Another big hike in Air Passenger Duty isn't justified

April 02, 2012 12:35 PM

Over the weekend, Air Passenger Duty (APD) was hiked yet again. If you want to enjoy a well-earned break this year, you'll have to pay significantly more.

The Telegraph reports that a family travelling to Sydney will pay £500 in APD, compared to just £80 in 2005, and a "family of four living in Scotland or Northern Ireland to visit relatives in England three times a year" will pay £420 in APD, compared to £120 in 2005. All that despite the fact that, as far back as 2007, the Government's own research found it was excessive compared to the environmental costs created by flights, and a whole new tax has since been imposed on flights with their inclusion in the EU Emissions Trading System.

The Aviation Cost Assessment 2008, produced by the Department for Transport, found that after the doubling of APD rates in 2007, "aviation would cover its climate change costs with an excess of some £0.1 billion".  That means that people are already paying for the carbon footprint created by their flights. But the Government isn't going to take "we still want to travel" for an answer so they try to correct for the same externalities in lots of other ways as well.

They are blocking airport capacity, meaning more inconvenient indirect flights and more time spent loitering in the skies over London waiting for a landing slot at Heathrow. And by including aviation in the EU Emissions Trading System, they introduce a whole new tax on flights. The EU ETS is a regulation that requires businesses to hold allowances for the carbon dioxide they'll emit before doing something like generating electricity in a power plant. It adds to your electricity bill and now the cost of your flights too.

Given that airline passengers pay for the infrastructure through their tickets, airports aren't built with taxpayers' money, and the existing taxes more than pay for the greenhouse gas emissions flights generate, this is looking more and more like politicians are victimising them as a convenient source of revenue. We've seen from Fuel Duty where that leads. Higher and higher prices.

That is bad news for anyone flying away on holiday but also bad news for Britain's economy. Most of our competitors don't impose anything like the same unilateral taxes on flights. That means tourists deciding where to travel and businesses deciding where to invest, or who to trade with, have to pay more to get to Britain. When we should be supporting companies here to compete for growing markets around the world that is an economic disaster. With plenty of other countries to visit, do we really want to put such a hefty charge on coming here?

Ever higher APD is bad news for families enjoying a holiday this Summer. In the longer term it will mean fewer jobs and opportunities for all of us.

 Over the weekend, Air Passenger Duty (APD) was hiked yet again. If you want to enjoy a well-earned break this year, you'll have to pay significantly more.

The Telegraph reports that a family travelling to Sydney will pay £500 in APD, compared to just £80 in 2005, and a "family of four living in Scotland or Northern Ireland to visit relatives in England three times a year" will pay £420 in APD, compared to £120 in 2005. All that despite the fact that, as far back as 2007, the Government's own research found it was excessive compared to the environmental costs created by flights, and a whole new tax has since been imposed on flights with their inclusion in the EU Emissions Trading System.

The Aviation Cost Assessment 2008, produced by the Department for Transport, found that after the doubling of APD rates in 2007, "aviation would cover its climate change costs with an excess of some £0.1 billion".  That means that people are already paying for the carbon footprint created by their flights. But the Government isn't going to take "we still want to travel" for an answer so they try to correct for the same externalities in lots of other ways as well.

They are blocking airport capacity, meaning more inconvenient indirect flights and more time spent loitering in the skies over London waiting for a landing slot at Heathrow. And by including aviation in the EU Emissions Trading System, they introduce a whole new tax on flights. The EU ETS is a regulation that requires businesses to hold allowances for the carbon dioxide they'll emit before doing something like generating electricity in a power plant. It adds to your electricity bill and now the cost of your flights too.

Given that airline passengers pay for the infrastructure through their tickets, airports aren't built with taxpayers' money, and the existing taxes more than pay for the greenhouse gas emissions flights generate, this is looking more and more like politicians are victimising them as a convenient source of revenue. We've seen from Fuel Duty where that leads. Higher and higher prices.

That is bad news for anyone flying away on holiday but also bad news for Britain's economy. Most of our competitors don't impose anything like the same unilateral taxes on flights. That means tourists deciding where to travel and businesses deciding where to invest, or who to trade with, have to pay more to get to Britain. When we should be supporting companies here to compete for growing markets around the world that is an economic disaster. With plenty of other countries to visit, do we really want to put such a hefty charge on coming here?

Ever higher APD is bad news for families enjoying a holiday this Summer. In the longer term it will mean fewer jobs and opportunities for all of us.

 

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