Air Passenger Duty: Regional Airports
Debate between Julian Knight and Karen Lumley(9 years, 1 month ago)
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Julian Knight (Solihull) (Con)
I beg to move,
That this House has considered air passenger duty and regional airports.
It is always a pleasure to serve under your chairmanship, Sir David. I am delighted to have secured this important debate, and I put on record my thanks to my hon. Friend the Member for North West Leicestershire (Andrew Bridgen), who has been a champion of regional aviation and has campaigned on many of the issues that I hope to touch on in the debate.
Along with many hon. Members present, I have a regional airport on the edge of my constituency—in my case, Birmingham airport. I will set out the importance of my regional airport to the west midlands and to the wider UK economy, before moving on to the specifics of air passenger duty.
Birmingham airport is the second largest regional airport in England and the third largest regional airport in the UK. York Aviation has calculated that in 2014 the airport’s total economic impact in the west midlands was worth about £1.1 billion. The airport supports about 25,000 jobs.
Karen Lumley (Redditch) (Con)
I congratulate my hon. Friend on securing the debate. Does he agree with me that Birmingham international airport is a fantastic airport and, when High Speed 2 is built, some people in London will be able to get to Birmingham quicker than they would be able to get to Gatwick or Heathrow?
Julian Knight
My hon. Friend is a strong champion of regional aviation, and many of her constituents in Redditch not only use Birmingham airport and enjoy its facilities but work there.
As I was saying, York Aviation calculated that some 25,000 jobs rely on the airport, which puts it in a similar bracket to developments such as HS2 in driving the regional economy. Passenger numbers at Birmingham airport have grown by 13% over the past five years and in 2014 alone it handled more than 9.7 million passengers, including a 7.2% growth in long haul. Nevertheless, the airport is running well below capacity. It could conceivably accommodate up to 36 million passengers, rather than just under 10 million.
The potential for Birmingham airport, and I am sure for many other hon. Members’ airports, to impact positively on the UK economy is considerable. Genuinely, we have only scratched the surface of what we can achieve. While we take seemingly forever to debate a new runway at Heathrow, jobs and direct investment in the regions are going begging.
The west midlands is in receipt of over a quarter of all foreign direct investment entering the UK and leads the UK in terms of export growth. It is the only part of our country with a positive visible trade balance with the European Union, seeing overall growth of 100% between 2009 and 2014. Birmingham airport is central to that—but more growth and jobs could be had. A major stumbling block is the air passenger duty regime.
Regional airports are at a disadvantage, as rates of APD are calculated on the destination of the flight and the class of travel that a passenger is in. This fee is the same whether someone flies from Heathrow, Birmingham or any other English or Welsh airport: for flights within the European open skies area, the fee is £13 in standard or £26 in a higher class, but jumps dramatically for flights outside that area, to £71 in standard class or £142 in a higher class. APD in the UK is considerably higher than in our neighbouring competitor economies: in Germany, it is £5.70 in the European open skies area and £32 for the rest of the world in standard class; and in France it is cheaper still, at £3.90 in the European open skies area and £8.90 for the rest of the world in standard.
An Airport Operators Association survey found that the APD has had a direct effect on passenger numbers and routes. Bristol airport reportedly said that several domestic services were scrapped as a result. Routes between Southampton, Leeds-Bradford, Glasgow, Edinburgh and Brussels airports had been “adversely affected” by the tax.