Northern Ireland Finance Minister says cutting APD on short haul flights would cost NI too much
Northern Ireland Finance Minister, Sammy Wilson, has said he would like to see APD on short-haul flights cut, but said it might cost NI too much. The tax currently adds £13 to a flight in Northern Ireland, compared to €3 in the Republic. While legislation to cut APD on long-haul flights is going through the assembly, NI does not have the power to cut it on short-haul flights. Getting this power would affect the amount it gets in the block grant that Northern Ireland gets from the Treasury in London – of some between £60-90m a year. As the devolved administration does not have responsibility for tax-gathering, when tax is gathered in Northern Ireland, it is collected by HM Revenue and Customs and it goes directly to the Treasury in London. Sammy Wilson said “Even if we did have the powers we would have to ask the question whether or not the £60m this would cost us, rising to £90m, would be better spent on other developments.”
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7 October 2012 (BBC)
Cutting air passenger duty tax may cost too much – Sammy Wilson
Finance Minister Sammy Wilson has said he would like to see the Air Passenger Duty on short-haul flights cut, but said it might cost NI too much.
The tax currently adds £13 to a flight in Northern Ireland, compared to three euros in the Republic.
While legislation to cut the duty on long-haul flights is going through the assembly, NI does not have the power to cut it on short-haul flights.
Getting this power would affect the amount it gets in the block grant.
This is the money Northern Ireland gets from the Treasury.
As the devolved administration does not have responsibility for tax-gathering, when tax is gathered in Northern Ireland, it is collected by HM Revenue and Customs and it goes directly to the Treasury in London.
The Treasury then works out how much Northern Ireland should get from the United Kingdom’s overall income.
If the power to cut Air Passenger Duty on short-haul flights was devolved it would have a potential cost to the block grant of between £60-90m a year.
“I have already spoken against air passenger duty in its totality in the House of Commons during budget debates,” Mr Wilson said.
“There’s already additional costs now under the Emissions Trading Scheme which imposed burdens on airlines.
“We see this a double taxation and damaging to the economy.”
However, he added: “We don’t have the power to cut it – the only power that has been devolved to us is the power for direct long-haul flights.
“Even if we did have the powers we would have to ask the question whether or not the £60m this would cost us, rising to £90m, would be better spent on other developments.”
http://www.bbc.co.uk/news/uk-northern-ireland-19983360
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BA boss Willie Walsh not hopeful over air passenger duty
The head of British Airways has said there is no chance of Air Passenger Duty being scrapped on short-haul flights from Northern Ireland.
Legislation to cut the duty on long-haul flights is going through the assembly.
However, Willie Walsh said he had no hope that Westminster would get rid of the £13 tax paid by passengers on short-haul flights.
He said it was damaging the economy and that the whole tax should go.
“It’s better, I think, if the whole tax was scrapped rather than adjustments made on an ad hoc basis like we’ve seen in Northern Ireland for long-haul flights,” he said.
“It does put us at a disadvantage compared to the carriers that are operating directly from Belfast, because if you’re flying from Belfast over Heathrow you’re still paying the high levels of taxation.”
On Wednesday, Finance Minister Sammy Wilson said he would like to see the Air Passenger Duty on short-haul flights cut, but said it might cost NI too much in terms of what would be lost from the block grant.
This is the money Northern Ireland gets from the Treasury.
“We don’t have the power to cut it – the only power that has been devolved to us is the power for direct long-haul flights,” he said.
“Even if we did have the powers, we would have to ask the question whether or not the £60m this would cost us, rising to £90m, would be better spent on other developments.”
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27 September 2011 (BBC)
George Osborne confirms NI air passenger duty cut
Chancellor George Osborne has announced air passenger duty (APD) will be cut for direct long-haul routes from Northern Ireland airports.
The direct long-haul rate of APD will fall to the lower short-haul rate – £12 per passenger in economy and £24 for business and first class passengers.
It currently adds £60 to an economy fare and £120 to a business ticket.
The cost of the tax has been threatening to kill off the daily service between Belfast and New York.
‘Proactive measures’
The flight is operated by Continental Airlines which also operates a daily service from Dublin.
However, the tax out of Dublin airport is just three euros and Continental said it had been absorbing the cost in Belfast in order to avoid passengers simply opting for Dublin.
This, the company told MPs recently, would cost them £3.2m this year and meant the route was no longer viable.
The route is seen as vital for promoting trade and inward investment.
“The government has taken proactive measures to protect the only direct long-haul service operating from Northern Ireland and with it the jobs of those who serve the Belfast route,” Mr Osborne said.
“Northern Ireland faces a unique challenge in attracting traffic – including very valuable business customers – into its airports.”
The government will launch a parallel process to devolve aspects of APD to the Northern Ireland Assembly.
The precise scope of devolution will be agreed in cooperation with the Northern Ireland Executive.
‘Crucial for business’
The Northern Ireland Finance Minister Sammy Wilson welcomed the decision, which he described as “crucial for business and for tourism”.
Secretary of State Owen Paterson said the air link between Belfast and the United States was vital.
He added that Tuesday’s decision would make it easier for the executive to develop other long haul routes from Northern Ireland’s airports.
However, Friends of the Earth has criticised the decision, claiming the aviation industry was actually a drain on the economy.
Its spokesperson, Declan Allison, said that for every £1 spent in Northern Ireland by tourists, Northern Ireland residents spent £4 abroad.
He added: “This air passenger deficit means the economy loses over £114m every year.”