Scottish Airports at unfair advantage over English Airports over air taxes cut
English Airports will suffer damage due to unfair advantage to Scottish Airports
There are concerns about unfair advantage to Scottish Airports over English Airports as the Scottish Government cuts air travel taxes in Scotland. This lack of level playing field is believed to result in phenomenal damage to Birmingham Airport as air travel in Scotland will be cheaper and place English Airports such as the Birmingham Airport at competitive disadvantage. The Air Passenger Duty will be cut in half which will be totally abolished after some time.
Speaking in the House of Commons, Birmingham MP Steve McCabe (Lab Selly Oak) urged the Government to give English regional airports a fair deal.
Mr McCabe asked:
“What are the Government doing about the changes happening elsewhere in the country? When the Scottish Government set their rate for air departure tax that could have a phenomenal impact on the airline industry and every regional airport and regional economy in this country?”
However, Mel Stride, the Treasury Minister representing the Government in the debate did not respond to the queries by Mr McCabe.
Scotland’s SNP Government has announced a 50% tax cut and renamed the charge Air Departure Tax in Scotland which it plans to abolish completely.
Travellers flying from Edinburgh could save up to £194 per person instead of an English regional airport, say experts. This will also make Scottish Airports more attractive for airlines. These factors are expected to give Scottish Airports competitive advantage over English Airports.
Birmingham Airport says giving the West Midlands the same deal as Scotland could provide a huge boost to the economy.
David Cameron, the former Prime Minister, promised in March 2015 that the Government would protect English airports. He said:
“We are not going to accept a situation where there’s unfair tax competition” and the Government would “do what’s necessary to make sure England’s regional airports can succeed”.
But the Government had announced in November 2016 that it had decided to do nothing until after we leave the EU.
A Treasury document said:
“The Government does not intend to announce any specific support measures on this issue at this time, but will revisit this issue once the UK has left the European Union.
“During this time, the government will continue to work closely with local stakeholders to discuss any relevant further evidence or analysis.”
A spokesperson for Birmingham Airport said:
“Birmingham Airport served 11.6 million passengers in 2016, 14 per cent more than the year before. This connectivity boosts the UK economy by over £1 billion every year. To cater for growing demand we have invested £350m into the Airport in recent years, and are currently investing a further £100 million to improve passenger facilities.
“Alongside this, we have called on the government to reform air passenger duty so that it is lower for those airports like ours seeking to grow new routes. This would protect our regional economies from air passenger duty cuts in Scotland while helping to plug the Midlands Engine into new international opportunities.
Independent analysis has found that if air passenger duty was reduced by 50 per cent at Birmingham Airport now and then abolished in 2018, by 2025 the West Midlands economy would be growing by an additional £330m.”
Read More: Tories query First Minister on tax increase
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