Finance Minister Calls For Air Duty Tax Action

NI Finance Minister Simon Hamilton has called for UK action on Air Passenger Duty (APD), after news that Dublin has decided to reduce the tax from €3 to zero on short haul flights in the Republic of Ireland.

The reduction will take effect in April 2014.

Minister Hamilton said the announcement by Irish Finance Minister Michael Noonan is "not really a surprise".

"The Irish Government had previously, in their 2010 Budget and in their 2013 Action Plan for jobs, signalled that they might reduce this tax from the €3 amount to zero conditional on the airlines introducing new routes," Minister Hamilton said.

"We have made it clear to the UK Government that we regard APD as an unfair tax that disproportionately affects regions in the UK and Northern Ireland in particular where alternative transport options are more limited and where the option of travelling from Dublin exists.

"There has and continues to be a national campaign against the duty. PWC, on behalf of the major airlines, provided evidence to the Chancellor in the run up to Budget 2013 of the benefits that the abolition of this duty would bring to the whole of UK including Northern Ireland if it were removed."

Concluding, the Minister said: "I believe that the reduction of APD is a matter for the whole of the UK and I am not therefore convinced that devolution is the answer - the cost to the NI Block and other public services would be significant – between £60 - £90 million a year. However, I and my Executive colleagues will continue with our lobbying and hope that the UK Government will soon see sense."

Alliance Deputy Leader Naomi Long said that the decision by the Irish Government "adds urgency" to the case for action on APD in Northern Ireland.

"The differential in duty charged on flights between north and south places our airports at a competitive disadvantage and the scrapping of duty in the south exacerbates an existing problem," she said.

"Crucially, it shows the emphasis the Irish Government place on APD in terms of its effect on the wider economy, reinforcing studies presented to Treasury by Oxford Economics and PwC which indicated that APD was growth limiting and that the revenue loss from abolishing or significantly reducing it would be recouped through increased revenue linked to economic growth.

"Given Northern Ireland's reliance on air travel as well as our unique proximity to Irish airports, the effects of this differential are all the more acute.

"The devolution and reduction of long haul air passenger duty helped retain our single transatlantic flight and provided a base on which we could build for the future. We now need to deal with short haul APD to level the playing field and stimulate growth."

(IT/CD)