UKinbound, the trade association for UK export tourism businesses, welcomed the acknowledgement by Government that a fundamental reform of Air Passenger Duty (APD) is long overdue; however, hidden in the small print is the further  objective to increase taxes on travel and this is certainly not welcome.

UKinbound has been lobbying Government for the last three years to reform APD but the announced changes would see taxes relate to the distance travelled and capacity of the aircraft, yet these have a marginal effect on the total amount of carbon produced. UKinbound would rather see a scalable charge levied against the full environmental impact of the aircraft type including fuel efficiency and noise pollution. Not only would this system tax the heavier polluters more, it would also encourage airlines to use more environmentally friendly aircraft and allow consumers to make an informed choice.

Simply increasing taxes on travel would also further damage the inbound tourism industry, whilst having little effect on the number of flights taken by UK citizens. For a relatively wealthy nation like the UK higher taxes do not mean that people will fly less, just that they will probably spend less money on other elements of the trip. However, higher taxes will mean that potential overseas visitors, comparing UK prices with the lower priced flights and taxes of other destinations will increasingly choose to take their business elsewhere.

Stephen Dowd Chief Executive of UKinbound said: “The Treasury has yet again missed the point in its efforts to gouge more money from tax weary travellers. And where will this money be spent? There was no indication the additional taxation would be used for environmental purposes. This policy will do more to damage inbound and domestic tourism than to curb outbound travel or carbon emissions. By taxing the environmental impact of the aircraft, airlines will be encouraged to invest more heavily in developing sustainable alternatives.”

“Even by Government’s own calculations APD already raises more than the cost of all carbon emissions from UK air travel. The market cost of carbon is £10 per tonne*, the total CO2 emissions from aviation is approximately 37.5m** tonnes per year, so the offsetting cost is around £375m – significantly below the £1.8bn raised annually in APD. Further increases are totally unjustified and would simply undermine our international competitiveness.”

* based on costs from Climate Care

** e-Digest of Environmental Statistics, Published January 2007, DeFRA