The Westminster government is committed to considering the case for devolving APD powers to Wales in line with those being given to Scotland. If such powers were devolved to Wales it is likely that BRS would be potentially more affected than any other English regional airport. The government has issued a discussion paper this week setting out three options it wants to explore in more detail to support English regional airports from the impact of APD devolution to the rest of the UK.
The options are:
Devolving APD within England
Varying APD rates within England
Providing aid to regional airports within England
https://www.gov.uk/government/upload...l_airports.pdf
Taking the last option first, the paper points out that EU state aid regulations control strictly what aid can be given and the EC guidelines of 2014 state that those airports with a throughput above 5 mppa can only be helped in the most exceptional of circumstances. The paper concludes that many regional airports in England ‘could be too large to be eligible for aid’. BRS will be well over 6.5 mppa at the end of the year so clearly would be one of the airports mentioned in the previous paragraph.
Moving to the option of varying APD rates within England, this too is not straight forward. EU state aid rules dictate that member states must not vary national tax rates in a way that is more favourable to individual regions. One way might be to base APD rates on airport congestion and the government is seeking the views of the European Commission to determine the legality of such an approach. The discussion paper though is not convinced that this would result in an equitable distribution of passengers within English airports, fearing that there would be winners and losers. With this model central government would retain powers over APD in England.
The third option is the full or partial devolution of APD to local authorities or Combined Authorities. Boundaries would need to be defined and where an airport is located within the borders of one authority but close to another the local authorities may come together to share ownership of a devolved APD system.
A local authority or Combined Authority could pay HMRC to administer the system. If it didn’t it would have to ensure that it possessed the necessary resources itself, which would include training compliance officers and having staff able to pursue tribunals.
BRS is located in the area of North Somerset Unitary Authority, a small council, but it might be that the four authorities of the former Avon area would be asked to consider a joint approach. The first snag is that the authority/authorities would lose from their central government grant a sum equal to the amount of APD that BRS generates. I can’t see there is the remotest chance that the former Avon area authorities would be prepared to give up many millions of pounds from their budget in order to slash BRS’s APD rate. They, like other authorities around the country, are seeing huge cuts already. Given these four local authorities’ abysmal record in co-operation with each other they’d never agree anyway.
The government says it welcomes views on these options together with any further evidence of the likely impact. It also wants to meet interested parties to explore their views further. Comments can be sent by email or by letter.