Henry Smith MP: The Government should not raise air passenger duty further

Henry Smith is Member of Parliament for Crawley.

I share the concerns of the 500-odd constituents that have personally contacted me over the past two weeks regarding Air Passenger Duty (APD).

Many people will be aware that we already pay around eight and a half times the rates of APD than the European average and only four other countries charge APD in the European Union; Germany is reducing their APD and the Netherlands abandoned this form of tax altogether as it was costing their economy far more than it was raising.

If APD is increased further and not simplified, we risk damaging growth by increasing the tax burden on families and by giving our European competitors an unfair advantage in a global market.

Aviation accounts for about 5.5% of UK total emissions. To put that in context, road transport emissions account for about 18% and energy production emissions account for about a third of the UK total. In addition, it should be noted that the aviation sector contributes some £53 billion to UK Gross Domestic Product (GDP) and employs almost one million people, in addition to around 1.5 million employed in our tourism industry, and that about half of this country’s population fly each year.

Aviation has a critical role to play in UK tourism and the wider economic recovery through encouraging visitors to this country ahead of the London Olympic and Paralympic games, but this economic potential is being stifled by ever increasing levels of air passenger duty, which are already the highest in Europe.

The World Economic Forum’s international tourism competitiveness report actually ranked the UK 134th out of 138 nations for air taxes, and we are beaten only in the amount we charge by the west African countries of Senegal, Ivory Coast, Mali and Chad.

I fully believe this policy is economically misguided because, while proponents of the policy say that it would rebalance the UK economy by moving key business routes to regional airports, it misunderstands the fundamental economics of long-haul business routes and ignores the fact that London’s airports serve the whole British economy.