Last-ditch fears raised over ‘counter-intuitive’ Budget APD hike

Business travel trade bodies and the UK pilots union have made last-ditch pleas for the chancellor to avoid weighing the travel sector with higher costs in Wednesday’s Budget.

 

The concerns focus on a potential “counter-intuitive” hike in Air Passenger Duty and tourist taxes.

 

British Airline Pilots’ Association (Balpa) general secretary, Amy Leversidge urged chancellor Rachel Reeves to ditch a rumoured Budget increase in APD. 

 

She said: “Increases in Air Passenger Duty are passed straight on to passengers by increasing ticket prices, hitting families going on holiday the hardest.

 

“The government’s own figures show that APD brought in over £4b illion in the financial year 2024 to 2025, an increase of £350 million on the previous year. Quite simply, air passengers are already paying enough.

 

“The government has cleared the way for millions of pounds of private investment in airport expansion at Heathrow and Gatwick. 

 

“To discourage people from flying by raising the cost of a ticket is counter-intuitive and risks undermining the government’s own plans for growth.”

 

Clive Wratten, chief executive of the Business Travel Association - also speaking on behalf of the Global Business Travel Association and The Institute of Travel Management - sent out a unified message to the chancellor. 

 

He warned  that increasing the cost of travelling for work “risks undermining growth at the very moment the UK economy needs it most”.

 

Wratten said: “As we approach the Budget, our members are particularly concerned by reports of a new overnight visitor levy, a further rise in Air Passenger Duty and the potential introduction of a pay-per-mile levy on electric vehicles. 

 

“Each of these measures, in isolation, adds friction to the UK’s economy. Taken together, they risk sending a signal that travelling for work, which is a key driver of national productivity, is being discouraged rather than supported.”

 

He noted: “An overnight visitor levy may appear modest, but for regional cities competing for conferences, investment and talent, it becomes a direct deterrent. Overnight levies will hit those very areas the government is seeking to level up, penalising travellers whose visits fuel local economies.

 

“Another increase in APD, already one of the world’s highest and most complicated aviation taxes, risks eroding the UK’s competitiveness as a place to do business. APD is not simply a passenger charge; it is a tax on global connectivity that directly penalises UK plc for engaging in international trade.

 

“Consider an economy class flight to a trade partner like India, with whom just this year we signed a free trade agreement. The standard APD rate on that long-haul business journey is currently set to be £102 per passenger. 

 

“This is not necessarily a cost for travelling boardroom executives; it’s more commonly for frontline professionals delivering practical work. 

 

“It’s a policy that is profoundly counter-intuitive, actively penalising the very business travel needed to maximise the benefit of a crucial new trade deal.”

 

Wratten added: “We also note speculation around a pay-per-mile charge on EVs. While we agree that future road taxation must be sustainable, an early levy risks sending mixed messages about the UK’s commitment to greener corporate travel. 

 

"If the government wants to shift travellers toward low-carbon alternatives, then rapid railway reform, reliable services and modern ticketing must come first.

 

“Across all these measures, the BTA, Gbta and Itm stand ready to work with the government on solutions that drive economic growth without inhibiting business travel. 

 

“Business travel isn’t a luxury; it’s how the UK wins investment, delivers services and keeps supply chains running. We require a travel system that is affordable, reliable and competitive globally.”