Guest column
Key industry people share their knowledge and views on issues facing the business travel sector today
UNITE AND FIGHT
Simon Buck, chief executive of the British Air Transport Association (BATA), says the industry should work together to combat the damaging effects of APD
IT’S APPROACHING THIS YEAR’S BUDGET, the time when the Chancellor will announce that the UK’s Air Passenger Duty (APD) is set to rise once again, ensuring that people flying from Britain will continue to pay the highest departure tax of any country in the world. Of course, the debate in recent months has focused on the issue of airport capacity, following the publication last December of the interim findings of the independent Airports Commission. But capacity is not the only issue facing the aviation and tourism industries, and in order to remain a competitive global aviation hub, the UK must not ignore the damaging effects of APD.
Coming into effect on April 1, the rises will see tax on an economy class seat to the US increase to £69 and to £138 for business class passengers, with the cost of flying to longer-haul destinations, such as Australia and New Zealand, rising to £194 for some passengers. George Osborne is looking
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increasingly isolated on the issue, with the UK bucking the trend around the rest of Europe: on the same day that APD rises here, the Republic of Ireland is abolishing its own Air Travel Tax, making the UK one of just five countries in Europe levying a comparable tax. What’s more, Germany
recently froze its equivalent duty and the SNP is pledging a 50 per cent APD reduction if Scotland secures independence
later this year. The rest of the continent appears to be able to see the tax for what it truly is – so why can’t we? The Treasury continues to
maintain that APD is necessary for deficit reduction, and that if the tax were reformed then the money would have to be found elsewhere. However, this is not borne out by the facts, and by the experience of other countries that have already scrapped their tax. An independent and
robust report published by PWC in February last year found that APD abolition would effectively pay for itself, as the economic stimulus it would precipitate would create jobs, galvanise the industry and increase the tax collection to the HMRC from other indirect taxes: a win-win. So what can be done? Well, this year A Fair Tax on Flying
will continue to keep the pressure up on policymakers, and keep building the case against this clearly damaging tax. To help with this, the campaign has begun to engage with international experts and policymakers, who bring their first-hand experience and perspective to the case for reform. The Dutch example is particularly interesting: when their government introduced their equivalent of air passenger tax in 2009, it lasted just one year before being abolished. It was later found that Schiphol, the Netherlands’ main airport, lost two million passengers, and over one million Dutch passengers chose to fly from foreign airports to avoid the tax. UK flyers are likely to be
similarly price-sensitive, and – were Scotland to significantly reduce APD in the event it
The rest of the continent appears to be able to see the tax for what it truly is – so why can’t we?
Simon Buck joined the Department for Transport in 1983. After holding various roles, both in Westminster and the regions, he served as private secretary to the Minister for Aviation before leaving to take up the role of external affairs manager at Air 2000 in 1995. He was subsequently promoted as group head of industry affairs at First Choice Holidays, where he served until 2006. He was appointed chief executive of BATA in July 2010. Simon is a member of the Chartered Institute of Logistics and Transport, and the Chartered Institute of Public Relations.
secures independence – this sort of damage would make recovery from the economic crisis even harder for the aviation and tourism industries, particularly in the north of England. The Treasury must be
confronted with as much data as possible about the damaging effects of APD. From big businesses and organisations to individuals and families who have borne the brunt of the tax, we would encourage you to provide the ammunition required to ensure the reform of the tax. Anyone who has experienced the negative effects of APD is encouraged to share any information they have with the campaign, to help contribute towards building a powerful case for APD reform. You can email
admin@afairtaxonflying.org to supply us with your own evidence, to find out more about membership of the campaign, or simply to ask us any questions, which we’d be happy to address. This year we were privileged
to have been recognised with the Outstanding Achievement Award at the Business Travel Awards 2014. This recognition is testament to the hard work over the past three years of our campaign members. However, in the face of the
continued intransigence of the UK government, we need to assemble as much evidence as we can, from the widest possible demographic, to put our case to ministers. We hope you can help us. It’s a fight we are determined to win. ■
MARCH/APRIL 2014
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