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Air Passenger Duty

Volume 551: debated on Wednesday 24 October 2012

5. What assessment she has made of the effect of the level of air passenger duty for short-haul flights on the regional economy in Northern Ireland. (123805)

The impact of air passenger duty on Northern Ireland was carefully considered last year, and, in recognition of Northern Ireland’s unique circumstances, my right hon. Friend the Chancellor agreed to the Northern Ireland Executive’s request for the devolution of APD for all direct long-haul flights departing from Northern Ireland airports.

I welcome the Secretary of State and the Minister to their first Northern Ireland questions, and associate myself with the kind comments about Sir Stuart Bell.

Is the Minister aware that the business community in Northern Ireland is unanimous in its view that the high level of passenger duty is helping to strangle potential economic recovery? Will he tell us more about the unique circumstances that he mentioned?

I just about heard what the hon. Gentleman said. I think he asked about future APD. Interestingly, when I looked into the matter, the Executive did not ask for short-haul powers. If they had, we would have considered it. If they want short-haul powers, therefore, we will consider the matter, although there would, of course, be a cost to their own Exchequer.

Does my hon. Friend agree that the cut in APD in Northern Ireland will allow airlines to develop further long-haul services and significantly stimulate the Northern Ireland economy, and would that not be true across the whole of the UK?

My hon. Friend draws me into territory that my right hon. Friend the Chancellor, who is sitting to my left, will probably ensure I do not dwell on. There was a sustainable argument for the exceptional circumstances in Northern Ireland. The Executive requested long-haul APD, and the Chancellor gave it to them. Should they request something more, we would consider it.

Does the Minister agree that the reduction in APD is a key driver in attracting inward investment? Will he agree to negotiate with the Department for Enterprise, Trade and Investment, should it propose that short-haul APD—in other words, at Belfast City and Londonderry airports, as well as for international flights—also be reduced?

I will continue to work as closely as I can with all parts of Northern Ireland, particularly the Department of Finance and Personnel and businesses, but there would be a cost to the Minister for Finance and Personnel, which I know he is aware of, but as yet we have not had a request for short haul. If we do, we will look at it.