Wales blocked from abolishing unpopular air tax
Wales has been prevented from abolishing air passenger duty on direct long-haul flights even though the Welsh Government has been given control of £3 billion of tax revenue, new borrowing powers, control of business rates and the ability to create new taxes.
The devolution of air passenger duty to Wales was the only one of 31 recommendations for Wales made by the Silk Commission, set up by Westminster to look into devolved powers, to have been flatly refused by the Treasury.
Welcoming the decision, Bristol Airport said it was made on the grounds that different rates of APD on either side of the Wales / England border would be likely to redistribute passengers between airports rather than significantly increasing the overall demand within the UK.
Bristol Airport chief executive officer Robert Sinclair said: "We are very pleased and relieved that the UK Government has decided to reject the Silk Commission’s recommendation on APD and not devolve this particular tax to Wales.
"Air travel is an open and competitive market across the UK where passengers seek out the best deal, wherever that might be. Bristol and Cardiff Airports are about an hour’s drive apart and we both compete for passengers in the South Wales market. If devolved, the intention was to scrap or zero rate APD, which is the highest aviation tax in the world.
"Such a move would have distorted a highly competitive market, causing a tax-payer funded re-distribution of passengers from airports in England to Cardiff Airport, with no net benefits. "
Sinclair said Bristol’s existing services to Europe, which provide onward connections around the world, would have been hit and it would have been a setback to its attempts to secure future services to the US and Middle East.
"The Welsh Government’s purchase of Cardiff Airport would have exacerbated this issue, creating a clear conflict of interest between the Welsh Government’s role as the owner of Cardiff Airport, the only international airport in Wales, and its role as a taxing authority," he added.
"Today’s announcement should now end the uncertainty in the aviation industry created by the Silk Commission’s report, providing reassurance to airlines and passengers that all airports serving the Welsh market can continue to operate on a level playing field."
However, the Welsh Government has said it will continue to fight for the right to set its own air taxes.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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