MPs say APD isn’t green at all – it’s just a money-raiser

Dec 8 2009 by Amy Hunt, The Journal

ECONOMIC experts in the North East have accused the Government of attempting a “smash and grab” on the air industry on the back of a new report.

In their Future of Aviation report, MPs on the influential Commons Transport Committee said Air Passenger Duty (APD) should not be touted as a green tax.

The North East Chamber of Commerce (NECC) is calling on the Government to admit APD is a revenue-raiser, rather than an attempt to tackle aviation’s impact on the environment.

The Journal’s Tax Too Far campaign is urging the Government to scrap its plans to raise APD next year, saying it will harm the region’s economy.

The controversial tax was increased last month and another rise could see rates four times as high as three years ago.

Experts claim a rise in the price of holidays and exports could hit the North East economy hard and say the Government should recognise how much the aviation industry has already suffered due to the recession when setting the level of APD.

The report by the committee says existing green levies set by Europe are enough to address climate change and that APD should be set “according to the Government’s revenue needs”.

Ross Smith, head of policy at the NECC, said: “This lays bare the fact that APD is about raising revenue for the Treasury, and that environmental impacts must be dealt with on a European basis to maintain the competitiveness of UK airports.

“It’s clearly not acceptable for Alistair Darling to do a smash and grab on the air industry if it means threatening links to vital international markets for North East businesses. In light of this, we repeat our call for him to review the levels of APD in his Pre-Budget statement tomorrow.”

The Future of Aviation report says: “It is right that the aviation sector should be contributing its fair share to Government revenues. Air Passenger Duty was introduced to raise revenue for the Government. It has been modified to provide ‘green signals’ but the Government states that it is not an environmental charge.