Government orders research into regional rate for air passenger duty

Chloe Smith, Economic Secretary to the Treasury, has said – at a meeting with the Sedgefield MP and Newcastle airport and Durham Tees Valley airport – that the Government has commissioned research into varying APD on a regional basis. The research, planned to be published this summer, will consider the potential impact of a regional APD rate as well as devolving the power to set the tax north of the border to the Scottish Government. There has been a campaign in the region, by the Journal newspaper, to get APD changed, claiming it has adverse economic consequences. Newcastle Airport  wants APD to be charged at a higher rate at the biggest, most congested airports (south east), and a lower rate from uncongested regional airports.

 

 

Government orders research into regional rate for air passenger duty

  • by William Green, (The Journal)
  • 19.6.2012
A plane coming into Newcastle Airport and a warning sign for low flying planes

AIRPORT chiefs have welcomed news that the Government has commissioned research into varying air passenger duty on a regional basis.

The news emerged during a meeting yesterday between bosses from Newcastle and Durham Tees Valley airports with Treasury minister Chloe Smith. It was arranged and attended by Sedgefield MP Phil Wilson and his Newcastle North colleague Catherine McKinnell.

The research, planned to be published this summer, will consider the potential impact of a regional air passenger duty (APD) rate as well as devolving the power to set the tax north of the border to the Scottish Government.

The Journal’s A Tax Too Far campaign has highlighted fears about the impact that APD has on the region – with warnings it is acting as an economic brake on the region and that handing powers to Scotland would give it an unfair advantage.

Newcastle International Airport has helped lead calls for a re-think, putting forward a proposal for a higher rate of APD be charged from the biggest, most congested airports, and a lower rate from uncongested regional airports.

Graeme Mason, planning and corporate affairs director at Newcastle International, said: “We have been trying to encourage the Treasury to assess in more detail what the different possibilities are and in that respect they have given us some encouraging signals.”

Labour MP Phil Wilson said: “We are pleased that from what gathered from the meeting, the Government is doing some economic modelling on this. And they want to publish it in the summer.”

Ministers have already cut APD for long-haul flights leaving Northern Ireland because it has a land border with Ireland, which has a much lower rate.

The Northern Ireland assembly is also getting the power to set APD rates for long-haul flights to safeguard trans-Atlantic flights.

In April, Economic Secretary to the Treasury Chloe Smith said all taxation was kept under review after being quizzed about APD by Mr Wilson in the House of Commons.

She also said: “My main point about the potential devolution of APD is focused on the wider-ranging impact such a move might have across the whole of the UK economy.

“We should not run the risk of replicating the same problems that Northern Ireland has faced with its land border and lower taxes in the Republic.”

The Tory minister also pledged at the time that the Government was determined to examine the full range of effects that devolution of APD could have on the UK before taking any final decisions.

http://www.journallive.co.uk/north-east-news/todays-news/2012/06/19/government-orders-research-into-regional-rate-for-air-passenger-duty-61634-31211410/

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Earlier

Government urged to reform tax on air passengers to help North East economy

SCOTLAND could be banned from setting a cheaper passenger tax rate in a bid to protect North East airports. Demands to allow the country to set its own lower tax on air passengers appear to have been rebuffed by the Treasury amid calls for a regional rate to help the North East.

Scottish First Minister Alex Salmond may not now get the power to set air passenger duty (APD) unlike other areas in mainland Britain, Treasury Minister Chloe Smith signalled.

North East MPs are instead urging the Government to look at a regional APD rate, something the Scottish National Party (SNP) has said it would support for England.

Warnings had been sounded that a lower APD rate in Scotland would unfairly hit North East airports and the economy, with passengers simply travelling over the border.

SNP MP Angus MacNeil said his party would support regional variations in tax.

Ministers have already agreed to cut APD for long-haul flights leaving Northern Ireland because it has a land border with Ireland, which has a much lower rate.

The Northern Ireland assembly is also getting the power to set APD rates for long-haul flights to safeguard transAtlantic flights.

North East MP Phil Wilson, who represents Sedgefield, said: “I have a small airport, Durham Tees Valley airport, in my constituency.

“The problem with air passenger duty relates to regional airports, and I believe that we need a UK solution, rather than a Scottish solution or a Welsh solution. There are specific reasons for the arrangements in Northern Ireland.

“We need a duty that reflects the needs of the regional airports outside the South East of England.”

He added: “Will the minister look into whether there is a way of varying air passenger duty? Perhaps there could be two variations in the duty, and a small congestion charge to encourage the growth of regional airports around the country.”

Economic Secretary to the Treasury Chloe Smith said all taxation was kept under review.

But she added: “My main point about the potential devolution of APD is focused on the wider-ranging impact such a move might have across the whole of the UK economy.

“We should not run the risk of replicating the same problems that Northern Ireland has faced with its land border and lower taxes in the Republic.”

The Government was determined to examine the full range of effects that devolution of APD could have on the UK before any final decision was taken, she said.

Graeme Mason, planning and corporate affairs director at Newcastle International, said APD was acting as a brake and warned that solely giving APD powers to Scotland would give it an unfair advantage over the North East.

“From what the Economic Secretary said during the debate, we think she understands this,” he said. “There is a much better way of reforming APD to address the problem of regional impact.

“Last year we proposed that a higher rate of APD be charged from the biggest, most congested airports, and a lower rate from the uncongested regional airports.

“We are therefore pleased that Mr Wilson called on the Government to consider a variable rate of APD across all regions, not just Scotland and Wales.”

The Journal’s A Tax Too Far campaign has set out warnings about the risk that the current APD system poses to regional airports and economic growth.

http://www.journallive.co.uk/north-east-news/todays-news/2012/04/21/government-urged-to-reform-tax-on-air-passengers-to-help-north-east-economy-61634-30805957/

 

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And

MP for Sedgefield’s call over air passenger duty

AN MP is pressing for the air passenger duty to be varied to help regional airports such as Durham Tees Valley.

Phil Wilson, the MP for Sedgefield, also fears if the Scottish Government is given the power to vary the air passenger duty (APD) at Scottish airports it would put Durham Tees Valley Airport at a big disadvantage.

Mr Wilson and Catherine McKinnell, MP for Newcastle North, are to meet Treasury Minister Chloe Smith along with representatives of Durham Tees Valley and Newcastle airports.

Mr Wilson is backing the idea of varying the rate of APD outside the South-east to help struggling regional airports. APD is a tax on passengers flying from UK airports and it ranges from £13 to £92 depending on the distance of the flight.

The Scottish National Party also wants the tax to be devolved to the Scottish Parliament.

Mr Wilson said: “The Scottish Parliament would reduce the rate for Scottish airports, which would give an unfair advantage to airports such as Edinburgh and Glasgow over Newcastle and Durham Tees Valley.

“A more fair approach would be to have a flexible approach to the level of the tax on passengers using UK airports outside of the South-east.

“I want the Government to explore the possibility of a variable rate for regional airports as well as those in Scotland and Wales.”

http://www.gazettelive.co.uk/news/teesside-news/2012/04/26/mp-for-sedgefield-s-call-over-air-passenger-duty-84229-30844344/#ixzz1yNiPfCil