need this thing sorted out or we are not going to continue to stimulate jobs and invest millions of pounds here if we are going to be met with bills for 110 grand."

Fair enough - that's how O'Leary bargains, and good luck to him.

The local council says that its hands are tied:

Tom Cairns, chief executive of South Ayrshire Council, said: "The council has no discretion whatsoever in this matter."

A spokesman for the Scottish Executive said an appeal process was open to any business who wished to contest the rates and that Ryanair had done so and were now trying to reach an agreement with assessors.

I can understand why it may not be possible - or fair - to give Ryanair a cut-price deal that's not available to other local businesses. What doesn't seem to have been questioned is why business rates are so much higher in Scotland than in England. I believe that shops in Princes Street, for example, pay far higher rates than similarly sized properties in London's Oxford Street. The explanation, of course, is those Jurassic politicians mentioned in the previous post. Less socialism = less tax = more jobs. It's simple really.

1 comment:

David Farrer said...

Comment made on previous template:

Neil (
True on both points. 
A cut in business rates of 10% (cost about £80M) would have a substantial effect on our economy. 
However large companies with good PR should not get a specialdeal by going public.

19 May 2004, 01:18:44 GMT+01:00