COMMITTEE FOR REGIONAL DEVELOPMENT

Committee Office Room 402
Parliament Buildings
Belfast
BT4 3XX
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Email committee.regionaldevelopment@niassembly.gov.uk

Aviation Duty Consultation
Environment and Transport Taxes
HM Treasury
1 Horse Guards Road
London SW1A 2HQ

23 April 2008

Aviation Duty Consultation

Dear Sir/Madam,

The Northern Ireland Assembly Committee for Regional Development decided at its meeting of 16 April 2008 to respond to the UK-wide consultation exercise on the introduction of aviation duty. The Committee for Regional Development undertakes a scrutiny, policy development and consultation role in respect of the Department for Regional Development, which has responsibility for transportation policy in Northern Ireland.

The Northern Ireland Assembly’s recent Programme for Government placed particular emphasis on building a strong economy in order to build a peaceful, prosperous, fair and healthy society. With this in mind, the Committee is concerned that the proposals contained within the consultation document will impact negatively on business, tourism and the economy in Northern Ireland.

Peripherality

Northern Ireland faces particular difficulties arising from peripherality. Whereas travellers on the UK mainland can choose alternative modes of transport, Northern Ireland travellers to the UK have little alternative but to fly. Furthermore, passengers from Northern Ireland often have to connect via larger airports on the UK mainland in order to access international destinations, thus incurring a double charge. It is likely that many international passengers will opt to travel to the Republic of Ireland in order to avoid this.

The consultation document, at point 4.6, states that a potential exemption for the Scottish Highlands and Islands is being considered. The Committee is of the opinion that Northern Ireland should also benefit from such an exemption, due to its geographical peripherality.

Economic impacts

The Committee notes that, unlike current air passenger duty, freight and carrier services will be required to pay aviation tax. This will result in increased transportation costs being passed to the end user, making Northern Ireland a less attractive tourist destination. It will also make Northern Ireland’s imports and exports more expensive and damage the competitive position of Northern Ireland businesses.

Because of the proximity of, and ease of access to, airports in the Republic of Ireland, there is a risk that freight and passengers will choose to avoid the proposed duty by choosing to use airports in the Republic of Ireland. This would cause serious detriment to the airports in Northern Ireland, which have been developing and growing in recent years.

Environmental issues

The proposals also raise a number of environmental issues. It is of further concern to the Committee that efforts to avoid the aviation duty by travelling to airports in the Republic of Ireland will cause an increase in private, commercial and freight journeys on Northern Ireland’s road network, resulting in increased congestion and increased emissions which may negate any environmental benefit arising from the introduction of aviation duty.

The Committee is also of the view that the revenue generated by aviation duty should be hypothecated for use in measures to address the environmental impact of flying, rather than as a contribution to the funding of public services.

On behalf of the Committee, I would like to thank you for the opportunity to contribute to this consultation, on what is a serious and significant issue for the future economic, social and environmental well-being of Northern Ireland.

For the reasons outlined above, the Committee does not believe that aviation duty should be applied to Northern Ireland.

Yours sincerely,

Fred Cobain MLA
Chairperson
Regional Development Committee