Dear Mrs May, please devolve powers over air passenger tax
First Minister Carwyn Jones has made another direct appeal to the Prime Minister calling for Air Passenger Duty (APD) to be devolved to Wales.
Mr Jones has written to Theresa May saying her Government’s reluctance to devolve APD continues to place unjustifiable constraints on Wales’ ability to promote itself abroad and is hindering growth in its aviation sector and wider economy.
He said it is also unfair that the aviation tax had been devolved to both North Ireland and Scotland.
To date the UK Government has refused to devolve the tax, saying that to do so, for the purpose of its abolition or reduction across its three bands, would be damaging to Cardiff Airport’s nearest rival Bristol.
But independent research by aviation consultancy Northpoint, commissioned by the Welsh Government last month, said any impact on Bristol would be marginal.
A 2015 report by York Aviation, commissioned by Bristol Airport, said APD being devolved to Wales, for the purpose of it being scrapped completely or significantly reduced, could cost the region 1,500 jobs and over £800m in GVA.
The Northpoint research – separately validated by Arup – said “significant questions must be raised about the accuracy of projections presented by York Aviation”.
Cardiff Airport chief executive Debra Barber said devolution of APD, for the purpose of abolition or reduction, would help increase passenger numbers by 500,000 a year.
And she said the cost to the Welsh Treasury would be more than offset by new jobs and investment created by attracting more airlines and routes to the Rhoose-based airport, which is owned by the Welsh Government.
Mr Jones has indicated that APD would be scrapped on long-haul and reduced on the other bands of shorthaul and domestic.
He said: “With APD already devolved to Northern Ireland and the commitment given to devolve APD to Scotland, the UK Government’s refusal to move on this issue is undermining our economic position compared to our colleagues in other devolved administrations.
“Following publication of independent analysis on the devolution of APD to Wales, we recently held a meeting with prominent figures in the aviation, tourism and business sectors in Wales to discuss this new evidence. That meeting showed that support for the devolution of APD is unanimous, with it being broadly viewed as a move that will help ensure Wales is open for business across international borders.
“The meeting also showed that there is a widely held view that APD is negatively affecting businesses within our economy and its reduction or removal would be a stimulus to enable competition and increase growth. I have made clear that if APD was devolved I would reduce it in Wales, a move that I am confident would better connect Wales with transport and business hubs and act as a huge stimulus for business and investment.
“The UK Government gave a clear commitment to review any new evidence – I call on them again to act in the interests of Wales on this important matter.”
A UK Government spokesperson said: “Having considered the impacts of devolving APD on nearby English regional airports, we have ruled out the devolution of APD to Wales.”