Fair Tax on Flying campaigners are "extremely disappointed" that the Government is refusing to budge on Air Passenger Duty and has rejected calls for a review.
The Government said yesterday that it has "no plans to undertake a review of the economic impact of APD at this point" despite recommendations for a review by the Transport Select Committee.
"Rather than examining specific taxes in isolation, Government’s focus is on improving the efficiency and competitiveness of the tax system as a whole in order to achieve its objective of having the most competitive tax system in the G20," said a Government statement.
In May, the Transport Select Committee said a fully-costed study of how far APD impacts on the UK economy should be undertaken.
The Committee said if this provided clear evidence that the tax causes harm to the economy or to government revenue, it should be significantly reduced or abolished.
A PwC report, commissioned by major airlines, concluded that abolishing APD would boost the UK economy.
But the Government said it disagrees with the findings and believes abolishing APD would have a lesser impact on GDP than the report claims and would lead to a net loss of tax receipts, which would then "need to be paid for through tax rises or spending cuts elsewhere, which would themselves have an economic impact."
Darren Caplan, chief executive of the Airport Operators Association which is a supporter of the Fair Fax on Flying campaign said: "It is extremely disappointing to see that despite the wealth of evidence suggesting that APD is negatively affecting the UK economy, the Government is still refusing to act.
"The UK could be even further down the road to recovery if our leaders abandoned their current unwillingness to encourage jobs and growth through reform of this unfair and regressive tax."
Simon Buck, chief executive of the British Air Transport Association, added: "There is mounting evidence to show that the sky high level of tax on flying in the UK costs jobs and disincentivises investment.
"The Government needs to be less defensive on this issue and listen to what business is saying."
Many European countries including Belgium, Holland and Denmark have abandoned their aviation taxes due to the negative effects on their economies.
