SELECT COMMITTEE ON ECONOMIC AFFAIRS - Parliament

Newcastle International Airport Ltd—Written evidence
Newcastle International Airport Ltd—Written evidence
Please accept the following short representation, on behalf of Newcastle International
Airport Ltd, to the Call for Evidence on The Economic Implications for the United Kingdom
of Scottish Independence.
1 The possible devolution of APD to Scotland raises huge issues for other regional
airports, particularly those closer to the Scottish border. Devolving APD to the Scottish
administration, given their keenness to reduce the rate of APD in order to give Scotland
a competitive advantage, would have a devastating impact upon Newcastle Airport.
2 We have set out an alternative proposal to address the impact APD is having upon
regional airports and the economies they serve. This proposal would involve the varying
of APD rates according to the level of congestion at an airport, rather than where that
airport is located. This approach would in our opinion be legal under EU State Aid rules,
and would be fair. A devolved approach, whereby passengers – who are essentially
mobile between airports – could pay significantly less north of the border than they
would pay south of the border, would in our view be certainly very unfair. It would lead
to the loss of a significant number of direct and indirect jobs in the North East of England
and make this region even more of an economic backwater than it is or deserves to be.
3 In the event of devolved APD, and should the Scottish Government elect to reduce the
rate or cancel the Duty altogether, we anticipate that both passengers and airlines would
move from Newcastle to airports north of the border, particularly Edinburgh. For
example, Emirates, an airline we have worked hard to acquire and retain, would be able
to offer its customers far cheaper flights from Edinburgh and would therefore be likely to
consider relocating its service. We are certain there would be numerous other
examples, and we are genuinely concerned that the future viability of Newcastle Airport
could be threatened.
4 The consequences for the economy of the North East of England of such a move would
be equally devastating. The Eddington Report concluded that the region is already
relatively poorly connected when compared to other UK and European city regions. The
economy of the region also has a range of other disadvantages. The loss of a number of
critical air services would be hammer blow, setting the region back both in terms of
private sector activity and the outlook and aspirations of its population. Large and
international employers could have to review their presence in the region, and the
tentative growth seen in inbound tourism would be reversed.
11 June 2012
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