Could we see APD devolved to Wales under Labour?

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Anyone who follows me on social media will know that I’m an aviation geek and that I’m very supportive of Wales only international airport - Cardiff Airport – as well as being a pro Welsh independence supporter and someone who is supportive of devolution, which to leads me wonder if we might see APD finally devolved to Wales post 4th July if UK Labour win the election.

What is APD?

Air Passenger Duty is an excise duty that the UK government levies on every flight departing the UK on aircraft that can seat 20 or more passengers. In Scotland it is called Air Departure Tax.

From April 2024 it will have 4 bands with each having 3 different rates (reduced rate, standard rate and higher rate). The bands are Domestic Band (£7, £14 & £78), Band A 0-2000 miles (£13, £26 & £78), Band B 2001-5500 miles (£88, £194 & £581) and Band C 5500 miles & over (£92, £202 & £607).

The battle for devolution up to now

In 2012 the Silk Commission recommended the devolution of long haul APD to Wales to bring Wales in line with Northern Ireland, APD was fully devolved to Scotland in 2018. The Welsh government has consistently lobbied for the devolution of APD with the UK government refusing due to concerns about how it would effect other UK airports especially Bristol citing that Wales and England are part of the same aviation market despite the Welsh government producing a report in 2017 challenging that and in 2019 the Welsh Affairs Committee at the UK Parliament recommending APD be devolved and for the UK government to set out its plans to do so by 2021. The Conservative UK government has consistently refused to devolve any form of Air Passenger Duty to Wales.

Levelling the playing field for Cardiff Airport

The main reason for seeking the devolution of APD is to help make Cardiff Airport more competitive and more attractive to airlines to base at and to operate routes into and out of Wales. Attracting more routes and based aircraft from airlines like Ryanair and TUI is one of the airport’s main goals along with better hub connections through airlines like KLM.

The challenge is that it is very easy to get from Cardiff’s catchment area to England (its estimated that 20% of Bristol Airports passengers originate from Wales) and airlines know that they can base in England and attract passengers to them rather than having to operate their flights directly from Wales and even if they are minded to operate routes to Cardiff there is massive competition from other airports around Europe.

Any potential change to APD whether that is reducing it, scrapping it or changing it so it’s more an incentive to the airlines to operate more environmentally friendly into Wales can only be considered to benefit Wales only airport and Wales economy. Every passenger that doesn’t or can’t fly into and out of Wales is a passenger that isn’t spending money in Wales and contributing towards Wales economy. There’s no denying that since the pandemic the airport has been struggling, with passenger levels below 1 million for 2023. APD devolved to Wales could help alleviate that and there is a political aspect to this as well. The Welsh government own Cardiff Airport and the airport doing well reflects on it even if they don’t run the airport on a day-to-day basis. Having a successful and connected airport can only be good for Wales as a country and politically the party that forms the government which will be seeking re-election in 2026.

Is devolution likely?

The Welsh government has been pretty consistent in wanting APD devolved to Wales so even with a new First Minister I’d expect that it is something that they would seek out from UK Labour, though UK Labour hasn’t yet said whether they are willing to devolve it or not. The current Keir Starmer government in waiting doesn’t seem to potentially be that keen on devolving more powers to Wales especially in big areas like justice, transport and energy but APD might be something they could consider, almost as a token gesture to the Welsh government itself to make it look like a two-way partnership and that Wales is benefitting from a UK Labour government. In my opinion though if they do devolve APD then I suspect it will be long haul APD. This would have the least effect on English airports especially Bristol which doesn’t have a long-haul operation now and could be used as a carrot to get airlines like Qatar Airways and Play Airlines (Play will operate a limited schedule to Iceland between October and December 2024) to return and would also help with the airports goal of boosting freight through it and the Welsh governments goal of connecting Wales to places like North America and the Far East for business and inbound tourism. It would put into effect the Silk commission’s recommendations and part of the Welsh Affairs Committee recommendations. Devolving short haul will probably be a step to far for a government that will be prioritising England and may be concerned about keeping its northern Wales MPs happy as well.



Devolution of APD in the grand scheme of devolution will always be a minor granting of powers whether it’s all of it or just long haul but even just devolution of long haul puts Wales devolution settlement more on a par with Northern Irelands settlement and for a Welsh government that is currently embattled by the Vaughan Gething corruption scandal and Vote of No Confidence could be trumpeted as a win. The goal for Wales must be a successful and thriving airport and devolution of Air Passenger Duty can play a part in achieving that.

This article will be also be featured in BylinesCymru

 

Ah yes, the levelling up fund. That'll be the same levelling up fund that was promised for the Northern Powerhouse between Liverpool, Manchester, Leeds and Hull. We're still waiting.

Cutting to the chase, I don't think Wales or Scotland should receive any more money than anywhere else. What we need is a more even distribution of any money that is available because at the moment it seems like most of it stays in London.

The Barnett formula also allows Scotland and Wales an unfair advantage over many of the English regions. Leeds for example has been trying to obtain funding for a tram system for 30 years and it is still waiting.

Edinburgh on the other hand wants a couple of £££ billion for a bridge and it's handed the money. Cardiff is half the size of the Leeds City Region, isn't Cardiff getting a tram system?

 

The Barnett formula also allows Scotland and Wales an unfair advantage over many of the English regions.

The Barnett formula benefits Scotland it doesn't benefit Wales and even its author said it wasn't suitable in the long term. As for English regions then they need to campaign for proper devolution even the federalisation of England. At the moment they're getting a diluted version that's more like more powerful councils than the devolution of Wales, Scotland and Northern Ireland. A type of devolution that Westminster is comfortable with because it means it keep the powers. And a part of that is voting for local/regional parties rather than the main national ones.

Edinburgh on the other hand wants a couple of £££ billion for a bridge and it's handed the money. Cardiff is half the size of the Leeds City Region, isn't Cardiff getting a tram system?

Scotland and Wales also has certain amount of borrowing powers. In the case of the South Wales Metro part of the money is coming from the Welsh government because the UK government wouldn't fund it all. Cardiff is getting a cross rail system but not all the parts of Cardiff will be covered. The rail network and local transport network in Wales has been massively under funded and works happening now should've really been done a generation ago.

 

Strickly speaking I'm not against Scotland or Wales going it alone but I honestly think it will make things worse for everyone living on this island. The country as in the UK is already small. One of the pro EU arguments was as a pact we could compete with larger emerging economies. Splitting the UK up even further will not help any of the nations within it. Fedralisation of England would just create more hoops and red tape IMHO.

 

Strickly speaking I'm not against Scotland or Wales going it alone but I honestly think it will make things worse for everyone living on this island. The country as in the UK is already small. One of the pro EU arguments was as a pact we could compete with larger emerging economies. Splitting the UK up even further will not help any of the nations within it. Fedralisation of England would just create more hoops and red tape IMHO.

Personally i think it will actually be the opposite. So much of the politics of the UK is focused on England because its the biggest country and its not always to the benefit of Wales, Scotland and Northern Ireland and England itself. Its been shown in Europe how small countries can cooperate with bigger neighbours and thrive as independent countries. A big chunk of the problems that Wales has need the powers of an independent country to solve. I personally don't see why all of the countries of the UK can't have a mutually beneficial relationship as independent countries, the UK doesn't need to exist for that to happen. The Nordic countries are an example of that. As for England and federalising it, part of that would be to give more powers locally to tackle the problems many of its regions have. I think people in England need to stop looking to London to solve their problems.