Gatwick and Birmingham airport chiefs urge Rachel Reeves to tackle business rates threat
Airport bosses have called on ministers to urgently address the threat of a rising business rates bill on the sector amid fears of price hikes for consumers.
Chief executives from Gatwick and Birmingham airports on Thursday criticised Chancellor Rachel Reeves’ planned changes to rates relief, even despite profit increasing at most British hubs in recent years.
It comes after a leaked letter to the Treasury from lobby group AirportsUK claimed the industry would have to cough up more than £1bn due to the re-evaluations, a fivefold increase on current levels.
Speaking at the AirportsUK annual conference in London, Gatwick’s Stewart Wingate urged the government to address the issue “at the earliest opportunity,” describing the changes as “just not acceptable.”
“It’s important that we have a fair tax environment… and that’s why we do need to have this business rates solved.”
He added: “At Gatwick, we’re expecting an increase which is about six or seven times the amount of rates we pay today, which is about £40m.”
Birmingham Airport boss Nick Barton told an audience the hub was looking at a 400 per cent increase in costs due to the changes, which he described as a “huge issue.”
Wider cost challenges faced by airports have also been fuelled by changes to national insurance, he added.
The comments signal a growing backlash from the sector against Labour’s Autumn Budget, which also introduced another increase to Air Passenger Duty (APD), a levy on passengers unique to the UK.
Opponents of APD, which is based on the length of flight and class of cabin, argue it damages tourism and puts the UK behind European competition.
Speaking alongside Wingate and Barton, Edinburgh Airport’s chief executive Gordon Dewar said politicians needed to “step back and get out of the way.”
The Scottish businessman took aim at the Budget APD hike which he described as a “really strange place” to target and the “opposite of what we need.”
Such stinging criticism may surprise some, given many airlines and airports across Europe have raked in record profit from soaring travel demand over the last two years.
The demand has seen a number of hubs change hands recently as their owners look to cash in. Paris-based Vinci bought a majority stake in Edinburgh Airport for around £1.27bn in April, while AGS airports, which runs Aberdeen, Glasgow and Southampton, was sold to AviAlliance in November.
Morning Wire also revealed in November that Labour had signed off a Saudi-French consortium’s bid to acquire a majority stake in Heathrow Airport from its Spanish owners.
A Treasury spokesperson said: “This was a once in a Parliament budget to wipe the slate clean which will help cut business rates for the high street for the first time and keep the corporation tax rate capped at 25 per cent.
“Revaluations will not take effect until 2026. Ahead of then, we will announce details of the next transitional relief scheme, which will cut bills for those facing the largest increase as a result of the revaluation.”