Petition for Freeze on Air Passenger Duty (APD)
Multicom has called on the government to rethink an expected rise in Air Passenger Duty (APD) next year due to the impact it will have on struggling EU destinations.
APD was introduced in 1994 as an environmental tax, and it didn't stop passenger numbers in Britain rising every year until 2007 and didn't seem to impinge strongly on consumer behaviour until the end of 2010, when passengers heading to the US had to start paying £60 ($94) each in economy class; those flying in business class to Singapore had to hand over £170.
This year the government froze APD in the March Budget, but a double-inflation rise is expected next year. An indication of government plans on APD is expected in the Chancellor’s budget statement on November 29th.
Multicom MD John Howell fears further increases in APD will not only damage the UK travel industry but put further pressure on Eurozone countries like Greece.
John said: "Increasing APD rates so dramatically will not only impact the travel industry in this country but it is also potentially disastrous for Eurozone countries already in crisis.
"The damage to the economy of Eurozone countries hit by a fall in visiting UK holidaymakers especially Greece, is a factor often overlooked in this debate but one that politicians ignore at their peril.
"A significant drop in the number of British families who can afford to take a holiday in these already difficult times could be devastating for many Eurozone destinations.
"Equally, higher APD, which also affects inbound tourists when they leave the UK, alongside the rise in VAT will be a further deterrent to overseas visitors coming to the UK.”
The airline industry has also recently launched a united attack on the unfair tax. Four airlines – Easyjet, Ryanair, Virgin Atlantic and British Airways – have called for APD to be scrapped claiming it is hugely damaging to the UK economy.
They claim that the tax, which generates £2.2bn a year for the Treasury, is a drain on the economy because it puts tourists off visiting the UK and discourages businesses from investing in Britain.
An economic report commissioned by the airlines found that the tax costs the UK economy £2.6bn a year and claimed it caused a 29m drop in the number of flights taken between 2007 and 2010.
"It is net negative for the UK economy. It's destroying jobs, it's destroying the opportunity for job creation, it's discouraging tourism and it's discouraging business investment in the UK," said Willie Walsh, chief executive of British Airways' parent company, IAG.
Ryanair boss Michael O’Leary, added that the Treasury could gain by scrapping APD because it would reap the benefit of the additional income which would be generated by more tourists coming to Britain if the tax on flights was dropped.
Easyjet's Carolyn McCall said the tax was "easy money" for the government, adding:. "The government can find out for themselves how damaging this will be to the economy and jobs."
Jim McAuslan, chief executive of the British Airline Pilots’ Association added: “The economic outlook for the UK is not rosy. Unemployment is up again and growth projections down. The Government needs to realise that the aviation industry is a driver of growth. Government policy should be a catalyst, not an inhibitor for this industry which contributes hugely to the success of UK plc and could be doing even more.'’
“With passengers also due to start paying an Emissions Trading Scheme tax in the new year on flights into and out of the European Union, all European airlines face an uncertain few months. Thanks in part to the APD effect, those whose business is concentrated in Britain have even more to worry about.” – The Economist Nov 18th 2011
However, Chloe Smith, the new economic secretary to the Treasury, recently told MPs that she could not “promise the House that APD will be cut in the near future”.
John has now launched an e-petition calling for a freeze on APD designed to send a clear signal to the government ahead of the Autumn Budget statement later this month.
John is urging everyone in the travel industry to get behind the campaign and support the e-petition calling for a freeze on APD.
“There is a growing consensus in the travel industry that further increases to APD will do nothing but heap yet more damage on our struggling economy,” said John.
“However, we have a long way to go to convince government that there is a case for abolishing or even reducing APD but we can at least seek to minimise any additional damage by calling for another freeze.
“I hope every tour operator, airline and travel agent will encourage its staff to support our campaign and encourage them to sign the e-petition.
“If we can reach the magic 100,000 mark before the Chancellor stands up to make his budget statement on November 29th it will send him a very strong and powerful message on behalf of our industry.”
The text of the e-petition reads –
Call for any further rises in Air Passenger Duty (APD) to be frozen as further increases in APD will not only damage the UK travel industry, pricing many families out of the market and damaging UK travel businesses, but will also add further pressure on the crisis facing the Eurozone. Furthermore, increasing APD, which also affects inbound tourists when they leave the UK, alongside the rise in VAT will be a further deterrent to overseas visitors coming to the UK, thereby damaging the UK tourism market as well.
The e-petition can be signed at http://epetitions.direct.gov.uk/petitions/23162