Industry furious that Budget ‘puts beer before aviation’

The Government has been berated by airlines and the rest of the UK travel industry for failing to put an end to APD misery in his latest Budget.

Dale Keller, chief executive of the Board of Airline Representatives, said it was "beyond belief that the Chancellor has put beer before aviation".

"Just because the industry was fully expecting a slap in the face from the Treasury does not make it any more palatable," he said.

"We have listened to much talk from the Government about the UK being in a global economic race and the importance for the UK to become more competitive, yet airlines, amongst the most global of businesses; continue to be hammered by the highest aviation tax in the world. The Government has built a veritable ‘wall of tax’ around the UK which international travellers and airlines are increasingly overflying.’¨"

Simon Buck, chief executive of British Air Transport Association, said in light of "incontrovertible evidence" that the tax is damaging the UK economy "the missed opportunity to help kick start our economy is a shocking own goal".

He added: "1p off a pint of beer won’t do much to help those who might otherwise have been looking forward to new jobs."

GTMC chief executive Paul Wait said APD was putting extra pressure on companies trying to build trade and export overseas.

"We are concerned that the practice of using European hubs to travel to critical long haul business destinations and emerging markets to lower costs and avoid higher APD charges will significantly increase," he said.

Chris Clarkson at www.sunshine.co.uk said the Chancellor’s failure to act over APD was a "huge kick in the teeth for holidaymakers".

"I’m sure people will be celebrating everywhere about beer being cut by 1p, but if you really think about it, you’d have to drink one beer every day for a year before you’re getting a beer on George. What about the annual summer holiday? High APD tax rates are really getting to be ridiculous now and need to be sorted, so it’s really not good that the subject wasn’t even touched upon in today’s Budget."

ABTA chief executive Mark Tanzer said: "We needed to see bold action on infrastructure and APD. We saw neither."

In a joint statement, the chief executives of British Airways’ parent IAG, easyJet, Ryanair and Virgin Atlantic said the planned rise in APD "beggars belief".

"We are very disappointed that the Government’s tax on flying, already the highest in the world, will increase yet again this year and next," they said.

"These rises in Air Passenger Duty show the emptiness of rhetoric on boosting exports to emerging economies and building the most competitive tax system in the world.

"Increasing this alarmingly uncompetitive tax on business, trade, and inbound tourism beggars belief when the evidence clearly suggests that abolition would deliver growth, create 60,000 jobs and pay for itself through higher receipts from other taxes."

The Chancellor did announce a range of tax cuts, some of which will benefit travel companies, but the Forum of Private Business said most firms would be hugely disappointed after the Chancellor gave no concessions on business rates.

Forum spokesman Robert Downes said: "Ask any small businesses what they wanted to see from this Budget and many will have said: ‘action on business rates’.

"We said before the Budget government couldn’t keep clobbering businesses with hike after hike, and unfortunately we haven’t seen that sentiment acknowledged today by Mr Osborne.

"It was really a case of enough already years ago, and April’s increase which now goes ahead as planned will mean rates have spiralled by a mammoth 13% in just three years. There aren’t many businesses who’ve seen income increase by anything close to that figure with sluggish growth and recession to contend with in the same period.

"Business rates have risen so much in just a few years they are the number one enemy to many small firms, and we believe are a big part of the problem behind the problems with our high streets too. It’s disappointing to see no action here – it was the obvious way to relieve pressures and is a missed chance for quick and easy relief for business."

by Linsey McNeill and Bev Fearis