By Gareth Axenderrie
First Minister Carwyn Jones has called on the UK Government to give Wales control over flight tax. New evidence claims to dispute existing arguments for withholding devolution of Air Passenger Duty, the tax paid on long haul flights.
It has long been a desire of the Welsh Government to see the tax devolved, with previous support coming from the findings of the Holtham and Silk Commissions.
This had been rejected by officials from Bristol Airport however, with the Silk Commission quoting them as saying: “Aviation policy should remain reserved to the UK Parliament.”
Bristol’s concerns centre around the unfair advantage Cardiff International Airport would gain from the Welsh Government being able to reduce fairs for passengers flying out of Cardiff.
In June 2016, Bristol South Labour MP Karin Smyth said in Parliament, “APD devolution would have broken up the level playing field on which it currently operates, so the government’s decision not to devolve these powers to Wales is very welcome news for the south-west’s economy.
“Aviation has long been part of Bristol’s economic success story and our local airport’s capacity is central to further growth.”
Guto Bebb, parliamentary Under Secretary of State for Wales agreed, stating “Air Passenger Duty has been raised during the debate, and the fact that we are not proposing to devolve it has been criticised, although I think that that is right and proper.”
These contributions to a debate on the 2016-17 Wales Bill seemingly shelved any chances Air Passenger Duty being devolved for the foreseeable future, however new evidence now suggests these arguments are deeply flawed.
The independent peer reviewed evidence revels that any impact on Bristol Airport would in fact be negligible. The research in fact argues that contrary to fears, reducing APD would see a significant boost for the economies of both South Wales and the south west of England.
First Minister Carwyn Jones responded to and endorsed the research, saying: ““This new evidence dispels many myths and presents an economic case for giving Wales control over Air Passenger Duty which is overwhelmingly compelling. As we prepare for a future outside the EU, it is essential we are able to take action to promote Wales to the world and support growth in our aviation sector and wider economy.
“Once devolved, the Welsh Government would reduce or even scrap the tax paid on flights – not only benefitting passengers, but providing a huge confidence boost for Cardiff Airport and Wales’ aviation industry.”
Cardiff International Airport has long been regarded as Bristol Airport’s poorer relation, with Bristol’s 7,610,780 annual passengers in 2016 dwarfing Cardiff’s 1,347,483. If devolution of APD was to follow other taxes being transferred along the M4, it would provide the Welsh Government – who took it under state control in 2013 – with tools to strengthen the airport as a major aviation hub.
Next year the airport will service regular international flights provided by Qatar Airlines, and the assumption is that other international carriers may see Wales as a new hot spot for investment if APD is scrapped and fairs lowered. APD accounts for £13 on your short haul economy flights and as much as £73 for long-haul on other classes. It is yet to be confirmed whether the tax will be devolved to Wales, but if it does, those in the Senedd will hope that lower prices will attract a swell of custom.