Flight tax fury shows how painful it is

Just weeks after the TaxPayers’ Alliance campaigned against Air Passenger Duty (APD) at Bristol Airport, the unpopular tax on holidaymakers has become a political hot potato in the region. Last week, the chairman of Cardiff Airport tabled an amendment to the Wales Bill in the House of Lords, asking for the devolution of APD on all flights from Welsh airports. If this was accepted, Cardiff Airport could then cut the duty and gain an enormous competitive advantage over its closest rival at Bristol Airport.

On a standard rate flight originating in Bristol or Cardiff to New York, APD adds £138 to the overall cost. For a longer flight to South East Asia that can rise to £170, while a family of four travelling to Florida with economy flights can expect a whopping £276 in duty alone. To have the ability to scrap this extra cost would give any airport a distinct advantage over others in the UK.

Chief Executive of Bristol Airport, Robert Sinclair, is fuming at the proposal. “The two airports are less than 100km apart,’ he says. ‘Bristol is as convenient as Cardiff for many people who live in south east Wales, and we currently serve 25% of the market for air travel for the entire country. This is not about England versus Wales, it is about the market deciding where airlines wish to operate and passengers voting with their feet. Selective subsidies or tax systems which favour one government-owned airport over privately operated competitors are not only unfair, they are a waste of taxpayers’ money.”

Cardiff Airport has already proved controversial after it was nationalised by the Welsh government last year with £52m of taxpayers’ money, raising fears that it would benefit unfairly from state subsidies.

“The purchase price of £52m paid by the Welsh government, which is well above market value when compared to recent transactions involving UK airports, gives us concern that ongoing government involvement and support is highly likely,” said Bristol’s Robert Sinclair. “Bristol Airport has never been concerned about competition from Cardiff or other airports, provided that competition is on a level playing field without any form of state subsidy or government support.”

That airport bosses in both Cardiff and Bristol clearly think APD is a drag on their business should surely be good enough reason for the government to look again at scrapping this unpopular holiday tax and give every a passenger break—and boost business at the same time.

Tim Newark is the TaxPayers’ Alliance’s Grassroots co-ordinator in the South West.