02 November 2009

Caribbean APD concession expected

An anomaly on new Air Passenger Duty banding which penalises Caribbean destinations is expected to be ironed out this week.

The European Tour Operators Association believes the Government will act this week to coincide with APD rates going up.

The tax on air travel went up yesterday when a new banding structure was introduced to peg charges to distances travelled.

"Only the Caribbean is likely to benefit from a concession expected to be announced this week, to address an anomaly that APD on Caribbean flights is higher than on flights to the west coast of the United States because it is calculated on distances to the capital city from London," ETOA said.

Financial services minister Lord Myners admitted during questions in the House of Lords last week that APD was a tax revenue generating measure that has little to do with environmental protection, according to ETOA

"The purpose of the air passenger duty is primarily fiscal but gives a strong nudge towards environmental considerations and will, we believe, lead to a reduction of some 0.6 million tonnes of carbon per annum as a result of the increase in the rates that is proposed with effect from 1 November," he reportedly said.

"However, it is primarily a fiscal strategy and that, of course, is why it was introduced by the Conservative Government in 1994."

He also confirmed that the Government would not be moved on environmental arguments that a tax on flying should be levied on each aircraft rather than on every passenger.

"We consulted widely in 2007-08 on whether we should make a change to per plane or per passenger duty but, having listened very carefully to the detailed, vociferous and consistent representations from the business lobby, we concluded that a per passenger duty - it had been introduced, as I said earlier, by the Conservative Government in 1994 - was the most effective way of introducing taxation in this area."

But former Labour MP and government minister Brian Wilson, chairman of pro-aviation lobby Flying Matters, warned that taxes on travel could harm the economic recovery.

He said: "Voters rightly recognise APD as a ‘stealth’ tax with wings. They recognise it not only as a threat to their own desire to fly occasionally, but also as a short-sighted measure which will harm economic recovery.

"Exactly the same considerations have led other countries like the Netherlands and Spain to remove aviation taxes rather than increase them."

by Phil Davies

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Your Comments (3)

Trash the Tax

hi there I would agree with those other countries which have taken the brave decision to remove the "Stealth Tax" APD. these taxes are nothing more than a rip off and do absolutely nothing to reduce greenhouse gas. we seem to be living an era where governments have employed a new policy...If It Moves Tax It...if moves faster or more efficiently tax it again cos because more people will use it so we can rip people of even more !! stupid and short sighted comes to mind...

By Geoff Lord, Tuesday, November 3, 2009
APD

I have to agree with every single word Peter Cansick says. Can't the government see that this doesn't just stop at extra charges to passengers. If the costs stops people travelling, then airlines will suffer, so jobs/routes will go, airport spend will suffer, so jobs will go, car park & airport hotel revenue will suffer, so jobs will go, the destinations will suffer, so jobs will go. The list goes on and on. If this lame 'government' couldn't see a massive bank crisis looming, due to their own lack of control (or just chose to ignore it) then heaven help the travel industry!

By Keith Standen, Tuesday, November 3, 2009
That's pretty typical of a government

spokesman (even if it is Lord Myners)to blame a previous government for introducing APD when it is his government that is hell bent on increasing it to undreamt of levels. As for saying that this tax is a 'nudge towards environmental considerations' that is the biggest load of codswallop that I have heard in a long time - even from a government minister. We all know this tax is going straight into the black hole at the treasury and as for leading to a reduction of 0.6 million tonnes of carbon per annum as a result of this increase I assume this figure was provided by the Department of Guesswork who contrive all of these dubious figures. The government obviously didn't take too much notice of all of the 'detailed, vociferous, and consistent representations' from the business lobby because they went ahead and did what they wanted anyway - so much for consultative government. Perhaps this will all change if we have a change of government next year, let us hope so - if not the industry will be in even deeper trouble that it is now.

By Peter Cansick, Monday, November 2, 2009