Treasury Minister David Ashford says the 50% cut to UK Airport Passenger Duty will not be carried over onto the island and that even if it was, the gov doesn’t believe it would provide a boost to tourism.
Mr Ashford was quizzed on the matter by MHKs Jason Moorhouse, Claire Christian and Chris Thomas in this morning’s Keys sitting. Chancellor Rishi Sunak announced in his autumn Budget that internal flights in the UK will see a reduction in APD from 2023.
Speaking in Keys, Mr Ashford confirmed the island will not be following the UK in halving APD from £13 to £6.50. Following a supplementary from Mr Moorhouse, the Treasury Minister said that the potential cost to the Manx taxpayer had been calculated at £2m, based on pre-pandemic passenger figures.
After a question from Douglas Central MHK Chris Thomas, Mr Ashford confirmed that the island received ‘indications’ of the proposed changes to the APD, but that he did not believe the full details of the plans were shared by Westminster before Rishi Sunak’s Budget.
Mr Moorhouse followed up this by asking Mr Ashford whether the differences in rates, thereby creating more work for airlines, the island should be asking for ‘special treatment’ and not expect what he termed ‘negative consequences’. However, Mr Ashford told him: ‘The announcement made by the Chancellor was quite clear in that it applies to airports in relation to England, Scotland, Wales and Northern Ireland, so internally within the UK. It doesn’t apply to us and equally it doesn’t apply to the other Crown Dependencies either.
‘So if any change was to be made, it would actually be us putting things out of kilter by charing £6.50 for our portion of the APD and the UK would still impose the £13 [for flights to the island] so if we went down that route, we would be the ones out sync.’
Green House Emissions
Douglas South MHK Claire Christian said that cutting APD would ‘increase’ greenhouse gas emissions and suggested that the island should invest the £2m saved by not reducing it into the green economy. Mr Ashford said: ‘In relation to emissions, that is clearly something that feeds into the climate change agenda, but also equally, we mustn’t make the assumption that any reduction in the APD, including what the Chancellor has said in the UK, will necessary feed down to the consumer. We’re seeing, essentially, the reduction of £6.50 and if I was a betting man, I would say that will be absorbed into the airline’s operating cost rather than passed onto the consumer.’
After Mr Moorhouse also suggested this may impact on the number of people coming to the island, Mr Ashford said Treasury did not believe making this change would result in a ‘boon in people deciding to come to the island’.