Gordon Brown will take over as prime minister amid growing concern that the outgoing chancellor’s legacy to travel – the doubling of air passenger duty – will be repeated.
Abta trade relations manager Susan Parsons warned the Guild of Travel Management Companies this week: “Brown has stated APD could be raised in line with inflation.”
The admission appears in the current Treasury consultation document on business class-only rates of APD. It notes: “The Government will keep APD rates under review as part of the normal… Budget process.”
Treasury documents list income from APD as “indexed” and estimate it will rise by 10% on the current year in 2008-2009 and almost as much the following year. This is double the expected annual growth in air travel.
A Treasury spokesman said: “This does imply we could raise [APD], but we say that about all taxes. It would not guarantee an increase at every budget. We assume taxes will be up-rated in line with inflation unless specifically frozen.”
The spokesman attributed the 10% annual rise in projected income as due to “rounding up the figures”.
FTO secretary-general Andy Cooper, who will challenge the Government on the legality of APD in the High Court in July, said: “We queried this when we were still on speaking terms with the Treasury. We hope the Government takes on board our comments and reverts to the sensible procedures of the past.”
Monarch Airlines managing director Tim Jeans accused the Treasury under Brown of “arrogance” and said: “We’ve been done over by the Government. You would not believe the time spent on collecting money for the Government.”