Plan to replace APD with aircraft tax ‘on track’

The Treasury has insisted it is “proceeding on schedule” with proposals to replace Air Passenger Duty with a tax on aircraft and the chancellor will make an announcement this autumn.

However, a spokesman said: “No decision has yet been made. It is entirely a matter for the chancellor.”

The statement followed Travel Weekly’s story that the government is considering a retreat on the tax, after parliamentary under-secretary for transport Jim Fitzpatrick said: “There are strong arguments that we should not proceed.”

The Treasury said: “Mr Fitzpatrick was merely pointing out that there are strong arguments as to whether the government should proceed with the transition.”

The government has pledged to replace Air Passenger Duty with a tax on aircraft from November 2009.

EasyJet stepped up its lobbying for the change this week, with full-page advertisements in national newspapers. The Federation of Tour Operators is also in favour. But many airlines, including British Airways, are lobbying hard against the tax and would prefer to see APD retained.

Cargo firms and the Confederation of Business Industry also oppose the switch and the US government has threatened legal action. Transfer passengers, cargo flights and business jets are all excluded from APD, but would be brought within the new tax.

An easyJet spokesman said: “The arguments against are morally bankrupt.” FTO director-general Andy Cooper admitted tour operators are concerned.

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