By Ashley Fox, Conservative Member of the European Parliament for the South West of England & Gibraltar.
The Chancellor is soon expected to announce the future of Air Passenger Duty (APD) in the UK and his decision could have far reaching implications for Bristol’s economy. 
My preferred option is for the abolition of APD altogether. It is, and always has been, a socially regressive penalty which impacts most upon those who can least afford it and it can lead to families being priced out flying. It is a tax on tourism, on growth and investment and a levy on aspiration.
A recent study by accountants PwC makes a compelling case for abolition. The report states it could boost UK GDP by around 0.5% in the first year. Treasury receipts would be boosted by £570m in extra tax receipts in the first fiscal year.
Bristol Airport is a success story of that there is no doubt. But the reform of APD could threaten our airport’s very existence and the fight is very much on to protect it. The problem is the Welsh Assembly wants APD devolved with a view to scrapping it.
Why does this matter? The close proximity of Bristol and Cardiff airports means they attract passengers from broadly the same customer base. In my view this makes South West England and South Wales a single market for aviation.
To devolve APD to the Welsh Assembly would, I fear, create a market distortion. No APD at Cardiff Airport would equate to a State-sponsored subsidy for its passengers and make Bristol more expensive. This would destroy the jobs and the economic benefits that Bristol Airport brings. Proof of this can be seen in Northern Ireland with Dublin Airport increasing its passenger numbers from north of the border by half a million a year after APD was abolished in the south.
Another study, by York Aviation, predicts a loss of 440,000 passengers to Bristol if Cardiff had no or a lower APD. It also estimates that up to 33 routes could be lost along with 1,500 jobs and over £800m from our local GDP.
Bristol aspires to the transatlantic and the Middle East markets and airlines are free to deploy their aircraft wherever they can make the best financial returns. Their margins are such that a preferential tax regime at a nearby competing airport would severely limit Bristol’s ability to compete. I am happy for the airports to compete with each other but they must do so on equal terms.
I have made my views clear to the Chancellor; I see no point in continuing with a tax when its abolition would boost economic growth and increase tax receipts. But if we can’t abolish it, we should certainly not devolve it.
