Luke Pollard was Abta’s Head of Public Affairs from 2009 to 2013 and is the Labour Party Parliamentary Candidate for Plymouth Sutton and Devonport
The travel industry has long grown used to Budget day meaning another set of bad news. Taxes up, valid concerns dismissed and economic bad news aplenty. But perhaps not today.
The re-banding of Air Passenger Duty represents a sizeable victory for the travel industry and a huge boost for long-haul markets, and demonstrates that the sector’s years of lobbying on APD have not been in vain.
The Treasury has been privately signalling for some time that the arguments being put by industry about the economic damage being done by APD were beginning to pay off.
The PwC economic study about the consequences of APD that had been funded by the airlines went a long way to helping persuade Ministers that APD was worthy of another look, even in these austere times.
The lobbying by the Fair Tax on Flying campaign also helped. The industry presented sound arguments, well put, widely supported and kept at it. The usual doom merchants in the industry used columns like this to cry defeat at every opportunity.
But the persistence of the industry to keep campaigning, presenting evidence, persuading and explaining the effects of APD, has paid off and in some style too. To those I say well done for keeping your nerve.
The Fair Tax on Flying campaign in particular has taken much stick over recent years about its so-called failure to deliver results. Not so today though. Its critics rightly silenced.
It has not always been popular to pool resources and campaign alongside rivals, and managing a campaign where BA and Virgin and Heathrow and Gatwick work alongside each other is somewhat tricky. But when it comes to policy, working together is the only way to achieve results.
But let’s be frank: it has taken far too long for the government to listen. Serious damage has been done to our economy by hiking APD and ignoring the concerns of airlines, businesses, airports and travel specialists.
Our European competitors have seen more sense. No tinkering with banding in European capitals – air taxes have been slashed and abolished.
The announcement that APD is to be restructured with only two, not four bands, is welcome but until sizeable inroads are made into the level of tax this is still a technical announcement that will only boost aviation in some, not all markets.
The industry will be at pains to be unremittingly positive today. The Treasury is watching after all. More detailed analysis will follow in the coming days. Long-haul destinations and operators should be rightly pleased.
It is also positive for business travellers seeking to be competitive in the emerging markets. Those companies operating short-haul programmes might look at today’s announcement and wonder what is in it for them though. 90% of UK travellers don’t board long-haul flights and for them today’s announcement will deliver little.
Re-banding is a big boost for the Caribbean and its quiet, effective and sublime lobbying operation. Righting that historical wrong is long overdue.
Now that banding has been tackled, let’s hope that those companies who have worked together to win a victory on banding can continue to co-operate to win a victory on the level of the tax too. Now that would be something truly worth celebrating.