Writing in The Times today on the eve of the 20th anniversary of the introduction of the air tax on Saturday, the boss of British Airways parent company said the debate over extra taxation powers for Scotland is creating an opportunity “to remove this beast which has held back job creation and economic growth across the UK”.
“It is no wonder that the Scottish National Party wants to cut APD on flights from Scotland by 50% as soon as possible as a preliminary to scrapping it completely,” Walsh said.
“The tax is said to cost Scotland £200 million a year in lost tourism alone. And if you allowed that potential economic activity to happen, your increased take from VAT and other taxes would go a long way to covering the loss of APD revenue. In fact, research by PwC suggests that the Treasury would end up net beneficiaries.
“So, what if Scotland goes it alone on APD? Well, the first thing that would happen is that Scottish airports would take traffic from northern England, as passengers scooted across the border to escape the punitive rates they would encounter at Newcastle, Manchester or any other English airport.
“With a family of four now facing an APD bill of £276 for an economy flight to the United States, the incentive would be clear enough.”
Walsh’s latest argument against APD came just hours after he reiterated calls for its abolition. He outlined the impact the tax in having on visitor numbers from Asia to the UK.
The APD that tourists must pay on their homeward journey is a huge incentive for them to visit other European countries instead.
“Our paucity of Chinese visitors is well known. Less so is the fact that visitor numbers from Japan have fallen 22% in the past 10 years when APD has risen from £20 to £81 for Japanese visitors to fly home. Meanwhile visitor levels to other European countries have remained stable over the same period,” Walsh said.
“The UK ranks seventh among European countries for Japanese visitors behind smaller countries such as Austria and Switzerland despite having the largest expat community in Europe.
“According to VisitBritain, each Japanese visitor spends about £950 on a visit to the UK meaning that the drop in Japanese visitors over the last few years costs our economy £300 million every year.
“That is the impact from one country. Multiply that across the world and you can see that the UK is missing out on billions of pounds of tourism spend.”
He added: “The aviation industry has been asking the treasury to undertake an independent assessment of the economic impact of APD for many years, surprisingly this request has fallen on deaf ears. What is George Osborne afraid of?
“The majority of European countries either levy no flight tax or have seen the sense in abolishing it. Only four others retain a similar tax but at nothing like APD’s stratospheric levels.
“After 20 years, this tax has lost any shred of economic justification. Ask yourself this question: if the governments of Northern Ireland, Scotland and Wales want to reduce APD significantly or scrap it because it is harming their economies, why does the Conservative-led government want to retain this damaging tax in England?
“There is only one sensible, reasonable option — to axe this tax across the UK and far from reducing the government’s spending power, all indications are that it will in fact increase it.
“APD should be consigned to the annals of history along with other 1990s relics. It must be put out of its misery.”
Sourced from Travel Weekly