Wales should control air passenger duty – but is scrapping it the right option?

Touchdown at Cardiff Airport. Picture by Clint Budd (CC BY 2.0)

Matthew Hexter

Carwyn Jones has this month repeated calls for the devolution of air passenger duty (APD) to Wales.

He said it would only cost £1m of the Welsh Government’s £16b budget: ‘It’s a small amount of money, but the economic boost would be far more than £1m.’

It’s hard to disagree that this is a decision that should be taken in Wales for Wales. The power has already been devolved to Scotland. Why must Wales wait?

Labour and Plaid Cymru are both supportive. But the Conservatives remain opposed.

Back during the debates surrounding what eventually became the Wales Act 2017, amendments were laid down for the devolution of APD.

Guto Bebb, a Wales Office Minister and MP for Aberconwy, however, argued that such a development would negatively affect Bristol airport just down the M4.

It has now emerged, however, that because Bristol airport cannot accommodate long-haul flights such a move would have little to no economic effect on Bristol airport.

Cardiff airport has recently attracted long-haul flights to Doha, Qatar and already runs flights to Orlando, Florida.

Abolishing the tax could certainly encourage more providers to operate flights from Cardiff.

Environment

But then the First Minister went further, saying that ‘we start from the position of looking to get rid of it, certainly not to increase it.’

Whilst this could provide more of a boost to the Welsh economy what will the environmental effect be of encouraging a huge increase in air travel in South Wales?

In Wales, Cardiff, Swansea, Port Talbot, Newport, Chepstow and Wrexham are already over the limit set by the World Health Organisation Air Pollution Guidelines.

What effect would a mass influx of air travel do to Wales’ air? Could it cost Wales more money in the long term by negatively affecting the public’s health?

Should a progressive, green Wales actually take steps to increase APD in order to tackle climate change?

With Labour and Plaid both backing the plans to scrap the tax, it seems unlikely that the environmental consequences will be placed ahead of the economic advantages.

Any move to abolish the duty, however, remains, for the moment, hypothetical. The UK Government remains reluctant to engage in discussion on the devolution of APD no matter how much the First Minister tries.

The shambolic St David’s Day process which created the Wales Act remains fresh in the memory, and there is pressure from conservative MPs in the Bristol and Shropshire area.

The only way that Conservatives in Westminster will make the change is if it becomes an issue they think will win them votes in south Wales’ marginals.

They quickly became sympathetic to a change of policy on the Severn Bridge Tolls when they realised there were a few marginal constituencies along the M4 corridor.

On the basis of subsidiarity and of equality between the devolved administrations, it is clear to most that APD should be devolved to the Senedd.

Though if that power is devolved we should have a discussion about how those powers can be used to improve Wales holistically not just economically.

A quick grab and cut would see us win the race to the bottom on tax, but is it a race that Wales wants to win?


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glasiad
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glasiad

The fact that Scotland has more devolved powers than Wales should be regarded as outrageous and unacceptable. What a spineless bunch we are!

Regarding flights and tax, a few years ago my friend from Hamburg flew over for a visit. She flew to Bristol airport because flights to Cardiff airport were too pricey. So I drove to Bristol to pick her up and drop her of a week later. I wonder if reduced taxes would have made Cardiff airport more attractive? Would have saved me a few hours of driving.

Edeyrn
Guest
Edeyrn

Humans are blinded to only seeing the short term……the environment is not being managed sustainably in the slightest

Bill
Guest
Bill

Syniadau was much more incisive. At least he proposed a solution rather than just asking the questions.

http://www.syniadau.cymru/2017/11/trashing-planet-for-commercial-advantage.html

Sam
Guest
Sam

It’s right that APD should be devolved, but it’s so irresponsible to consider cutting it. We can’t afford the increased emissions from more air travel, and it’s yet another example of not having confidence in our economy, the 21st century equivalent of attracting inward investment with ‘competitive’ wages. What a poverty of ambition. It’s amazing that having passed the Wellbeing of Future Generations Act the government is considering this as well as the new M4. An economy that serves the people of Wales is built from within, not making it easier for the global elite to extract yet more value… Read more »

Jonathan Edwards
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Jonathan Edwards

Wales’ air industry is a sorry tale. Two airlines killed in bouncing infancy, Cambrian Airways and Air Wales. We have one airport worth the name, kept like a Victorian invalid in an attic by the wicked uncle at Bristol. Ireland is hardly different to Wales, except that they have a world-class Airline in Aer Lingus, an airport in their capital with TWO great Terminals, one Transatlantic. Plus they have Belfast Airport and Shannon. And you can clear US Immigration in Dublin which is fantastic and why I and lots of others from the UK love going to the US via… Read more »

Red Dragon Jim
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Red Dragon Jim

I find this quite lazy! No offence intended! APD has been cut in the north of Ireland, and effectively abolished in the Republic. Your comment doesn’t stack up. Welsh aviation does have some ambition, we are getting a daily flight to Qatar (one of the destinations you mention!), but it’s not enough. Still, a few years ago we were on the verge of ‘Welsh aviation’ disappearing and Cardiff airport shutting down. This might be the only thing I ever praise the Welsh Government for, but nationalising the airport was a vital and beneficial step for the Welsh people. I am… Read more »

daffy2012
Guest

But Jonathan….the Irish did cut corporation tax.

Should we cut APD and possibly even scrap it? I’m not sure. But one thing I’m sure of is the principle that we in Wales should be allowed to decide the answer to these questions.

Rob
Guest
Rob

As someone who flies regularly it makes me very angry that this power hasn’t been devolved to Wales, why should I have to pay APD when I fly from my own country just to keep Bristol happy?? We now have an English Grand Committee in Westminster, therefore if Bristol feels disadvantaged they can lobby this committee to cut APD in England, NOT deny the power to another country!!!I And I thought that it was the Conservative Party that embraced lower taxes & free market competition. I guess competition is fine as long as you are not competing with England. With… Read more »

Jonathan Edwards
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Jonathan Edwards

Replies. Yes, daffy2012, the Irish did cut Corporation Tax. But the point I was making is that this is a dangerous game to play. You need to have worked out your plan. And ultimately you don’t want to rely on the inward investor who has simply come because of the lower tax rate or the Welsh Government grant. What you need is the intangible, a country with confidence and competence and an overall plan and the energy to work. Play with tax rates in that context by all means. I think the Irish did more than just cut the tax.… Read more »

Red Dragon Jim
Guest
Red Dragon Jim

But cutting APD isn’t very dangerous because it’s such a small yielding tax. Your argument comes across as “don’t alter taxes until we have an ‘intangible’ vision”. I disagree. As Nike says ‘just do it!’ We are already pushing links to the Gulf. I don’t like your line that we “can barely manage one airport”. There’s nothing wrong with us. We’ve only had control of Cardiff Airport for a few years and it is growing. When the Spanish managed it, it was a basket case and a joke. And was going to eventually close down. Under Welsh ownership we’ve got… Read more »

Leia
Guest

There must be some middle ground – reduce it and ring fence the money thus raised it for environmental projects?

Joe Valleyboy
Guest

APD should be abolished throughout the UK. There are few other countries that abuse passengers travelling by air to raise taxes in this way and the financial benefit doesn’t stack up. Environmentally we have most noise coming from the so-called “environmentalists” who don’t want new roads or railways don’t want people building cars or driving them and don’t want airports or people travelling by plane. Airports do employ thousands of people directly and indirectly and with today’s global industry model air travel for many employees like myself is unavoidable. We can all have a wonderful pollution free environment if we… Read more »

Jonathan Edwards
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Jonathan Edwards

Red Dragon Jim I AM shouting from the rooftop. But what you describe is a situation where the heartbeat almost stops. And then recovers to a minimum steady but weak beat. Yes, its positive but the patient is still on life support. What I am shouting from the rooftop is “Wake up Wales!. Having your aviation on life-support is not enough. I want the wings beating and the dragon breathing fire and flying, heart pounding. Welsh Airline, Welsh transatlantic, whatever Welsh aviation can devise!”I want the Welsh people to demand this from their politicians. Though why I never hear this… Read more »

Red Dragon Jim
Guest
Red Dragon Jim

Ok- good! You are not part of the problem!

Things are picking up at the airport. Passenger numbers up, airline numbers up, jobs up and new shops. All since nationalisation.

I think Plaid has been positive about aviation and supported nationalisation but ultimately the Welsh Government controls things. They own the airport. If Plaid doesn’t want to join that government in a coalition, and I can well understand why, we need the airport to do well regardless.