An air passenger duty “holiday” could provide a major boost to Newcastle Airport and the regional economy, according to an MP.
Tory Guy Opperman has drawn up proposals to encourage carriers to run new long-haul services from regional airports such as Newcastle.
The proposal is backed by Newcastle Airport and Mr Opperman, MP for Hexham in Northumberland, hopes to present the proposition to Ministers in a Commons debate.
Newcastle Airport and the North East Chamber of Commerce have both called on the Government to reform air passenger duty to give airports outside the south east a fairer chance of competing against Heathrow.
The issue has been highlighted in The Journal’s A Tax Too Far campaign.
As well as providing jobs and bringing in investment locally, they say that reforms would help relive congestion in the south, where airports are running out of capacity.
But calls for a regional variations in air passenger duty have been opposed by London-based businesses, and also face opposition from the Treasury which fears it would lose revenue.
Passengers currently pay up to £188 per seat in duty for the longest flights, with the rate falling for shorter flights. Duty can also be lower for economy-class seats.
Mr Opperman’s proposal is to offer carriers a temporary waiver on air passenger duty when they introduce new long-haul services for a period such as two years.
Getting a regular service to America has been a long-term aim at Newcastle Airport.
This would encourage new services from airports with spare capacity. But if the service was successful, it would eventually become liable for duty, ensuring the Treasury did not miss out.
Requesting a debate in the House of Commons, Mr Opperman said: “May we have a Treasury debate on regional cuts to air passenger duty for entrants to the long-haul market, which would stimulate growth, reduce the burden on the south- east and kick-start the regional economy?”
Cabinet Minister Andrew Lansley, leader of the Commons, told him: “The point about regional airports is well taken. Taxes and duties are, of course, matters for the Chancellor of the Exchequer, but I will be glad to alert my honourable friends at the Treasury.”
Mr Opperman said afterwards: “What I want to do is to try and debate this in the Commons with the Treasury Minister, to see if we can help in particular the airports that are looking at this.
“I know that Newcastle Airport has looked at a Transatlantic flight for some time, and Manchester is also very far advanced in expanding its international connections.”
Graeme Mason, Planning and Corporate Affairs Director at Newcastle Airport, said: “We welcome Guy Opperman’s intervention on this crucial issue. We’ve been lobbying the Government for a number of years on the effects that air passenger duty has had on air services at Newcastle, and on the North East economy.
“We believe it has been acting as a brake on progress here in the North East.”
There is concern that Newcastle Airport could face stiff competition from Scottish airports such as Edinburgh if Scotland votes for independence, as the SNP has set out plans to halve, and eventually abolish, air passenger duty north of the border.