ABTA – MPs’ Opinions of Increases in Aviation Taxation

A survey of the ComRes MPs Panel conducted on behalf of ABTA in October 2010 and July 2011.

Date Published: 15 Sep 2011

Categories: Economy | Policy Makers | Transport | UK

Description

MPs: Increases in aviation tax may stop ordinary families flying

A strong majority of MPs say additional rises in UK aviation taxes risk stopping UK holiday-makers from flying in 2012, according to a new survey published today by ABTA - The Travel Association, as part of the Fair Tax on Flying campaign. It comes on the same day that 20 cross-party MPs and peers have also written to the Chancellor urging him to re-consider plans to hit air travellers in 2012 with unprecedented tax increases.

MPs’ Survey:
Three out of four MPs (75%) say the Government’s plans for increases in aviation tax (Air Passenger Duty) in 2012 may stop ordinary families from flying, according to the research by ABTA. The ComRes survey of more than 150 MPs is published ahead of the Chancellor’s Autumn statement (29 November), when he is expected to confirm a double-inflation rise in Air Passenger Duty in 2012. Next year the UK also enters the Emissions Trading Scheme (ETS), further increasing the price of flying for passengers.

Key Findings:
• Overall: 75% of MPs say ‘further rises in aviation taxation may price some people out of flying’.
• Year-on-year: It’s a huge increase compared with last year (Oct 2010) when just 39% of MPs said the same.
• Cross-Party: Conservative MPs are most worried: 83% agree that further increases ‘may price some people out of flying’ despite their own Government’s plans to raise the rate of APD in 2012. But MPs across all three parties expressed concern that planned aviation tax rises could price ordinary holiday-makers out of flying: with 67% of Labour MPs and 71% of Lib Dem MPs agreeing.
• UK-wide: MPs in every part of the UK expressed concern for the cost of flying for their constituents, especially in London (78%) and the South of England (90%) where MPs felt particularly strongly that ‘further rises in aviation taxation may price some people out of flying’.

20 MPs and peers urge Chancellor to protect ‘ordinary families’
The findings come on the same day that parliamentarians have written to the Chancellor of the Exchequer, urging him to protect ordinary families from aviation tax rises. In a strongly-worded letter to George Osborne, 20 MPs and peers “urge the Government to reconsider its plans to for a double-inflation rise in APD in 2012”. They say the effect of a double-inflation rise in APD “will be a significant increase in the cost of flying abroad next year, at a time when many ordinary families are already coming under severe financial pressure.”

Recent data shows that holiday-makers are cutting back on flying. Office of National Statistics figures already show a decline in air passenger numbers from the UK to European destinations: falling 3.4m from 45.9m in 2009 to 42.6m in 2010.

There is also widespread opposition to aviation tax from flyers. In a survey conducted by ComRes in February this year, almost two thirds of consumers (63%) said the current level of tax was too high.

A Gatwick spokesperson said:
"Gatwick is a family airport. Our passengers pay £400 million in APD every year, which goes straight into the treasury's coffers. It is difficult to understand why hardworking families, whose household bills are rising every month, should pay so much extra just to go on holiday. For many of them, its a luxury they save all year to afford".

Andrew Hawkins, Chairman, ComRes said:
“It is rare indeed for the tide of opinion among MPs to turn so massively within the space of just nine months. Concern about this issue among MPs of all parties, and particularly among Conservatives, is surely something that George Osborne will have to address ahead of the planned APD rises in April next year.”

Brian Donohoe MP, Chairman of an influential All Party Group on aviation, said that:
“With so many MPs concerned about the impact of rising aviation duty on ordinary families, the Treasury should change course and suspend its plans for the damaging tax rises. The Government should be trying to support ordinary families, not adding to the financial pressures many are facing.”

Luke Pollard, Head of Public Affairs at ABTA added:
“Tax on aviation – through Air Passenger Duty – in the UK has risen disproportionately over the past five years. The travel industry knows that George Osborne wants to balance the books, but to maximise the tax take it must be set at a level where people can still afford to fly - not at a level where people are priced out of the skies.

“It’s clear that people are already being priced out of flying because of aviation taxes. We’ve already seen air passenger numbers fall from the UK to European destinations. The Chancellor has the opportunity to arrest this trend and make sure flight taxes don’t put off the travelling public.”
 
Show your support for the Fair Tax on Flying Campaign by joining our Facebook page: www.facebook.com/afairtaxonflying

Background on Air Passenger Duty:
• The UK pays the highest rates of aviation tax in Europe.
• Many EU countries are phasing out their versions of air passenger duty to compensate for the revenue to be raised by the EU ETS.
• Currently, a typical British family of four travelling in economy class pays £240 more than most European countries to fly to the USA and almost £50 more to fly to Europe. 

For further information contact:
Olly Kendall, Westminster Public Affairs, tel: 07793 224 749
Sean Tipton, Senior Press Officer, tel: 020 3117 0513
Victoria Bacon Head of Communications, tel: 020 3117 0515
Out of Hours:  Contact the Duty Press Officer via pager: 07659 190 987
E-mail: [email protected] / [email protected]
Web: www.abta.com
Twitter: @ABTAtravel

ENDS
Notes to Editors:
 
Fair Tax on Flying Alliance
The Fair Tax on Flying alliance consists of over 30 leading travel organisations including airlines, airports, trade associations and destinations. The campaign has created a dedicated Facebook page www.facebook.com/afairtaxonflying to raise awareness of the tax and allow consumers to register their views.

Fair Tax on Flying campaign members: ABTA, AOA, ANTOR, British Airways, BAA, BARUK, BATA, BMI, Bristol Airport, ETOA, Gatwick Airport, Jet2, Lastminute.com, London City Aiport, Luton Airport, Manchester Airport Group, Manston Airport, Monarch, Newcastle Airport, The Caribbean Council, The co-operative travel, Thomas Cook, Tourism Alliance, TUI Travel PLC, ukinbound, Virgin Atlantic.

ABTA
ABTA has been at the heart of travel for more than 60 years. Our purpose is to help our Members to grow their businesses successfully and sustainably, and to help their customers - the travelling public – have confidence in their travel experience.
The ABTA brand stands for expertise, reliability and fairness. These qualities are core to us. They ensure that holidaymakers remain confident in the holiday products that they buy from our Members.

We help our Members and their customers navigate through today's changing travel landscape by providing schemes of financial protection and a course of redress if something goes wrong; by raising standards in the industry and by giving guidance on issues from sustainability to health and safety; and by presenting a united voice to government to ensure the industry and the public get a fair deal.
 
ABTA currently has over 1,300 Members and represents over 5,000 retail outlets and offices. For more details about what we do, what being an ABTA Member means and how we're working at the heart of the industry to ensure that we continue to build confidence in travel visitwww.abta.com

Letter to Chancellor – full text:
Rt.  Hon  George  Osborne  MP 
Chancellor  of  the  Exchequer 
HM  Treasury 
1  Horse  Guards  Parade 
London 
SW1A  2HQ 

15th September 2011

Dear Chancellor,

Air Passenger Duty

We the undersigned are writing to express our concern about the impact of the Government’s planned rises to Air Passenger Duty (APD) in 2012 on ordinary families. The Government’s intention is to introduce a double-inflation Air Passenger Duty rise in April 2012 even after the aviation sector enters the Emissions Trading Scheme (ETS) in January 2012, adding extra cost to each flight. The effect of these two tax increases on the travelling public will be a significant increase in the cost of flying abroad next year, at a time when many ordinary families are already coming under severe financial pressure.

Many other EU countries are either phasing out their versions of Air Passenger Duty to compensate for the revenue to be raised by the EU ETS or offsetting the income from ETS against revenue from flight taxes to avoid a double whammy effect. The UK’s uniquely high level of taxation is already eight-and-a-half times more than anywhere else in Europe, yet the UK intends to not only keep it but to increase it in 2012. Indeed, even before the Government’s planned increase a typical British family of four travelling in economy class pays £240 more than most European countries to fly to the USA and almost £50 more to fly within Europe. 

We are also concerned that rising APD levels have actually contributed to falling passenger numbers since 2008. This has been further exacerbated by the economic downturn. The result is that APD increases have actually had the opposite of the intended effect: both pricing ordinary people out of flying at the same time as not increasing the level of revenue the tax raises.

We want to see the UK grow economically and for families to be able to afford to fly. Our concern is that rising APD levels not only make the UK less competitive than our neighbours but also make it harder for British families to enjoy overseas holidays. According to a recent survey three out of every four MPs say they now believe that “further rises in aviation taxation will price people out of flying” – up from just four in ten last year. 

We believe wholeheartedly that aviation should meet its environmental costs, but by the Department for Transport’s own figures, aviation taxes exceed the sector’s environmental costs by over half a billion pounds every year. 

In light of this we urge the Government to reconsider its plans for a double-inflation rise in APD in 2012.

Yours sincerely,

Tom Blenkinsop MP
Graham Brady MP
Michael Connarty MP
Rosie Cooper MP
Nic Dakin MP
Philip Davies MP
Baroness Dean
Brian Donohoe MP
Paul Goggins MP
The Rt Hon the Lord Foulkes
Lord Harrison
Michael McCann MP
Lord Pendry
Yasmin Quershi MP
Margaret Ritchie MP MLA
Jim Sheridan MP
Angela Smith MP
Henry Smith MP
Lord Soley
Graham Stringer MP

Polling data:
For full data, please contact Olly Kendall

Air Passenger Duty – additional information:
• The current rates of tax, following substantial increases in November 2009 and 2010, are:
    Economy Rate  Premium Rate
Band A  0–2,000 miles from London  £12  £24
Band B  2,001–4,000 miles from London  £60  £120
Band C  4,001–6,000 miles from London  £75  £150
Band D  over 6,000 miles from London  £85  £170
• Only four other European countries levy some form of air passenger tax.
• Denmark, Norway, Malta and Holland have all scrapped similar taxes as the revenue raised was outweighed by the damage caused to their economies.