Industry condemns Brown’s APD rise

The travel industry rounded on Chancellor Gordon Brown after he confirmed speculation and doubled Air Passenger Duty.

The rise comes into force from February and will see APD go up from £5 to £10 on most flights.

The announcement came in the Chancellor’s pre-Budget speech as part of a number of ‘green tax’ measures.

But the increase was condemned as a ‘slap in the face’ for the UK’s less affluent travellers by Cheapflights CEO David Soskin.

He said: “It will do nothing to stop global warming and is merely another stealth tax in an attempt to plug the huge gap between the government’s profilgate spending and its income.”

First Choice chief executive Peter Long said the group would be vociferous in its opposition to the APD hike.

He described it as “another tax grab for another black hole.” 

The Federation of Tour Operators said: “From an industry perspective, the proposed February introduction is the equivalent of a punitive windfall tax on tour operators who will not be able to pass on the cost to the four million holidaymakers who have booked for departures after February and we will strongly challenge this.

“We will request an urgent meeting with the Chancellor to express our concerns and make constructive recommendations to help the Government meet its environmental responsibilities.”

The FTO added: “The better way ahead is for the airline industry to join the EU emissions trading scheme, something we support. In contrast this increase will hit hard ordinary working families and their holiday plans.  

“This unprecedented doubling of taxation will also hit livelihoods of the millions of families dependent on tourist-related jobs overseas in countries and regions hugely dependent on tourism, including those still struggling to recover from natural disasters such as the tsunami.”

British Airways described the rises as “highly regrettable”.

The airline said: “Air Passenger Duty is an extremely blunt instrument that provides the Treasury with extra funds for general public expenditure without any benefit to the environment whatsoever.

“Further taxing hard-working families and British businesses is not the way to address climate change.

“Unlike other transport sectors, UK aviation pays for all its own infrastructure and security. This hike in Air Passenger Duty is revenue-raising pure and simple with aviation being treated as a cash-cow.”

EasyJet chief executive Andy Harrison said: “Gordon Brown was right to recognise that it was time to look at APD, but came up with completely the wrong answer. He has come up with a tax that will do nothing for the environment while penalising the travelling public even more – they are unlikely to forgive him.” 

Tourism Alliance spokesman Stephen Dowd said: “Increased taxation is a very crude and blunt approach that fails to understand the issue of climate change, or the importance of the tourism industry to the UK economy.

“Rather than the environment benefiting from the increase in APD, the main beneficiary will be the overseas destinations that visitors will go to instead of coming to Britain.”

Bmi said APD was a “punitive” tax that will hit leisure and business travellers alike. 

The airline said: “For example, a business passenger travelling between London and Edinburgh will be forced to pay £40 just in tax on a return flight from next year.

“The extra money collected will not even be reinvested into the environmental initiatives or transportation improvements that it was created to fund. It places an unfair burden on air travellers that is not placed on those taking other forms of transport such as road or rail.”

Responsibletravel.com managing director Justin Francis said: “Gordon Brown’s price increase in APD from £5 to £10 is insufficient to deter frivolous air travel. We already know this to be the case becasue APD was set at these rates back in 1996 by Kenneth Clarke and it did nothing to halt the increase in air travel.

“£5 extra on short haul flights is the equivalent of a Kronenbourg 1664 and a packet of Maltesers on an easyJet flight. Is isn’t going to break the bank and it won’t put people off flying.” 

BARUK chief executive Mike Carrivick said: “The announcement that APD will be doubled merely shows that airlines, and their passengers, are being hit for the sake of taxation, with no environmental benefits being achieved. Taxation is a blunt instrument, and always will be.

“The Chancellor also fails to recognise air travel as a form of public transport. The same people that use trains and coaches are also users of the air travel system. It is timely to remind him that air travel provides safe, reliable mass transport at no cost to the public purse, but with great economic benefit for the country, and its regions.

“This rise will not only affect those living in the UK, but every overseas visitor as well. Air taxes are already a significant part of the total cost paid, so this increase could be the one that persuades visitors to go elsewhere.”

Report by Phil Davies