Statement from Bristol Airport in response to the report by the commission on devolution in Wales (The Silk Commission)

2012-11-20 — / — The Silk Commission’s report published today (19 November) recommends that Air Passenger Duty (APD) be devolved to Wales for direct long haul flights, and that devolving all rates of APD to Wales should be part of the UK Government’s future work on aviation taxation. Commenting on the report’s recommendations, Bristol Airport’s Chief Executive Officer, Robert Sinclair, said:

“We strongly object to the Silk Commission’s recommendation that Air Passenger Duty on direct long haul flights should be devolved to Wales.

“Today’s report is particularly disappointing as the Commission has ignored the strong evidence we submitted demonstrating the damaging effect that such a move would have on Bristol Airport and the economy of South West England.

“Politicians in London and Cardiff should be under no illusions that, if implemented, this recommendation would jeopardise jobs, connectivity and growth in the South West, with no net benefit to UK plc. Recent research by HM Revenue & Customs clearly demonstrated how a reduction in APD in Wales could have a complex, dramatic and damaging effect on the distribution of passengers between airports. There is no economic justification for distorting the market in this way, and there would only be one winner – the Spanish owners of Cardiff Airport. In our view, this would result in significant market distortion and could contravene EU State Aid rules.

“Even when restricted to direct long haul flights, a price advantage in Wales would put vital services from nearby English airports to European hubs at risk and severely undermine the business case for long-haul services from Bristol to the USA and Middle East. This would have consequences for the South West’s inward investment profile, the profitability of existing international businesses based in the region, and its ability to attract overseas tourists.

“The devolution of APD to the Northern Ireland Assembly is cited as a precedent in the report, but this ignores the very special circumstances in play in that case. Devolution of APD to Northern Ireland, enabling the rate on long-haul flights to be reduced, addressed a unique situation where a part of the United Kingdom shares a land border with another state – the Republic of Ireland – whose aviation duty is substantially lower, resulting in significant leakage over the border and jeopardising vital routes. The Silk Commission’s recommendation would create the very inequality the UK Government took steps to address in Northern Ireland.

“Bristol Airport plays a positive role in meeting the air travel needs of the Welsh public and, for many Welsh people, Bristol is the most convenient option. We are willing to work with the Welsh Government to explore ways of delivering a joined up approach that best serves Welsh passengers, inbound visitors and the economy. However, this can only be achieved with a level playing field for all airports serving the Welsh market.

“Instead of treating APD as a bargaining chip in a game of constitutional politics, policy-makers should consider ways in which an aviation tax based on congestion could help rebalance the economy to the benefit of all UK regions. We welcome the Commission’s recommendation that the Davies review should consider such a mechanism, but I am afraid this will be too little, too late if unilateral long-haul reductions have already been implemented in Wales.”

Last month Bristol Airport published a report, Giving wings to airports across the UK, making the case for Government policy to enable airports outside London to more effectively serve their local markets by making best use of existing capacity, easing congestion in the South East as a result. It includes five recommendations which would deliver real benefits for airports in the regions, the wider economy and passengers across the country:

A copy of Bristol Airport’s written evidence to the Silk Commission can be downloaded here.


Statement from Bristol Airport in response to the report by the commission on devolution in Wales (The Silk Commission)

Statement from Bristol Airport in response to the report by the commission on devolution in Wales (The Silk Commission)