Published on Wednesday, December 7, 2011
Industry bodies have reacted with total shock to the Government's decision to ignore their pleas to reduce or alter the controversial air passenger duty, which they claim is harming the economy of the UK and other countries that are heavily dependent on UK tourism.
The Caribbean Tourism Organisation described the Treasury's decision to maintain the existing four tax bands, which the CTO has passionately argued discriminates against the region, as a "slap in the face" for the Caribbean people.
The CTO added that it was "deeply disappointed and surprised by the UK Government’s announcement on 6 December that it will continue to discriminate against the Caribbean in relation to the banding aspect of the APD system".
Passengers flying to the Caribbean pay a higher rate than those flying to the west coast of America, even though the distanced travelled is shorter. The CTO said the Government's decision to continue charging Premium Economy passengers the same tax as First Class was a further blow.
CTO chairman Minister Ricky Skerritt said: “(The) announcement on the APD is a slap in the face for all Caribbean people. It dismisses all of the research and information CTO has provided to the British Government over the past three years, and it contradicts the message sent by the UK Chancellor, George Osborne, in March 2011 when he cited the discrepancy between the USA and Caribbean APD rates as one of the reasons for holding a consultation on reform of UK APD.
"The Caribbean is the most tourism-dependent region of the world and the British Government’s decision totally ignores the negative effect that APD is having on our economies and the Caribbean’s business partners in the UK travel industry.”
The Scottish Passenger Agents' Association reacted with fury to yesterday's announcement from the Treasury. “Words cannot express the anger and frustration we feel at this decision," said president Kevin Thom. "We find it inconceivable that the Government has not listened to, or heeded the very strong anti-APD messages that have been delivered to its door, time and time again. This maybe a cash cow for the Treasury in the short term, but the long-term damage to the UK and its economy will be huge.
"Along with our colleague organisations, the SPAA has invested considerable time, expertise and effort in responding to this Government’s so-called Consultations on APD, only to have our pragmatic arguments treated with contempt.
“There can be no winners from the Government’s short-sighted action, and our active campaign against APD – in partnership with our travel sector colleagues - will continue.”
The World Travel & Tourism Council described the Treasury's announcement as "a missed opportunity to reform one of the world's most notorious tourism taxes". President and CEO David Scowsill said APD was "a blunt instrument and a bad tax".
He added: “According to the Treasury’s own consultation, aviation creates over 250,000 jobs directly, and supports an estimated 200,000 through the supply chain. It is also a principal artery for the wider travel and tourism industry, which contributes £105 billion, or around 7 percent, of the UK’s GDP and supports 2.3 million jobs.
“It is time for a full cost/benefit analysis of APD to be undertaken to measure its contribution to the UK taxman against its damage to the wider UK economy in terms of job, competitiveness and GDP contribution.”
AITO said the Government's lack of flexibility on APD was "incredibly disappointing". Council member and Sunvil managing director Noel Josephides said: AITO lobbied for APD to be split into two or three bands. The government continues to ignore its environmental responsibilities too, by adopting a per person tax, as opposed to per plane. All of our members were united that APD on premium economy seats should be charged at the low rate and this isn’t going to happen either.”
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The recent insolvency of Low Cost Travel Group, one of the large players in the travel industry had a big impact on the travelers, hotels and all related players from both wholesale & retail arms. There were about 27,000 people on a holiday who had booked through the company comprised of a €200 million wholesale arm and €500 million OTA / retail arm.