Calls for VAT on aviation fuel as low-cost airlines hit UK tourism

A House of Commons select committee has been urged to recommend charging VAT on aviation fuel to protect domestic tourism from ‘subsidised’ low-cost airlines.

Speaking at the Culture Committee’s inquiry into domestic tourism yesterday, Travelodge director of communications Greg Dawson said the period between 1995 and 2002, when no-frills flights launched and began to flourish, saw the inbound tourism spend drop by 16%, while the outbound tourism spend increased by 48%.

He said these changes have created a tourism trade deficit of £18 billion, which is set to grow to £25 billion by 2020 unless the Government stops subsidising budget airlines by not charging VAT on aviation fuel.

Dawson said: “[Budget airlines] are the single biggest cause of decline in traditional tourism resorts and we urge the inquiry and Government to investigate the airline’s unfair grip on holidaymakers that is squeezing the life out of ­British tourism.”

He claimed a 10% reduction in the number of overseas flights taken by British tourists by 2020 would create 31,250 jobs in the UK and raise £1 billion for many of its ­struggling seaside resorts.

Travelodge chief executive Grant Hearn added that the ­Government has failed the UK ­tourist industry as a whole.

He said: “Labour has thrown away a decade of growth potential for the industry. Seven tourism ministers, a 10-year funding freeze, a 9% drop in world market share and the slowest rate of growth of our European competitors is a sad story of mismanagement and failed policy.

“Securing the 2012 ­Olympics was a highlight but the Government is dithering over whether to release the funds needed to secure the much-hyped tourism legacy.”

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