EU rules currently dictate the government is not able to vary rates of APD by region, although it has moved to devolve the issue in Scotland and is looking at doing the same for Wales and Northern Ireland.
However, taking questions in the Commons earlier this week, exchequer secretary to the Treasury Robert Jenrick said this “will, or may” change depending on the outcome of Brexit.
APD is currently levied on aircraft seats at a rate of £13 for short-haul economy seat and £78 for long-haul economy seat.
Upper, business or first class seats start at £26 for short-haul rising to £156 for long-haul, which will increase to £172 from April 1 next year.
APD has been a bone of contention since it was introduced in November 1994 as an environmental or green levy, starting from £5.
Airlines though, as the rate has increased, contend the charge has become a moneyspinner for the government. Airlines UK has branded it “a tax on global Britain”.
Addressing Jenrick, East Devon MP Sir Huge Swire called on the Treasury to take a look specifically on the effect of APD on UK regional carrier Flybe, based at Exeter airport.
“I make no apologies for continuing to lobby Treasury ministers on the iniquity of APD and the discriminatory application of it to Flybe, based in my constituency at Exeter airport, which is the UK’s largest domestic carrier,” said Swire. “Will the Treasury look again at Flybe and its particular set of circumstances?”
In response, Jenrick said: “We are not able to vary APD under EU state aid rules for different regions of the United Kingdom, including the south west.
“That will change, or may, depending on the final state of things once we have left the European Union, but we have taken action in government: we have frozen short-haul rates for eight years in a row and exempted children going on family holidays [from APD], including to the south west.”
DUP MP Jim Shannon for Strangford added APD was stymying growth of Belfast’s two airports following the “tremendous growth” of neighbouring Dublin airport in the Republic of Ireland, which is not subject to APD, a levy specific to UK hubs.
In response, Jenrick confirmed a review of APD in Northern Ireland was ongoing amid long-standing suggestions APD could be devolved beyond Scotland.
“We announced at the Budget that we will be proceeding with a technical working group to look into and analyse further the remaining issues with respect [Shannon’s] proposal to devolve air passenger duty in Northern Ireland,” he said.
