Business

Foster and O'Neill urge UK Government to tackle APD in next week's Budget

Ryan McAleer

THE UK government has been urged to slash air passenger duty (APD) in Northern Ireland in the wake of the collapse of Flybe.

First Minister Arlene Foster and Deputy First Minister Michelle O’Neill made the joint call yesterday amid speculation APD could feature in next week’s Budget.

Airports and airlines, along with the tourism and hospitality industry have long called for the tax levied on air passengers to be scrapped.

In a pointed statement directed at Downing Street, Mrs Foster said: “If they believe in the United Kingdom connectivity, they really need to step up in relation to air passenger duty”.

Ms O’Neill said: “We’ve all made the case politically for APD. The British government have the policy levers, they can make a positive initiative here.”

EU state aid restricts the ability of member states to alter regional tax rates for individual regions. The Azores criteria, based on a Portuguese ruling, places a number of economic and administrative hurdles in front of governments.

But Mrs Foster said she believes Brexit could allow London to address the potential hole in the Northern Ireland block grant that APD would create.

A report in 2015 estimated the hole could be as big as £55m.

The UK government previously devolved powers to the Executive for APD on direct long haul flights. The 2012 legislation slashed the passenger duty on cross Atlantic flights leaving the north to zero.

But it wasn’t enough to convince airlines such as United and Norwegian to retain experimental routes to the US.

The DUP had sought to raise the issue again through its confidence and supply arrangement with the Conservatives.

It’s understood discussions have been ongoing, but the economic impact in the wake of the coronavirus outbreak could push the issue down the pecking order next week.

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