UK Air Passenger Duty ‘won’t be reduced’

APD cut ‘not likely’ as climate pressure on airlines grows. Ian Taylor reports

Industry groups appear divided on how hard to press the government on Air Passenger Duty (APD) as the EU moves closer to imposing a carbon tax on flying.

Abta chief executive Mark Tanzer called again for a review of APD last week, arguing for a tax policy “that does not unfairly penalise the industry or place UK airlines at a disadvantage”.

He repeated the demand at Abta’s Travel Matters policy conference on Wednesday, saying: “We still see APD as a blunt and regressive tax.”

Abta has led industry demands to cut APD since initiating the Fair Tax on Flying campaign in 2011.

However, Tourism Alliance director Kurt Janson told a Westminster policy forum last week: “I don’t think we’re going to see a cut in APD any time soon.”

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Abta is a member of the Tourism Alliance, the umbrella public affairs group for the UK outbound, inbound and domestic sectors.

The Treasury raised more than £3.6 billion in APD in the 12 months to March. Janson said: “It’s a large amount of money. I don’t think we’ll be able to claw it back.

“The government needs the money and giving a tax break to something seen as a leading cause of climate change is something we’re not going to see.”

Yet Airlines UK, also a member of the Tourism Alliance, demanded ministers set out “a clear roadmap to cutting and eventually abolishing APD” last week in its response to the UK government’s Aviation Strategy.

Janson did suggest the government “get rid of the double tax [APD] on domestic [return] flights once we are out of the EU”.

But he argued: “There is increasing pressure on the industry to ‘green up’. I would like to see some of that [APD] money used to help the industry develop alternative fuels.”

VisitBritain policy and public affairs manager Timothy Jenkins agreed, saying: “It’s challenging to see APD being cut. Realistically, APD is not going to be reduced.”

UKinbound chief executive Joss Croft told the same Westminster forum: “There is no getting away from it, tourism is a huge contributor to carbon emissions. People are taking more frequent trips [and] I wouldn’t be surprised if we see more focus on tourism to cut carbon emissions.”

EU finance ministers met last week to discuss an environmental tax on flying, with the Netherlands and France leading efforts to present a tax plan to the incoming European Commission this autumn.

Dutch deputy finance minister Menno Snel said aviation’s “contribution to global warming would be on the [EC] agenda in the first week”.

An EC study, published in May, suggested a 10% tax on fares would reduce emissions by 10%.

Airlines for Europe, representing Europe’s major carriers, hit back arguing: “Taxes weaken airlines ability to invest in new aircraft.”

But Tanzer signalled the shift in industry thinking when he told the Travel Matters conference: “We see rising concerns about carbon emissions. We have to play our part.

“Aviation has been able to demonstrate it can increase passenger numbers without increasing emissions as much, but that is not the same as cutting emissions.

“Tax has a part to play. If we can work with the Treasury on that we could provide money to the Treasury and help meet carbon targets.

“We need to deal together with the climate challenge.”

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