UK: Plea To Help North Airports

PRESSURE is mounting on the Chancellor to address a North-South imbalance in airport tax in his March Budget.

Transport experts have urged George Osborne to rethink his air passenger duty in order to help airports such as Newcastle International compete with the likes of Heathrow and Gatwick.

The Journal has campaigned through its A Tax Too Far campaign for the duty to be changed as the uniform rate passed on to passengers is making big airlines think twice about investing in regional services.

And now the Northern Way, the body tasked with promoting the region to the Government, has warned of a "triple whammy" if the Government does not reform the tax.

John Jarvis, transport director at the quango, said: "At the moment air passenger duty the tax on plane tickets hits the North more than the South East. Incomes are lower and there are fewer business travellers than at airports such as Heathrow.

"This means the market is more fragile and the flat rate of tax has a bigger impact on demand in the North. It is therefore harder for airlines to develop and sustain new routes and this impacts on the connectivity with international markets that a growing northern economy needs."

Mr Jarvis added: "The aviation business is very strongly market-driven. Tax is the only tool the Government has to support the development of the North's international connectivity.

"We're not saying that overall the Government should get less money from air passengers, only that the current tax system is having a greater impact in the North.

"We want the Government to address this by reforming the tax on passengers so those from Northern airports pay less than those using airports in the South East.

"Without this we face a triple whammy: a constrained network of direct routes from the North, limited links from the North to the world's big hub airports and other key destinations and the North's airports not helping take the strain off the South East."

While the quango's findings were welcomed by Newcastle Airport, whose planning and corporate affairs director Graeme Mason said they "await with interest the Chancellor's March Budget", the campaigners are up against strong and vocal opposition.

Today the former head of the Government team planning for a new UK-wide high-speed rail route, Barry Rowlands, will tell a transport conference that the line is no substitute for new airport runways.

And Mr Rowlands will criticise the expected plan to increase the duty on South East airports in order to send trade to regional airports.

Mr Rowlands is expected to say in his speech: "I am afraid that rhetoric alone simply will not do. Nor will random suggestions such as higher air passenger duty at South East airports in the absence of a coherent overall strategy for all Britain's airports."

In December, aviation minister Theresa Villiers said reforming the duty could see the Government introduce different tax rates to help "relieve overcrowding" at London airports.

But the prospect of ministers trying to tax people off flights from Heathrow, Gatwick and Stansted is likely to prove controversial with travellers.

Liberal Democrats in coalition had wanted a per-plane tax, but the powerful aviation lobby has shot this down after concerns it would cripple regional sites.

The per-plane tax means passengers travelling from Newcastle to the United States via London would have to pay the tax three times by the time they returned home.

Mr Osborne will present his Budget on March 23.