COMMENT: APD is still wrong

Disappointment was the word most heard last week after the Autumn Statement failed conspicuously to address Air Passenger Duty (APD), but disbelief would be more appropriate. How can the government not take notice of such a torrent of criticism from an entire industry? And not just any industry, but one whose contribution to UK plc has long been beyond question?

On the government side, we have to remember that according to figures released as the debate swirled on last week, passengers since its introduction in 1995 have paid more than £31bn in APD, raising – and this is surely the point – more than £3bn for the Treasury in 2015.

Short-haul passengers are currently charged £13 for every departing flight from the UK, and long-haul passengers pay £146. The fee is set to increase to up to £150 next April.

That’s the economics. But what about the message APD sends out about the welcome awaiting in the UK?

The AOA last week issued a new set of statistics to support the case for abolishing or at least reducing the tax, including the fact that the UK is ranked 137th out of 138 when it comes to air ticket taxes and charges, according to the 2015 World Economic Forum’s Travel and Tourism Competitiveness Report. 

The AOA said only six other EU countries levy aviation taxes, but all at substantially lower rates. The next highest aviation tax is in Germany, where the charge is less than half the level of UK APD.

The number of Northern Ireland residents flying from Dublin increased by 52% the first year after Ireland scrapped the tax, according to Dublin Airport. 

The British Chambers of Commerce calls APD “a trade tax on global traders”. The Confederation of British Industry (CBI), Institute of Directors and many other leading business groups have also highlighted its damage.

Some 40% of the UK’s trade by value uses aviation, predominantly in the belly hold of passenger aircraft. In terms of destinations, the majority of air freight goes to the US and Asia. 

With nearly 75% of inbound tourists travelling by air, according to VisitBritain, UK aviation supports nearly half a million jobs in the tourism sector and adds £19bn to UK GDP, according to a report by Oxford Economics published in 2014.

Here’s an idea. Make passengers pay their APD by credit card at the airport (or at a special cash point). It will bring the advertised price of air travel down, save the carriers paperwork and eliminate any cash transfer to the Treasury. But most important of all it will show travellers just what the goverment take on air travel is. It will come as a nasty shock. Don't protest to the airlines, complain to your local MP.

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