Newcastle and Manchester Airports oppose devolution of APD powers to Scotland


Backlash over devolution of airport taxes


25 July 2011  (Herald Scotland)

by DAMIEN HENDERSON Transport Correspondent EXCLUSIVE

MINISTERS are facing a backlash from English airports over plans to devolve power
on aviation taxes amid fears it could lead to an exodus of passengers travelling
north of the Border to catch flights.

The Scottish Government has promised to lower Air Passenger Duty (APD) to cut
fares and encourage the development of new routes. It has been pushing Westminster
to honour a commitment to hand over responsibility for the tax to Holyrood.

However, it has faced an angry response from Newcastle and Manchester airports,
which claim introducing a lower rate in Scotland would put them at a competitive
disadvantage as passengers would drive north to get better flight deals.

Airport sources say this would also potentially stem the flow of Scottish passengers
travelling south for cheaper flights.

Both English airports have pointed to the example of Belfast International, which
has lost a stream of passengers to Dublin since the republic decided this year
to scrap its aviation taxes.

There is no good reason why passengers in Scotland should have to travel in such
numbers through other UK airports Graeme Mason, Newcastle International’s planning
and corporate affairs director, said the devolution proposals, which are being
considered by the Treasury, would be “devastating”.

“The devolving of powers to Scotland, Wales and Northern Ireland to vary APD
would be devastating to other UK regions,” he said. “The north-east would be particularly
damaged, with air services and passengers relocating north of the Border.”

Both airports have called for variable rates of APD to be considered for across

The UK Government had intended to devolve responsibility for APD but reversed
its position while it examined a Coalition commitment to replacing the per-person
tax with a more environmentally-friendly per-aircraft tax.

Chancellor George Osborne then dropped the APD reforms in his March Budget, saying
they would not be legal, but included proposals to devolve responsibility forr
the tax to Scotland, Wales and Northern Ireland in a consultation which ended
last month.


An industry source said UK Government ministers were reluctant to put English
airports at a disadvantage and were also hostile to the idea of introducing a
two-tier tax system. The source said: “They were serious about reforming Air Passenger
Duty. But now that’s been dropped, there’s no way they want to see a variable
rate introduced between England and Scotland.”

A likely compromise would be to hand over power for collecting the tax – worth
£157m in Scotland – but not the power to vary it, the source claimed.

The Treasury insisted no decision had been taken on devolving APD but reforms
would be made on a “revenue-neutral basis”. A final decision is due in the autumn.

A spokeswoman for Manchester Airport Group said it was not against devolution
of APD but would object to reforms that disadvantaged English regions.

“We would be concerned if the Government were to devolve powers to Scotland without
taking into account the effect it would have on airports in the north of England,”
she said. “We have urged the Government to look at a differential rate of APD
more broadly if it is serious about stimulating airport growth, given the capacity
constraints in the south-east of England.”

A spokesman for Transport Scotland, the agency with responsibility for aviation
policy, said: “While we would not seek to displace services which operate from
other UK airports, there is no good reason why passengers in Scotland should have
to continue to travel in such numbers through other UK airports or should not
benefit from levels of connectivity enjoyed in other parts of the UK.

“The case for devolution is growing with Scotland’s four largest airports supporting
the Scottish Government’s call that Air Passenger Duty be devolved to ensure the
interests of passengers in Scotland are supported.”
see also

Northern Ireland MPs call for NI air passenger duty to be abolished

 9th July 2011     APD should be abolished on all flights from Northern Ireland, the NI Affairs
Committee has said. A report by the group has also suggested services to Northern
Ireland from Great Britain should be exempt. It says this is needed to counter
the threat the tax poses to the economy. Continental Airlines warned that the
region’s only transatlantic route could be axed if passenger duty was not cut.
It adds £60 to every flight to the US – but nothing in Ireland.

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Passengers fall at some regional airports by up to 70% since 2007; APD blamed
(as usual)

27th June 2011    Passenger numbers at regional airports have fallen by up to 70% in the last 4
years according to the CAA, and operators say APD is having a ‘damaging and disproportionate
impact’ on regional hubs. Over 4 years the APD on short flights has risen 140%,
from £5 to £12, and more on longer journeys. They are saying rises in APD would
cause loss of more regional routes and airport closures – with Bournemouth, Prestwick,
Robin Hood and Exeter the worst affected.
Click here to view full story…


Chief executive of Leeds Bradford Airport in plea to Government to tax others

27th June 2011     Several regional airports are calling on the Government to reduce the tax on
regional airports. They have signed a joint letter urging the government to abandon
its ‘one-size-fits-all’ approach to aviation taxes, which they believe penalises
the regions. Regional airport bosses want to see a charge on the busiest airports,
Heathrow and Gatwick, and bemoan the fact regional airports have been hit by recession.

Click here to view full story…


Manchester Airport calls for lower flight taxes for regions

13th June 2011    Manchester Airport has launched a new campaign to persuade the government to
introduce lower air taxes for flights from regional airports than from London.
It is urging passengers to write to the Chancellor George Osborne asking for a
regionalised taxation system. This is in response to the government consultation
on APD which ends this Friday. The airport is giving customers pre-written postcards
asking for a lower level of APD for airports like Manchester.
Click here to view full story…