AIRPORT bosses in the North East are intensifying their calls for an overhaul of the aviation tax system ahead of a major Government report.
While lampooning Prime Minister David Cameron with a cartoon showing him tipping Britain’s tourism and industry into the gleeful arms of France and Germany, Newcastle International chiefs say their message – that a rise in air passenger duty (APD) in April would cripple the UK’s economy – is a serious one.
Graeme Mason, planning and corporate affairs director at the city’s airport, said: “APD in the UK is at an unacceptably high level, and that is before the double inflation rise comes in from April 2012.
“This damaging tax sets the UK apart from the countries we are competing with and puts us at a serious disadvantage. It is particularly damaging to regional air services. For this reason we propose the Government looks again at the structure of APD.
“This issue is so important that we will not stop making the case for reform.”
This month will see the publication of a Department for Transport report into creating a “sustainable framework” for UK aviation. Produced following a six-month consultation with airlines, airports and businesses, it tries to balance the need for air travel with stringent environmental targets.
But any recommendations made in the report will come too late for many, with British Airways boss Willie Walsh announcing his firm is set to halve the number of jobs it will create in the near future – a move he blames on APD.
“Government policy, specifically Air Passenger Duty, the impact is massive and a major issue for the industry,” he said.
“The Government talk about job creation and growth but then have a policy which not only stifles that but actively destroys jobs and job opportunities.
“I speak specifically about the aviation sector, but there is a negative impact on tourism and APD definitely discourages business travel to the UK. It needs to be urgently addresses by the Government.”
Virgin Atlantic chief executive Steve Ridgeway has written to Chancellor George Osborne to plead for the planned 8% rise in Air Passenger Duty from April 1 to be abandoned.
“It is shocking that UK APD is already the world’s highest air passenger tax,” he said in the letter. “Given the importance you rightly place on international trade and inbound tourism in driving growth, increasing the cost of international business and visiting the UK is the last thing that should happen at this time.” Last week business lobby group the CBI called for the size of the APD increase to be reduced to 5%, while figures from the Office of National Statistics show that the Government collected an extra £530m in APD from air passengers last year – a 26% increase in revenue from 2010.
The Virgin Atlantic boss called for the Government to “commission an independent report on the full economic effects of aviation tax in Britain”.