Air Passenger Duty in the news again

[TheLocalYokel]

This week there has been another call for APD powers to be devolved to the Welsh Government, this time by a senior Welsh politician. The WG has previously said it would abolish APD if given the power. Also in the past couple of days there have been a number of pleas from influential bodies and individuals in Northern Ireland for short haul APD to be abolished in the country. A separate report called for the same thing at Newcastle Airport.

In each case evidence was adduced as to the number of additional routes/frequencies that would eventuate if APD was abolished, with persuasive arguments that the loss of the tax money to the government would be more than compensated by the boost to the economy.

After Brexit the UK's place in the world will alter. As a country we might welcome additional and more convenient (ie around the English regions and via the airports in the other three countries of the UK) means of accessing the UK. The government's Green Paper on its aviation strategy would be a good place for the APD discussion and arguments to be thrashed out.

 

[David_itl]

Found this article (click here!) that links to the APD report. The actual report is found by clicking on these words

 

[TheLocalYokel]

Excellent link. It's very persuasive but will the government listen? I would not bet my house on it.

 

[David_itl]

Air travel is a soft touch. And with Brexit round the corner you can't take it as read that the obvious sign of saying Britain is open for ALL business by removing/reducing APD to encourage overseas companies to locate here and/or encourage overseas visitors, they will look at make up for any shortfall in EU revenue from APD by increasing it.

 

[TheLocalYokel]

Air travel is a soft touch. And with Brexit round the corner you can't take it as read that the obvious sign of saying Britain is open for ALL business by removing/reducing APD to encourage overseas companies to locate here and/or encourage overseas visitors, they will look at make up for any shortfall in EU revenue from APD by increasing it.

I agree. It also plays well with the environmentalists that governments often clash with through policies.

APD is cash in the government's pocket today whilst an improved economy via its abolition would be 'cash' tomorrow and governments, always with an eye to the next election, view that differently.

 

[Jerry]

APD is a big earner for the treasury so i can't see them getting rid of it. Maybe they'd change it to 3 bands? Ie domestic European and international?

 

[TheLocalYokel]

APD has been reduced in recent years if inflation is taken into account.

Since 2014 the Band A level (up to 2,000 miles) has been retained at £13 for Reduced Rate (travel in the lowest class of travel, usually economy) and will be pegged at this rate in 2019 too.

The same applies with the Band A level for Standard Rate (travel in any other class of travel, usually business class or first class) which has also been capped at £26 since 2014 and will continue at that rate in 2019.

Band B level (over 2,000 miles) is more complicated. Up to 2014 there were two other levels -Band C (over 4,000 miles) and Band D (over 6,000 miles). The decision was then taken to have one band for all travel over 2,000 miles and the Band B level at that time was the basis.

Because of that APD is still not at the level it was in 2014 for extreme long haul travel when Band D was £97 for Reduced Rate and £194 for Standard Rate.

In 2014 Band B was £69 Reduced Rate and £138 Standard Rate.

The years 2015-2018 were respectively (Reduced Rate/Standard Rate) £71/£142, £73/£146, £75/£150, £78/£156.

It will be seen that as with Band A the Standard Rate was twice the Reduced Rate in Band B, although unlike Band A there were small increases each year.

2019 is different though. Band A will continue at £13/£26 as it has done since 2014. Band B though will be pegged at the 2018 rate of £78 for Reduced Rate but Standard Rate will increase to more than twice the Reduced Rate for the first time to £172.

In summary, It seems that the UK government, if not reducing in actual rates or abolishing APD, has pegged it at 2014 levels for Band A both Reduced and Standard. Band B has risen from £69/£138 in 2014 to £78/£156 in 2018, but in 2019 the Reduced Rate will be pegged at 2018's level whilst the Standard Rate is increased by considerably more than twice the Reduced Rate.

It remains to be seen if the government will continue the 2019 decision with business class/first class passengers taking more of the burden in long haul than economy class passengers.

 

[TheLocalYokel]

https://www.thenorthernecho.co.uk/business/17518313.politicians-clash-over-future-of-airport-tax/

Any hopes that a Labour government would abolish APD appear to be wishful thinking following a comment by the Labout shadow transport secretary.

Responding to a plea from the Tees Valley mayor that APD should be slashed or abolished, the shadow transport secretary is reported as saying, "I am however alarmed at the suggestion that APD should be abolished. Abolishing APD would be an entirely retrograde step in terms of our climate change obligations. In addition, abolishing the tax would require £3.2bn of cuts to vital public services. This is about serious policy choices and there is no greater priority that protecting our planet.”

It seems that the Scottish and Welsh governments don't share his concern that reducing or abolishing APD would harm the UK's climate change obligations. The Welsh Government is Labour-run too. Interesting divergence of policy within the same political party.

The Tees Valley mayor is a Conservative so he seems out of step with his own party's APD policy in government too.

 

[jfy1999]

British MPs urge government to scrap airline tax post-Brexit

A report by a cross-party group of British MPs, the All-Party Parliamentary Group for Air Passenger Duty Reform, has urged the government to drastically cut or scrap the UK’s aviation...

www.ch-aviation.com

 

[airforced]

If we leave the EU, and it is still an IF, then it would make sense to follow this route to stimulate growth. There would be an overall increase in government revenues by way of an increase in the number of people flying and paying the tax. New routes and increased frequencies outside the south east would benefit the regions too. Whether they (whoever THEY are) would be far sighted enough to see this is debatable however.