Part of the debate – in the Senedd at 5:06 pm on 2 July 2019.
Diolch. I'm very grateful to all Members who have made some very interesting and useful contributions during the debate today. It is really my hope that the UK Government will stop seeing APD devolution as something to be resisted, but instead work with us to generate opportunities not only for the economy of Wales but also for the south-west of England and the UK as a whole, because there is no evidence to suggest that the devolution of APD would disadvantage Bristol Airport in any way and the Welsh Affairs Committee was quite clear on that.
Whilst the benefits to Wales are clear, devolution of APD to Wales could ultimately help reduce airport congestion in the south-west of England, making more efficient use of the existing runway and airport capacity across the UK. Expanding airport capacity is clearly crucial for the UK's longer term prosperity.
Turning to some of the specific contributions, there was, naturally, concern about the climate emergency, and to address the climate emergency we have accepted the UK Committee on Climate Change's recommendation for a 95 per cent reduction in Wales and intend to legislate to that effect. This represents Wales's fair contribution to the UK's commitment under the Paris agreement and demonstrates our commitment to tackling the climate emergency. In March, the Welsh Government published 'Prosperity for All: A Low Carbon Wales', and that contains detailed, sector-by-sector emissions profiles, and 100 policies and proposals to achieve a low-carbon Wales. And this will get us to our 2020 emissions target and set the foundation for greater efforts that we are starting to generate. It's important, I think, to recognise and to put the issue in context because the latest figures, from 2016-17, estimate the total emissions from national and international aviation in Wales is 0.22 per cent of overall emissions for Wales. It's also important to recognise that research that's been carried out independently shows that there would be carbon savings in terms of emissions because of the road traffic to Bristol Airport.
I recognise that there's lots of interest and enthusiasm in terms of how Welsh Government might seek to use these powers in future, but during this debate and during the discussions that we're having on this, and during the evidence that I was pleased to give to the Welsh Affairs Committee, I was really quite clear not to spell out exactly what we'd intend to do with that, because there's an important point of principle here, which I think Alun Davies encapsulated perfectly, and that is that it's not for the UK Government to decide whether or not to devolve powers to Wales by taking a view on how those powers might be used in time. It should undertake the decision as to whether or not to devolve the powers on that merit alone, which is why I haven't gone into much detail on that in the debate today. However, of course, it would be subject to full consultation with interested individuals, with business, with the tourism sector, and, of course, colleagues would want to have their say.
In terms of cost, there would be no cost to the UK Government. The Welsh Government's funding would be correspondingly reduced to a block grant adjustment to account for the loss of UK revenues. This is likely to be initially equivalent to the amount of APD revenue generated in Wales, and the latest estimates by HMRC for 2017-18 show APD revenues in Wales to be around £9 million. So, there's absolutely no prospect of it being the kind of cash cow that Michelle suggested that it might be. Actually, our interest here really is about unlocking the potential of the airport.
There'll be no administrative costs for passengers either. As with the current system of APD, which is run by HMRC, airlines are obligated to make the tax returns. And in terms of the cost to operators, in their oral evidence to the Welsh Affairs Committee, airline operators confirmed that in the event that additional administrative costs did arise from devolution, they didn't expect the burden to be significant or lasting, and it certainly would not serve as a barrier to them using Cardiff Airport.
I've really welcomed the strong party support and consensus that we've had during this debate, so perhaps I'll prevail upon colleagues for some further cross-party support on a related issue, and that's, in terms of planning for a post-Brexit Britain, we need to create opportunities to continue and develop our economy. Andrew R.T. Davies specifically spoke about the importance of connectivity and the role that air travel can play there. With 80 per cent of Wales's trade being with UK domestic markets, improving the transport connectivity around the whole of the UK is vitally important to the success of our future, and that's why those public service obligation routes are so important.
As part of our planning for life post Brexit, we did develop and send robust evidence-based applications to the UK Government to submit to the European Commission for a new network of domestic public service obligation air services, but the UK Government, unfortunately, is blocking these applications, without the provision of any real rationale other than it's currently developing a new aviation strategy 2050, and that's likely to take two or three years to be passed into UK law.
Now, the UK Government's role in terms of public service obligations is simply as a conduit to pass our applications on to Europe; it has no other function in the process. So, Westminster's position of obstructing the development of these new routes, and therefore, more widely, the aviation sector's development in Wales, is extremely frustrating, particularly when considered alongside its decision, for example, not to fund the eGates in Cardiff while, at the same time, funding them in competing regional airports in England, and, of course, persistently refusing to devolve air passenger duty to Wales when it's already done so for Northern Ireland and Scotland. So, I'd welcome cross-party support for the public service obligation air routes that we have asked the UK Government to take forward on our behalf.
But to close, Llywydd, I'm very grateful, again, to colleagues for their contributions and to put on record my thanks, again, to the Welsh Affairs Committee for a very useful and good piece of work. Thank you.