Sorry to jump up to a previous line of comments, but APD..... I'm sure I could google this, but there's so much knowledge in this forum, it's more interesting by far to place this here....
If the UK gov decided to give the powers to WG tomorrow, I understand that money would come out of WG budget.
If the total is 1m /2 x £15 at roughly £7.5m and the Welsh Gov decided to then decrease the cost to 0, in the next settlement would that original £7.5m be deducted or would the deduction be based upon passenger numbers (assuming they'd increase post reduction) so the WG being potentially £10m lower next cycle and so on if pax numbers exploded?
If it's the original 7.5m ammount, then while at a lower pax level, the sooner the better surely?
You'll not be surprised by this answer BUT… it’s as simple as its complicated! 🤓
HM Treasury income from APD applied to passengers travelling to and from Wales, via airports in Wales, is not separately broken down in the national statistics by HMRC.
The only "
qualified" number we have is the £6million estimate provided by Rebecca Evans to the House of Commons Select Committee in 2019, i.e. that the adjustments made to the Welsh Block Grant “
would reflect APD, which the latest estimates by HMRC for 2017–18 show was in the region of £6 million”.
Taking this number, if APD was abolished, HM Treasury would lose £6million in income pa, therefore Wales would (in theory!) lose an equivalent £6 million each year from the Block Grant.
Simple answer so far. However, there's three things to bear in mind.
1) The "£6million" stated was disputed at the time as being closer to "£13million", depending on which source or political party was involved.
2) The figures refer to the tax-year 2017-18 as c1.5 million passengers passed through Cardiff Airport, a period which skewed slightly more towards low-cost travel (Flybe, Ryanair, Vueling) than charter (TUI, Thomas Cook), the reverse being true today of course. The rates for passenger duty have also changed since then, as has the number and mixture of passengers.
3) Critically, adjustments to the Barnett Formula post-Brexit also means the "like-for-like" calculation isn't as it was back in 2019 (and even then the statement made by Rebecca Evans was simplified). Today, a reduction of £6million income to HM Treasury would (in theory) be adjusted downwards by the formula.
In summary, and for the benefit of simplicity, revenue lost by HM Treasury would be duly reflected in an equal reduction to the Block Grant settlement.
In reality, while the calculation is more nuanced, the principle is the same.
Finally, the Barnett Formula calculation would be based on actual HM Treasury income over previous financial years, not forecasts of future growth, income or passenger numbers.
The above of course
assumes APD would be abolished. Should the Welsh Government retain APD in line with the UK or alternatively retain but set its own rates, the same principles would apply.
Hope this makes sense.