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Published on Thursday, March 21, 2013

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 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

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  • APD is Like Hotel Breakfast Charges

    APD will continue to rise until the number of people flying in and out of the UK each year starts to drop, then it will be relaxed a little and stay at that rate. The principal is the same as hoteliers use when working out breakfast charges. When more people leave the hotel to have breakfast at Starbucks etc. than use the hotel dining room they know they have pushed prices to the limit.

    By Martin Drew, Wednesday, November 2, 2016

  • Beer and planes

    I think it's a sad day when the travel industry is more concerned with dragging a few screaming tourists in to the country than a having a cheaper booze up.

    By Johnson Michael, Thursday, March 21, 2013

  • To be strictly accurate...

    ...the reduction is beer duty was not simply equivalent to a penny off a pint. The duty was also frozen rather than being set to rise at inflation plus 2%. The duty on beer is now around a pound on a pint and the cumulative price increase this has caused has resulted in many pub closures. The brewing industry and CAMRA has managed to prove that the tax increases have resulted in a lower than expected tax take and this point was vigorously made to the Chancellor. Of course, the same point has been made to the Chancellor about APD - but maybe the Government wanted to create the impression that they were looking out for the "common man". The tax on other alcoholic drinks has not been changed and, as everyone "knows" it's only really wealthy people that drink wine and spirits - and fly on aeroplanes. It's a shame that the Government doesn't look as hard at its spending as it does at its income - as those of us in the real world have to do.

    By Richard English, Thursday, March 21, 2013

  • Decreasing relevance

    New Zealand's changing demographics are leading to an increasing focus on Asia for both inbound and outbound travel. Traditional ties with the UK are rapidly diminishing and an increasing number of visits to Europe no longer involve stays in Britain as the main purpose of visits are for Med, Baltic or river cruising, villa stays in Italy, France or the Adriatic etc. There is no longer a need to fly in and out of London and the increases in the hugely discriminatory distance-based APD will further decrease demand by New Zealanders & Australians for vacations in the UK. Air New Zealand seems to be increasingly ambivalent about the worth of retaining its daily services into Heathrow and may well opt to sell its valuable landing rights whilst they still have some value. Osborne lacks any foresight.

    By Gary Westwood, Wednesday, March 20, 2013

  • Detrimental to promoting the British economy

    Fits well with this governments philosophy of charging more for worse service! In 1990 the extras on an airline ticket from USA to London were US$ 6.00, in 2013 this now amounts to US$ 678.10. The extras are almost 150% of the airline fare. The airline fare in the same period has increased by around US$ 50.00! The Government is doing its utmost to turn the clock back 50 years, when only the rich could afford to travel. I now travel to Europe via Germany, with great savings in both airfare and hotel.

    By Mike Terran, Wednesday, March 20, 2013

  • Easy target

    Seems like another easy target to tax the masses similar to the fuel taxes we pay at the pumps.

    By cliff fletcher, Wednesday, March 20, 2013

  • They have a point

    I sent a business type on a sales mission to South Africa.... and the Chancellor collected £160. It used to be £5 and £10.... So yes, the airlines have a very good point. It does beggar belief that you have to pay a tax to export...

    By ** Jetwash **, Wednesday, March 20, 2013

  • Beer before aviation

    Putting beer before aviation is hardly "beyond belief". It's the blunt nature of APD rules that are the problem not an increase in overall tax.

    By Mike Read, Wednesday, March 20, 2013

  • Grab a GBP

    When your economy is a tad challenged and yet flights in & out of the Green Isle flourish, what must a man do to rake in the money to pay for his misgivings ? Have a heart airlines, OSBORNE is simply milking the easiest ' cow ' to raise a few Pounds to cover up their unholy mess of the UK's financial position.

    By Colin J FRYER, Wednesday, March 20, 2013

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