MPs urge government to halve APD

MPs urge government to halve APD

The government is being urged by MPs to halve Air Passenger Duty in next week's autumn statement.

Cross-party members of the British Infrastructure Group (BIG) claim the tax acts directly against a policy of extending UK business links to the "farthest reaches of the globe".

The tax is set to rise again in April to £150 for some long-haul flights.

A report from BIG calls for APD to be cut by 50%, then scrapped altogether – echoing yesterday’s demand from the Airport Operators Association and wider industry lobbying.

Grant Shapps, former international development minister who chairs the group, said prime minister Theresa May needs to make good on a promise she gave on Monday to "forge a bold, new, confident future for ourselves in the world".

“Particularly post-Brexit, now is the time to do it," he told the BBC.

Cutting APD could provide an immediate "Brexit dividend" because the government would not have to wait until Article 50 is triggered to make the cut, Shapps claimed.

BIG cites industry figures that shows APD for non-economy tickets is three times more expensive than France and four times higher than Germany.

It notes that Ireland has scrapped APD completely. Also, Scotland is planning to reduce APD by 50% in 2018.

It said: "APD has disproportionate effects on different tickets, disadvantaging flights to the Far East and especially to developing economies, where the cost of a plane ticket from London can be well over 10% tax."

The report adds: "If the government is to act on its commitments, especially those of securing new trading partners outside the EU, it must make it as easy as possible to do business, conduct negotiations and to stimulate the exchange of people and skills.

"It cannot continue to actively make extra-European travel more expensive than it needs to be."

Shapps argued a sharp drop in tax revenue from implementing a 50% cut would be recovered from increased trade outside Europe.

He added that a reduction would allow Philip Hammond to "stamp his own authority" as chancellor in his first autumn statement next Wednesday since being appointed to the role.

A Treasury spokesperson said: "We keep all taxes under review, and do not comment on speculation around the autumn statement."

While former chancellor George Osborne exempted children under 16 from APD, the tax has continued to rise for adults.

The charge was £5 on short-haul flights and £10 on long-haul travel when it was introduced in 1994 and it was expected to generate £330 million a year in revenue.

APD now generates around £3 billion a year for the government.

Pilots have joined MPs in urging the government to abolish APD.

British Airline Pilots Association general secretary Brian Strutton said: “Pilots are pleased to see that MPs are putting pressure on the government to reduce air passenger duty but more needs to be done. We would like to see a removal of this unfair tax.

“We have been calling for APD to be scrapped for many years and especially post-Brexit we need to ensure the British aviation industry remains competitive.

“The industry needs support in these uncertain times and a further rise will only serve to discourage Britons from air travel.”

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