Select Committee on Treasury Written Evidence

Memorandum submitted by the Board of Airline Representatives UK (BAR UK)

  The Board of Airline Representatives in the UK (BAR UK) represents 91 scheduled airlines in their dealings with Government; a list of members is attached for your information.

  The aviation community is unhappy with the APD increase in any event; however, it is the manner in which it is being implemented that is of much graver concern.

  BAR UK was present at the meeting of aviation delegates at the Treasury on Monday when our concerns were expressed. At that time, we were informed that Treasury was aware that there would be issues arising out of its proposal, but decided to proceed with the implementation date of 1 February anyway. It was also apparent from what was said that the increase in APD has little, if anything, to do with the environment, but was a way of meeting the financial needs of the Exchequer. Their closing response in declining to change anything was "we are where we are". That could have been said as "you are where we have put you".

  My point in writing to you is to make you aware of the implications outside of the UK.

  APD is collected in respect of all travellers departing the UK, regardless of where tickets have been issued. The doubling of APD for all travellers from 1 February, with such little notice, has huge financial implications overseas, as well as here in the United Kingdom.

  The issues are two-fold:

    (a)  tickets already purchased, and issued, for travel on/after 1 February; and

    (b)  tickets purchased and issued between the announcement of the increase, and the dates by which ticketing systems are updated.

  In both cases, but especially the first, it is extremely impractical to collect additional monies from passengers. To do so would require such actions to take place at airports, something that could be expected to lead to chaos, and to scenes of disorder.

  BAR UK has now received representations from airlines from around the world. They are all extremely concerned of the financial implications for their companies, each of whom faces a liability of several hundreds of thousands of pounds.

  It can be expected that some foreign Governments may intervene on their behalf, as IATA (International Air Transport Association) already has.

  The sensible remedy would be to adjust the policy so that the increased rates of APD applied to all tickets issued on/after 1 February; to date, the Treasury has shown no wish to do so.

  I trust that this update, and the potential effects on foreign relationships, may be of use to your Committee.

15 December 2006

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