MPs have voted in favour of a Treasury review to assess the impact of air passenger duty on the UK economy, following a three-hour debate yesterday in the House of Commons.
The debate was brought about by a group of cross-party backbench MPs who have been putting pressure on the government, and who expressed their views on the negative effects of APD.
A motion was put forward calling on the Treasury to commission a comprehensive study into the full economic impact of APD in the UK, including the effects on jobs and growth.
Despite widespread support for the motion, Sajid Javid, economic secretary to the Treasury, reiterated recent Treasury statements on the call for a review, stating that “we have no plans at this point for further consultation, but we are keen to ensure that the aviation sector can continue to enable economic growth and support jobs across the country”.
MP Priti Patel, who proposed the motion, said: “There is powerful evidence highlighting the damage that the high rates of this tax cause to the economy and the country’s competitiveness.
“At a time when we need to encourage foreign investment into Britain, the current rates of air passenger duty deter investors from our country and act as a barrier to trade. This tax hits holidaying families hard and adds extra costs to British businesses looking to trade overseas in the emerging markets.”
“I welcome the cross party consensus among backbench MPs and hope that the government will now act to review this tax and pursue reforms that support growth, trade and families,” she added.
Last night, the industry responded to the outcome of the debate, praising all those MPs who attended and argued in favour of the motion and a review of APD, but denouncing the response from the economic secretary to the Treasury that no further consultation on the tax will take place at this present time.
Luke Pollard, head of public affairs at Abta, said: “The Treasury now know that not only is APD one of the largest post-bag issues of the parliament thanks to the A Fair Tax on Flying campaign, but MPs also unanimously back the call for an economic review.
“The outcome of the debate was a great result and we will be keeping the pressure on the Treasury to make sure that they act upon it. We’d like to thank all the MPs who spoke out at the debate, and everyone who has helped lobby their MP.”
Abta’s chief executive Mark Tanzer said the association had been working long and hard for this outcome, and that it was a positive step towards its goal of securing a review into the economic impacts of APD.
“The Treasury now knows such a review has strong support from MPs, the general public and British businesses, and we will continue to put pressure on the government,” said Tanzer.
Simon Buck, chief executive of the British Air Transport Association, said: “The strength of feeling expressed by MPs on all sides of the House demonstrates the recognition of the damage done to the economy by the highest tax on flying in the world.
“According to the World Travel and Tourism Council, APD will cost the UK economy £4.2 billion in additional revenue and 91,000 jobs in 2012 alone.”
The debate comes 20 weeks into a summer initiative by campaign group A Fair Tax on Flying, encouraging travellers and businesses to contact MPs about current levels of APD, and calling for a Treasury review into its wider economic impact.
The campaign has so far seen 200,000 emails sent by constituents to their local MPs, with David Cameron and Nick Clegg receiving more than 465 and 157 emails respectively. Over 90,000 emails have also been sent to the Treasury by non-UK residents.