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Government smokescreen on APD Devolution

GOVERNMENT  SMOKESCREEN ON APD DEVOLUTION

Government  proposals to mitigate the damage to English airports of devolving APD to  Scotland and Wales lack substance and credibility, says IAG. In its response to  a Treasury discussion paper, the airline group is calling for APD to be  scrapped across the UK.

In  the paper, the Government admits that APD devolution will negatively impact  English regional airports as passengers will rush across borders to avoid  paying the highest aviation tax worldwide. Its proposed options are complex and  unworkable.

IAG  highlights that scrapping APD would boost the Britain’s economy, lifting GDP by  1.7 per cent and creating 60,000 new jobs by 2020, according to a study by PwC.

Willie  Walsh, IAG chief executive, said: “The Treasury has finally acknowledged that  partial APD devolution will not work and these options are just a smokescreen.  This is an exercise in futility. APD should be scrapped across the UK otherwise  we end up with a domino effect at airports as passengers drive across the  country seeking cheaper flights. The northern powerhouse will be seriously  undermined as passengers flee northern airports.

“Scotland  and Wales know that scrapping the tax on flying will boost their economy. How  can it be fair for English travellers to carry on paying this tax. The idea that  you can resolve this by allowing local authorities to raise their own mini-APDs  is laughable. It is time to scrap this tax.” 

Ends

September 8, 2015

IAG016

Notes to editors:

     
  1. Link to the discussion paper  launched by the Treasury in July 2015:
  2. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/442960/Discussion_paper_on_impacts_of_air_passenger_duty_on_regional_airports.pdf

     
  3. In 1994, APD economy-class levels  were set at £5 for short-haul and £10 for long-haul.  Currently, they are £13 for  short-haul (each way on flights within the UK) and £71 for long-haul. From next  April this rate will rise to £73. APD charged for premium cabins on flights  outside the EU is £142 rising to £146 from April next year.
  4.  
  5. BA’s passengers paid £646 million  in APD in 2014.