A plane coming into Newcastle Airport and a warning sign for low flying planes
AIRPORT bosses will renew pressure on the Government to scrap Air Passenger Duty after a new report claimed the UK would be better off without it.
Since 2009, The Journal and Newcastle International Airport have been calling for an end to the unpopular levy through our A Tax Too Far campaign.
Now, according to accountants PricewaterhouseCoopers, abolishing the tax – which has rocketed on some long-haul flights by more than 600% in six years – would give the UK economy a £16bn boost by 2016.
And that could, in the long term, mean an extra 60,000 jobs across the nation.
Airport planning and corporate affairs director Graeme Mason said the study, produced for British Airways, Virgin Atlantic, Ryanair and easyJet, proved what he has believed all along.
“We’ve been saying for some time that we believe APD is having a detrimental effect on the economy and is a regressive tax, so we are very pleased with the report that demonstrates our view was right,” he said.
“By taking the fairly dramatic step of abolishing all APD it would have instant benefits for the UK economy both in terms of growth and creating jobs, both in the short and long term.
“This is very powerful stuff and reflects what we’ve said all along.
“Regions like the North East are particularly disadvantaged by APD and so we will continue to fight to get it eliminated or reduced – or at the very least see it finessed for regional airports – by having meetings with the Treasury and ministers about the issue.”
The PwC report claims that axing APD would give a boost to Britain’s Gross Domestic Product – the value of goods and services produced – by encouraging airlines to invest more and expand, with knock-on effects for other aviation businesses, increasing inbound tourism and improving companies’ connections internationally through more business travel.
A spokesman for the financial firm said: “APD is at least as damaging to the UK economy, and probably more so, than corporation tax or fuel duty.
“But abolishing APD has the potential to reduce the cost of flying, making it cheaper to maintain relationships with customers.”
In a joint statement the bosses of the four airlines for which the report was produced urged Chancellor George Osborne to do something about APD in his next Budget.
“APD is one of the three most destructive taxes, alongside corporation tax and fuel duty,” they said. “The Chancellor has taken action on those two taxes in the Autumn Statement and we would encourage him to use the forthcoming Budget to remove APD to stimulate economic growth and create jobs.
“Should APD be abolished, the aviation industry would be able to move quickly to add flights in and out of the UK, or invest in products and services, creating opportunities for businesses and much-needed jobs.”
A Treasury spokesman said: “Despite pressure on the public finances and the challenge of cutting the deficit, the Government has limited any rise in APD to inflation since 2010.
“During this time APD rates have increased by just £1 for the majority of passengers. We do not recognise the figures in the report or agree with the assumptions behind it.”