Politicians ‘don’t believe’ industry arguments on APD

The industry has failed to convince the Government or opposition of the case for cutting Air Passenger Duty (APD) according to a former transport minister.

Yet Labour’s current shadow transport secretary Mary Creagh admitted yesterday she has not read a report on the economic impact of APD commissioned by major airlines.

Asked if she had seen the PwC report produced for British Airways, easyJet, Ryanair and Virgin Atlantic and published in 2013, Creagh said: “No.”

Creagh has been shadow transport secretary for eight months. She told the Abta Travel Matters conference in London: “Do send us the APD research.”

The PwC report, The Economic Impact of APD, concluded abolishing the tax would give the UK economy a £16-billion boost. The Government disagreed with the findings.

In an address to the Abta conference, Creagh referred to the abolition of the higher APD bands on long-haul flights in March and said: “We had a decision abolishing APD bands C and D that will cost £250 million [a year] by 2018-19.

“The books are not balanced. The Treasury has a hole of £250 million.”

She insisted: “Any cut in APD needs to be balanced with investing in transport, having adequate staff at border controls, getting passports issued.”

The shadow transport secretary then waded into the furore over Passport Office delays, saying: “Half a million people who have applied for passports are not sure whether they will be able to travel because of the ineptitude and incompetence of this Government department.”

Labour MP and former transport minister Jim Fitzpatrick defended Creagh for not having read the APD report, saying: “APD is a Treasury issue.”

But he told the Abta conference: “You have not won the argument [on APD]. The Government does not believe you. The opposition does not believe you.

“The argument has been made repeatedly but the Treasury is not persuaded. It is taking £3 billion a year [from APD] and here is someone promising ‘You will get £4 billion to £5 billion if you abolish APD’.”

Fitzpatrick said: “The aviation industry does not speak with one voice – one airport competes with another airport, one airline competes with another airline. The industry has to get its act together.”

He added: “The argument [on APD] needs to be pushed again and again, and for a long time after the next election.”

Conservative MP Alok Sharma appeared to dismiss the PwC report when he told the conference: “You can put all sorts of assumptions into a report and come out with a big figure.”

Abta head of public affairs Stephen D’Alfonso conceded: “We have been pushing at a very closed door for a very long time.”

Labour candidate and former Abta head of public affairs Luke Pollard said: “We need a reality check at times. There is a disconnect between the industry and the experience on the doorstep where no one thinks about APD.”

However, Pollard said: “There is a need to keep up the lobbying work.”

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