JP Floru is PPC for Bermondsey and Old Southwark, and a Westminster Councillor.
The UK’s Air Passenger Duty punishes hard-working people who are desperate for a break from our sunny islands. Chancellor George Osborne courageously cut punitive APD rates on long-haul flights and on children’s flights. But today our ADP is still the most expensive in the world, does not improve the environment, harms poverty reduction in developing countries, and reduces the total tax take. Hello? Does anyone want to win the election out there?
When it was introduced in 1994, the APD did not claim to be an environmental tax. It was just one more case of pointing at things and taxing them. Families want to go on holiday? Obese government wants a piece of the pie! By 2007, when the last socialist government doubled APD, “green taxes” had obtained magical powers of persuasion, and suddenly APD became a means to change the planet’s climate. Under pressure from an assortment of (LibDem, surely?) climate fanatics the Coalition continued to increase air passenger duty, irrespective of whether planes were more green and more efficient (an old inefficient plane pays as much as a new clean and efficient one).
During the 2010 election campaign, both Conservatives and Liberal Democrats had argued for a reform of APD, proposing to switch from a per passenger to a per plane duty – which could have encouraged greener planes. But we ditched this in the 2011 Budget: “given concerns over the legality and feasibility of this approach”. Today many Brits fly to Paris, from where they can take a much cheaper international flight. Result? More carbon emissions. Characteristically ignoring the facts, reducing carbon emissions continues to be used to sell APD.
In its public consultation in 2011, the Treasury admitted that APD is just another source of income: “Air passenger duty is primarily a revenue raising duty which makes an important contribution to the public finances, whilst also giving rise to secondary environmental benefits”. Even so, APD is misguided in that respect. There is evidence to show that if we abolished APD altogether, the total tax take would rise. In 2013, a report by PricewaterhouseCoopers showed that the net effect of abolishing APD would be a net increase in the total tax take because of a resulting rise in GDP. In the first year of ADP abolition, GDP would rise by 0.45 per cent; averaging at just 0.3 per cent in the subsequent years. Up to 60,000 additional jobs could be created. All of this would result in a net gain of £0.25 billion in revenue.
Desperate for some sunrays, hard-working Brits absorb the cost. Except for a short-lived dip after the last socialist government doubled APD, the number of flights out of the UK continues to rise. For a flight to Florida, a British family of four pays £276 in APD. For a German family the cost would be £154. Presumably the hard-working families which we in the Conservative Party are proud of defending are cutting back on other spending. Because of the greater competition among airline companies in the UK, flights from here should be cheaper. Yet APD makes them more expensive than flights from abroad. And APD is not the only cost, of course. When I recently booked a flight to Boston, my invoice told me that the ticket cost £358.90, with an additional £338.76 in taxes and charges.
Occasionally, the attacks on budget air travel reek of paternalistic snobbery. A select few don’t quite like seeing boutique sunsets obscured by tacky backpackers. And let’s not forget the outrage of wealthy culturati from Monaco-on-Thames when they see indigenous tribes ditch their authentic and unspoiled misery because tourism makes them richer! I for one think that condemning people in exotic countries to poverty is just plain evil.
Do we want to win this election? How about abolishing APD which does nothing to reduce carbon emissions, increases the cost of living for hard-working families, keeps people in developing countries in poverty, and has a negative effect on the state finances?
Is a holiday abroad not as much an aspiration as a job or owning one’s own home is? George Osborne did abolish some punitive APD rates on long-haul flights in the 2014 Budget. He also scrapped APD on children’s flight. Let’s go the full monty: abolishing APD is a win-win.