Further supplementary written evidence from British
Air Transport Association (BATA) (TE 61a)
AIR PASSENGER
DUTY
1. In our submission of September 2010, we made
reference (paragraph 6-7) to the increasing level of Air Passenger
Duty. In the light of exchanges between the Committee Chair and
the Minister for Transport on the subject at the evidence hearing
on 14th December, BATA wishes to add a little more
detail on the quantum of the tax and its total take in comparison
to other Treasury revenue.
2. The Government dramatically increased the
tax on flying from 1 November this year with increases of up to
50%. After one of the most disastrous years on record for aviation,
this was a kick in the undercarriage that the industry could ill
afford. Aviation already more than pays for the environmental
costs of the 6% of total UK CO2 emissions it produces
through the imposition of Air Passenger Duty (APD) and Britain
now suffers from the heaviest tax on flying in the world with
as much as £170 on a single ticket. Indeed, the Treasury
now makes more money from the tax on flying than it does from
the Bank Levy or from duties on alcoholic spirits, intending to
raise over £15 billion from APD in the next five years. This
level of taxation is especially damaging to regional airports
where routes have been lost over the last few years to our near
continental competitors who impose little or no similar tax on
flying. Instead, they are actively building new runways to accommodate
new traffic and the anticipated growth in tourism from the Far
East.
3. The Prime Minister has stated an aspiration
to grow the numbers of tourists visiting the UK and thus help
stimulate the economy. Yet the cost of a visa and APD totals £612
for a visitor from China on a round trip flying economy to the
UK. By comparison, it costs that same Chinese tourist £212
to go to Paris. In 2008, France received 688,000 Chinese tourists
compared to just 108,000 visiting the UK. With such a disparity
in tax on tourism between the UK and our continental competitors,
the challenge of increasing our tourist numbers is made all the
more difficult.
4. In its recent Budget, the Irish Government
reduced their tax on flying on the grounds that the quantum of
the tax was damaging to tourism. It is notable that a Government
facing arguably a far more serious fiscal crisis than the UK has
taken the decision to reduce its tax on flying in order to stimulate
the economy.
December 2010
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