Wednesday, October 19, 2011

Ministers urged to cut air passenger duty for Newcastle Airport. (UK)

MINISTERS are being urged to match a cut on flight taxes from Northern Ireland airports with a similar reduction on services from the North East.

The Treasury yesterday confirmed that the rate of air passenger duty (APD) for direct long-haul passengers leaving airports in Northern Ireland would be cut within weeks.

The Government is also looking at handing powers over APD to the Northern Ireland Assembly, new Treasury Minister Chloe Smith said in a written statement to Parliament.

The news comes as the Scottish National Party (SNP) is pushing UK ministers to devolve APD powers to the Scottish Government, sparking fears that the tax could be varied to the detriment of the North East.

Jarrow MP Stephen Hepburn, a member of the Northern Ireland select committee, welcomed the reduction in APD for flights from Northern Ireland but urged ministers to help the North East.

He said: “We are keen to see it work so that we can use it as an example of how we can maintain and boost airports like Newcastle. Airports like Newcastle are struggling with APD as it is at the moment.

“If we know it works for Northern Ireland, we know it will work for the North East. It is a great opportunity for us in the North East to see it in action.”

His comments come as The Journal’s A Tax Too Far campaign has warned that APD has a disproportionate and unfair impact on regional airports, despite their key role in ensuring good transport links and economic growth.

From November 1, APD for direct long-haul passengers departing from Northern Ireland airports will be cut to the short-haul rate – which is currently £12 in economy, and £24 in business and first class.

The move comes after Continental airlines threatened to withdraw its Belfast to New York route because it was uneconomical despite it being the last such remaining transatlantic link.

Many found it cheaper to cross the border to Dublin, which has a much more favourable tax regime.

Treasury Minister Chloe Smith said: “This measure is a response to the unique challenge facing Northern Ireland and is designed to ensure local airports remain competitive, demonstrating the Government’s commitment to stimulating and rebalancing the Northern Ireland economy.”

In a further development, SNP MP Angus MacNeil has tabled a Commons motion urging the UK Government to honour a commitment to devolve responsibility for APD to the Scottish Government as soon as possible.

Such a move is currently under review, although The Journal has been told the ultimate intention is to hand over responsibility for APD.

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