Special pleading, spineless bleating
Bosses at Manston are calling on the government to implement a “congestion charge” at London’s main airports because of the “devastating impact” of Air Passenger Duty (APD) on smaller airports. The proposal is part of Manston’s submission to the government’s consultation on APD, which it is estimated could cost the public, visitors and businesses an extra £1bn a year.
Manston is arguing that the tax will severely hit regional economies, and in particular the tourism sector, by hindering the growth of regional airports. As a result Manston is proposing that the most effective way to deliver the government’s “Better not Bigger” initiative is to set APD levels at a lower level for uncongested regional airports with significant available capacity to help alleviate congestion and improve the passenger experience at the main London airports. Charles Buchanan, chief executive of Manston Airport, said:
“We believe the government should follow other European countries and scrap APD as the tax is making the UK less attractive to international visitors and also holding back the growth of regional airports. The government should provide economic incentives to encourage airlines to move out of the congested London airports, and importantly to make better use of those where capacity is available. If passengers and airlines want to fly out of airports which are congested then they should pay a premium for doing so, just as motorists pay a premium to drive in central London.”
The top rate of APD is currently eight times the average of other countries in Europe and the Office for Budget Responsibility has forecast that APD will raise £17.5bn from 2010-11 to 2015-16 for the government. In countries such as Belgium, Netherlands, Denmark and Malta, APD has been scrapped due to its detrimental impact on tourism and wider economies in those countries, and it may be scrapped next year in Germany.
Manston has joined a partnership of other regional airports, including Birmingham, Bournemouth, Bristol, Durham Tees Valley, East Midlands, Humberside, Leeds Bradford, Liverpool, Manchester, Newcastle, Prestwick, and Robin Hood, and obtained legal advice on whether a new differential tax regime can be introduced. The UK aviation industry is also preparing itself for a “double tax whammy” with the impending introduction of the European Emissions Trading Scheme (EU ETS), which, in addition to the APD regimes, means it is disadvantaged further against other European airports. Mr Buchanan said:
“With Air Passenger Duty in the UK now at a level far higher than anywhere else in the world, combined with record fuel prices, continuing weak economic conditions and the impending introduction of the EU ETS in 2012, it is making it difficult to sustain our existing air services and very challenging to attract new airlines and services to our airport. This is not only bad news for our airport and passengers, it is also bad news for jobs, inward investment, tourism and wealth creation in Kent. Under the right economic conditions Manston is uniquely positioned to provide air services for Kent and London once the already improving surface access infrastructure is in place.”
The industry is arguing that regional airports across the UK, such as Manston, will be disproportionately affected by APD, at a time when they are best placed to assist the Government fulfill its commitment to constrain the growth of the congested London airports by not building additional runways at London Heathrow, Gatwick and Stansted.
Regional airports argue that they do not have the luxury or benefit of having a large proportion of business travellers or wealthy passengers with a propensity to fly, that the main London airports such as Heathrow and Gatwick enjoy. Without decisive action, they say, the gap between the largest London airports and those in the regions will continue to increase.
kentonline 20th Jun 2011