Industry efforts to convince the government to rein in a planned rise in Air Passenger Duty (APD) will climax today ahead of the Chancellor’s autumn statement tomorrow.
The Association of National Tourist Offices and Representatives (Antor) joined the lobbying efforts, telling Chancellor George Osborne: “APD is impeding travel.”
In a letter to Osborne, Antor warned of “serious consequences” from “ever increasing APD rates combined with the global economic downturn”.
The Treasury has indicated it will impose a double-inflation rise in APD from next April after freezing the tax rates on air fares this year. In its March 2011 Budget the Treasury gave notice: “The increase assumed in the [2011-12] forecast will be deferred and implemented alongside the April 2012 RPI [Retail Price Index] increase.”
Antor chairman Tracey Poggio told the Chancellor: “The impact of the proposed double inflation increases in 2012 will seriously weaken the UK public’s choice to travel abroad and communities travelling to and from Britain. The UK economy will be a net loser.” She called for reform of APD “to make the tax fairer”.
The Chancellor is expected to announce a reform of the APD banding system following a consultation earlier this year which sought industry views on a switch from the current four bands to a two-band or three-band system.
A change in banding is of real concern to many destinations, particularly the Caribbean countries – which currently endure a higher tax rate than neighbouring Florida and the rest of the US and Hawaii – and Egypt which bears a higher APD rate than Tunisia and rival destinations in the eastern Mediterranean.
In a statement to the Chancellor submitted with the Antor letter, the Malta Tourism Authority in the UK said: “APD increases have hit families considerably, making previously accessible destinations unaffordable for some.”
The UK’s biggest airlines have formed an unprecedented alliance to demand the government scrap the tax. But a retreat from the expected double-inflation increase would be welcome now and – failing that – the industry would like a halt to further rises while the government gives serious consideration to the economic impact of APD.