14 Mar 2016

Newcastle International Airport reacts to consultation on a Scottish replacement to Air Passenger Duty

14-03-16

Newcastle International Airport has today made a number of comments in response to the launch of a consultation by the Scottish Government on reductions, from 2018, in Air Passenger Duty (APD) north of the border. Speaking after the announcement, David Laws, Chief Executive, said:-

“The Scottish Government has now commenced detailed consultations on the reform and reduction of Air Passenger Duty in Scotland. This increasingly firm plan now provides confirmation that the dangers that made it necessary, in 2015, for David Cameron to promise intervention have not subsided. In fact, they have become very real and urgent. We have recently therefore written to the Prime Minister reiterating our concerns.

“We maintain the view that the Government should commit now to matching reductions in Scotland across the whole country. If this is not possible, then our view is that the second of the options in last year’s APD discussion paper - the varying of rates within England - is the most preferable and the least inequitable.

“A failure to act now would break the promise made in 2015 to protect English regional airports. The consequences of unmatched reductions in Scotland would be so serious that ‘do nothing’ continues to be simply not an option. 

“We would be surprised if the Government allowed the devolved administrations to drive the policy direction on this important issue. This surely wouldn’t be right for our country as a whole? We therefore call upon the Government to take control of this crucial agenda now, before it is too late.”

During the build up to the 2015 General Election, the Prime Minister made it clear that the government would not allow airports and regions to be adversely impacted by the devolution of APD. During the General Election campaign, he said:-

“The SNP Government in Scotland is committed to using its new powers to cut and eventually abolish Air Passenger Duty from Scottish airports. This could distort competition and see business drawn north of the border with a huge impact on airports in the rest of our country so we’re reviewing the way Air Passenger Duty works to make sure other cities don’t lose out.”

In a separate interview, the Prime Minister said:

“We are not going to accept a situation where there’s unfair tax competition. We will do what’s necessary to make sure England’s regional airports can succeed.”

Speaking about these reassurances, Graeme Mason, Planning and Corporate Affairs Director, said:-

“These comments were very reassuring at the time. We maintain the view, therefore, that the Government should commit now to matching reductions in Scotland across the whole country.

“If this is not possible, then our view is that the second of the options in the APD discussion paper, the varying of rates within England, is the most preferable and the least inequitable. If in order to meet EU legal requirements this must be a system of differential rates based upon level of airport congestion, then we would accept that.

“Such an approach would help ensure, as has been promised, that other English cities don’t lose out and that England’s regional airports can succeed.

“We have been asked whether an alternative approach, a system of APD ‘holidays’ for new air services, would be a possible solution. Our strong view is that such an arrangement would not address the threat that we face, and would in fact make matters even worse by concentrating new routes at larger airports further south.”