Industry urged to sign e-petition against APD rise

 The air travel industry is desperate to influence the Chancellor on Air Passenger Duty, before his autumn statement on 29th November. They have created a petition and want 100,000 of the staff who work in the industry to sign it.  They are arguing that APD is damaging European countries, as we Brits are now deterred from visiting them. Whether a £12 charge per person per holiday is enough to stop us visiting Europe, when a hotel for the night is at least £40 each, is hard to believe.

 

23.11.2011 (Travel Mole)

[This article, and the one it links to, are filled with the usual half truths etc that have been trotted out time and time again over the past couple of years. AirportWatch response is below].

Multicom boss John Howell has launched an e-petition calling for a freeze on Air Passenger Duty ahead of the Chancellor’s Autumn Budget statement next week.

Howell is urging everyone in the travel industry to support the e-petition calling for George Osborne not to go ahead with his plans for a double-inflation rise in the air tax for 2012.

His call comes a week after four airlines, British Airways, easyJet, Ryanair and Virgin Atlantic called on the government to ditch APD altogether. Multicom said it supported the calls for the abolishment of APD, but Howell said he believed the case had yet to be made for it to be scrapped.

“I very much welcome the intervention by the four airlines and their joint approach to the problem. For far too long we have failed as an industry to lobby government effectively and it is high time we presented a more united front,” he said.   

“However, we have a long way to go to convince government that there is a case for abolishing or even reducing APD but we can at least seek to minimise any additional damage by calling for another freeze.”

Howell said calls for a further freeze were more likely to be heard by the government if the industry supported his e-petition in large numbers. At least 100,000 signatures are needed for it to stand a chance of it being debated in parliament.

Details of the e-petition can be found at http://www.multicom.co.uk/pages/our-activities/petition-for-a-freeze-on-air-passenger-duty

[A very biased webpage which deliberately gives only the air transport industry’s side, and leaves out all the inconvenient arguments and facts].

 “I hope every tour operator, airline and travel agent will encourage its staff to support our campaign and encourage them to sign the e-petition,” added Howell.

“If we can reach the magic 100,000 mark before the Chancellor stands up to make his budget statement on November 29 it will send him a very strong and powerful message on behalf of our industry.”

http://www.travelmole.com/stories/1150387.php?mpnlog=1&m_id=s~T_Y!vnm

 

The text of the e-petition reads –

Call for any further rises in Air Passenger Duty (APD) to be frozen as further increases in APD will not only damage the UK travel industry, pricing many families out of the market and damaging UK travel businesses, but will also add further pressure on the crisis facing the Eurozone. Furthermore, increasing APD, which also affects inbound tourists when they leave the UK, alongside the rise in VAT will be a further deterrent to overseas visitors coming to the UK, thereby damaging the UK tourism market as well.

The e-petition can be signed at http://epetitions.direct.gov.uk/petitions/23162

[This completely ignores the fact that many more Brits fly abroad for their holidays, taking their money to spend abroad, than visitors from abroad come to the UK on holiday. Therefore for every three or four full holiday aircraft heading off abroad, something like one job in British tourism is lost.  Some evidence  at http://www.aef.org.uk/downloads/airports_regions_tourism.pdf 

and

“85%  of Gatwick passengers are travelling for leisure.  Four out five of the leisure passengers are Britons going abroad.  Spending their money abroad creates jobs there instead of in the UK.  Thus roughly four jobs are created abroad for every one job created in the UK by inbound tourists  http://www.airportwatch.org.uk/downloads/Economic_benefit.doc]

 

 

see also

UK airlines seek to evade taxation

Date added: November 19, 2011

Commenting on the airlines’ attempts to get cuts in APD, the Aviation Environment Federation says while Government figures suggest that the benefit to the aviation industry as a result of its paying no fuel tax or VAT is around £10 billion a year, APD brings in only £2 billion. The four airlines ‘pleading poverty’, have all recently made millions of pounds in profit. Ryanair reported a £467 million profit in the months to Sept 2011. APD will represent a ‘double counting’ of environmental costs, as it was never designed as an exclusively environmental tax.

Click here to view full story…

 

and

 

AirportWatch says airlines must pay their fair share of the fuel tax burden

In a letter to the Chancellor in advance of the Pre Budget Report AirportWatch has pointed out that those who travel by air have it easy compared to those who travel by car.  Motorists pay 58p a litre duty on their fuel.  Motorists pay a further 22p VAT on their fuel.  Motorists pay 20% VAT to have their car serviced.  Airlines pay NONE of these. Motorists pay 20% VAT to buy their car.  Airlines pay no tax on new aircraft. APD would need to be quadrupled to compensate for the fuel duty and VAT exemptions enjoyed by the aviation industry. In 2010/11 the exemption from fuel tax and VAT was worth more than £11 billion to the airlines. 

17.11.2011 (AirportWatch press release)

AIRLINES MUST TAKE FAIR SHARE OF FUEL TAX BURDEN

In a letter to the Chancellor (see below) in advance of the Pre Budget Report AirportWatch has pointed out that those who travel by air have it easy compared to those who travel by car –

• Motorists pay 58p a litre duty on their fuel.  Airlines pay nil.
• Motorists pay a further 22p VAT on their fuel.  Airlines pay nil.
• Motorists pay 20% VAT to have their car serviced.  Airlines pay nil.
• Motorists pay 20% VAT to buy their car.  Airlines pay no tax on new aircraft.

Air Passenger Duty (APD) would need to be quadrupled to compensate for the fuel duty and VAT exemptions enjoyed by the aviation industry.(2)  And whilst motorists complain about swingeing year on year increases in the cost of filling up at the pump, the vast majority of airline passengers still pay APD at its lowest rate of £12, just £2 more than it was in 1997.(3)

Many motorists rely on their cars to travel to and from work or for their weekly shop but the vast majority of flights are for leisure purposes and, despite the advent of so-called ‘cheap flights’, air travel is increasingly becoming the preserve of an affluent minority. Fewer than half the UK population took any flights at all in 2010 and those who did had average household income in excess of £50,000. (4) .

Chairman of AirportWatch, John Stewart, commented:
“We hear a lot of ritualistic grumbling from the aviation industry about levels of Air Passenger Duty but they conveniently forget to mention the £11 billion a year subsidy they enjoy from paying no fuel duty and no VAT.  They also conveniently forget to mention their own surcharges.  In these difficult economic times, the airlines must be made to take their fair share of the fuel tax burden.”

ENDS
NOTES FOR EDITORS

1. A copy of the AirportWatch letter to the Chancellor is below.

2.  In 2010/11 the exemption from fuel tax and VAT was worth more than £11 billion to the airlines.  After deducting APD revenues, the net benefit is around £9 billion – equivalent to a subsidy to the airlines of about £360 per household.  Even the 53% of the UK population who do not fly – mainly the less affluent – find themselves subsidising the aviation industry.

3. APD for economy short haul flights applied at a rate of £10 per passenger from 1997 until  2001 when it was halved to £5.00.  The £10 rate was restored in 2007, increased to £11 in 2009 and to £12 in 2010.  In 2010/11, 77% of all passengers paid the lowest (£12) rate.

4. Actual figure = £50,139. Source: CAA 2010 Passenger Survey, Table 14.
 
5.The evidence is summarised and presented in an SSE research paper ‘Aviation, jobs and the UK economy’ at http://www.stopstanstedexpansion.com/documents/SSE_scoping_response_-_Annex_A.pdf 

 

 

Letter
17 November 2011

to

Rt Hon George Osborne MP
Chancellor of the Exchequer
HM Treasury
 1 Horse Guards Road
 London
 SW1A 2HQ

Dear Chancellor

AirportWatch is an umbrella organisation uniting the national environmental organisations, airport community groups and individuals opposed to unsustainable aviation expansion and its damaging environmental effects, including climate change. 

We are aware of the lobbying pressure being applied to you by the aviation industry to reduce Air Passenger Duty (‘APD’) and we herewith set out some of the counter arguments.

We note that you are also being pressed by the road transport lobby for tax concessions and, whilst it is not part of our remit to argue the case for road users, it is irrefutable that those who travel by air are lightly taxed compared to those who travel by car –

• Motorists pay 58p a litre duty on their fuel.  Airlines pay nil.
• Motorists pay a further 22p VAT on their fuel.  Airlines pay nil.
• Motorists pay 20% VAT to have their car serviced.  Airlines pay nil.
• Motorists pay 20% VAT to buy their car.  Airlines pay no tax on new aircraft.

APD would need to be quadrupled to compensate for the fuel duty and VAT exemptions enjoyed by the aviation industry.   And whilst motorists complain about swingeing year on year increases in the cost of filling up at the pump, the vast majority of airline passengers still pay APD at its lowest rate of £12, just £2 more than it was in 1997.

Many motorists, particularly in rural areas, rely on their cars to travel to and from work or for their weekly shop but the vast majority of airline flights are for leisure purposes, increasingly the preserve of an affluent minority despite the advent of so-called ‘cheap flights’.   Fewer than half the UK population took any flights at all in 2010 and those who did had average household income in excess of £50,000.   In short we believe that the aviation industry has very little to complain about, especially in these difficult economic times.

We would also ask you to examine the economic evidence relating to the price of air travel and the balance between inward and outward tourism.  This evidence clearly indicates that increasing the price of air travel has a significant dampening effect on outward tourism but very little effect on inward tourism to the UK, thus making a positive contribution to jobs, economic growth and the UK trade balance.  

In conclusion, we are confident that any proper review of the evidence will clearly indicate that there is a compelling case for a substantial increase in APD on the grounds of fiscal equity and fairness.  Increasing APD would also contribute towards the deficit reduction plan and to UK employment, investment and economic growth.

Yours sincerely

John Stewart
Chairman

 

see also

 

How do the charges work out, comparing a return flight for 2 people to Rome, with driving there?

Date added: November 12, 2011

 With the debate on reducing Air Passenger Duty, and increasing petrol prices, how to the costs work out, comparing driving and flying?  How much tax is paid, how much duty, how much VAT? The distance from London to Rome is about 890 miles.  So driving would be a bit further, as the roads do […]

Click here to view full story…