The Finance Minister has warned that airline routes from Northern Ireland will be axed because of air passenger duty (APD) — despite a cut in the aviation tax here.
Sammy Wilson said he had spoken to airline chiefs yesterday who “made it clear that they are considering pulling a number of European and UK flights out of Northern Ireland as the impact of this tax bites into profits and sales of seats”.
The DUP MP said he was thankful that the Chancellor had agreed to cut APD for long-haul flights from Northern Ireland. Last month’s move came after Continental Airlines warned that Northern Ireland's only transatlantic route could be axed if APD was not cut.
But Mr Wilson warned that the prospect of an 11% rise in the tax in the next budget would make even more flights from Northern Ireland vulnerable.
The cut to long-haul APD will come into force here on November 1 when it will move to the lower short-haul rate — currently £12 per passenger in economy and £24 for business and first-class passengers. US-bound passengers were paying a tax of £60 or £120 for economy and business class respectively on the long-haul flight, compared to just €3 (£2.60) from Dublin.
The new Economic Secretary to the Treasury, Chloe Smith, confirmed the cut last night, saying it would “ensure local airports remain competitive”. Ms Smith, appointed in the aftermath of Defence Secretary Liam Fox’s resignation, added the measure was a response to the “unique challenge” facing Northern Ireland and was designed to “ensure local airports remain competitive, demonstrating the Government's commitment to stimulating and rebalancing the economy”.
The Government, she said, was also launching a process for the devolution of APD to the Assembly to “provide a lasting solution to the unique circumstances Northern Ireland faces”.
But Mr Wilson said APD, a tax “so loved by global warming-crazed environmentalists”, has already lost the UK 25,000 tourism jobs.
“Business links are also made more expensive and will be put in jeopardy if flights are withdrawn,” he said. “Ironically, despite the lip-service paid to reducing CO2, many EU countries — including the Republic — are now phasing out their versions of APD, which will make the UK even more uncompetitive.”
He said the tax was “pricing ordinary working families out of their annual holiday and damaging regional economies”.