The chief executive of Newcastle Airport has urged the government to abolish APD, warning that the 1,000 jobs in the north-east could be in jeopardy if air levy is devolved in Scotland.

David Laws revealed his concerns as David Cameron announced yesterday that control of air passenger duty was set to be devolved to the Scottish parliament.

The move means Scotland can decide if it wishes to slash or abolish the tax.

Laws said the consequences could be devastating, leaving 1,000 jobs at risk and draining a £400 million from the region’s economy output over ten years.

Mr Laws said: “We are extremely concerned about these proposals. We have undertaken intensive lobbying, including letters to the Prime Minister, Chancellor and other senior politicians. We have also submitted a full representation to the Smith Commission. This hasn’t been published due to its commercial sensitivity but may be in the future,” news site The Journal reported.

“We are now seeking a signal from the Chancellor in next week’s Autumn Statement that the Government is going to do something to address any future distortions. The Prime Minister said on September 19 that the devolution settlement had to be fair also to the people of the rest of the UK. We now want him to honour this commitment.

“The only way to achieve this is for any reductions in Scotland to be matched in the rest of the UK, or for this damaging Duty to be reformed in such a way that distortions are avoided.”

Laws’ concerns were reportedly echoed by bosses at Liverpool and Manchester airports, with a spokesperson for Liverpool stating that 95% of passenger traffic in the north of England was served by low-cost airlines, for whom APD is the biggest barrier to cheap tickets, Cityam said.

Labour MP for Newcastle North Catherine McKinnell said Labour would lobby the Coalition ahead of the Autumn Statement.

“It is absolutely critical that the Smith Commission’s proposals for APD do not damage airports like Newcastle and the North East’s economy,” she said.

“I’m therefore pushing strongly to ensure that that this principle is upheld in relation to any changes to Air Passenger Duty following devolution.”