NORTH East aviation chiefs tentatively welcomed a Government decision to vary duty on air passengers yesterday.

Travel bosses from the region said they were pleased to see the Chancellor lower the rate of Air Passenger Duty (APD) in Northern Ireland to preserve Belfast’s last remaining transatlantic link.

However, fears were also raised the North East could still stand to lose out heavily if the move is followed up by a decision to devolve the setting of APD rates to Scotland and Wales.

Business leaders in the region have long-standing concerns Scotland would dramatically drop the rate of the tax, pulling passengers away from Newcastle, across the border.

George Osborne was forced to intervene when Continental airlines threatened to withdraw its Belfast to New York route because it was uneconomical.

Before yesterday’s announcement each passenger was paying £60 of APD, on top of their ticket price.

Many found it cheaper to cross the border to Dublin which has a much more favourable tax regime.

Mr Osborne yesterday said he was prepared to reduce the rate to £12 of tax per person to ensure the route, crucial to maintaining Northern Ireland’s economic links to North America, remained.

For two years The Journal’s A Tax Too Far campaign has argued APD has a disproportionate and unfair impact on regional airports such as Newcastle International, which is crucial to the North East’s connectivity and longer-term wealth generation.

Supported by business leaders, we have lobbied the Government to ease the rates, which will allow trade links across the world to prosper.

Newcastle International Airport yesterday said it was encouraged by Mr Osborne’s decisiveness, but devolving rates could be disastrous for the already recession-hit North.