Air Passenger Duty is a ‘tax on trade’. So, what will the Chancellor do about it?
Conservative MP, Steve Double urges the Chancellor to show that Britain is both Brexit-ready and open for business by cutting Air Passenger Duty
Next Wednesday, the Chancellor has the opportunity to show that Britain is both Brexit-ready and open for business by cutting Air Passenger Duty (APD) by at least 50%, as called for by the A Fair Tax on Flying Campaign.
UK APD is the highest tax of its kind in Europe and amongst the highest in the world. It adds £75 to long-haul economy and £150 to all other long-haul classes, including premium economy and £13 and £26 to short-haul economy and all other short-haul classes respectively. Germany has the next highest aviation tax, dramatically less than UK levels at between £5 and £32. The Netherlands and the Republic of Ireland have scrapped similar taxes altogether.
As an island nation and a major global trading economy, it makes no sense that we make travelling to and from Britain more expensive for holiday makers, overseas visitors, and people travelling for businesses. I believe that APD acts as a barrier to the Chancellor’s aims of ensuring Britain will remain one of the best places to invest in and do business with.
Britain needs to get Brexit-ready so that businesses can take advantage of the new trading relationships on offer post-Brexit. Businesses want to get out there and trade with the rest of the world. Having the highest air passenger tax in Europe places us at a competitive disadvantage. UK businesses want to be part of an outward-facing, export-led growth drive post-Brexit but that is threatened by maintaining an excessive and unfair tax burden on the UK’s connectivity and our post Brexit future.
The call to reduce APD is backed by colleagues across the political divide because we all realise that our future depends on the very trading relationships that only aviation can help deliver. Put simply, Air Passenger Duty is a ‘Tax on Trade’.
Cutting APD by 50%, will have positive economic benefits. Research conducted by PwC shows that we would see an increase in tax receipts, boost GDP and create new jobs. Alongside this, a more competitive tax will help improve the UK’s connectivity to new markets and destinations. Our current high level of APD acts as a brake on route development at the very time that we need to be reaching out to our future trading partners. The UK cannot afford to have fewer direct connections to South Korea, Japan, Brazil and China than Germany has.
The Chancellor has an opportunity to demonstrate to businesses throughout the world that we are open for business by cutting APD by at least 50% in next week’s Budget. I urge him to do so.
Steve Double is the Conservative MP for St Austell and Newquay
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