We are disappointed to learn that two local MPs Rodger Godsiff and Steve McCabe are amongst over 50 who have signed an early day motion to reduce Air Passenger Duty in the UK.
Is it really serving as a deterrent to inbound tourism and inward investment; having a financial impact on ordinary families ability to fly; and impacts on businesses wishing to export to emerging markets? We say not.
The usual suspects are getting involved, but actually it may be that if there is a truly independent evidence-based study on the effects of aviation and the its tax arrangements, there may be a different outcome from the one they want.
We know the UK has a huge tourism deficit, with £13.1 billion lost to the economy by people spending money abroad rather than in the UK in 2011.
So is this tax (only £12 per passenger for any short haul flight, under 2,000 miles, departing from a UK airport and not on return trips) something that puts tourists off coming here? Again, that seems highly unlikely.
Perhaps instead of it being seen as a burden on business, it could be seen as encouraging them to use greener techniques to seek exports – such as video conferencing. Businesses can also offset some of the APD paid by their staff travelling against tax.
APD exists primarily because the airlines are exempt from paying fuel duty and VAT on fuel, planes or servicing. Airlines and airports do not pay APD, only passengers do and the total revenue from air passenger duty was £2.2 billion in 2010-11.
The Treasury estimated in October 2009 that the loss of revenue as a result of no fuel tax and no VAT on airlines was at least £10 billion a year. These calculations have since been confirmed, so each year, the effective annual subsidy to the aviation industry, from paying less tax than motoring, is around £8 – 9 billion.
To achieve fair tax with motorists, air passenger duty would need to be quadrupled!
It is time to set the facts straight in the aviation debate and ensure this clamour for less tax and more capacity is seen for what it is – industry propaganda based on fantasy figures.