Jantra
Fri Jan 16, 2015 4:02 pm
Maybe I was being pedantic, but i never made the claim. Regardless, devolving APD wouldnt increase flights out of the uk, it will just reduce the tax take. Much as we will see with devolved Corp tax.
I didn't claim that lower APD would increase flights from the UK (although it probably would a bit, as demand for flights is quite price-elastic, and we presently have a fair bit of spare capacity outside Heathrow). I claimed that if APD was devolved to Wales, and it was cut, that would lead to an increase in flights from Cardiff, in large part at the expense of flights from elsewhere. Wales, South-West and West Midslands based travellers to/from say New York, Florida, and mid-east hubs like Dubai might fly from Cardiff if it were cheaper due to zero long-haul APD. If there were zero short haul APD, that might prove attractive to airlines currently based in Bristol.
Its very much a tax competition issue. I'm not saying its right. But it would give Wales the opportunity to poach from England. (And incidentally, England has relatively less incentive to follow, as the larger tax base means it has more to lose from APD cuts - tax competition is somewhat assymetric).
