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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...tted***-&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.
 
Once the transition period is up at the end of the year the UK government could do all sorts of things with APD that it currently cannot because of EU state aid rules - unless we leave with some sort of single market agreement which the Johnson governemnt has said will not happen.

If short haul was cut or reduced by the Westminster government either across the country or at certain airports (according to whatever criterion was used - perhaps annual passenger throughput) that might be a better bet for the WG as it would not lose an APD-equivalent amount from its Westminster block grant. Against that, if long haul was kept as it is or even increased by the Westminster government the WG could not cut that if it wished unless APD was devolved.

Some would argue that it attracted Qatar with APD in place.
 
I'd be very surprised if this current government would even consider devolving APD to Wales in any way as it would effect England. I thinkwhatever they do would be with an England first policy. It's possible that they may well reduce domestic APD which would have a small benefit for Cardiff but not as much as devolution of APD. Generally though i think the WG wants short haul and long haul devolved to help boost European and international connections and the airport no doubt feels it would make it more attractive to airlines like TUI, Ryanair, Vueling and Jet2 maybe even Easyjet as well.

I do think though with the current UK government any more devolved powers would be unlikely and there may even be a fight on the horizon to keep the Senedd.
 
I'd be very surprised if this current government would even consider devolving APD to Wales in any way as it would effect England. I thinkwhatever they do would be with an England first policy. It's possible that they may well reduce domestic APD which would have a small benefit for Cardiff but not as much as devolution of APD. Generally though i think the WG wants short haul and long haul devolved to help boost European and international connections and the airport no doubt feels it would make it more attractive to airlines like TUI, Ryanair, Vueling and Jet2 maybe even Easyjet as well.

I do think though with the current UK government any more devolved powers would be unlikely and there may even be a fight on the horizon to keep the Senedd.
Interesting take on the APD situation in Northern Ireland.


A report by an external body (Oxford Economics) was commissioned by the Northern Ireland's Department for the Economy looking at whether a cut in APD rates there would deliver value for money - that would be short-haul APD as direct long-haul flights from Northern Ireland are APD-free, the idea being that they are better able to compete with flights from the Republic of Ireland although it hasn't really worked.

The report concludes that such an APD cut would be unlikely to deliver value as Northern Ireland's block Westminster grant would be cut by a similar sum of money. It would also amount to a subsidy on existing commercially-viable routes. (Perhaps with a much smaller APD take in Wales than in Northern Ireland the reduction of the Westminster block grant in Wales might not be felt as acutely - my italics.)

The report does accept that an APD cut would be likely to be 'relatively effective' in increasing the country's aviation connectivity.

Interestingly the report suggests that the most realistic policy is to invest in more co-operative marketing agreements, where economic and tourism agencies, airports and airlines come together to spend money promoting and marketing new routes. Wales and Scotland are held up as examples of this approach successfully attracting long-haul services.
 
I'd be very surprised if this current government would even consider devolving APD to Wales in any way as it would effect England. I thinkwhatever they do would be with an England first policy.

At least one perceived obstacle is out of the way. I've read a lot in the past about Liam Fox MP being regarded by some people as the arch-opponent of APD devolution to Wales (I think his influence on the matter was overblown by some but it's a matter of opinion). He is no longer in government and in his open letter published last week he does not support further expansion of Bristol Airport with its current planning application that also requests a raising of its current 10mppa planning cap to 12 mppa. This would mean that any impact APD devolution had on that airport would be minimal to non-existent if it was prevented from growing anyway.

Dr Fox also believes that BRS's contribution to its regional economy is small. When he was singing from a different hymn sheet in 2016 regarding what then appeared to be the imminent devolution of APD to the Welsh Government, Dr Fox said, “The South West is set to lose out massively if this tax on flying is devolved to Wales. The toxic combination of less consumer choice, job losses and reduced economic activity is simply not acceptable and I am today calling on the Government to halt this measure.” So he must have believed then that BRS did make a substantial contribution to the economy of its region.

The Conservative Government at Westminster is not politically aligned with much of the Bristol area local government. Bristol City Council has an overall Labour majority, has a Labour elected mayor and four Labour MPs; North Somerset Council in whose area the airport sits lost its huge Conservative majority last year and is now a 'Rainbow' council with the Conservatives a minority party; Bath and North East Somerset Council lost its Conservative overall majority last year to the Lib-Dems and has a Lib-Dem MP. Only South Gloucestershire Council that forms the northern part of the Bristol conurbation is Conservative controlled and has Conservative MPs.

Taken together with the local Conservative MP no longer supporting BRS growth there probably has not been less party political imperative for a decade to set the Westminster government bothering about the effects on BRS of APD devolution to Wales.

Add in the Westminster Government's election pledge to improve the lot of the regions then assisting the lot of an airport like CWL might fit in with that without affecting BRS if it was anchored at 10 mppa more or less permanently. Although Wales is a country in its own right within the UK, it also has many similarities with English regions with connectivity being an important one.
 
The report does accept that an APD cut would be likely to be 'relatively effective' in increasing the country's aviation connectivity.
Looking at Northern Ireland's european routes and they do have a decent LCC network with flights to places like Bordeaux and Berlin though some are seasonal. They probably lack hub routes like Frankfurt with airlines like Lufthansa and of course they lack a ME3 carrier though maybe with the government back that will change.
In comparison although CWL has decent hub connections, Dublin, Amsterdam and Doha it does lack the LCC city network from an airline like Easyjet which tried to instigate with the Flybe deal. In a way the airports of Northern Ireland and Wales are similar in that they both have bigger neighbours in other countries effecting them for different reasons.
This would mean that any impact APD devolution had on that airport would be minimal to non-existent if it was prevented from growing anyway.
Yes it would potentially take one reason away for not devolving APD but i'm sure BRS would say it would potentially steal the business they currently have.
I've read a lot in the past about Liam Fox MP being regarded by some people as the arch-opponent of APD devolution to Wales
It sounds like Liam Fox is only a supporter of BRS and says it's valuable when the threat of any extra powers to Wales comes along. I do suspect that his influence wasn't as much as people thought it was.
Although Wales is a country in its own right within the UK, it also has many similarities with English regions with connectivity being an important one.
The problem i see though is many of the government elites don't see Wales as a country in it's own right but just an extension of parts of England hence why the UK government always seems to come up with cross border initiatives like the Western powerhouse and the Borders deal rather than internal Wales schemes and the ones they do seem in favour of M4 relief road and removing Severn tolls help seem to point to that. I generally think when it comes to connectivity to the rest of the UK and Europe and the world many don't see CWL as important to Wales and that Bristol, Birmingham, Heathrow and Manchester provide it so there's no need to give Wales any special treatment like Scotland and Northern Ireland get to help boost it.
 
The problem i see though is many of the government elites don't see Wales as a country in it's own right but just an extension of parts of England hence why the UK government always seems to come up with cross border initiatives like the Western powerhouse and the Borders deal rather than internal Wales schemes and the ones they do seem in favour of M4 relief road and removing Severn tolls help seem to point to that. I generally think when it comes to connectivity to the rest of the UK and Europe and the world many don't see CWL as important to Wales and that Bristol, Birmingham, Heathrow and Manchester provide it so there's no need to give Wales any special treatment like Scotland and Northern Ireland get to help boost it.

Going off at a slight tangent although it does have cross--border air connotations, the so-called Western Powerhouse began as a proposed collaboration between Cardiff and Bristol councils. There were several meetings and it morphed into something bigger involving larger sections on both side of the estuary with government representatives from the WG and Westminster chucking in their ten pennyworth as well. As far as I can see though not much, if anything, has been achieved other than more meetings and it's been going on for several years. I don't think much will come of it.

The then Independent elected mayor (although he was a former Liberal and was very much concerned with the environment) had been an opponent of BRS expansion until elected mayor when he became more ambivalent in his public utterings. He was one of the drivers of the Cardiff-Bristol council collaboration and I remember him saying something about pooling aviation resources - he obviously saw it as a way of constraining BRS although as that airport is in the private sector neither he nor any politician could have any direct influence.

When the Westminster Government announces the result of its APD deliberations generally we ought to get a better idea of whether its attitude to Welsh APD devolution has changed.
 

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