The £2.50 per head Atol Protection Contribution has been reclassified as a tax rather than a fee or charge but the Air Travel Trust Fund will continue to have overall control.
The move had raised fears that the Treasury will now view APC as a revenue-raising opportunity, but Kate Jennings, head of aviation policy implementation at the Department for Transport allayed fears.
Speaking at yesterday’s Barclay’s Travel Forum she said: “We have agreed with the Treasury that the trustees will continue to manage the fund.
“If it’s in deficit there’s the overdraft facility, if it’s in the positive they will be responsible for using those funds.”
The reclassification came after an Office for National Statistics reviews of fees, charges and licences against current European accountancy definitions.
Leading industry accountant Chris Photi, senior partner at white Hart Associates, was sceptical that the Treasury would be kept at arm’s length for long.
“Once they have designated something as a tax, governments have an amazing ability to put it in to a different pocket at a later date,” he said.
Jennings told the forum that the travel industry has an important opportunity in coming months to influence the direction of consumer protection reform.
With the draft proposal for the new Package Travel Directive expected in July, Jennings said ministers were clear that the industry and the customer should fund financial protection.
“It’s not right that the tax payer should be at risk for people taking a holiday,” she said.
Jennings said that the government was trying hard to reach out to all stakeholders that might be affected by the changes to the PTD including through trade bodies like Abta.
Steve Endacott, On Holiday Group chief executive, a founding member of the Association of Travel Agents formed to lobby on behalf of online travel firms on APD, said the body fundamentally disagrees with Abta’s stance on APD.
But he added: “ATA is not a challenge to Abta. We believe Abta is a very strong body and we are not going to give it up to the tour operators.
“Mark Tanzer [Abta chief executive] is an employee and he has two strong voices on his shoulder with Tui and Thomas Cook. There has to be a single voice for the independent travel agent.”