Given VS's trimming down of ambition over the past few days, Land23R is ahead of the game on this one.
It has been mentioned elsewhere that a cut to APD (or an APD "holiday" - which I think has been suggested by MAN) may help preserve strategically important routes. My feeling is that this may help links like e.g. SFO, LAX, JFK, SIN, HKG, PEK where a little support goes a long way. Quite how that affects the MEB3's relationship with MAN, I don't know.
It wont be anything in MAN's gift, and I expect it will be part of a devolved Greater Manchester authority deal.
What are your views on this?
Under EU state aid rules, member states must not vary national tax rates in a way that is more favourable to individual regions, as to do so would be to provide a selective economic advantage to businesses operating in those regions.
To comply with such rules the devolution of a tax power must meet the 'Azores criteria' that, broadly, require the individual regional authority to which they are devolved to have a sufficient degree of fiscal and economic autonomy from central government: it's measured according to how the devolved authority is institutionally, procedurally and economically autonomous.
Clearly the Scottish, Welsh and Northern Irish governments meet these criteria but no region of England currently does. So far Wales has not had APD devolved to it. As Jerry points out there might be legal challenges from competitors if APD is devolved to Wales, particularly because the major airport and the only one of any size in the country is state owned which would mean the airport owners would be setting their own APD rates, something that might be seen as anti competitive.
If Greater Manchester is given a sufficient degree of fiscal and economic autonomy in the future it could have APD devolved to it. However, to meet the Azores criteria central government funding for a future fiscally and economically autonomous Greater Manchester would be reduced by a sum equivalent to the amount of APD that central government would have collected in that area had APD not been devolved.
In other words, Greater Manchester would have to decide if it could afford to cut APD to the full amount that it would lose from central government funding. Scotland seems to have pulled back a bit on its original plans to axe APD completely or at least reduce it to nil (both have the same result) because it can't afford to do so, although that is still its long term aim.
Of course, post Brexit EU state aid rules would not apply but the UK government has intimated that it would still be likely to comply with many aspects of EU law and it will probably have to if it wants to secure any sort of realistic deal with the EU following departure.
