The government has come under fire for refusing to instigate a review of the impact of Air Passenger Duty.
Members of the A Fair Tax on Flying industry lobby group said they were “extremely disappointed” at the offical response to the Transport’s Select Committee’s recommendation that the current system of air passenger tax should be reviewed.
Whitehall’s reaction to the select committee inquiry said: “The government has no plans to undertake a review of the economic impact of APD at this point.
“Rather than examining specific taxes in isolation, government’s focus is on improving the efficiency and competitiveness of the tax system as a whole in order to achieve its objective of having the most competitive tax system in the G20.”
The Transport Select Committee said in May that a fully-costed study of how far APD impacts on the UK economy should be undertaken.
If this provided clear evidence that the duty causes harm to the economy or to government revenue, it should be significantly reduced or abolished.
The government’s position is at odds with the evidence cited by the campaign from PwC, which suggests that reduction or abolition of APD would bring significant benefits to the UK economy,
Airport Operators Association chief executive Darren Caplan said: “It is extremely disappointing to see that despite the wealth of evidence suggesting that APD is negatively affecting the UK economy, the government is still refusing to act.
“The UK could be even further down the road to recovery if our leaders abandoned their current unwillingness to encourage jobs and growth through reform of this unfair and regressive tax.”
British Air Transport Association chief executive Simon Buck added: “There is mounting evidence to show that the sky-high level of tax on flying in the UK costs jobs and disincentivises investment. The government needs to be less defensive on this issue and listen to what business is saying.”