MPs slam air tax threat to Northern Ireland economy

Direct services to Northern Ireland from Great Britain should also be exempt to counter the threat posed by the tax to the local economy, the Northern Ireland Affairs Committee said.

On June 29 United Continental Airlines warned that Northern Ireland’s only transatlantic air route could be axed in less than a year if action was not taken to cut passenger duty.

Executives from the US airline, which operates flights between Belfast international airport and Newark, told a committee of MPs that it could not justify paying £3.2m annually in departure tax when the levy in the Republic of Ireland would soon be zero.

Chairman of the Northern Ireland Affairs Committee Laurence Robertson said: “If the current tax rate is not addressed as a matter of urgency, the implications for Northern Ireland are deeply troubling.”

The MPs recommended that two air tax bands be merged and that a zero duty rate be applied.

The detrimental effect of the duty on the Northern Ireland economy is significant and its continuation may threaten the viability of Northern Ireland’s connections to Great Britain and the United States of America, the report added.

Witnesses to the Committee’s inquiry have highlighted serious concerns, including Northern Ireland’s geographic location and reliance on air travel; the sharing of a land border with the Republic of Ireland, which levies air duty at an extremely low rate, and the need for investment from businesses and tourism.

The report added: “By abolishing the tax, Northern Ireland’s business, enterprise and tourist industry stands a chance of bring able to compete with the Republic of Ireland, which is due to abolish its already low rate of air passenger duty.”

The 18-page report made five recommendations and conclusions.

These highlighted that the Committee was not convinced of the viability of devolving the power to set Air Passenger Duty (APD).

That may be reconsidered if corporation tax to the region is devolved and its impact assessed.

Brian Ambrose, chief executive of George Best Belfast City Airport, said: “We welcome the findings of this timely and important report and hope that Government give it serious consideration.”