SOUTHAMPTON Airport has welcomed the chancellor’s controversial decision to cut air passenger duty for flights within the UK.

Rishi Sunak mentioned the city where he was born and raised as he announced the tax cut, days before Britain hosts the COP26 climate change talks.

He said: “This will help cut the cost of living, with nine million passengers seeing their duty cut by half.

“It will bring people together across the UK. And because they tend to have a greater proportion of domestic passengers it is a boost to regional airports like Aberdeen, Belfast, Inverness and Southampton.”

He also announced the government would extend support for English airports for another six months.

Labour’s shadow chancellor Rachel Reeves said that “bankers on short haul flights sipping champagne will be cheering today”.

A spokesperson for Southampton Airport’s owner, AGS Airports, said: “As a regional airport group, the connectivity we provide is vital to the economic success of the regions we serve and will play a key part of the UK government’s levelling up agenda. This is both a welcome and much needed announcement which comes as we begin the long process of rebuilding our domestic connectivity which was decimated following the pandemic.

“Removing the double whammy of having APD (air passenger duty) charged on both legs of a return trip will strengthen the viability of these important routes which will get our economy moving again. Now more than ever, it’s crucial we provide the connectivity which will drive growth, employment and prosperity.”

Other key measures in the budget included cutting the Universal Credit “taper” for working people on benefits; a 50 per cent reduction in business rates for leisure, hospitality and retail premises; cutting the tax on drinks served in draught containers by five per cent; and freezing fuel duty.

Peter Taylor, president of Hampshire Chamber of Commerce, said: “While trading conditions remain fragile, the key test is whether or not the chancellor has given businesses more headroom and confidence to make the right decisions on investment, reskilling and job creation.

“We welcome the substantial reduction in business rates he announced for the retail, leisure and hospitality sectors. The move to more frequent revaluations of rates is also good news but we still believe structural reform of such an iniquitous tax, which takes little or no account of profitability or ability to pay, remains long overdue.

“The extension of the annual investment allowance and targeted tax-reliefs for our creative industries will be applauded.

“Cancelling the planning rise in fuel duty will also benefit business and, particularly in Hampshire, companies working in global shipping and logistics stand to gain from the simpler, fairer tonnage tax regime being introduced.

“Given its many UK connections, Southampton Airport should also see a boost from the lower rate of air passenger duty attaching to domestic flights.

“Some of those businesses struggling with rising upfront costs and the prospect of higher inflation will be concerned about the size and speed of the increase in the minimum wage but we believe this is an essential move towards the economy we all want to see, one built on high skills and high productivity,”he added.

Alan Rolfe, senior tax manager at Chandlers Ford-based accountancy firm HWB, said: “The budget did seem to be aimed at businesses rather than the individual with the increased R&D tax relief to include cloud and data costs, the extension of the capital allowances £1m annual investment allowance to March 2023 and the 50 per cent business rates discount for hospitality and retail businesses.

“Looking at the details, second homeowners and people with a property portfolio will be happy to see the time the government is giving for capital gains tax to be paid following a property sale, has been extended from 30 days to 60 days, which is much more realistic.

“The chancellor has not yet stated whether the tax bands will change and that will be worth keeping a watch for in the coming weeks - with inflation expected to reach four per cent, if it does not keep pace with the tax bands, it is effectively a tax rise.”

David Barnes, chief executive of the Farnborough Aerospace Consortium, said: “We very much welcome the reduction in duty for internal flights.

“Our airlines and airports employ many people and this will help boost them as regional hubs.

“Unfortunately the Chancellor has felt the need to increase the duty on longer haul flights which will impact on those who rely on doing business over long distances, and on companies that operate in the long haul sector.”

Phil Hoyle, landlord of the London Tavern pub in Poulner, Ringwood, welcomed the chancellor's bid to simplify the alcohol duty system, with the number of main tax rates to be cut from 15 to six.

Mr Hoyle said: “The alcohol duty system has been a mess for a long time and needed sorting out.

“The pub sector has had a horrid time through the pandemic and this at least seems to have been recognised in the budget, as has pubs’ community importance.

“To bring sparkling wine into line with other wine makes sense and any reduction in duty on beer and cider will please my regulars.

“But the recovery from what we have been through will take a long time and any benefits from the budget might be wiped out by rises elsewhere. The devil will be in the detail.”