Air Passenger Duty

Oral Answers to Questions — Treasury – in the House of Commons at 11:30 am on 5th November 2013.

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Photo of Paul Goggins Paul Goggins Labour, Wythenshawe and Sale East 11:30 am, 5th November 2013

If he will introduce a time-limited exemption from air passenger duty on new long-haul routes from uncongested airports.

Photo of Nicky Morgan Nicky Morgan The Economic Secretary to the Treasury

The Government are always open to ideas that promote regional growth. The Airports Commission will shortly publish a report on the best use of existing airport capacity in the short to medium term and the Government will take its findings into account in our response.

Photo of Paul Goggins Paul Goggins Labour, Wythenshawe and Sale East

I am grateful to the Minister for her answer, and I welcome her to her position. As part of the growing links between the north-west and China,

Manchester airport is seeking to develop a new route to Beijing, but one of the major obstacles is the very high level of UK APD. Will she take a careful look at new research by York Aviation, which has concluded that a time-limited exemption from APD on new long-haul routes from regional airports would make the Manchester-Beijing route immediately viable?

Photo of Nicky Morgan Nicky Morgan The Economic Secretary to the Treasury

I thank the right hon. Gentleman for his question. The Government will always take a look at the evidence. In fact, we debated APD in the House only the week before last. In October 2012, Her Majesty’s Revenue and Customs published modelling on price differentials at UK airports, and it showed that even large price changes have a relatively small impact on total passenger demand, but I am sure he will welcome my right hon. Friend the Chancellor of the Exchequer’s announcement of the £800 million investment in Airport City in Manchester, which will create over 16,000 jobs. The involvement of Beijing Construction Engineering Group as a partner in this project is the latest in a line of new partnerships being forged between the UK and China.

Photo of Nigel Evans Nigel Evans Conservative, Ribble Valley

Manchester airport is second only to Heathrow in terms of airport capacity, but it is operating at under half capacity yet Heathrow is full. Boris Johnson talked yesterday to the CBI about getting these new routes out to China and Asia, but instead of forcing people from the north-west to fly down to London in order to fly to China, why cannot we get people to come from London up to Manchester to fly out on all these new routes that we need?

Photo of Nicky Morgan Nicky Morgan The Economic Secretary to the Treasury

I thank the hon. Gentleman for his question. As I said, we will always look at any evidence that people want to send us. We want to encourage new links between the UK and China, and the Mayor of London made some interesting points. The point is that we have to change prices a lot in order to change passenger behaviour, and we would need to look at that further.

Photo of Angus MacNeil Angus MacNeil Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Constitutional Reform), Shadow SNP Spokesperson (Scotland)

Is the Minister aware of the success of Barcelona airport in gaining more than 20 international routes in the past year because of a 100% APD reduction? Does she think that such a reduction would help Scotland to regain the millions of passengers it has lost due to this Government’s APD costs?

Photo of Nicky Morgan Nicky Morgan The Economic Secretary to the Treasury

The hon. Gentleman will be aware that there is no APD charge from airports in his constituency. As he knows from our recent debate, APD makes an important contribution to the deficit reduction plans; we will always keep it under review, but it is a very important part of this Government’s attempts to rebalance the economy.

Photo of Stephen Gilbert Stephen Gilbert Liberal Democrat, St Austell and Newquay

APD can also have a disproportionate effect on regional airports operating lifeline routes with modest passenger numbers, such as Newquay’s. Will the Minister factor that into the discussions she is having with colleagues on the future of APD?

Photo of Nicky Morgan Nicky Morgan The Economic Secretary to the Treasury

I thank the hon. Gentleman for his question. We will always look at the evidence, and if cares to write to me, we will certainly take that into account.