TRAVEL WEEKLY BUSINESS
d mixed news for the industry on key issues at forum in London last week. IAN TAYLOR reports
APD: TRADE ‘HAS FAILED’ TO PERSUADE GOVERNMENT OF LOGIC OF CUTTING TAX
The industry has failed to convince the government or opposition of the case for cutting APD, a former transport minister told the Abta Travel Matters conference. Labour MP Jim Fitzpatrick said: “You have
not won the argument.” Yet Labour’s current shadow transport
secretary, Mary Creagh, told the same conference she had not read an industry report on APD’s economic impact. When asked, she said she had not seen the PwC report commissioned by British Airways, easyJet, Ryanair and Virgin Atlantic and published in 2013. The report, The Economic Impact of APD, concluded that abolishing the tax would give the UK economy a £16 billion boost. Creagh referred to the abolition of the higher APD bands on long-haul flights in March and said: “Abolishing APD bands C and D will cost £250 million [a year] by 2018-19. The books are not balanced. The Treasury has a hole of £250 million.” She insisted: “Any cut in APD needs to be balanced with investing in transport, having adequate staff at border controls and getting passports issued.” Fitzpatrick defended Creagh for not
having read the PwC report, saying: “APD is a Treasury issue.” But he told the conference: “The
argument has been made repeatedly but the Treasury is not persuaded. It is taking £3 billion a year [from APD] and here is
PTD: GOVERNMENT WILL CHALLENGE PROPOSED REFORM
Aviation minister Robert Goodwill confirmed the government will challenge European Commission proposals to reform the Package Travel Directive (PTD). Goodwill told the Abta Travel Matters
conference: “There are elements of the proposals we have difficulty with.” He highlighted three areas of the plans to
extend package-travel protection, published last July. Goodwill said: “There is insufficient clarity on the scope [of the directive]. It’s crucial to establish limits to consumer
LABOUR SPENDING: ‘THERE’D BE NO RISE IN TRANSPORT BUDGET’
A future Labour government would allow no increase in spending on transport infrastructure or transport systems. Labour shadow transport secretary Mary Creagh told the Abta Travel Matters conference: “Decisions will have to be made in conditions of austerity.” She said a Labour government would “look at how
Jim Fitzpatrick: ‘The government does not believe you’
“The Treasury is not swayed by the industry’s argument”
someone promising ‘You will get £4 billion to £5 billion if you abolish APD’…The government does not believe you. The opposition does not believe you.” Conservative MP Alok Sharma appeared to dismiss the PwC report when he told the conference: “You can put all sorts of assumptions into a report and come out with a big figure.” Abta head of public affairs Stephen
D’Alfonso conceded: “We have been pushing at a very closed door for a very long time.”
protection, and a new approach based on where a business is based might undermine protection.” Kate Jennings, head of aviation policy at the Department for Transport, said: “The current definitions of a package and of ‘assisted travel arrangements’ are not clear and they need to be clear to inform consumer clarity.” Jennings said a proposal to base protection on arrangements in the country where a travel business is ‘established’, rather than on the market in which it sells, posed several problems. She said: “There is a lack of clarity about what
we deliver new transport infrastructure and existing transport services with a zero budget increase”. Yet Creagh invited industry members to feed ideas into Labour Party policy and insisted: “We want the UK to be seen as a global leader in transport.”
She told the conference: “Good air links are
vital, but we must remain aware of aviation’s contribution to climate change. We have seen from the floods how disruptive that can be.” Creagh added: “We want to ensure transport is accessible to everyone. I want more protection for air passengers with mobility issues.” She
suggested this could include “free tickets for carers”.
Mary Creagh: ‘Conditions of austerity’
‘established’ means, and it would widen the nature and breadth of risk. What if a company decides to relocate to Spain where there is a less sophisticated financial protection system? The UK scheme might be protecting travellers from other EU states – say, repatriating people from the Maldives back to Germany. That is not practical. “It might encourage companies to move across borders or move offshore [from Europe]. It could lead to ‘consumer-protection’ shopping [seeking the cheapest scheme]. It is all unhelpful. The PTD was invented to allow consumers
redress in their own country in their own language.”
26 June 2014 —
travelweekly.co.uk • 63
“The definitions
of a package and assisted
arrangement are not clear”
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