UK Government blocks devolution of Air Passenger Duty to Wales


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Cardiff Airport statement: UK Government’s decision to block the devolution of Air Passenger Duty (APD) to Wales
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Deb Bowen Rees, CEO of Cardiff Airport, said: “We are hugely disappointed by today’s announcement.
“Cardiff Airport has always been in favour of the UK-wide abolition of Air Passenger Duty and in support of the ‘A Fair Tax on Flying’ campaign. It is a punitive tax on travel and a cost that hinders the ability for the United Kingdom to remain competitive in what is a very competitive, fast-paced global industry. Not to mention, the UK APD rate is one of the highest in the world.

“We presented compelling and robust evidence to the Welsh Affairs Committee to demonstrate how beneficial this would be to both Wales and the South West as a region. The WAC then went on to make their own impartial, confident recommendation to the UK Government that demonstrated complete, cross-party support for the devolution of Air Passenger Duty to Wales.

“It is difficult to understand the timing and the reasoning behind today’s decision. This would have been a real post-Brexit boost to the region, enhancing international connectivity and promoting competitiveness within the industry. Furthermore, it would lead to environmental benefits, enabling customers to fly locally and, in turn, drive significant economic benefit to Wales and the South West of England.”
 
I wonder if the additional Conservative MPs in Wales will make a difference.
I personally doubt that but who knows! It'll be interesting to see who ends up Welsh Secretary. David TC Davies is a possibility and he was in charge of the Welsh Affairs Committee which recommended that it be devolved but even so i'd be surprised and shocked if any of it was devolved.
Jerry with what happened today its going to be at least 10 years before labour get into power,,unless the tories have a complete melt down and cant see that happening.
UK politics is extremely volatile at the moment and i genuinely wouldn't rule out their majority being wiped out at the next election.
 
Well the general election has most likely put paid to any hope that the WG has of getting APD devolved at least for another 5 years. Will be interesting to see if there's a new Welsh secretary.
I was reading an article this evening in the financial press that suggested that those areas not normally supportive of the Conservatives but which did elect Tory MPs this time will be rewarded by additional investment. We might get a clue in the Queen's Speech due next Thursday or from the Chancellor when the next budget is presented.
 
I was reading an article this evening in the financial press that suggested that those areas not normally supportive of the Conservatives but which did elect Tory MPs this time will be rewarded by additional investment. We might get a clue in the Queen's Speech due next Thursday or from the Chancellor when the next budget is presented.
There was in their manifesto a thing about a borders deal and giving north Wales independent mayors.
If the Conservatives actually want to stand a chance of keeping their gains in Wales they would be wise to announce a big investment package into Wales but whether they actually would I'm sceptical. As for devolving actual powers I'd be very surprised if they did and would expect them to actually try and take powers back from Wales.
 
A new Welsh secretary has been appointed Simon Hart the MP for Carmarthen West and South Pembrokeshire. Although he represents a Welsh constituency he's not actually Welsh and still lives in England. I'm surprised to be honest as I'd expected Brexiteer David TC Davies might have got it. Either way I doubt he'll be championing devolving powers to Wales!
What will be interesting to see if Alun Cairns eventually comes out in support of devolving APD now he's no longer in the cabinet as he will still be the airport's MP.
https://www.bbc.co.uk/news/uk-wales-politics-50809649?ns_campaign=bbc_wales_news&ns_source=Facebook Groups&ns_mchannel=social&ns_linkname=wales
 
I didn't listen to the Queen's Speech today but from a summary I've since read I didn't come across anything that would indicate specific plans to transfer more powers to Wales.

However, the PM bangs on about uniting the entire country (the UK that is) with hints that some powers might even be devolved to the North of England.

I did listen to a BBC Tv News Report this lunchtime that discussed Nicola Sturgeon's continuing campaign for a second referendum on Scottish independence. The BBC correspondent suggested that although the PM is dead set against that he might try to weaken support in Scotland for independence by devolving more powers to Scotland. Cameron did that in the run-up to the last independence referendum when it looked as though the electorate north of the border might actually vote to leave the UK.

If more powers were devolved to Scotland and some powers given to the North of England I could see Wales getting more and they could easily include APD.

If that didn't happen another potential pathway could be dependent on how the UK leaves the EU. If we remained tied into a single market and a customs union we would effectively be in the same position we are now regarding competition, and would almost certainly still be subject to the EU rules including those on APD and state aid.

If we leave the EU through a much looser arrangemment the UK government could be quite imaginative with APD if it wished. EU member states cannot vary taxation rates in a way that is more favourable to individual regions. However tax powers, of which APD is one, can be devolved within a member state to regional authorities provided such an authority bears a sufficient degree of fiscal and economic autonomy from central government ('Azores criteria') which Wales does although the WG probably doesn't like being described as a regional authority .

Without those restrictions the Westminster government could, for example, vary APD rates around the country based on such things as individual airport passenger numbers or individual airport congestion.

Although that might not give CWL an edge over competitiors if those competitors also saw their APD rates reducing or even disappearing, it would make the climate more agreeable for airlines wanting to set up at smaller airports. We know that Ryanair said they would like to do more at CWL but the APD regime prevents that.
 
I didn't listen to the Queen's Speech today but from a summary I've since read I didn't come across anything that would indicate specific plans to transfer more powers to Wales.

However, the PM bangs on about uniting the entire country (the UK that is) with hints that some powers might even be devolved to the North of England.
From what i remember he said during the election the Tories wanted to create elected mayors in northern Wales, whether he actually can i don't know. My personal opinion is that i'd be surprised if they gave extra powers to Wales. I think Johnsons version of uniting the country may well be to return more powers to London when it comes to Wales but probably for the North create elected mayors and with Scotland i don't think devolving more powers will work. The SNP will get their referendum eventually.
The future relationship he wants with the EU is a free trade deal Canada style, so i'm guessing that would give the government the flexibilty to change APD which ever way they want but will the government really want to do so as to promote small airprorts? I'd imagine that the likes of MAG, Heathrow, Gatwick and OTPP would lobby fiercely to stop that if it didn't include them.
 
Welsh Government and Cardiff Airport fought to get APD devolved to Wales so they could potentially cut it. This definitely would be bittersweet as it would potentially benefit the airports who lobbied so hard against it being devolved to Wales.
 
Welsh Government and Cardiff Airport fought to get APD devolved to Wales so they could potentially cut it. This definitely would be bittersweet as it would potentially benefit the airports who lobbied so hard against it being devolved to Wales.
That was only part of the story though. Airports such as BRS, which I guess is the main one to which you allude, were never against the axing of or a cut in APD across the board. They didn't think it fair that one airport should benefit but not others - I know there are smaller airports in Wales but CWL is the only one worthy of the name when it comes to proper passenger services (there is no APD payable on CWL-Valley as it's a PSO route).

When the UK leaves the EU (not much doubt about that now) it will potentially be in a position to become much more flexible in taxation matters such as APD. Currently it can't, for example, differentiate between large and small airports in terms of the rate of APD charged.

Unless we leave the EU with an agreement tied to the single market and remain subject to EU rules on the subject of competition, the UK can plough its own furrow when it comes to taxation that might affect competition.

BRS might still be unhappy if, say, the government decided that all airports with a throughout less than 5 mppa (or even a sliding scale of annual passenger numbers) should be subject to a different regime than larger airports, but at least it would be fair across the board. Then, in this example, if a smaller airport grew beyond 5 mppa it would then itself be subject to higher APD.

This is only a 'for instance'. If the government is no longer tied to EU rules on the subject it could be as imaginative as it wished with APD.
 
Well looks like the Welsh government aren't giving up on getting APD devolved.
"Welsh Government Finance Minister Rebecca Evans has called on the UK Government to stop dragging their feet on handing over powers for raising and lowering Air Passenger Duty to Wales".
 
Well looks like the Welsh government aren't giving up on getting APD devolved.
"Welsh Government Finance Minister Rebecca Evans has called on the UK Government to stop dragging their feet on handing over powers for raising and lowering Air Passenger Duty to Wales".
With APD in the national news again with Flybe the WG would have been negligent had it not taken the opportunuty to put its hat in the ring again.
 
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