Air Passenger Duty

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Air Passenger Duty is a punitive tax which is hurting the struggling aviation industry and strangling economic growth at a time when it is most needed.

This ‘poll tax of the skies’ has increased by a factor of nearly 19 for some flights since it was introduced, and we are expecting further increases.

At his 2013 budget the Chancellor, George Osborne, failed to address widespread concern about the damaging effects of APD.  In fact, he pressed ahead with inflation increases. The new rates will be:
 

Bands (approx distance
in miles for the UK)
Reduced rate (lowest class of travel) Standard rate (other than lowest
class of travel)
  From 01/04/13 From 01/04/14 From 01/04/13 From 01/04/14
Band A (0-2000 miles) £13 £13 £26 £26
Band B (2001-4000 miles) £67 £69 £134 £138
Band C (4001-6000 miles) £83 £85 £166 £170
Band D £94 £97 £188 £194
 

A poorly-timed tax on a fragile industry
As the UK economy struggles to recover from the recession, the aviation industry is also struggling. The aviation industry contributes hugely to the economy of the UK and taxing it at punitive levels is causing untold damage to our prospects for recovery.

The British Government’s approach is in stark contrast with other EU countries where they have realised the damaging nature of punitive aviation taxation. The Dutch and the Irish – two big competitor countries for the UK – have abolished their airport taxes.

An environmental tax?
In its recent response to the public consultation on APD which BALPA took part in, the Government has acknowledged, for the first time, that APD is a revenue-raising cash cow for the Treasury, and not in any way an environmental tax.

This is certainly the case. In fact, APD has the perverse effect of increasing carbon emissions. People are drawn to taking connecting flights via European airports such as Amsterdam to avoid APD rather than fly direct which results in more pollution.

The alternative
BALPA believes that the overall level of aviation taxation must reduce, especially with the forthcoming implementation of the EU Emissions Trading Scheme (EU ETS) which will put further price pressure on airlines and therefore passengers.

We are far from complacent about the environmental impact of aviation. But aviation’s contribution to global carbon emissions should be put in context. If we grounded every UK flight it would cut global man-made CO2 emissions by 0.1%. All UK domestic and international aviation accounts for around 6% of UK CO2 emissions compared to 31.1% from power stations and 21.6% from road transport.

Could aviation do more to cut its carbon emissions? Of course. Is APD going to encourage that? Absolutely not.

The Government should be using policy levers to assist the industry invest in research and development. New technology is going to be the way the industry can cut its contribution to carbon emissions, not artificially constraining demand which has huge knock-on effects on the economy.

A recent study by PwC has concluded that scrapping APD would more than pay for itself, would boost economic prosperity and create 60,000 jobs.  The report’s summary can be found here: http://press.ba.com/wp-content/uploads/APD-Short-Version-Final.pdf


For any further information on APD or any of BALPA’s campaigns please contact Richard Toomer at richardtoomer@balpa.org  

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