The Conservatives have committed themselves to wholesale reform of APD if they are elected on May 6. Shadow economic secretary to the Treasury Greg Hands outlines the plans to Chris Gray
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ABTA RESPONSE.
Reform: close but no cigar
THE CONSERVATIVES’ plans for Air Passenger Duty come closest of the parties to what the industry has been demanding, said Abta chair- man John McEwan. Scrapping distance bands and taxing aircraft on the basis of their environmental impact rather than passengers fitted “the direction of travel” of the industry, he said. But McEwan added: “Given the economic cir- cumstances, it’s highly unlikely the Conservatives would want a tax that brought in less money should they win the election.” ITT chairman Steven Freudmann said: “Any- thing that could reduce APD has got to be given a chance. But I don’t think they are going far enough. A root and branch review of taxation in the travel industry would be more appreciated.” Airlines were divided in their reaction. EasyJet welcomed the reform but lobbying group Bar UK, which represents mainly traditional airlines like BA, said the Conservatives, Labour and the Lib Dems had failed the aviation industry by not reducing or abolishing APD.
DOMESTIC LEVY.
‘Lib Dem tax will hit UK regions’
REGIONAL AIRLINE Flybe has claimed the Liberal Democrats’ proposal to add extra tax for domestic flights could threaten the economic recovery in the UK regions. The Lib Dems have promised to charge a higher rate of tax for domestic routes where there are “less polluting” alternatives available. Flybe’s head of public affairs Niall Duffy said:
“This will add a levy of about £20 per passenger. It would impact on 1.5 million of our passengers so that means £30 million a year.”
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16.04.2010
Top Tory claims fairer flying tax
CUSTOMERS ON charter flights and no-frills airlines stand to benefit most from the Conserva- tive’s manifesto commitment to reform Air Passenger Duty, the party has claimed. Speaking to TTG after the manifesto launch this week, shadow economic secretary to the Treasury Greg Hands said people travelling on holiday would gain because the tax would be extended to cover cargo aircraft and private jets as well as passenger services, without raising any more money overall.
Hands outlined details of the plans for
the first time, saying it would scrap the much criticised system of distance bands, which have led to people travelling to the Caribbean paying more than those to the west coast of the US, which is further from Britain. A replacement system possibly using more bands and based on actual distance rather than distance between capital cities – a key demand of TTG’s Fair Fares campaign – would be introduced.
Hands said the reform would change APD to tax aircraft rather than passengers, apply to trans- fer passengers who are now ex- empt, and charge a lower rate for newer, more fuel efficient aircraft. Hands said the aim of the
reform was to “properly tax the environmental impact of aviation, not raise more revenue”. “We can’t guarantee that any specific passenger will pay less
but the overall burden of the tax will be moved away from the ordinary British travelling public,” he said. The Conservatives expect airlines to pass on the cost of the tax to passengers, but as it will be a set fee per aircraft, the cost per passengers will be lower for airlines that fly with the highest load factors – generally charter or no-frills operators.
It is not clear when the reform would take place as the Tories have not committed to includ- ing it in their post-election emergency budget. But Hands said the aim was to have it in place before the end of the party’s first term in power.
HOW WILL YOU USE VOTE FOR TRAVEL?
Phil Nuttall
director, Save’n’Sail Blackpool
Who is getting my vote?
Anyone that promised to reduce APD and could
guarantee a tourism minister would get my vote.
Why?
I’ve just booked a flight from Copenhagen to
Manchester, for £60 one-way. If I’d booked that from the UK, I would have paid that in tax alone. I want a party that recognises the revenue that the travel industry brings to the country. You can’t have a family of four paying hundreds of pounds before they’ve even set foot out of the country.
Last election: I voted Conservative
■Take our survey at:
ttglive.com/votefortravel
16.04.2010
COVER STORY
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