Belfast Telegraph

UK Website Of The Year

Airport chief slams Executive for failing to cut air passenger tax

Published 13/01/2016

Belfast International Airport's boss has criticised the policy on APD
Belfast International Airport's boss has criticised the policy on APD

The Executive has "bottled it" on cutting air passenger tax because of the impact on the public finances, the managing director of Belfast International Airport claimed.

Northern Ireland risks missing the boat as airlines receiving new aircraft plan routes for next year, Graham Keddie added.

He said ministers could pick up the bill for Air Passenger Duty (APD) to compete with Dublin's tax free status, which has prompted enormous growth south of the border based on low fares.

Mr Keddie claimed: "We are pointing business across to a foreign country.

"Our devolved central government is abdicating responsibility to deal with this."

He said worry about the block grant impeded any real development.

Ryanair announced plans to fly from Belfast to London Gatwick later this year but said new European routes were uncertain while most of their profits were eaten up by tax.

Cuts to APD in Northern Ireland separately from the rest of the UK would see Treasury reducing the amount it provides Stormont to run public services.

Ministers have to decide whether that risk and cost would be adequately rewarded by widespread economic growth.

Mr Keddie said: "The Northern Ireland Executive are, to put it in colloquial terms, bottling it."

Airline chiefs gave evidence on APD to the Northern Ireland Affairs Committee at Westminster.

Stormont's Department of Enterprise, Trade and Investment (Deti) has already cited an assessment which found that reducing APD was not a strong tool for promoting economic development, unlike corporation tax. It is working to develop an air route development fund.

Despite overwhelming corporate support, the Executive has come under fire from trade unionists favouring more public spending for agreeing to cut the business levy.

Committee member Lady Sylvia Hermon, Independent representative for North Down, said it was odd that Northern Ireland was prepared to take a huge cut in the block grant to accommodate corporation tax but not accept a smaller reduction for APD.

Mr Keddie said: "We are an island beyond an island, we need air transportation. It is not a luxury, it is crucial to our development."

He approached the Executive with Ryanair for additional support months ago. He said they also asked ministers for £200,000 to entice an airline to operate to Munich in Bavaria but that did not proceed.

George Best Belfast City Airport chief executive Brian Ambrose said the airport could deliver 10 European routes over time with more favourable tax treatment.

Gavin Robinson, DUP MP for East Belfast, said Jet2.com had begun operating from Belfast to Italy in spite of APD.

"There are clearly other factors at play irrespective of what APD is charged."

A Deti spokeswoman said an expert assessment found that any reduction in short-haul APD would result in increased passenger numbers using Northern Ireland's airports.

However, the assessment also identified that, when the cost to the public finances in Northern Ireland is taken into consideration, APD is not considered to be a strong economic development tool.

"The tax is imposed and set by the UK Government and therefore Northern Ireland ministers have stated that the onus must be on HM Treasury to deal with APD at a national level.

"Air connectivity is an important driver for economic growth and the Department of Enterprise, Trade and Investment (which includes Invest NI and sponsorship of Tourism Ireland) is in ongoing contact with Northern Ireland's airports and airlines to discuss route development opportunities.

"Work to progress an air route development fund for Northern Ireland is ongoing and the Deti minister intends to be in a position to announce the way forward before the end of the financial year.

Your Comments

COMMENT RULES: Comments that are judged to be defamatory, abusive or in bad taste are not acceptable and contributors who consistently fall below certain criteria will be permanently blacklisted. The moderator will not enter into debate with individual contributors and the moderator’s decision is final. It is Belfast Telegraph policy to close comments on court cases, tribunals and active legal investigations. We may also close comments on articles which are being targeted for abuse. Problems with commenting? customercare@belfasttelegraph.co.uk

Read More

From Belfast Telegraph