APD abolition would be game-changer for airport
Former leader of the Welsh Conservatives, Andrew RT Davies AM, explains why he believes the UK Government should devolve powers over Air Passenger Duty to Wales
SEPTEMBER 17 was a notable milestone for Cardiff Airport, as it marked 2,000 days since the Welsh Government purchased the site in Rhoose for more than £50m.
I vehemently opposed this decision through a belief that there were more attractive propositions in the private sector.
As Welsh Conservatives, we set out an alternative blueprint for the airport. To some degree this was vindicated some years later by the Wales Audit Office report, which found the Welsh Government paid vastly over the odds for the airport, nearly double its initial valuation.
Nevertheless, it would be churlish not to recognise some of the progress which has been made at the airport since this tumultuous period.
Living in the Vale of Glamorgan, I’ve the pleasure of waking up to a fantastic view of the countryside and one which also takes in the tarmac at Rhoose. Given its importance to my constituency and the local economy, I’m pleased to see its recent renaissance.
Credit must be given to the team at Cardiff Airport, ably led by Debra Barber and Roger Lewis, who have overseen a considerable turnaround in its fortunes.
This year the airport is set to achieve double-digit passenger growth, but it does remain some way off the dizzy heights of 2007 when numbers peaked around the two million mark.
Financially, it has also incurred some significant losses over the past few years, but the organisation is optimistic that a profit-making business is just around the corner.
As a business-owner and neighbour who wants to see my local airport thrive, thoughts naturally turn to what we can do next to ensure this progress is maintained.
There has undoubtedly been mixed success when it comes to route development, from the unveiling of Cardiff-Qatar to the disappointing failure of the Cardiff-London route.
However, the key to unlocking the airport’s true potential actually does now rest with politicians and revolves around the devolution of Air Passenger Duty (APD).
APD is an excise duty charged on the carriage of passengers flying from a UK airport on aircraft with a take-off weight of more than 5.7 tonnes or more than 20 passengers.
The devolution, and importantly, subsequent reduction in APD would bring significant benefits to the airport. Estimates are wide-ranging, but the most conservative suggest an increase in traffic at the airport of at least 15%. The most generous puts it closer to 50%.
Lowering APD is a game-changer and would make the airport more competitive – attracting more passengers and route options – while delivering a shot in the arm to the Welsh economy.
The Scottish Government already enjoys the power, and Northern Ireland has the ability to flex its muscles when it comes to determining longhaul APD, with the likelihood of short-haul making its way across the Irish Sea in the not-too-distantfuture.
It has been the longstanding position of the Welsh Conservatives in the National Assembly that this power should be transferred to Wales. It also featured as a prominent recommendation of the Silk Commission.
So what’s stopping it? Many cite the intransigence of the UK Government, which some speculate is down to a strong south-west political lobby citing the negative impact such a decision might have on Bristol Airport.
While I recognise some of these concerns, I do not believe they are insurmountable. One report found that many of these concerns were unjustified and focused simply on the worst-case scenario.
And not one study or report has found a detrimental impact to UK Plc as a whole. In fact, quite the opposite, with a slight rebalancing between markets and passenger traffic. As the party of the Union, what’s not to like?
Even the partial devolution of APD (long-haul) could allow for the development of two successful airports with distinct catchments, one which both governments and economies could benefit from.
And as an Assembly Member who represents south Wales central and has been elected to champion the interests of my constituents in the Vale and beyond, our national airport shouldn’t be ignored at the expense of others.
As a party, we have a proud tradition of being one that stands up for the Union, for fairness and for prosperity.
And as a Conservative, I instinctively believe in lower taxes to drive prosperity, economic investment and growth. This can and should be done at Cardiff Airport.
The devolution of APD would satisfy these traditions and ambitions while providing a huge thumbs-up for UK Plc, and importantly, the Conservative Government’s record of delivery for Wales.