David Cameron has conceded there will be “unfair tax competition” for north east airports if Scotland abolishes Air Passenger Duty.
The prime minister stated that a lower APD rate in the north-east is a “positive suggestion” and the government “will do what’s necessary to make sure that England’s regional airports can succeed”.
Changes to APD came into play today and will see the two highest rates – bands C and D – abolished.
Band C affects people travelling over 4,000 miles and Band D affects people travelling over 6,000 miles
The Treasury said this will eliminate the highest rates for travellers visiting destinations such as China, India, Brazil and "many other emerging markets" including the south Asia region.
Speaking to the Northern Echo, Cameron pledged that if his party wins the election in May a list of options would be drawn up shortly after. He also sought to reassure airport bosses and business leaders about the threat posed by an abolished APD in Scotland.
“No-one should think that after a decision by the Scottish Parliament, the Westminster Parliament will simply sit there and say that’s fine then,” Cameron said.
“We are not going to accept a situation where there’s unfair tax competition. I’m very keen to make sure that Newcastle Airport has a bright future and I think it does.
“We will do what’s necessary to make sure that England’s regional airports can succeed.”
British Airways said adjustments at Newcastle airport would lead to a “domino effect” across England, with Leeds and Manchester airports demanding similar concessions to remain competitive.
“The prime ministers' words speak volumes,” said BA CEO Willie Walsh. “He has finally conceded that APD damages growth and stifles job creation. If APD is on the way out in Scotland, it needs to be scrapped UK wide.”