On 2 July 2019, there will be a government debate on the case for devolving Air Passenger Duty (APD) in the Assembly.
What is Air Passenger Duty?
APD is a duty which is charged on all passenger flights leaving the UK. Passengers pay different rates for short haul and long haul flights as part of their ticket price, which is passed onto the responsible government by airlines.
What is the current situation in the UK?
APD was fully devolved to Scotland in 2018 with long haul flights devolved to Northern Ireland in 2012. However, APD remains non-devolved in Wales, which means the UK Government sets and receives APD for passenger flights from Welsh airports.
Why has APD not been devolved to Wales?
In 2012, the Silk Commission published its proposals for devolving fiscal powers to Wales. The report recommended “the devolution of long haul rates of APD, as in Northern Ireland, and consideration of full devolution in the future”.
Welsh Government has consistently called for APD to be devolved to Wales and has argued that ‘UK Government’s reluctance to devolve APD continues to place unjustifiable constraints on Wales’ ability to promote itself abroad and is hindering growth in its aviation sector and wider economy’.
In 2016, the UK Government confirmed it did not intend to devolve APD to Wales on the grounds it would create market distortions and be detrimental to other UK airports, particularly Bristol.
Welsh Government produced a report in June 2017 which challenged the UK Government’s assessment that the close proximity of Cardiff and Bristol airports forms a single aviation market in South Wales and South West England.
The UK Parliament’s Welsh Affairs Committee recently conducted an inquiry into ‘Devolution of Air Passenger Duty to Wales’. The Committee’s report published in June 2019 recommended that APD should be devolved to Wales. The UK Government was called upon to set out plans to do so by 2021.
Article by Christian Tipples, Senedd Research, National Assembly for Wales
