THE devolution of Air Passenger Duty to Holyrood risks putting airports in northern England at a "severe" competitive disadvantage, MPs have said.
Louise Ellman, who chairs the House of Commons Transport Committee, said airports in Northern Ireland had already experienced a similar fate because aviation taxes are lower in Dublin and there was a concern Northern England could suffer in the same way if APD is devolved to Scotland.
The committee report noted: "The proposed devolution of APD to Scotland threatens to create further market distortions, which could severely disadvantage airports in England."
Ms Ellman urged UK Government Ministers to "stand up for smaller airports" and make the case to the Treasury that APD squeezed jobs, growth and connectivity.
The Coalition Government has accepted the recommendation by the Smith Commission that APD be devolved to the Scottish Parliament but the specific timing is unclear. The SNP Government wants to halve the tax within the term of the next parliament.
A recent report commissioned by Edinburgh Airport said doing this would create almost 4,000 jobs, increase passenger numbers by 700,000 in the first year and boost the Scottish economy by £1 billion during the next five years.
The Commons report, entitled Smaller Airports, noted how also devolving APD to, say, north-east England or Wales would ultimately serve to extend a patchwork of APD-derived market distortions across the UK and spur a race to the bottom on regional APD rates.
"We would prefer the Government to act strategically and in the national interest to address APD," the MPs said.
The report also warned that the double-charging of the tax on domestic return flights incentivised passengers to fly from hub airports in other European countries.
It also examined how smaller airports might benefit from airport expansion in the south-east of England.
"The whole country should share the economic benefits of expanded airport capacity. But that will only happen if new capacity includes new domestic flights to airports outside London," insisted Ms Ellman, who represents Liverpool Riverside.
"The Department for Transport needs to take a proactive approach and ensure that the regions are connected," she added.
Smaller airports are those which handle fewer than five million passengers each year. The nine busiest UK airports, including Heathrow, Gatwick, Manchester, Edinburgh and Glasgow - fell outside the scope of the inquiry.
The 40 or so smaller ones that fell within it ranged in size from Newcastle, which handled 4.4m passengers in 2013, to Lydd in Kent, which handled just 1000.
The Airports Commission is due to publish its final report on expanding hub airport capacity in the south-east of England shortly after the General Election.
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