APD to be replaced with per-plane duty

Air Passenger Duty is to be replaced by a scheme that taxes airlines per plane as part of the Conservative-Liberal Democrat coalition agreement announced today.

The parties agreed that a switch should be made to a per-plane, rather than per-passenger duty.

A proportion of any increased revenues over time will be used to help fund increases in the personal allowance for income tax, details of which the coalition will announce in its first budget.

The parties also plan to cancel the expansion of the third runway at Heathrow and will refuse any additional runways at Gatwick and Stansted.

Instead, a high-speed rail network will be established.

Newly appointed prime minister David Cameron said the coalition would work in the long term and would be a “progressive partnership”.

Vince Cable has been apppointed business secretary.

More to follow.

The full agreement can be read here.

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