Business leaders urge Chancellor to lower passenger duty for Birmingham Airport

BUSINESS leaders in Greater Birmingham are urging the Chancellor to lower Airport Passenger Duty (APD) for airports which have spare capacity, such as Birmingham.
 
The move follows concerns that giving regions in Scotland and Wales the power to set their own rates will have a detrimental impact on regional airports in England by allowing them the opportunity to offer more competitive fares.
 
Paul Faulkner, chief executive of Greater Birmingham Chambers of Commerce (GBCC), said that varied rates would encourage airlines and passengers to make the best use of airports capable of taking more traffic.
 
In a letter to George Osborne, he added that the GBCC welcomed the discussion paper in view of the acknowledged concerns from regional airports over the impacts of the devolution of APD.
 
He went on: “The government recognises regional airports play a significant role in local economies, and we welcome the opportunity to discuss options which help mitigate the impacts of devolving APD on regional airports, like Birmingham Airport.
 
“Birmingham Airport is a figurehead business in the Greater Birmingham area.  It is a leading employer, providing over 40,000 jobs.  In addition, it facilitates the national and international transport of both people and products, bringing both tourism and trade to the region.  
 
“Through creating jobs, increasing trade and improving connectivity, it is no wonder that the airport’s total impact is estimated at £1.7bn in GVA.  Furthermore, Birmingham Airport currently accommodates 10 million passengers per year, however this can increase up to 36 million on just one runway.”  
 
He said the airport had clear capacity to grow and to increase its contribution to the economy even further.  It was important therefore that policies regarding the devolution of APD do not jeopardise this.  

“In the productivity plan, the government emphasises building strong city regions as part of successful rebalancing of the economy.  Birmingham Airport already plays a fundamental role in strengthening the Birmingham city region, through the prosperity it creates,” said Faulkner.  
 
“Moreover, it has the capacity to contribute further, subject to appropriate policies supporting this.  We therefore support the recommendation from Birmingham Airport that the Government initiates a new APD regime in England designed to encourage airlines and passengers to make best use of spare capacity at regional airports.
 
“The Final Report of the Airports Commission highlighted a lack of capacity in the South East and its constraint on economic growth.  Through a lower rate of APD for non-congested airports, Birmingham Airport could provide additional capacity, relieving pressure in the South East, and supporting more balanced economic growth in the UK.”
 

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