This is a time to celebrate a milestone, and we should be confident that decision-makers will continue to listen, says Abta’s head of public affairs Stephen D’Alfonso
Air Passenger Duty (APD) is in the news again – and this time, for the right reasons. Yesterday, the Chancellor used his Autumn Statement to deliver a cut to the tax, abolishing the duty for under-12s effective from May 2015 and for under-16s from May 2016.
This is a bold move by the government, and the industry has shouted its support. Positively, so has the Labour front bench.
Despite some logistical challenges ahead, Abta is delighted that so many travel businesses have responded by welcoming the announcement and releasing positive messages for consumers about forward bookings beyond May 2015.
Let’s not be in any doubt that the Autumn Statement announcement on child APD is excellent news for our industry. This is the second cut to APD in the last nine months, and from April, the banding and child APD changes will represent a £300 million saving for air passengers.
Following the Budget and Autumn Statement in 2013, there was concern from certain quarters that the government was just not prepared to listen on APD. However, it is clear that building a robust and evidence-based case, as well as the industry’s perseverance in making that case, is paying dividends.
There remains much work to do; however, it is worth reflecting that in this parliament, the industry has achieved an APD freeze in 2011; no above inflation increases since 2009; the abolition of long-haul bands C and D from April 2015; and now the scrapping of child APD. In the constrained fiscal environment we’ve found ourselves over the course of this parliament – that is a record to be proud of.
I’d like to take stock for a moment, and say that the campaign could not have won this concession without the drive and commitment of the industry, sharing information, using your social media channels and engaging important stakeholders individually and through your associations.
Throughout years of campaigning with partners in A Fair Tax on Flying, the industry has built a strong consensus that this deplorable and damaging tax must be challenged and fought at every opportunity – and that’s what we have achieved with this latest success.
How? With strong arguments about the fairness of the tax and how UK passengers pay more than their European neighbours, with a very reasonable assessment on the cost to the Treasury, and by responding to the government’s own call that policies must meet their ‘family test’.
There remains a fairness argument we must continue to invoke, as most passengers will still have to pay – on average – four times as much APD as other passengers in Europe.
Furthermore, the evidence is very clear that APD serves as a block on inward investment, and that it limits this country’s competitiveness in winning the ‘global race’.
While the recent changes to APD highlight that the government is tacitly recognising these arguments, they have yet to look more fundamentally at the structure and level of this tax, and we will continue to call for a government-led review of the impact of the tax with a view to ensuring the level is brought in line with our competitors in Europe.
Challenges lie ahead, particularly as the debate on devolution gathers pace and the government seeks to implement the recommendations of the Smith Commission in relation to APD.
However, today should be a day to celebrate a milestone, and we welcome this brilliant announcement made by the government. Fortified by recent success, we should be confident that with the right arguments, decision-makers will continue to listen.