The industry should ramp up its lobbying efforts against a rise in Air Passenger Duty (APD) as the Treasury is in the throes of deciding what to do about the tax ahead of the Budget on March 23.
Liberal Democrat MP Don Foster, a member of the government coalition, revealed: “APD is at a very sensitive stage of discussion.” However, he told a Tourism Society audience in London on Tuesday night: “I’m gagged on APD.”
Foster suggested Tourism Society members should “Look at the words of the coalition agreement [between the Conservatives and Liberal Democrats] on this issue.” He argued those opposed to APD would like what they read.
The agreement commits the coalition to “the replacement of APD with a per-flight duty” – a proposal backed by easyJet, Tui Travel, Thomas Cook and travel association Abta, but opposed by British Airways and other carriers.
However, Foster warned: “You may be disappointed by what the government eventually does.”
Reports have suggested the government will include an announcement about APD in the Budget in March, with Jamaica tourism minister Edmund Bartlett claiming the UK government will consult on changes proposed then.
Foster was more forthcoming in responding to a wider question on VAT, saying: “The government will look at taxation issues as the economy stabilises. It is not going to happen in the forthcoming budget.”
He was speaking at a Tourism Society debate on the travel industry’s Prospects for 2011.
The MP described cuts in funding for tourism as “regrettable”, but insisted the economy was the priority, arguing: “The first thing this government can do to help tourism is get the economy on track.”
Geoffrey Lipman, advisor to the United Nations World Tourism Organisation (UNWTO), said: “APD is a bad tax, a discriminatory tax, but the government gets too much money from it and it is not going to change it.”
UNWTO secretary general Taleb Rifai agreed “excessive taxation” was among the key challenges facing the industry, but added: “There is a feeling in the UK that tourism does not need to be the business of government.”