THE Government has admitted it needs to protect a North-East airport from Scottish competition over proposed duty cuts – but has stopped short of committing to immediate action.
Transport Secretary Patrick McLoughlin says it will continue operating a wait-and-see approach on air passenger duty (APD).
His stance follows that of Chancellor George Osborne, who is reluctant to take on the issue ahead of May’s General Election.
However, Newcastle Airport bosses last month told The Northern Echo the Government must act now, citing rivals north of the border gaining an advantage with APD devolution cuts.
A reduction in APD would effectively make it cheaper to fly from Glasgow or Edinburgh than from the North-East.
But Mr McLoughlin said ministers will wait until Scotland makes its move before the Government offers similar powers to English regional airports.
He said: “Newcastle Airport is incredibly important.
“As a Government, we do not what to see it put at a disadvantage.
“We are committed to devolution for Scotland and are alert to what could happen.
“That’s why we will take action as necessary, but, at the moment, Scotland has not got devolution for APD.”
However, speaking to The Northern Echo last month, Graeme Mason, Newcastle Airport’s planning and corporate affairs director, said Scottish airports were already attempting to secure deals with airlines, and potentially win passengers from the North-East, with the promise of a duty cut.
Mr Mason called on the Chancellor to use his March Budget to stop what he described as unfair competition.
He added: “Airlines are planning now for 2016, so we cannot continue with this uncertainty and the prospect of unfair competition.
“We face being at a serious disadvantage.
“Ensuring we are all operating on a level playing field needs to be a part of the Budget.”
Mr McLoughlin reiterated the Government’s APD stance during a visit to the region where he also took the opportunity to hail Hitachi’s £82m train building factory, in Newton Aycliffe, County Durham.
He said the 730-job plant, which is due to start production at the start of next year, would be critical as the Government looks to improve transport links.
He added: “There is a lot going on and when David Cameron talks about re-balancing the economy, you can see the real positives of that in the North-East.
“The Hitachi plant is going to be a very important facility, creating jobs in the region and supporting posts across the UK.
“Look at High Speed Two and what the Chancellor is saying about High Speed Three, connectivity and the Northern Powerhouse.
“It will not happen overnight, but we have got to reduce journey times.
“We are good at doing north to south, but not so good east to west.”
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