Strategic Meetings Summit London, 26 September,
September 29 2022, Kimpton Fitzroy London
Friday 30 September 2022, JW Marriott Grosvenor
The travel industry has attacked the government’s decision not to launch a review into the impact of Air Passenger Duty on the UK economy.
Members of the Fair Tax on Flying alliance of travel organisations and companies said they were “extremely disappointed” by the government’s stance.
The House of Commons’ transport committee had recommended that the Treasury conduct a “fully-costed study” into the effects of APD.
This followed the publication of a Pricewaterhouse Coopers (PWC) report, commissioned by the UK’s major airlines, which argued that abolishing APD would boost the economy and effectively “pay for itself”.
But in an official response to the committee’s recommendations, the government said it “disagrees with the findings of the PWC report”.
“The government believes that abolishing APD would have a smaller impact on GDP than the report implies and would cause a net loss of tax receipts,” said the government in a statement.
“This reduction in receipts would need to be paid for through tax rises or spending cuts elsewhere, which would themselves have an economic impact.”
The government added that it had “no plans to undertake a review of the economic impact of APD at this point”.
“Rather than examining specific taxes in isolation, the 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 government said.
But the Fair Tax on Flying alliance said the government was ignoring a “wealth of evidence” about the damage APD was causing to the British economy.
Darren Caplan, chief executive of the Airport Operators Association said: “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.”
Simon Buck, chief executive of BATA, added that the “sky-high level” of aviation taxes “costs jobs and disincentivises investment”.
“The government needs to be less defensive on this issue and listen to what business is saying," added Buck.