PM concedes ‘unfair’ APD if Scotland abolishes tax

Prime Minister David Cameron has admitted the north-east will be adversely affected by “unfair tax competition” if Scotland abolishes APD.

Air passenger duty was introduced on November 1, 1994 and has since increased seven-fold — more than 3.5 times the rate of inflation — and is the highest aviation tax imposed anywhere in the world.

The PM said that, if re-elected in May, he will protect Newcastle and Durham Tees airports by looking into how to vary APD rates by region should the SNP axe the tax.

He told the Northern Echo: “We are not going to accept a situation where there’s unfair tax competition. I’m very keen to make sure that Newcastle Airport has a bright future and I think it does.

“We will do what’s necessary to make sure that England’s regional airports can succeed.”

Willie Walsh, the chief executive of British Airways’ parent company IAG who has previously called for APD to be scrapped (see news, October 29), seized on Cameron’s comments.

He said: “The Prime Minister’s words speak volumes. He has finally conceded that APD damages growth and stifles job creation. If APD is on the way out in Scotland, it needs to be scrapped UK wide.”