Government orders research into regional rate for air passenger duty

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

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.

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