Regional Airports

Jim Shannon Excerpts

Tuesday 2nd February 2016 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate. I was not sure that I would be called so soon, but I appreciate the opportunity. I congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on focusing everyone’s attention on the issue. Clearly, I will be speaking from a Northern Ireland perspective.

The issues of regional airports, including capacity and air passenger duty, are particularly pertinent to Northern Ireland as we share a land border with the Republic of Ireland. My hon. Friends the Members for East Antrim (Sammy Wilson) and for North Antrim (Ian Paisley) have said that on a couple of occasions so it is clear that these issues concern us all. Another indication of that concern is the number of Members of Parliament from Northern Ireland who are here.

Just a few miles down the road, Dublin airport does not have APD imposed on its flights. Not only does the existence of APD put strain on Northern Irish airports as it does with other regional airports throughout the UK, but we are punished twice by having to compete with foreign airports able to operate at a significant advantage. APD was designed to be a revenue raiser but, in the case of regional airports—especially in Northern Ireland—APD has instead become an obstacle to growth. Perhaps the Minister could comment on the suggestion that revenue could be raised by reducing APD and by making us an equal competitor with the Republic of Ireland.

Just last week, news came out showing that passenger numbers have soared at Northern Ireland’s two main airports: George Best Belfast City airport and Belfast International airport. More than 7 million passengers passed through Ulster’s airports last year—a rise of 9% at Belfast International and a rise of 5.4% at Belfast City. However, despite the success at Belfast City and Belfast International, there was a huge slump at Londonderry airport with numbers down by almost a fifth.

[Ian Paisley]

My hon. Friend will appreciate that the figures from 2006 to 2016 show that passenger numbers have not yet recovered for Belfast City and Belfast International airports because numbers are being sucked to Dublin.

[Jim Shannon]

I will certainly speak about that. The figures show an increase, but a much greater increase could be achieved. Perhaps we might dwell on that. A spokesman for Belfast International airport said:

“If we can make advances such as this with the drag of APD impeding progress, think what we could achieve for the Northern Ireland economy if we didn’t have this regressive tax”.

That is a great point, which my hon. Friend the Member for North Antrim also makes. We could do better and much better.

Some 240 million passengers a year join or leave aircraft at the reporting airport. That figure is important because the increase in traffic is yet to be evenly spread out. Other airports outside of London—in Wales, Scotland and, particularly, Northern Ireland—should get the advantage of that. I want to see the connectivity and I know the Minister will comment on that. Those airports are making a case for at least some reduction in APD, with Wales and Scotland already on course to deliver. This debate is important to me as the MP for Strangford because I see Belfast City airport as the airport for my constituents, and they see it that way as well. We want the advantages, across my constituency and across the whole of Northern Ireland, of better prices and better connectivity with other parts of the United Kingdom.

As well as regional disadvantages, APD is at risk of creating a socioeconomic divide, where those with the ability to pay can enjoy the benefits of air travel when and where they want, while those without it are left using other, less appropriate means of transport. APD raises some £3 billion a year in tax revenue, year on year, for the United Kingdom but, despite its introduction, demand has risen rather than fallen. Although APD is a form of revenue, raising it has failed in its aim of reducing demand and carbon demand. If something is broken—and in this case, it is—we should fix it. It is clear that APD does not work for regional airports across the whole United Kingdom of Great Britain and Northern Ireland, and Northern Ireland wants something different.

The benefits of abolishing air passenger duty will be seen across the entire United Kingdom. According to PricewaterhouseCoopers, abolishing the duty would see the UK economy grow by a staggering 0.5%, which would give the UK Treasury some £570 million in tax receipts in the first year after abolition due to the increased demand for air travel. That is a win-win.

In Northern Ireland we know all too well how much air passenger duty influences the decisions of airlines about doing business. We compete directly with the Republic of Ireland in this sector, and we need only look at what happened when air passenger duty was abolished in the Irish Republic. The figures are interesting: Dublin airport increased its passenger numbers from north of the border—my constituents—which is proof that APD is an obstacle to business, growth, prosperity and security for our people. We must do everything we can to ensure the future success of Northern Ireland.

My party is on record as supporting a third runway at Heathrow—we said it in previous debates, and we are saying it in Westminster Hall today. Let us get the third runway in place for Heathrow. Let us get connectivity across all the United Kingdom, and let us get it for Northern Ireland—for Belfast City, for Aldergrove and for Londonderry. Let us move forward and give everyone in the United Kingdom of Great Britain and Northern Ireland the opportunity to have the advantage of no APD.

--- Later in debate ---

[Gavin Robinson (Belfast East) (DUP)]

I greatly appreciate the opportunity to contribute to the debate, and I congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), who summed up entirely appropriately the issues that frustrate and constrain regional aviation in this United Kingdom.

I am proud to have, in east Belfast, George Best Belfast City airport. Its provenance goes back to the second world war, the Sunderland flying boat was launched there in 1952, and the precursor to the Harrier jump jet was trialled in Belfast. On that site, with Bombardier, we are currently developing the C Series, which is an important tool for regional and small airports throughout the United Kingdom that need light, less noisy, as well as efficient and effective aircraft that can get in and out quickly. I am glad that London City airport is considering the C Series. When I was Lord Mayor of Belfast a number of years ago, the city airport was our unique selling point. A passenger can walk out of the arrivals lounge and be in the city centre in five minutes. No other regional airport has such connectivity to its city centre.

[Jim Shannon]

In my constituency it is 10 minutes.

[Gavin Robinson]

The Ards aerodrome has its place, and the kites that are flown there are of great significance.

We are constrained by a regressive and restrictive tax—air passenger duty—which has been fairly reflected on today. The devolution of the duty is the wrong course of action, but I am slightly concerned by the suggestion that we need further strategies and opportunities for the Government to consider what happens next. We need decisions. We have had the devolution of air passenger duty on long-haul flights in Northern Ireland. It sustains our only transatlantic flight from Belfast International airport, but it is not enough. I ask the Minister to reflect on that. In the Northern Ireland Affairs Committee we are currently considering air passenger duty and the variation of VAT on tourism and hospitality, and I hope that our report, when published, will form part of the Department for Transport’s current thinking.