Today Newcastle International Airport has announced its response to five key areas outlined in the Budget’s consultation on the Reform of Air Passenger Duty (APD), set out in March 2011. The main thrust of the response is a joint approach to lobby government for a radical change to how the aviation tax is applied on a national level.
The consultation document set out the government’s proposals for reform of the current APD banding system, its plans to extend the tax to customers aboard ‘business jets’, seating class distinctions, the impact on regional economies, and the possible devolution of APD powers to Scotland, Wales and Northern Ireland.
Graeme Mason, Newcastle International’s planning and corporate affairs director, said: “Air Passenger Duty has now reached levels that are making the UK uncompetitive; reducing inbound tourism, damaging businesses and curtailing inward investment. Regional airports cannot withstand the current levels of APD. Any further rises and the cumulative impact of the aviation tax and the introduction of the European Union Emissions Trading System will lead to the loss of many more regional air services and the closure of further regional airports.”
Newcastle Airport has long argued that APD is having a damaging and disproportionate impact on regions. A partnership between Newcastle, Manchester, Leeds Bradford, Birmingham, East Midlands, Bristol, Prestwick, Manston, Humberside, Bournemouth, Liverpool, Robin Hood, and Durham Tees Valley airports has obtained legal advice on whether a new differential tax regime can be introduced.
Graeme Mason added; “A group of regional airports is proposing that the government replaces APD with an Airport Congestion Tax which would be charged at a higher rate from the most congested airports. Such a tax would assist in taking the pressure of the most congested airports, rebalancing the economy between London and the regions, and encourage private sector growth in regions reliant on the public sector.”
The response also raises concerns about the possible devolution of APD powers to Scotland, Northern Ireland and Wales.
“The devolving of powers to Scotland, Wales and Northern Ireland to vary APD would be devastating to other UK regions. The North East would be particularly damaged, with air services and passengers relocating north of the border. A congestion based approach to differentiation would be the only legal and fair way of addressing regional impact.
“Low and middle income families in regions like the North East are being priced out of air travel and in many cases are being denied the opportunity to broaden horizons by enjoying overseas holidays as a motivation for hard work throughout the year.”
Newcastle Airport joined with other regional airports to send an open letter to George Osborne emphasising the problems with the current APD system and outlining the proposed congestion-based approach. The letter is available to download below:
Open Letter to George Osborne