The Government recognise the importance of regional airports, not least for the productivity of smaller local communities. That is why, despite the fact that there is no VAT on airline tickets or duty on aviation fuel, we have frozen the APD rate for long-haul economy flights, as was announced in the Budget.
I thank the Minister for that reply. Many of the flights from our regional airports are internal domestic flights, on which passengers end up paying APD twice—on both legs of their journey. To support our smaller regional airports, will he consider cutting APD on internal flights by 50%, as I believe we will be able to once we leave the EU?
My hon. Friend raises an interesting point. This is something that we have looked to address in the past. In 1998, the European Commission ruled that we were unable to do that under state aid rules, but of course once we have left the European Union, depending on the details of the agreement under which we do that, we may be able to revisit this.
The Treasury’s own modelling shows that Newcastle airport in my constituency will be the most affected by the devolution of air passenger duty to Scotland, so what progress have the Government made on ensuring that any impact is mitigated for English regional airports?
As I have said, in this Budget we have frozen APD for long-haul economy flights. That comes on the back of a number of actions that we have taken over the years to reduce APD. In 2014 we cut it and exempted children from it on economy flights. We will continue to review it, as we do all taxes, in the light of the issues that the hon. Lady has raised.
In the light of the Chancellor’s very welcome announcement last week about a possible review of air passenger duty in Northern Ireland, will the Minister take account of the fact that all our airports—Belfast City, Belfast International and Londonderry—suffer a very serious disadvantage when competing with airports in the Irish Republic, which all have significantly lower APD, and review matters accordingly?
I thank the hon. Gentleman for his question. In the Budget, the Chancellor made it very clear that we will have a full call for evidence and undertake a review of matters relating to both APD and VAT, and their impact on tourism, which we recognise is so vital to the Northern Ireland economy.