Scottish APD changes could create 'unfair’ tax competition – Cameron

UK prime minister David Cameron has admitted that there will be ‘unfair’ tax competition for airports in the north-east of England if Scotland abolishes Air Passenger Duty (APD).

He reportedly said that a lower APD rate in the region is a ‘positive suggestion’ and that ‘we will do what’s necessary to make sure that England’s regional airports can succeed’.

The comments were made during an interview with The Northern Echo newspaper. It is first time the government has committed to lower airport taxes south of the border if the Scottish administration acts first under devolution plans.

Cameron said a list of options would be drawn up within months of a Conservative election victory to examine how to vary APD rates.

He sought to head off the growing concern of airport bosses about the threat posed by much lower – or abolished APD – in Scotland, saying: ‘I get it.’

Cameron said: ‘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.’

British Airways, whose passengers paid £646 million in APD last year, jumped on the comments by reiterating calls for the tax to be abolished across the UK.

Adjustments at Newcastle Airport will lead to a domino effect across England, with Leeds Bradford and Manchester airports demanding similar concessions to remain competitive, according to the airline.

‘If APD is on the way out in Scotland, it needs to be scrapped UK-wide,’ said Willie Walsh, chief executive of BA’s parent company, International Airlines Group.

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