NEWS — HOT STORIES 2
Trade hopes chancellor will scrap APD for children
Ian Taylor
There were high hopes chancellor George Osborne would scrap APD for children under 12 in his Autumn Statement on Wednesday.
Industry coalition A Fair Tax on Flying launched a campaign to abolish APD on children’s fares only last week, but the reaction was likely to be angry if Osborne failed to act, given strong rumours that the Treasury would concede on the issue. Any cut could come into force next April when the current four APD rates go down to two – reducing APD on fares to the Caribbean and other long-haul destinations to the same rate as to the US. The chancellor revealed that change in March. A Fair Tax on Flying pointed out that cutting APD on the fares of under-12s would halve the cost of APD for a family of four while costing the Treasury just £52 million a year. Further change is on the cards
after the Smith Commission on Scottish devolution proposed that the Scottish Parliament
has the power to axe APD. The commission was set up immediately after the Scottish independence referendum in September and its proposals, issued last week, agreed by the main political parties. The industry reacted
sharply. Willie Walsh, head of British Airways’ parent International Airlines Group, warned: “Removing APD in
Scotland would see passengers rushing across the border to avoid paying the tax. APD must be axed across the UK.” Abta chief executive Mark
Tanzer said: “Any inconsistencies between what a passenger pays would create a damaging situation for travel businesses.” The government will publish the
draft constitutional changes by January 25, but the timetable for devolution is unclear – meaning there is no firm date for abolition in Scotland.
3
Aito ponders easing rules to help members compete
Juliet Dennis
Abta and the Association of Independent Tour Operators (Aito) may be forced to relax rules for members if the new Package Travel Directive (PTD) does not create a ‘level playing field’. Speaking at a panel debate at Aito’s November conference in
Istanbul, both organisations complained that a “critical mass” of unregulated competitors were putting their members – traditional travel companies – increasingly at a disadvantage. Aito chairman Derek Moore (pictured) said: “How fair is it for our regulatory authorities to expect us to continue offering, and paying to offer, fully bonded travel services when so many of our competitors using new routes to market do not have to do so? How long should we continue to be the good guys?” He said: “Members are irritated. Fewer than 50% of travel companies are now regulated. We believe
everyone should be.” His views were echoed by Abta bosses, who said that the rise of the sharing economy and unregulated companies, such as Airbnb, were putting pressure on
members and its own commitment to enforcement. Head of financial protection John de Vial said: “It may just be [the industry] has to move away from that so our members have freedom of cost base with those they are competing with. We will not serve members well by maintaining costs their competitors don’t have.” Abta chairman Noel Josephides added: “The government is not
prepared to bite the bullet and regulate.” The associations said that changes for their members would depend on the new PTD, due in 2017, extending the scope of financial protection. ❯ Aito conference report, page 12
4 December 2014 —
travelweekly.co.uk • 5
“Removing APD in
Scotland would see passengers rushing across the border”
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