Britain’s new UK Conservative-Liberal Democrat government has announced measures potentially hostile to the aviation industry and Britain’s role as a global aviation hub.
These include a new per-flight duty which is in part designed to be a source of revenue for the new government’s plan to raise personal tax allowances for low and middle income earners.
This represents a significant shift in UK taxation policy with a move to the ringfencing of aviation tax revenues to fund income tax allowances.
The treasury had predicted that APD will raise £2.2 billion in 2010/11, but the new Deputy Prime Minister Nick Clegg has previously stated his plans for a new per-flight levy would raise another £3 billion on top of that figure.
The coalition also voiced its opposition to the third runway at Heathrow airport as well as any expansion of Gatwick and Stansted airports.
This will be a major blow to Britain’s role as a global aviation hub.
Both these proposals will now be subject to parliamentary scrutiny, and the financial measures will form part of a new Finance Bill, expected to be published in an emergency Budget in around 50 days time.
Mark Watts is the director of independent communications consultancy Luther Pendragon